04 December 2011

Orioles' Payroll Flexibility

Over the past ten years, the Orioles team payroll has varied considerably.  It has been as high at 93.3MM in 2007 and as low as 51.6MM in 2004.  Last season, the club came in at 86.9MM and that is probably a good line for considering what the payroll could be next year and, perhaps, over the next few years.  That would be good for the 15th highest payroll in baseball.  The take home message there is that while the team is not poor, it is in no position to buy themselves into contention as long as we assume that there are no further streams of revenue to increase spending.

The Orioles have a bit of flexibility in their payroll.  In 2012, they are obligated to pay five players 42.4MM: Nick Markakis (12.35MM), Brian Roberts (10MM), Mark Reynolds (7.833MM), J.J. Hardy (7.417MM), and Kevin Gregg (5.8MM).  They also have several players in line for arbitration for 28MM: Luke Scott (3rd arb; est. 6.2MM), Jeremy Guthrie (3rd arb; est. 7MM), Adam Jones (2nd arb; est. 7MM), Darren O'Day (2nd arb; est. 1.2MM), Jim Johnson (2nd arb; est. 2MM), Jeremy Accardo (2nd arb; 1.1MM), JoJo Reyes (1st arb, est. 1MM), Brad Bergesen (1st arb., est. 1MM), and Robert Andino (1st arb., est. 1.5MM).  That commits roughly 70.4MM for the 2012 season and leaves around 17MM left to improve the team.

This tells us two things:
  1. There is supposedly not much money left over to improve the team.
  2. 70.4MM does not get you much to start with.
In the future, things are likely to get worse.  Markakis' salary increase another 3MM, Roberts is around through 2013, Mark Reynolds has an 11MM team option, Guthrie and Scott become free agents, and there are a number of arbitration cases.  Jones enters into his final arbitration day in 2013 where his salary may go as high as 10MM from the 3.25MM he saw last year.  Johnson and Andino may see their arbitration values rise significantly if they wind up with the increase in playing time as a starting pitcher and starting infielder, respectively.  Finally, Brian Matusz, Matt Wieters, and Tommy Hunter become arbitration eligible.  It would not be surprising if the Orioles are at 87MM before entertaining a single free agent.  It could be argued that the ability to bring on a high price free agent would not present itself until 2014 at the earliest.  Brian Roberts' contract would open up a great deal of money, but that cash might be flipped over to Adam Jones.

As Dan Duquette has mentioned, the Orioles are going t have to be able to make the most of the non-premier free agent market.  That includes finding potential players like Mike Antonelli.  However, this model is more and more difficult because other teams are doing and have done the same thing.  Somehow, Duquette has to make up for lost ground and then become an industry leader in finding what others are overlooking.


Anonymous said...

So they trade Nick, Jeremy and Mark (and sell Luke and that closer dude for scrap), and punt it down the road hoping to build around Machado.

Anonymous said...

How generous of them to go to arbitration with Accardo, who isn't on the 40-man roster. They might pick one of Bergeson and Reyes to pay, but two? They also might even pay Scott six million, but I don't think so.

Plus, they're open to trading Guthrie and Reynolds, and might even trade Andino if the return is right (teams are interested).

Bit premature with this, I think.

Jon Shepherd said...

Good catch...I flipped Rapada with Accardo. Those tricky three syllable names.

The rest of the roster is quite obviously in flux. I think it is good when looking at the flexibility of a roster with the understanding of arbitration as a non-definite...it is good to think of where all the money is lined up currently. From there you can subtract. That is why it really is not premature. It is the view of the roster right now.

That said the arbitration quibbles are about 9MM or so and all the others you mention amount to about 16MM or so. That means by eliminating three relievers, a starting pitcher, a starting corner infielder, and a DH you have enough money to bring in one star player and maybe a reliever or two. That leaves holes and speaks to the real issue which is that the depth of the team at the MLB level is becoming more expensive to keep and replace in large part because AAA does not have many ready solutions.