Pirates Have Money to Spend This Off-Season
Earlier today I posted the early look at the 2012 Pittsburgh Pirates 40-man roster and payroll. The current estimates, which are far from complete, show that the Pirates are around $30 M, based on the projected decisions with option years, arbitration decisions, and non-tender candidates. The question is, how much do the Pirates have that they can spend? A quick look at that $30 M and the $53 M that they spent in 2011, gives us the idea that the team can go out and spend $23 M this off-season. But there are other factors to consider, such as in-season spending, and in the event that the team gives out multi-year deals, the long term payroll.
Below is a chart with a long term projection of the Pittsburgh Pirates and their 40-man payroll. The projection estimates the salaries for the key contributors on the current 40-man roster, minus guys who are projected to be non-tendered or become free agents after the 2011 season. There is also a breakdown by year of each individual season.
2012 – Estimated Minimum Payroll: $30.16 M
Based on my early projections for the 2012 season, the Pirates will have a $30.16 M payroll heading in to the off-season. There are a few factors that could make this amount go up. For example, they could pick up the options of Paul Maholm, Chris Snyder, and/or Ryan Doumit (my estimate has them declining all three options). They could also tender contracts to guys that I have projected as non-tenders, such as Ross Ohlendorf and Jose Veras. Bringing Derrek Lee back to play first base would also likely take up at least $7 M, if not more (and if they offered arbitration and he accepted, the amount would have to be at least $8.5 M, since that was his total compensation in 2011).
The 2012 salary isn’t by any means set in stone, but it’s the easiest to project, as we don’t have to worry about all of the moving parts that can affect future payroll decisions, such as breakout players, regressions, free agent signings, trades, etc. The Pirates ended up spending $53 M in 2011. If they spent to that total again in 2012, that gives them about $23 M to spend this off-season, based on the above projection. Again, this spending could include guys like Derrek Lee, picking up the options of guys like Paul Maholm, or tendering certain players a contract. It could also include extensions for guys like Neil Walker and Andrew McCutchen, boosting their 2012 salaries, and adding signing bonuses to the payroll total. I don’t expect the Pirates to spend the full amount by Opening Day, as the last two years they’ve spent around $8-10 M during the regular seasons.
The big question will be, what can the Pirates do in terms of external additions? To figure that out, we need to figure out the payroll for the next few years.
2013 – Estimated Minimum Payroll: $31.65 M
Kevin Correia and Ronny Cedeno will come off the books, removing $7 M from the payroll. However, that will be countered by raises to Joel Hanrahan, Jeff Karstens, Charlie Morton, and the rest of the arbitration eligible players (including first time arbitration eligible players Andrew McCutchen, Neil Walker, and James McDonald). This is where the moving parts come in to play.
First of all, the chart above shows Joel Hanrahan projected for $7.5 M in his final arbitration year. That’s based off the numbers that Heath Bell received, and based off of Hanrahan’s 2011 season. If Hanrahan repeats his 2011 season in 2012, I think he’s a lock to receive this amount, as the arbitration process favors closers and saves. It wouldn’t be a surprise to see the Pirates trade him prior to the 2013 season, as this number is a lot for a closer, especially when you consider that the value of a closer is over-hyped, and that no closer should be worth this much.
For Karstens, Morton, and McDonald, their values really depend on whether they can repeat their 2011 numbers. For Karstens and Morton, their numbers will also depend on how much they actually receive in arbitration in 2012.
Andrew McCutchen and Neil Walker could each see a big pay increase with breakout seasons in 2012. It wouldn’t surprise me if the Pirates upped their attempts to get these two signed prior to their arbitration eligibility. Most teams try to lock up their players right before arbitration, and the Pirates have already started going after each player.
The 2012 performance of guys like Garrett Jones, Evan Meek, and Chris Resop could also determine whether they will receive arbitration again in 2013. As bench/bullpen options, they’re at risk of being non-tendered with a down year. This figure, unlike the 2012 figure, doesn’t include the league minimum players. That probably adds around $6 M, so you’re looking at around a $38 M payroll before any other additions.
2014 – Estimated Minimum Payroll: $33.50 M
The two big salary reductions in 2014, barring any extensions, will be Joel Hanrahan and Jeff Karstens. Again, these are off-set by arbitration raises. The big situation in 2014 will be Pedro Alvarez. His $2 M arbitration figure is based off his performance in his first year and a half. If he realizes his potential, this could be a much bigger number, at least around $5 M.
There are no guarantees, but by this point the Pirates should have Gerrit Cole and Jameson Taillon in the rotation, giving them two top of the rotation starters for a league minimum price. That, plus one or two cheap starters that emerge in the next two years, will make it unlikely that Charlie Morton and James McDonald stick around. I also wouldn’t be surprised if Garrett Jones is gone by this point, and the same could go for Chris Resop. Starling Marte and Robbie Grossman could also create interesting situations, with Andrew McCutchen, Jose Tabata, and Alex Presley all figuring in to the mix here.
The figures don’t include league minimum salaries, so we’re likely looking at an extra $7 M, making the overall minimum payroll $40.5 M.
2015 – Estimated Minimum Payroll: $34.50 M
Charlie Morton, Evan Meek, and Chris Resop should come off the books by this point, if they haven’t already. I doubt Garrett Jones will still be around, especially with a lot of the heavy lifting taking place with Tabata, McCutchen, and Walker. Alex Presley will be first time arbitration eligible, and James McDonald will be in his third year. The Pirates could trim costs with these two players by going with younger options (Marte or Grossman should be up by this point, and a younger starter should emerge to replace McDonald).
There’s also a chance that guys like Jeff Locke, Brad Lincoln, Chase d’Arnaud, Josh Harrison, and all of the other guys who arrived in 2011 could be arbitration eligible for the first time this season. That would mean they would have to arrive early in the 2012 season, and remain in the majors. Then there’s the league minimum totals, which should add around $8 M this year, putting the overall minimum at $42.5 M.
What Can the Pirates Spend?
The projections are far from set in stone, especially once you get past the 2012 season. So much could happen to change the projections. The Pirates could see Kyle McPherson, Brad Lincoln, and a few guys from the Rudy Owens/Jeff Locke/Justin Wilson/Bryan Morris group emerge in 2012 as starting options. That would lessen the need to pay guys like Karstens, McDonald, or Morton as they reach their second and third arbitration years.
In each season, we can estimate that they will spend up to $8 M of their budget on Opening Day, leaving room for in-season transactions. If we assume that they spend $53 M a year, we get the following:
2012: $15 M
2013: $7 M
2014: $4.5 M
2015: $2.5 M
Again, a lot of things can change here. If the Pirates trade Joel Hanrahan prior to the 2013 season, that adds an additional $7.5 M for that year. If they trade Charlie Morton and James McDonald prior to the 2014 season, and cut Garrett Jones, that saves $12.5 M for the 2014 season. Getting rid of Jones and McDonald would also add an additional $10.5 M in 2015, with at least $2 M more coming if you create a spot in the outfield by that point for Starling Marte (with the $2 M coming from Alex Presley).
Any short term spending in 2012 can easily be worked around in 2013-2015. Last year we saw the Pirates go after Jorge de la Rosa, aiming to spend around $10 M a year for three years. If they took a similar approach with a player this year, and signed him this time around, they’d have to create a bit of payroll space in 2013 and 2014, but as shown above, that shouldn’t be an issue.
Another thing to consider is that the payroll could always go up. The Pirates saw an increase in attendance this year, which won’t amount to much in terms of a spending increase. However, if they continue to improve, and if attendance continues to go up, they could afford to spend more than $53 M a year.
The big advantage the Pirates have is the minor league system. The chart above shows the players who are currently on the 40-man roster, and only really projects the top performers and the key players for the next few years. It doesn’t reflect guys like Cole, Taillon, McPherson, Marte, Grossman, or even Brad Lincoln, Jeff Locke, or Chase d’Arnaud stepping up in to big roles. Every prospect that emerges as a starter over the next few years only lowers payroll, as it replaces a higher cost guy with a league minimum guy, ideally with the same or better production.
As far as where they should spend the money, there are several options. The team could look for a starter to lead the rotation, which should be made up of Jeff Karstens, Charlie Morton, James McDonald, and one or two of Brad Lincoln, Kevin Correia, and Jeff Locke. The Pirates could also search for a first baseman (or perhaps bring Derrek Lee back), a catcher (or bring back Chris Snyder or Ryan Doumit), and/or a shortstop upgrade over Ronny Cedeno (and Cedeno’s defense was strong in 2011, so this isn’t as urgent of a need).