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March 18, 2010

Contractual Matters

NL West Projected Payrolls

by Jeff Euston

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The National League West features a curious mix of divorce dramas, humidors, water-shot homers and dry heat. Continuing our 2010 payroll outlook (we’ve covered the NL Central, AL Central, NL East, and AL East), let’s check out the financial forecast for the Dodgers, Rockies, Giants, Diamondbacks, and Padres.

Los Angeles Dodgers
Projected 2010 payroll: $100,523,333 (ninth)
2009 spending: $109,176,603 (Opening Day), $131,507,197 (year-end)
Future commitments: $60.433 million for 2011, $12.783 million for 2012, $11.583 million for 2013, $3.2 million for 2014

The Dodgers have issues. The club cut payroll over the winter despite salary increases for several players in arbitration. Owner Frank McCourt and his wife, Jamie, are headed for divorce, and left fielder Manny Ramirez enters the final year of his contract sounding as if, in his mind, he might already be gone. Despite it all, the Dodgers have kept intact the core of the club that posted the NL’s best record in 2009 en route to a second consecutive division title. Los Angeles will open 2010 with a payroll of about $97 million, ninth in baseball. However, no player is signed beyond the 2011 season, hardly ideal for a team flush with young talent.

General manager Ned Colletti faced nine arbitration cases over the winter, including several with young home-grown stars who played prominent roles in the 2008 and 2009 post-season drives. Three of the Dodgers' young arbitration-eligible stars signed two-year contracts: closer Jonathan Broxton ($11 million) and outfielders Andre Ethier ($15.25 million) and Matt Kemp ($10.95 million). Meanwhile, Colletti settled on one-year agreements with catcher Russell Martin ($5.05 million), right-hander Chad Billingsley ($3.85 million), and first baseman James Loney ($3.1 million).

But that’s not to say LA is without long-term financial commitments. The Dodgers will pay Ramirez $8.333 million annually in 2011, 2012, and 2013 as the bill comes due on $25 million in deferrals from his 2009 and 2010 salaries. And the failed experiment that was Andruw Jones will cost the club about $3.2 million a year through 2014. In 2010, the Dodgers will pay five former players a total of more than $15 million: Juan Pierre ($7 million), Jones ($3.2 million), Jason Schmidt ($2.5 million), Orlando Hudson ($1.44 million), and recently retired Nomar Garciaparra ($1.25 million).

The commitments for 2011 include $43.75 million for six players on the roster: infielders Rafael Furcal, Casey Blake, and Jamey Carroll, along with Broxton, Ethier, and Kemp. With arbitration pay raises for Martin, Billingsley, and Loney and another $17 million going for ex-Dodgers, a dramatic cut in payroll is unlikely.

At the same time, the McCourt divorce proceedings loom, despite the organization’s insistence that it’s business as usual for the club. Just down the coast, the 2008 divorce of Padres owner John Moores resulted in deep payroll cuts and a sale of the club. However, a 2004 post-nuptial agreement between the McCourts reportedly grants Frank McCourt sole ownership of the Dodgers and other business assets, while granting Jamie McCourt sole ownership of the couple’s residential properties. Jamie McCourt is challenging the validity of the agreement with a legal team that includes prominent trial lawyer David Boies. Our Shawn Hoffman already has debunked the myth that the court filings in the case indicate the Dodgers plan to operate the franchise on the cheap. But the short-term ride might not be a smooth one.

Colorado Rockies
Projected 2010 payroll: $82,971,333 (17th)
2009 spending: $74,730,533 (Opening Day), $84,450,797 (year-end)
Future commitments: $50.591 million for 2011, $25.733 million for 2012, $10.75 million for 2013

As the 2001 season began, the Colorado Rockies signed first baseman Todd Helton to a nine-year extension worth $141.5 million, the most lucrative contract in NL history. Although Colorado’s multi-year deals for pitchers Mike Hampton ($121 million) and Denny Neagle ($51 million) did not end well, Helton became the face of the franchise, leading the Rockies to the World Series in 2007 and another playoff appearance in 2009.

Helton cemented his legacy in Denver last week, agreeing to re-work and extend his contract through 2012. Helton was guaranteed a $19.1-million salary in 2011 and a $4.6-million buyout in 2012 under the terms of his existing contract. The new deal converts the buyout to a signing bonus, paid in 2011, and defers $13.1 million of his 2011 salary until 2014-23. The result is a deal that frees up $8.5 million on the 2011 books and ensures the franchise’s greatest player ends his career in Colorado.

In addition to Helton, GM Dan O’Dowd has signed eight players to contracts of three years or more, providing the club an affordable core of young talent for the near future:

Troy Tulowitzki, SS, age 25
2010 salary: $3.5 million
Future commitment: $24 million for 2011-13, with 2014 club option

Signed after the Rockies’ 2007 World Series run, Tulowitzki’s deal was the largest contract for a player with less than two years of experience­—until Arizona’s Chris Young since leapfrogged it in terms of average annual value. Tulo’s deal includes a $15-million club option for 2014, with $2-million buyout.

Ubaldo Jimenez, RHP, age 26
2010 salary: $1.25 million
Future commitment: $7 million for 2011-12, with 2013 and 2014 club options.

O’Dowd locked up Jimenez a year ago, signing the dynamic right-hander to a four-year, $10-million contract with options through 2014. After a 2009 season in which Jimenez threw 218 innings and increased his strikeout rate while maintaining his ability to induce ground balls, the deal looks like a bargain. Colorado holds options for Jimenez’ first two free-agent years at club-friendly prices of $5.75 million in 2013 and $8 million in 2014.

Brad Hawpe, RF, age 31
2010 salary: $7.5 million
Future commitment: $10-million club option for 2011

Hawpe enters the final guaranteed year of his contract on the wrong side of 30. Though his bat still provides value, his defense and age make it unlikely the Rockies will pick up their $10-million option for 2011.

Huston Street, RHP, age 26
2010 salary: $7.2 million
Future commitment: $14.8 million for 2011-12, plus 2013 option

Street parlayed a strong 2009 into a three-year, $22.5-million deal over the winter. His contract includes a $9-million player option for 2013, though Colorado may decline and pay a $500,000 buyout.

Aaron Cook, RHP, age 31
2010 salary: $9 million
Future commitment: $9.25 million for 2011, plus 2012 option

Cook’s ground-ball tendencies play well in Colorado, who signed him to a three-year, $30-million deal after the 2007 playoff run. The contract includes an $11-million mutual option for 2012, with a $500,000 buyout.

Jeff Francis, LHP, 29
2010 salary: $5.75 million
Future commitment: $7-million club option for 2011

The early returns have been positive as Francis attempts to come back from 2009 shoulder surgery. He’s tentatively slotted in at the back end of Colorado’s starting rotation.

Chris Iannetta, C, age 27
2010 salary: $1.75 million, plus $250,000 signing bonus
Future commitment: $6.1 million for 2011-12, plus 2013 club option

The Rockies signed Iannetta to a three-year, $8.35-million extension in January, getting a $5-million club option on the catcher’s first year of free agency in the process. If he falters, backup Miguel Olivo is waiting in the wings.

Manny Corpas, RHP, age 27
2010 salary: $2.75 million
Future commitment: $3.5 million for 2011, with club options for 2012 and 2013.

Corpas hopes to bounce back from elbow surgery in 2009. If he’s successful, he should provide Colorado with a relatively affordable bullpen option for the next two seasons.

San Francisco Giants
Projected 2010 payroll: $94,882,500 (11th)
2009 spending: $88,777,106 (Opening Day), $95,202,185 (year-end)
Future commitments: $58.6 million for 2011, $32.6 million for 2012, $20 million for 2013, $7 million for 2014.

The Giants will open the season with a payroll of about $95 million, with two substantial obligations which stretch to 2013: $83 million for Barry Zito over the next four years and $36 million for Aaron Rowand over the next three seasons. Though Zito’s 2009 improvement suggests his deal might not become a sunk cost entirely, San Francisco had hoped for more than a $126-million innings-eater at the back of the rotation. And at 32, Rowand is not likely to hold even his middling value of 1-2 WARP, making him a costly proposition at $12 million a year.

General manager Brian Sabean provided a modest boost to his offense over the winter, signing super-utilityman Mark DeRosa and second baseman Freddy Sanchez to matching two-year, $12-million deals. Another 30-something, Aubrey Huff, will earn $3 million as San Francisco’s new first baseman.

Sabean did get some semblance of cost certainty for the next two seasons by signing ace Tim Lincecum to a two-year, $23-million deal in February, just before an arbitration hearing with the reigning two-time Cy Young award winner. The Freak is a relative bargain at the cost of a $2-million signing bonus and salaries of $8 million in 2010 and $13 million in 2011. The deal leaves Lincecum eligible for arbitration twice before he can hit the free-agent market after the 2013 season.

The Giants’ "other" ace, Matt Cain, is locked in to a club-friendly deal paying $4.25 million this season, with San Francisco holding a $6.25-million option for 2011, the final year before Cain will be eligible for free agency.

Arizona Diamondbacks
Projected 2010 payroll: $74,518,333 (19th)
2009 spending: $72,475,000 (Opening Day), $73,800,852 (year-end)
Future commitments: $43.991 million for 2011, $41.491 million for 2012, $23.208 million for 2013, $15.75 million for 2014

No team in the NL West has committed more money for 2011-14 than the Diamondbacks. Arizona projects to open the 2010 season with a $74-million payroll, 19th in baseball. That figure includes nearly $11 million for outfielder Eric Byrnes, who was released by Arizona over the winter with a year remaining on his three-year, $30-million deal.

Like the Rockies, the Diamondbacks have continued their club’s trend of signing young players to multi-year deals, a practice that has provided both disappointment and great value. Arizona has five players locked up through the 2012 season.

Dan Haren, RHP, age 29
2010 salary: $8.25 million
Future commitment: $25.5 million for 2011-12, with a 2013 club option.

In August, 2008, GM Josh Byrnes signed Haren to a four-year, $44-million contract extension, despite the fact that the right-hander’s existing deal ran through 2009, with an option for 2010. That proactive measure looks wise now, as Haren will earn below-market salaries of $12.75 million in 2011 and 2012, with the D-Backs holding a 2013 club option worth $15.5 million.

Chris Snyder, C, age 29
2010 salary: $4.75 million
Future commitment: $5.75 million for 2011, with a 2012 option

Back problems plagued Snyder for most of 2009, his first season after signing a three-year, $14.5-million extension in December, 2008. Absent renewed health and re-taking the catching job back from Miguel Montero, Snyder is likely to serve as a pricey backup until Arizona buys out his $6.75-million option for 2012.

Chris Young, CF, age 26
2010 salary: $3.25 million
Future commitment: $20.5 million for 2011-13, with 2014 club option

Young serves as a cautionary tale for clubs locking up young stars to guaranteed, multi-year deals. The center fielder posted a disappointing 2009 slash line of .212/.311/.400 and enters 2010 with four years and more than $25 million remaining on his contract. At 26, Young should receive ample opportunity to rebound, but the trends are not encouraging.

Mark Reynolds, 3B, age 26
2010 salary: $500,000, plus a $1 million signing bonus
Future commitment: $12.5 million for 2011-12, with a 2013 club option

It’s not often an eight-figure commitment is a low-risk move, but Arizona’s extension with Reynolds could be. The deal locks in the third baseman through his age-29 season at an affordable rate, given that statistically comparable Dan Uggla earned $13.15 million in his first two seasons of arbitration eligibility.

Justin Upton, RF, age 22
2010 salary: $500,000, plus a $1.25-million signing bonus
Future commitment: $49.5 million for 2012-15

Arizona opened spring training by giving the first pick in the 2005 draft the second-largest deal in team history behind Randy Johnson’s four-year, $53-million deal signed in 1999. The contract buys out two years of free agency at a below-market rate and allows the club to avoid the headache of arbitration with the star right fielder, whose age-21 slash line of .300/.366/.532 places him in the elite company of Hall of Famers Joe DiMaggio and Frank Robinson and current stars Alex Rodriguez and Albert Pujols.

San Diego Padres
Projected 2010 payroll: $37,575,000 (29th)
2009 spending: $42,746,653 (Opening Day), $43,210,258 (year-end)
Future commitments: $1.1 million for 2011

The Padres set team payroll records in four of the club’s first five seasons at Petco Park, surpassing the $70-million mark for the first time in franchise history in 2008. The Padres are now a financial blank slate, or at least as close as any club will get. At $37.575 million, they project to have the lowest Opening Day payroll in baseball in 2010, and no club has committed less money going forward.

The overriding issue for new GM Jed Hoyer is how to handle first baseman Adrian Gonzalez, the club’s greatest asset. Gonzalez will earn $4.75 million this season and $5.5 million in 2011 with the exercise of the club option in his club-friendly contract. However, Gonzalez will raise the stakes with his next deal. He and agent John Boggs reportedly will seek a contract rivaling Mark Teixeira’s eight-year, $180-million agreement he signed the Yankees before the 2009 season.

Hoyer also has two other potential trade chips in starter Chris Young ($6.25 million in 2010 with an $8.5-million 2011 option) and closer Heath Bell ($4 million in 2010).

San Diego has made commitments of $1.1 million for 2011, an amount that represents not salary, but buyouts on mutual options in the contracts of catcher Yorvit Torrealba and starter Jon Garland. Only a handful of Padres players are even due to qualify for arbitration after the 2010 season: Bell, outfielders Scott Hairston and Tony Gwynn Jr., and relievers Mike Adams and Edward Mujica.

Jeff Euston is an author of Baseball Prospectus. 
Click here to see Jeff's other articles. You can contact Jeff by clicking here

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