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February 23, 2011

Contractual Matters

NL East Payroll Projections

by Jeff Euston

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Spending is up in the National League East, where all five clubs should rank higher on the list of Opening Day payrolls than they did at this time a year ago. Advancing up the list are the four-time defending champion Phillies, whose payroll jumps from fourth in baseball to second in 2011. They’re followed by the Mets (sixth to fifth), Braves (17th to 14th) and Marlins (28th to 24th). Even the Nationals, who project to reduce payroll slightly, move up from 24th in 2010 to 23rd this year. With the usual disclaimer that the numbers are subject to change, let’s break down the projected 2011 payrolls for the NL East.

 

Philadelphia Phillies
Projected 2011 payroll: $163,802,381 (2nd)
2010 payroll: $138,178,379 Opening Day (4th), $145,539,931 year-end (3rd)
Future commitments: $112.903 million for 2012, $82.286 million for 2013, $50 million for 2014, $50 million for 2015, $37.5 million for 2016

If you have any lingering doubt which team is the dominant financial force in the National League, consider that this season, the Phillies will become the first NL club with two players—Ryan Howard and Roy Halladay—earning $20 million or more. And when Cliff Lee’s salary eclipses the $20 million mark in 2012, they’ll become the first NL club with three such players.

Aside from the Yankees, no team has ever assembled a roster with even two $20 million men. (The Yanks passed that milestone five years ago, in 2006, with a lineup that included Alex Rodriguez, Jason Giambi, and Derek Jeter, as well as the $19 million Mike Mussina.)

With stable ownership, a newish ballpark, a core of championship talent, and four consecutive division titles, the Phillies have advantages no NL franchise can match—and Phillies general manager Ruben Amaro Jr. leveraged them all in pulling off the winter’s biggest surprise, signing Lee to a five-year, $125 million free-agent deal. The free-agent coup capped a 15-month stretch during which the Phils committed $305 million to Howard, Halladay, and Lee alone.

Factor in a full season with Roy Oswalt and pay raises for several players already signed to long-term deals, and Philadelphia’s Opening Day payroll figures to hit $164 million, a jump of nearly 20 percent over 2010. Just three years ago, as their championship season of 2008 opened, the Phillies’ payroll ranked 12th in baseball at $98 million. This season, Philadelphia projects to edge Boston for second in payroll, trailing only the Yankees. And only the Bombers ($469 million) have committed more for 2012-2016 than the Phillies ($332 million).

Despite the spending increase, the Phillies could not match Washington’s $126 million offer for right-fielder Jayson Werth, opening opportunities for Ben Francisco and John Mayberry Jr. Amaro also passed on a chance to shed salary in not trading Joe Blanton, now a fifth starter earning $8.5 million in each of the next two seasons. Relievers Jose Contreras ($5.25 million for two years) and J.C. Romero ($1.35 million) return on relatively inexpensive free-agent deals.

So Philadelphia has kept most of its championship core in place for another season, but a number of financial issues await for 2012. Jimmy Rollins, now 32, and Raul Ibanez, 39, are entering the final years of their contracts. Amaro will have to decide whether to pick up pricey 2012 club options on Oswalt ($16 million) and Brad Lidge ($12.5 million). Cole Hamels will have one last shot at arbitration for 2012 before hitting the open market for the 2013 season.

 

Atlanta Braves
Projected 2011 payroll: $91,148,334 (14th) 
2010 payroll: $83,890,334 Opening Day (17th), $89,226,985 year-end (16th)
Future commitments: $62.842 million for 2012, $14.7 million for 2013, $13.2 million for 2014, $13.2 million for 2015

Frank Wren enters his fourth season as Atlanta’s GM with last year’s playoff appearance on his resume and a new contract extension through 2013. Under Liberty Media, which took control of the Braves during the 2007 season, payroll has fallen each season—from a high of more than $100 million in 2008 to $96 million in 2009 to $84 million in 2010.

Although the days of top-five payrolls during the Ted Turner Era are gone, the Braves will make a slight jump this season with an Opening Day total of about $91 million. The biggest addition is second baseman Dan Uggla, who came from the Marlins in November in exchange for Omar Infante and Michael Dunn. Rather than take his new middle-of-the-order right-handed bat to arbitration, Wren signed Uggla to a five-year, $62 million extension in January. The deal—the largest ever for a second baseman—buys out four years of free agency and makes Uggla a franchise cornerstone as the only Atlanta player signed beyond 2012.

The offseason’s next project for Wren was remaking his relief corps. With the departures of Billy Wagner ($6.75 million) and Takashi Saito ($3.2 million), Atlanta shed nearly $10 million in bullpen salary. Replacing them is a collection of inexpensive swing-and-miss relievers led by Craig Kimbrel and Jonny Venters. Wren supplemented this group with free agent lefty George Sherrill ($1.45 million) and veteran Scott Linebrink, who comes to Atlanta at a discounted cost of $2 million after being acquired with cash in a trade from the White Sox. 

Atlanta’s starting rotation should remain intact for at least the next two seasons. Derek Lowe’s deal does not expire until after the 2012 season, and the Braves control Tim Hudson and Jair Jurrjens through 2013. With Tommy Hanson and Mike Minor, that rotation should give the Braves a chance at another run to the postseason by 2012, the final guaranteed year of Chipper Jones’ contract.

 

Florida Marlins
Projected 2011 payroll: $57,250,000 (24th)
2010 payroll: $47,429,719 Opening Day (28th), $47,331,979 year-end (27th)
Future commitments: $45.75 million for 2012, $47.25 million for 2013, $16 million for 2014

The Marlins are at it again. Owner Jeffrey Loria approved a 24 percent increase in payroll last offseason, the first since the club won approval for construction of a new ballpark in Miami, set to open in 2012. And the Marlins didn’t stop there. An increase of more than 20 percent is in the works for Opening Day 2011, when the Fish will take the field with a payroll of about $57 million, their highest mark since 2005.

Yes, at 24th of 30 clubs, Florida still ranks in the bottom quartile of baseball’s payroll rankings. That’s a long way from Wayne Huizenga’s 1997 edition of the club, which ranked seventh at $47.75 million. But Florida’s ranking was 25th on Opening Day 2003. Not many Marlins players are concentrating on building mansions, but the team has the talent to throw a scare into its big-spending NL East rivals.

So where is all that money going? For starters, shortstop Hanley Ramirez will earn $11 million in 2011, making him the highest-paid player in Marlins history. His deal runs through 2014.

The Marlins also have kicked the habit of jettisoning any productive young player who reaches arbitration. In December, they locked up starter Ricky Nolasco to a three-year, $26 million extension, buying out a year of free agency. That deal—along with last offseason’s four-year, $39 million contract for ace Josh Johnson—provides Florida with a strong one-two punch at the top of its rotation. GM Michael Hill also performed an inexpensive bullpen makeover, acquiring relievers Edward Mujica ($800,000), Ryan Webb (about $425,000), and Randy Choate ($2.5 million for two years).

The Marlins even dabbled in the free-agent market this winter. Hill filled a gap behind the plate by giving John Buck $18 million over three years, and he added a veteran presence to the rotation by signing Javier Vazquez to a one-year, $7 million contract. Florida’s rotation of Johnson, Nolasco, Vazquez, Anibal Sanchez, and Chris Volstad will earn nearly $25 million combined this season. Just three years ago, the Marlins’ entire Opening Day payroll was $21.8 million.

 

New York Mets
Projected 2011 payroll: $136,945,000 (5th)
2010 payroll: $126,498,096 Opening Day (6th), $127,560,042 year-end (6th)
Future commitments: $65.83 million for 2012, $44.93 million for 2013, $8.5 million for 2014

The Mets parted ways with GM Omar Minaya in October, setting the stage for a roster overhaul. Unfortunately for Mets fans, changes probably won’t begin in earnest for another 12-24 months.

The man hired for the rebuild, Sandy Alderson, inherited a long line of significant financial commitments. Johan Santana, returning from a shoulder injury, has three years and $77 million left on his contract. Jason Bay, recovering from a 2010 season short-circuited by a concussion, has three years and $51 million remaining. Carlos Beltran, coming off a knee injury, enters the final year of his deal earning $18.5 million. Closer Francisco Rodriguez, attempting to rebound after a series of problems, will make $11.5 million. If he appears in 55 games in 2011, his option for 2012 is guaranteed at $17.5 million. Mercifully, the Mets’ obligations to Oliver Perez ($12 million) and Luis Castillo ($6 million) come to an end this season.

Alderson made modest changes this winter, focusing on the starting rotation. He signed 2010’s breakout surprise R. A. Dickey for $7.8 million over two years, then added free-agent rehab projects Chris Capuano ($1.5 million) and Chris Young ($1.1 million) to incentive-laden deals.

Payroll flexibility is coming, however, with financial commitments dropping to $63 million for 2012, $45 million for 2013, and a mere $9 million for 2014. The club’s larger issue is ownership, as the Wilpon family and Sterling Mets continue to deal with fallout from the Bernard Madoff financial fraud case. Until those uncertainties are resolved, Mets fans might face another offseason or two of modest changes.

 

Washington Nationals
Projected 2011 payroll: $63,791,429 (23rd)
2010 payroll: $66,275,000 Opening Day (24th), $71,937,323 year-end (24th)
Future commitments: $44.596 million for 2012, $35.921 million for 2013, $22.721 million for 2014, $23.821 million for 2015, $21.570 for 2016

The Nationals pulled off one of the offseason’s stunners, landing free agent Jayson Werth with a seven-year, $126 million mega-deal shocking for both its total value and length. Werth replaces Adam Dunn as the face of the franchise and the big bat in the middle of the Washington lineup.

With the loss of Dunn and outfielder Josh Willingham, the Nationals’ payroll will remain relatively flat for 2011. GM Mike Rizzo also signed free agent Adam LaRoche for $16 million over two years. But newcomers Tom Gorzelanny ($2.1 million), Jerry Hairston Jr. ($2 million), Rick Ankiel ($1.5 million), and Todd Coffey ($1.35 million) came at relatively inexpensive prices. Rizzo stumbled upon his best bargain in August, when workhorse Livan Hernandez approached him in a hotel lobby and handed him a piece of paper with his handwritten financial demand for 2011: $1 million. Rizzo jumped at the deal, adding another $750,000 in performance bonuses.

The Nats will clear a little more payroll space for 2012 as contracts for Jason Marquis ($7.5 million) and Ivan Rodriguez ($3 million) come off the books.

 

NL East Summary

The Phillies are positioned to maintain their advantages in talent and finances for the short term, as the Marlins and Nationals continue building with modest budgets and the Braves seem content to keep payroll in the middle of the MLB pack while leaning on a quality farm system. The Mets ownership situation looms as the division’s biggest known unknown.

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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