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March 9, 2011

Contractual Matters

NL Central Payroll Projections

by Jeff Euston

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Since 2006, only one club in the National League Central has managed to win more than 91 games in a season. The Reds turned the trick in 2010 and won the division title, despite being outspent by four of their other five Central competitors. Spending will remain flat in Cincinnati this season, but the division’s financial landscape is shifting. Let’s break down the projected 2011 payrolls for the NL Central.

 

Cincinnati Reds
Projected 2011 payroll: $77,758,000 (19th)
2010 payroll: $76,151,500 Opening Day (19th), $82,451,340 year-end (19th)
Future commitments: $51.261 million for 2012, $50.191 million for 2013, $25.791 million for 2014, $12.883 million for 2015, $12.583 million for 2016

The Reds rode to the 2010 division title with a payroll of about $80 million, good for 19th in baseball. This spring, they’ll take the field to defend their crown at roughly the same total cost. But that’s not to say Cincinnati is standing pat.

General manager Walt Jocketty began his off-season by declining his club’s 2011 options on Aaron Harang ($12.75 million) and shortstop Orlando Cabrera ($4 million), then allowed lefty reliever Arthur Rhodes to depart via free agency.

Jocketty then turned his attention to long-term deals with a group of core players central to the Reds’ playoff run, a strategy that resulted in the club committing more than $150 million to four players this winter. Jocketty began by signing a three-year, $35 million extension with workhorse starter Bronson Arroyo, who agreed to defer $15 million without interest, freeing up some short-term payroll space for the front office. A year ago, a similar agreement between Jocketty and Scott Rolen helped Cincinnati sign Aroldis Chapman.

The Reds then signed Jay Bruce to a six-year, $51 million deal, locking up the right fielder through his arbitration seasons and two years of free agency, with a club option for a third. First baseman Joey Votto was next, signing for $38 million for three years. Though the Reds were not able to buy back even one of Votto’s free-agent seasons, the deal does provide cost certainty through 2013 for a player who should provide MVP-caliber production through the end of the deal, which runs through his age-29 season. Jocketty wrapped up the effort with a four-year, $27 million contract for starter Johnny Cueto, a deal that gives the Reds control of the 25-year-old’s first season of free agency and an option for an additional year.

Jocketty’s one swing and miss this winter came on right-hander Edinson Volquez, who turned down Cincinnati’s four-year offer in favor of a one-year deal worth $1.625 million. The short-term contract will allow Volquez, 27, to continue to re-establish his value after elbow surgery in 2009 and a 50-game suspension in 2010. He’ll be eligible for arbitration for two more seasons before hitting the open market after the 2013 season.

The major contractual issues for 2012 are whether to exercise twin $12 million options on closer Francisco Cordero and second baseman Brandon Phillips.


St. Louis Cardinals
Projected 2011 payroll: $108,162,500 (11th)
2010 payroll: $94,220,500 Opening Day (12th), $98,354,244 year-end (12th) 
Future commitments: $49.288 million for 2012, $29.95 million for 2013, $17 million for 2014, $17 million for 2015, $17 million for 2016, $17 million for 2017, $1 million for 2018

In St. Louis, one issue looms over all others, and it’s the Albert Pujols contract situation. After making runs at signing him to an extension the last two winters, the Cardinals have arrived at a place where they can’t sign him but apparently can’t quite imagine living without him. Publicly, both sides remain optimistic a deal will get done. But short of a contract being hammered out during the All-Star break or shortly after the World Series, the best player in the game is headed to the open market in November, and no one is certain where that process will lead.

Aside from the discussion of whether the Cardinals can afford to make Pujols the game’s highest-paid player (an issue we addressed in December), a number of other issues remain for the Cards.

* Will manager Tony La Russa return for 2012 if Pujols has left town?

* Should GM John Mozeliak pick up his 2012 option on fragile ace Chris Carpenter at a cost of $15 million?

* Should he exercise a two-year option on Adam Wainwright—about one week into recovery from ligament replacement surgery on his right elbow—at a price of $21 million?

* How long will 38-year-old Ryan Franklin be a viable option to close games?

* Is there any chance of locking up Colby Rasmus to a long-term deal when the center fielder reaches arbitration for the first time at the end of the 2011 season?

In the meantime, the Cardinals are playing to win in 2011, paying Lance Berkman $8 million to return to the outfield for one more season and hoping Prince Albert can deliver at least one more playoff run, despite the loss of Wainwright.

 

Milwaukee Brewers
Projected 2011 payroll: $81,070,833 (18th)
2010 payroll: $90,408,000 Opening Day (15th), $94,554,209 year-end (13th)
Future commitments: $57.368 million for 2012, $39.618 million for 2013, $32.788 million for 2014, $12.288 million for 2015

The Brewers open 2011 with a trimmed down payroll of about $81 million, a leaner, meaner version of the club that spent nearly $95 million last season. Gone are hefty salaries for Jeff Suppan ($12.75 million), Bill Hall ($7.15 million), and Trevor Hoffman ($7.5 million), as well as nearly $20 million in 2010 payroll earmarked for David Riske, Doug Davis, Dave Bush, and Todd Coffey.

The new blood brought in by general manager Doug Melvin starts with two top starters under club control through 2012: Shaun Marcum, pried away from Toronto for second-base prospect Brett Lawrie, and Zack Greinke, acquired from Kansas City for a four-player package. Milwaukee signed Marcum to a $3.95 million deal for 2011, and he’ll be eligible for arbitration one final time at the end of the season. Greinke will earn $13.5 million in each of the next two seasons, though he will miss the start of the 2011 season after sustaining a rib injury playing pickup basketball.

Greinke and Marcum should team with Yovani Gallardo to provide the Brewers with the division’s most formidable rotation, as the club makes what's likely its last run at the postseason with slugger Prince Fielder, who will earn $15.5 million before hitting the free-agent market in November. Despite not being able to lock up his All-Star first baseman, Melvin has signed two key pieces to the Milwaukee lineup to long-term deals. Right fielder Corey Hart signed a three-year, $26.5 million extension in August, and second baseman Rickie Weeks agreed to a four-year, $38.5 million contract this winter. With Ryan Braun already signed through 2015, the Brewers should be set up to weather the loss of Fielder.


Chicago Cubs
Projected 2011 payroll: $133,600,000 (6th)
2010 payroll: $144,359,000 Opening Day (3rd), $142,410,031 year-end (4th)
Future commitments: $72.6 million for 2012, $28.8 million for 2013, $19 million for 2014

The end is finally in sight for Cubs fans longing for the day when their team is no longer handcuffed by big contracts. The 2011 payroll will include seven players earning $10 million or more: Alfonso Soriano, Carlos Zambrano, Aramis Ramirez, Kosuke Fukudome, Ryan Dempster, Carlos Silva, and Carlos Pena. But in 2012, the number of Cubs making eight-figure salaries falls to three (Soriano, Zambrano and Dempster). And by 2013, only Soriano’s deal will remain on the books.

GM Jim Hendry shored up his bullpen over the winter, signing Kerry Wood to a well-below-market $1.5 million deal laden with incentives. The once and future Cub hero will set up closer Carlos Marmol, who delayed his free agency by a season to sign a three-year, $20 million deal. Hendry also improved his starting rotation, acquiring Matt Garza in a trade from Tampa Bay. The right-hander agreed to a $5.95 million deal a week later, and he’ll be under the Cubs’ control through the 2013 season.

With both payroll flexibility and some promising young players on the way, the Cubs can take hope in the future in the event we’ve already seen the best out of the Zambrano-Dempster era.

 

Houston Astros
Projected 2011 payroll: $76,398,000 (20th)
2010 payroll: $92,605,500 Opening Day (13th), $90,119,188 year-end (15th)
Future commitments: $47.250 million for 2012, $16.5 million for 2013, $2.5 million for 2014

To the best of our knowledge, Astros owner Drayton McLane is not going through a divorce and has not heavily invested with disgraced financier Bernard Madoff. But his club is still for sale, for a reported asking price of $800 million.

Though Houston’s projected 2011 payroll of $76 million represents a drop of about 17 percent, the Astros have not slashed spending across the board. In addition to breaking with policy to pay above-slot bonuses to draft picks, the club has invested in international minor-league talent and built a new facility in the Dominican Republic.

At the major-league level, the 2010 trades of Roy Oswalt and Lance Berkman reduced payroll. Unfortunately, the mega-contract of left fielder Carlos Lee remains in place, eating up roughly a quarter of the club payroll. With two years and $37 million left on his deal, El Caballo likely won’t be leaving Houston any time soon.

But GM Ed Wade did have some money available this winter. He locked up ace Wandy Rodriguez to a three-year, $34 million extension before losing in arbitration to right fielder Hunter Pence, who won an award of $6.9 million. Wade reworked Houston’s middle infield for a relatively low price, acquiring shortstop Clint Barmes ($3.925 million) in a trade and signing free agent second baseman Bill Hall ($3 million).

Houston has already committed $47 million to four players for 2012—Lee, Rodriguez, Brett Myers, and Brandon Lyon—and Wade could have as many as nine arbitration cases on his hands next winter. But the relief comes in 2013, with only Rodriguez on the books with guaranteed money.

 

Pittsburgh Pirates
Projected 2011 payroll: $40,875,000 (29th)
2010 payroll: $39,068,000 Opening Day (29th), $44,146,967 year-end (29th)
Future commitments: $10.625 million for 2012

The Pirates’ projected payroll of $41 million figured to rank last in baseball until the mid-January retirement of Kansas City’s Gil Meche reduced the Royals’ 2011 spending to the $37 million range. Still, not only will new skipper Clint Hurdle’s club rank last in the National League in 2011 payroll, no team in baseball has committed less for 2012 and beyond than the Pirates.

This winter’s splash for GM Neal Huntington was a one-year, $5 million deal for first baseman Lyle Overbay. Huntington also reached two-year agreements with a pair of free agents, signing starter Kevin Correia for $8 million and outfielder Matt Diaz for $4.25 million. But other than third baseman Pedro Alvarez, no players have guaranteed deals running beyond this season.

The Pirates’ future now hinges on young players developed in-house like Alvarez, Neil Walker, Jose Tabata and Andrew McCutchen. Huntington’s own contract expires at the end of the year. Assuming he’s rewarded with a new deal, he’ll face decisions on 2012 options for lefty Paul Maholm ($9.75 million) and catchers Chris Snyder ($6.75 million) and Ryan Doumit ($8.25 million) – assuming he’s not traded beforehand. At those salaries, making the call to allow those three to depart figures to be much easier than Huntington’s constant task of establishing a pipeline of young talent to the big-league club.

 

NL Central Summary

As the building/rebuilding efforts continue in Pittsburgh and Houston, the Reds and Brewers are constructed to win soon, if not this season. Meanwhile, the Cubs should have money to spend on the free-agent market going forward, and the Cardinals hope to see to it that their longtime rivals do not sweep in and sign away their biggest star.

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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