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March 4, 2010

Contractual Matters

NL East

by Jeff Euston

From high rollers to low-stakes players, you can find examples of both in the National League East. Continuing our look at the 2010 payroll forecasts (we’ve covered the NL Central and the AL Central), let’s take a look at the Phillies, Braves, Marlins, Mets, and Nationals.

Philadelphia Phillies
Projected 2010 payroll: $139,327,334 (fourth)
2009 spending: $128,587,380 (Opening Day), $138,286,499 (year-end)
Future commitments: $132.7 million for 2011, $64.9 million for 2012, $36.7 million for 2013

The Phillies begin 2010 with baseball’s fourth-highest payroll at $139 million, neck-and-neck with the Cubs for the highest in the NL. The jump in spending, which accompanied the opening of Citizens Bank Park in 2004, culminated in a World Series title and two consecutive NL pennants. The Phillies are well positioned to continue to exploit their financial advantage over their NL rivals.

GM Ruben Amaro Jr. has committed more money for 2011-13 than every team but the Yankees, spending more than $143 million on long-term deals this past offseason alone. In all, Philadelphia has 19 players signed to multi-year contracts, including several substantial commitments for 2011 and beyond:

Ryan Howard, 1B
2010 salary: $19 million
Future commitment: $20 million for 2011

Your favorite Subway pitchman will be 32 years old when he hits the free-agent market after the 2011 season. Whether he can command $20 million annually—from the Phillies or any other club—will largely depend on his continued durability and production.

Roy Halladay, RHP
2010 salary: $15.75 million (with Toronto paying $6 million)
Future commitment: $60 million for 2011-13, with a $20-million vesting option for 2014

As part of the trade that delivered him from Toronto, Halladay agreed to a three-year, $60-million extension that places him third on the list of baseball’s highest-paid pitchers, behind CC Sabathia and Johan Santana. With the Blue Jays chipping in to defray some of the cost of his 2010 salary, the Phils will pay their new ace just $9.75 million in 2010, only $750,000 more than left-hander Cliff Lee will earn in Seattle. Halladay’s option for 2014 can become guaranteed based on his health and innings pitched in the deal’s final two guaranteed seasons.

Chase Utley, 2B
2010 salary: $15 million
Future commitment: $45 million for 2011-13

The game’s highest-paid second baseman reaches the backloaded end of his seven-year, $85-million contract this year. He’ll earn $15 million in each of the next four seasons.

Raul Ibanez, LF
2010 salary: $11.5 million
Future commitment: $11.5 million for 2011

Before the off-season trade of Lee, Amaro’s most controversial move was signing Ibanez to a three-year, $31.5 million free-agent contract just weeks after the 2008 World Series. Signed through age 39, Ibanez will need to stay healthy to live up to his eight-figure salaries in the next two seasons.

Brad Lidge, RHP
2010 salary: $11.5 million
Future commitment: $11.5 million for 2011, with a $12.5-million club option for 2012

Former GM Pat Gillick signed Lidge to a three-year, $37.5-million extension in July 2008. Though the 2008 campaign could not have been better, Lidge’s nightmarish 2009 season does not bode well for the final two years of the contract. Short of a remarkable recovery, it’s a safe bet the Phillies will pay $1.5 million to buy out his 2012 option.

Jimmy Rollins, SS
2010 salary: $8.5 million
Future commitment: $8.5 million for 2011

Five months before he was fired, former Philadelphia GM Ed Wade signed Rollins to a five-year extension worth $40 million. Already a bargain, the deal was extended this winter when Amaro picked up the club’s $8.5-million option for 2011.

Joe Blanton, RHP
2010 salary: $7 million
Future commitment: $17 million for 2011-2012

Eligible for arbitration this winter, Blanton agreed to a three-year, $24-million extension with Philadelphia, postponing his opportunity to become a free agent by two seasons.

Cole Hamels, LHP
2010 salary: $6.65 million
Future commitment: $9.5 million

Placido Polanco, 3B
2010 salary: $5 million, plus $500,000 signing bonus
Future commitment: $11.5 million for 2011-2012, with a $5.5-million mutual option for 2013

Polanco will likely provide an upgrade in replacing Pedro Feliz at third base, but he’s not without risk. Signed for $18 million over three years, Polanco will need to stay healthy and produce into his age-36 season.

Shane Victorino, CF
2010 salary: $5 million
Future commitment: $17 million for 2011-12

Another arbitration-eligible player who chose to sign a multi-year extension this winter, Victorino pushed his timetable for free agency back by one year in agreeing to a three-year, $22-million contract.

Amaro has also signed affordable extensions with right-hander Ryan Madson ($4.5 million each in 2010 and 2011) and catcher Carlos Ruiz ($1.9 million this season, plus $6.95 million for 2011-12). Notably absent from the list is right fielder Jayson Werth, who will be eligible for free agency in October.

Atlanta Braves
Projected 2010 payroll: $83,075,334 (16th)
2009 spending: $97,692,834 (Opening Day), $100,078,591 (year-end)
Future commitments: $58.5 million for 2011, $46.917 million for 2012, $1.5 million for 2013

Depending on your math, the Braves will cut payroll by 15 percent this season or spend roughly the same amount as 2009. Braves executives contend that spending will remain near 2009 levels, when they opened the season at $97.6 million and reached $100 million by year’s end. But Atlanta’s 2010 Opening Day payroll actually projects to be about $83 million, a drop of 15 percent and the club’s lowest since 2000.

Yes, incoming free agents Takashi Saito, Troy Glaus, and Eric Hinske might bump payroll by reaching playing time incentives. And yes, the Braves reportedly received a substantial insurance reimbursement on Tim Hudson’s $13-million salary in 2009, when he spent five months recovering from elbow surgery. So with some creative math, Atlanta’s 2010 payroll could conceivably approach the 2009 Hudson-adjusted figure. But absent another high-dollar acquisition (not a likelihood, if GM Frank Wren’s talks with Johnny Damon are an indication), 2010 spending is not likely to reach $90 million. The Braves, who now routinely lag behind both the Phillies and Mets in payroll, will open 2010 looking up at even the Twins and Brewers.

One thing that has remained constant is where the Braves allocate their resources. As a percentage of payroll, no team in baseball spent more (66 percent) on pitching in 2009 than Atlanta. That percentage will drop in 2010, thanks primarily to the trade of Javier Vazquez and his $11.5-million salary. Nevertheless, Atlanta will likely devote about 55 percent of its 2010 payroll to pitching, which should rank among baseball’s top five.

Wren has committed $58 million for 2011, including more than $31 million for starting pitchers Hudson, Derek Lowe, and Kenshin Kawakami. Center fielder Nate McLouth and catcher Brian McCann are signed to affordable deals with options through 2012 and 2013, respectively. Chipper Jones will earn $13 million a year through the 2012 season, with Atlanta holding an option for 2013.

Florida Marlins
Projected 2010 payroll: $46.7 million (28th)
2009 spending: $35,458,951 (Opening Day), $37,532,482 (year-end)
Future commitments: $18.75 million for 2011, $28.75 million for 2012, $29.25 million for 2013, $16 million for 2014

The Marlins visibly increased payroll this winter, their first offseason after winning approval for construction of a new retractable-roof ballpark in Miami, set to open in 2012. Florida’s Opening Day payroll is projected to be $46 million, an increase of 24 percent.

Owner Jeffrey Loria insists the increase was not motivated by questions about the Marlins’ use of proceeds from Major League Baseball’s revenue-sharing plan, which requires any club receiving money to spend it on player development and salaries. However, concerns from both the Major League Baseball Players Association and other teams prompted a January agreement ensuring the Marlins’ "continued compliance" with revenue-sharing rules.

The agreement—an offer the Marlins couldn’t refuse—was essentially the first punch in the fight that will be the 2011 labor negotiations. Notably, it was not an attack by the players against the owners (or vice versa), but a warning shot for any perennial losing club receiving substantial revenue-sharing dollars while making a profit.

Florida ranked last in payroll in three of the last four seasons (they were next-to-last in 2007). But GM Michael Hill re-signed nine of the club’s arbitration-eligible players, including second baseman Dan Uggla ($7.8 million), third baseman Jorge Cantu ($6 million), right fielder Cody Ross ($4.45 million), starter Ricky Nolasco ($3.8 million), and ace right-hander Josh Johnson, who agreed to a four-year, $39-million extension through 2013.

The Marlins have one other player signed beyond 2010: shortstop Hanley Ramirez, who has five years and $64.5 million remaining on his contract.

New York Mets
Projected 2010 payroll: $123,963,096 (sixth)
2009 spending: $139,602,235 (Opening Day), $142,229,759 (year-end)
Future commitments: $108.613 million for 2011, $60.875 million for 2012, $44.625 million for 2013, $8.5 million for 2014

After spending more than $140 million in each of the last two seasons, the Mets will open 2010 with a payroll of about $124 million, a cut of 11 percent. Mets GM Omar Minaya reeled in free-agent left fielder Jason Bay just before New Year’s Day with a four-year, $66-million contract that includes an option for 2014. But Minaya’s only other notable off-season additions were low-cost alternatives: pitchers Kelvim Escobar and Ryota Igarashi, outfielder Gary Matthews Jr., and catchers Rod Barajas and Henry Blanco.

With $108 million already committed for 2011, the Mets’ fortunes will continue to ride on the production and health of the seven players signed to expensive multi-year deals. Some flexibility arrives thereafter with the expiration of long-term contracts for center fielder Carlos Beltran, starter Oliver Perez, and second baseman Luis Castillo.

Johan Santana
2010 salary: $21 million
Future commitments: $77.5 million for 2011-13, with a $25-million club option for 2014

Santana reportedly appears healthy after having surgery in August to remove bone chips from his left elbow. He will earn $22.5 million in 2011, $24 million in 2012, and $25.5 million for 2013. His option for 2014 includes a $5.5-million buyout.

Carlos Beltran, CF
2010 salary: $18.5 million
Future commitments: $18.5 million for 2011

Beltran, entering his age-33 season, has only two years left on a seven-year, $119-million free-agent deal signed in January, 2005. He will miss Opening Day while recovering from off-season knee surgery.

Oliver Perez, LHP
2010 salary: $12 million
Future commitments: $12 million in 2011

New York’s starting pitcher in Game Seven of the 2006 NLCS, Perez spent much of 2009 battling tendinitis in his right knee before undergoing surgery in late August.

Francisco Rodriguez, RHP
2010 salary: $11.5 million
Future commitments: $11.5 million for 2011, $17.5 million vesting option for 2012

K-Rod’s 2012 option becomes guaranteed only if he finishes 55 games in 2011 and a total of 100 games in 2010 and 2011 combined. He must also be declared healthy after the 2011 season.

David Wright, 3B
2010 salary: $10 million
Future commitments: $29 million for 2011-12, with a club option for 2013

The expensive end of Wright’s August, 2006 extension begins this season as his salary reaches eight figures for the first time. New York will pay Wright $14 million in 2011 and $15 million in 2012. The Mets hold a $16-million option for 2013, his age-30 season.

Jose Reyes, SS
2010 salary: $9 million
Future commitments: $11 million club option ($500,000 buyout)

Reyes enters the final guaranteed year of his contract hoping his surgically repaired hamstring is sound.

Luis Castillo, 2B
2010 salary: $6 million
Future commitments: $6 million for 2011

After fighting injuries in 2008, Castillo rebounded in 2009, providing the Mets with some much-needed durability, if not a chip to offer in a trade. He is signed through his age-34 season.

Washington Nationals
Projected 2010 payroll: $63,675,000 (25th)
2009 spending: $61,455,049 (Opening Day), $69,321,137 (year-end)
Future commitments: $24.4 million for 2011, $16.975 million for 2012, $14.1 million for 2013

Nationals GM Mike Rizzo spent nearly $30 million shopping for veterans this winter, shoring up his roster without limiting the club’s financial flexibility. Most of the money went toward pitching, as Washington added starters Jason Marquis ($15 million for two years) and Chien-Ming Wang ($2 million), as well as relievers Matt Capps ($3.5 million), Brian Bruney ($1.5 million), and Tyler Walker ($650,000). Three other experienced arms, right-handers Miguel Batista and Livan Hernandez and lefty relief specialist Eddie Guardado, signed minor-league deals. Rizzo also added veteran catcher Ivan Rodriguez ($6 million for two years) and second baseman Adam Kennedy ($1.75 million, with an option for 2011).

Despite the new acquisitions, the Nationals will begin 2010 with an Opening Day payroll of about $63 million, only a slight increase from the 2009 season. Nearly one-third of the payroll will go to first baseman Adam Dunn ($12 million) and shortstop Cristian Guzman ($8 million), who both will be free agents in October.

Dunn has lobbied openly for a contract extension, and with just $24 million committed for 2011, the Nationals have the payroll flexibility to explore the idea. Washington could face as many as a dozen arbitration cases next offseason. However, only two players are signed beyond 2011: 2009 first overall draft pick Stephen Strasburg and third baseman Ryan Zimmerman, who has four years and $41.175 million remaining on an extension signed last April.   

Jeff Euston is an author of Baseball Prospectus. 
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Premium Article On the Beat: Mid-Week ... (03/03)
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Contractual Matters: N... (02/24)
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