This weekend Marc Topkin of the Tampa Bay Times wrote that the Tampa Bay Rays are still looking to lower their opening day payroll:
And more changes are coming, as the Rays have yet to address ownership’s directive to cut payroll — they are actually up a few million from this time last year. That means some veterans from the group of closer Alex Colome; infielder Brad Miller; starters Jake Odorizzi or, less likely, Chris Archer; and outfielders Corey Dickerson and/or Denard Span are still going to be moved.
This is exactly what was expected when the Rays started the offseason if you replaced Denard Span’s name with Evan Longoria.
The trade of Evan Longoria is the only major transaction the Rays have made in this offseason that has moved at a glacial pace. In that move the Rays only cut the 2018 payroll by $2.5MM after picking up Span’s $9MM salary and paying Longoria’s $2MM assignment bonus (The Rays also are paying $1.5MM that is deferred until 2025-29).
The Rays did save a little bit of 2018 money, but nothing major.
Stu Sternberg was quoted as saying the payroll would absolutely drop from the payroll the Rays ended the season. It’s hard to pinpoint a number, but the reports are in the low $80MMs for what will be available to the team.
Do the Rays need to cut payroll?
Steve Adams of MLBTradeRumors.com wrote about the need to cut payroll citing the Topkin piece. In the blurb he references the Rays having a current estimated payroll of $86.6MM via Roster Resource.
Meanwhile, Cot’s Baseball Contracts, the leading source for MLB payroll amounts, has the opening day payroll at $79,838,333. This is a significant increase over last year’s $70,064,700 payroll and above the franchise high of $76,872,384 set in the 2014 season.
Digging a little deeper, you’ll find Cot’s also the reported end of season payroll at $100,355,005 for 2017. That number seems incredibly high. The Rays did add payroll with the acquisitions of Adeiny Hechavarria and Lucas Duda among other in season additions, but they didn’t add approximately $30MM from opening day.
My numbers have the payroll at $75,030,000, under the assumption that Jake Odorizzi wins his arbitration hearing. He filed at $6.3MM and the Rays filed at $6.05MM, so there is the potential that this number is $250K over, and for the purposes of this article here are my numbers in full:
Projected 2018 Rays Opening Day Payroll
|Steven Souza Jr.
The names and roles aren’t really important. Matt Andriese might beat out Nathan Eovaldi in the rotation. Any of the other arms might win a job in the bullpen. The important thing is it includes all five players on guaranteed contracts, nine players who have salaries in arbitration, and the remaining eleven roster spots are filled out with players making the league minimum.
So why is Roster Resource reporting a Rays payroll amount of $86MM? These are pretty drastic differences. For many teams a spread of $11.6MM might not be a lot, but for the Rays that represents roughly 15% of their all time high opening day payroll.
Where are these differences coming from for 2018?
Differences in guaranteed contracts
Here’s the interesting thing about reported contract amounts: Neither Cot’s or Roster Resource report actual dollar amounts, but instead opt to spread signing bonuses through the contract length, regardless of when they actually get paid.
This makes sense if when you’re trying to figure out what their luxury tax number is, but if you are spreading out their salary by year I think it only makes sense to also attribute signing bonuses to the year they are signed.
Kevin Kiermaier and Chris Archer both received $1MM signing bonuses. Spread over six years that is only $167k each for a total of $333k. A minor rounding error in the business of baseball. In the Rays case it’s a very minor issue, but differences add up.
Denard Span’s signing bonus is spread out as $2MM per year making his salary $11MM at both Cot’s and Roster Resource instead of the $9MM on my records. Cot’s gives the Rays a $2MM credit showing the bonus being paid by the San Francisco Giants. Overall that puts Cot’s and I on the same page. Roster Resource doesn’t give the credit, so they are +$2MM.
Both Cot’s and I give Wilson Ramos a $10.5MM base due to him receiving a $2MM escalator to his 2018 salary due to making 55 starts. Roster Resource has the Ramos earning his base $8.5MM. That $2MM overage on Span’s number comes back on the Wilson Ramos number.
Interestingly, and only because the Rays are dealing in similar, low dollar amounts, if you add Span and Ramos together all three of us end up at the same starting place.
Then things get weird.
Roster Resource has a $4.75MM line item labeled as “money due for potential buyouts.” The only players the Rays have under contract with contracts that include buyouts are Span, Archer, and Kiermaier. Span has a $4MM buyout on his $12MM mutual option for the 2019 season. Archer has a $1.75MM buyout on his 2020 team option. Kiermaier has a $2.5MM buyout on his 2023 team option.
These buyouts go on the books somewhere, but the only one that really matters in the short term is the $4MM owed to Span in 2019. I would attribute that to the 2019 payroll. Cot’s attributes the $4MM towards the 2019 guaranteed money owed by the Rays.
If we’re comparing it to past years by using Cot’s opening day payroll number you need to be comparing like numbers. In the end it’s $4MM that is eventually owed by the Rays, but this $5MM expenditure closes the gap significantly between Cot’s and Roster Resource’s varying payroll amounts.
Differences in rookie contract amounts
For players on rookie contracts going through salary arbitration, Cot’s and Roster Resource both average the numbers filed by player and team, instead of assuming the higher or lower amounts.
Cot’s and Roster Resource count Jake Odorizzi at $6.175MM which is the midpoint of the two filing numbers. I chose to count Odorizzi’s filing number as a worst case scenario.
In the end it’s a difference of $250k between the filing numbers. Also worth noting: Roster Resource and my numbers are up to date after the Adeiny Hechavarria ruling. Cot’s hasn’t been updated to reflect the ruling yet. Again these are small differences.
Dig a little deeper, though, and we can see the real discrepancy between the projected payrolls of Roster Resource and Cot’s vs actual amounts isn’t players under contract or arbitration: it’s in how pre-arbitration player salaries are treated.
I use a rough average of $550k for players in the first three years of their contract. Cot’s uses $675K. Roster Resource comes in just under $900k.
Last year the Rays had 10 pre-arbitration players on the opening day roster totaling $5,434,700 or just under $550k per player.
The absolutely minimum has gone up from $535k to $545k this year. Jumbo Diaz was the highest earner in this category at $557,500. Due to the rise of $10k of the minimum my $550k average is likely to be low, but I expect it to only be low by roughly $5k per player. That totals $55k over the 11 roster spots.
The numbers are going to come below either Cot’s or Roster Resource by roughly $1.4MM at Cot’s and $3.75MM at Roster Resource, distorting further the projected amounts reported.
There will be additional money spent as the season goes on as player hit the disabled list or prospects are called up. If you are comparing the number to last year’s opening day payroll you need to be consistent in how the numbers are presented.
Differences in traded dollars
The other missing number is how the Rays deal with the $1.5MM deferred dollars in the Longoria contract. There are different accounting methods that all would be reasonable. The money is owed in 2025-29. You can either attribute it to that pay period or the present value of that money in today’s books. At a modest 3.0% discount rate $1.5MM owed in 2025 would count against 2018 payroll at $1,184,114. I do think it’s fair to add roughly $1.2MM to the 2018 payroll.
In the end you have to be comparing like numbers so $1.5MM could be added to my outcome and put the Rays at roughly $76.53MM in payroll, but that is still $10 million below what MLB Trade Rumors is reporting.
What will the Rays do?
This off-season has been dreadfully slow. The Rays likely have to wait until the top free agents sign before they really have the opportunity to move any of the players they would like to.
Other teams know what kind of deal the Rays are expecting for their players. If another team meets those demands it wouldn’t surprise me to see a few deals take place before opening day.
I’m sure the front office would love for the prices to be met on guys like Jake Odorizzi and Alex Colome. Just like in the past after dealing Ben Zobrist and Jake McGee they spent the savings on bringing in Asdrubal Cabrera and Steve Pearce they would be thrilled to be in a similar situation to add.
I think it’s more likely than not that the Rays do end up trading somebody making more than the league minimum before opening day. They have prices they feel their players are worth, but the Rays are not in a situation where they absolutely must trade somebody regardless of the offers that are sent their way.