The Pittsburgh Pirates released Scott Olsen last week, after Olsen spent the start of the 2011 season on the 60-day disabled list. The Pirates originally signed Olsen to a one year, $550 K guaranteed deal, which included a $450 K salary in 2011, and a $100 K buyout on his option in 2012. If you notice on the 2011 40-man roster page, I’ve got him listed as being paid $550 K for the year, even though he has been released.
The reason Olsen is taking up $550 K of payroll is that when the team released him, they basically ate all of the guaranteed money on the deal. That includes his 2011 base salary of $450 K, and his 2012 buyout of $100 K. Had Olsen been released prior to March 28th, the Pirates would have only owed him 45 days of termination pay. However, since they held on to him during the season, they assumed the entire guaranteed amount.
I bring this up because yesterday it was reported that the Pirates only paid $108 K to Olsen this year, reported by Colin Dunlap. However, I’ve checked with an industry source that confirms that the Pirates owe the full $550 K to Olsen. Even though Olsen was on the 60-day disabled list, he was still given a guaranteed amount in his contract, and the Pirates released him after the final day to release a player and avoid paying the full guaranteed amount.
The Pirates are on the hook for his $100 K buyout, although they could get some relief on his $450 K base salary this year. If another team signs Olsen, and adds him to the major league roster, that team would assume a portion of his major league salary. The portion would be a pro-rated amount of the league minimum, which is $414,000.
As an example, let’s say Olsen is signed today, and activated for tomorrow’s game. He would have already been paid $118,033 by the Pirates, spanning from the start of the season (3/31) to 5/17. His pro-rated time with the new team would span from 5/18 to the end of the season (9/28). His salary over that time would be $329,508. Since the signing team would only assume the league minimum over that time period, they would only be paying $303,148. That means the Pirates would end up paying $26,360 over the remainder of the season, which amounts to a total of $244,393 given to Olsen.
The longer other teams wait, the more the Pirates pay. If Olsen was signed and activated by July 31st, the new team would assume $135,738, which means the Pirates would be on the hook for $411,803 (option buyout included). The 40-man roster page reflects the projected year-end total, and Olsen’s total won’t be updated until another team signs him. As of right now Olsen is un-signed, which means the Pirates are on the hook for the full $550,000 that he was guaranteed when he signed in December. The only relief they can get can come if another team signs him.