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OC Register: A look at the Angels’ payroll now that the free-agent market is open

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By @Jeff Fletcher, OC Register

The free-agent season officially opened Tuesday, which means Angels fans can officially start salivating over Gerrit Cole and any number of other players who they believe can help stop the team’s four-year streak of finishing with a losing record.

But first, it’s important to understand the Angels’ payroll. So, here’s the definitive explainer of how to do to the math.

For starters, the Angels insist their payroll is always based on their revenues, not the luxury tax. So it’s not right to view the luxury-tax threshold as their payroll limit. This isn’t the NFL or NBA where the cap is at a point at which every team is expected to hit it. In baseball, only a few teams each year get to the luxury-tax threshold. Still, we’ll get to that.

The Angels’ actual payroll, which is what they have budgeted in terms of actual cash flow, is normally around $170 million to $180 million. Arte Moreno said this year it would go up, but he didn’t say how much. It could be $5 million or it could be $30 million. We don’t know.

Regardless, here’s the math of what they’ve already spent.

The Angels have five players with guaranteed salaries for 2020: Mike Trout ($36 million), Albert Pujols ($29 million), Justin Upton ($21 million), Andrelton Simmons ($15 million) and Zack Cozart ($12.75 million). That’s $113.75 million.

They also have nine remaining arbitration-eligible players, after they let go of Justin Bour, Luís García and Nick Tropeano. MLB Trade Rumors has arbitration estimates for them that look like this: Andrew Heaney ($5 million), Hansel Robles ($4 million), Tommy La Stella ($2.9 million), Cam Bedrosian ($2.8 million), Brian Goodwin ($2.1 million), Kevan Smith ($1.3 million), Noé Ramírez ($1 million), Max Stassi ($800,000) and Keynan Middleton ($800,000).

That’s $21.7 million worth of arbitration salaries.

So far that’s only 14 players, though. The Angels will have 26 active players at all times. So they need 12 other spots, plus accounting for the fact that there will be players on the disabled list or in Triple-A getting paid big-league salaries. So, estimating around $600,000 average for about 18 spots, that’s about another $10 million.

Add those three numbers, and you get $146.25 million toward what has been a limit of around $175 million. Moreno said it would be higher this year, though, so it’s anyone’s guess how high it goes.

The luxury-tax threshold is a little different.

It uses the average annual value of multiyear contracts. In the cases of Trout, Upton and Cozart, their 2020 salaries are about the same as their averages, but Simmons has an AAV of $8.3 million and Pujols has an AAV of $24 million. Both are significantly lower than what they’re actually being paid in 2020.

Assuming all of the arbitration-eligible players sign one-year deals, their figures will all be the same, so the current total of salaries as it relates to the luxury tax is actually about $132 million. For the luxury tax, you also have to count bonuses and benefits, so that’s about another $14 million or so.

So, although it gets there in a different way, it’s also about $146 million.  The luxury-tax threshold is $208 million.

If you want to figure what the Angels have to add to get there, remember the difference between actual salary and average salary. Say they sign Cole to a seven-year, $245-million deal. That would be an average of $35 million, but maybe in 2020 they pay him only $28 million. So it adds $28 million to the actual payroll, but $35 million to the luxury-tax payroll.

Now that you’ve got all of that, you can dream away about what the Angels should, or can, do this winter.

ALSO

The Angels on Tuesday lost infielder Kean Wong on waivers to the San Francisco Giants. Wong was just claimed on waivers from the Tampa Bay Rays in the final week of the regular season.

View the full article

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7 minutes ago, tdawg87 said:

Until proven otherwise, I'll take the liberal approach (f'n libs) to this off-season: I truly believe that Arte is going to go "all out". 

I'm aware that he is a businessman, and a smart one at that. He didn't gain his wealth by making dumb business decisions. That said, the Angels are just one of several business ventures Arte is involved with. While the ultimate goal for a smart businessman like Arte is to turn a profit on his investments, I also don't believe he bought the Angels solely to make money. I do think he is a competitor and I do think he is willing to do what it takes to field a winning organization. I don't think he signs Hamilton or gives Trout the biggest contract in history if he wasn't.

The Angels have their backs up against the wall right now. Getting Ohtani back on the mound is huge, but he's likely not going to top 140/150 innings next year. He's also going to lose at bats so while his value goes up, it's not as significant as it could be. Getting Upton back at full strength is also a big deal, but at most he's really only adding a handful of wins over last year.

We need 3 pitchers and a decent catcher. And when I say "3 pitchers" I clearly don't mean Hamels and two reclamation projects. We NEED Cole. Adding a pitcher who can throw 200 innings and give you a 3.00 ERA is such a huge deal for this team. He alone will add 7-8 wins, or perhaps more, over last year's team. But that doesn't quite move the needle far enough, does it?

Which is why we need a legitimate #3 starter behind him. Ryu or Wheeler probably push Ohtani to the #3 spot in the rotation, which is kind of ridiculous, but honestly given his likely innings limit isn't out if the question. Odorizzi is a nice option but I would be absolutely fine with Eppler not wanting to sacrifice a draft pick for him. Madbum is a nice piece but there are serious concerns moving forward. Ultimately, we really need a guy like Wheeler, who has his own concerns but has the talent of a Frontline starter. A 1-2-3 of Cole, Wheeler, and Ohtani is as good as any in baseball. Fight me. It also allows the back end to be questionable, with guys like Canning, Heaney, and Peters.

But the point remains here: Arte cannot blow his load on Cole and think that's good enough. It just isn't. We also need to not only replace Skaggs (RIP), we need someone better.

Mr. Moreno, you have Trout locked up for the rest of his career. Do you really want to be the owner who refused to surround him with enough talent to take him to the World Series? And yes, I use the word "refuse" because you have the money. You obviously want to win. Do what it takes. This is the time to do it. He's not getting any younger.

Thanks Toby.  

Go f**k yourself.  

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4 hours ago, tdawg87 said:

Until proven otherwise, I'll take the liberal approach (f'n libs) to this off-season: I truly believe that Arte is going to go "all out". 

I'm aware that he is a businessman, and a smart one at that. He didn't gain his wealth by making dumb business decisions. That said, the Angels are just one of several business ventures Arte is involved with. While the ultimate goal for a smart businessman like Arte is to turn a profit on his investments, I also don't believe he bought the Angels solely to make money. I do think he is a competitor and I do think he is willing to do what it takes to field a winning organization. I don't think he signs Hamilton or gives Trout the biggest contract in history if he wasn't.

The Angels have their backs up against the wall right now. Getting Ohtani back on the mound is huge, but he's likely not going to top 140/150 innings next year. He's also going to lose at bats so while his value goes up, it's not as significant as it could be. Getting Upton back at full strength is also a big deal, but at most he's really only adding a handful of wins over last year.

We need 3 pitchers and a decent catcher. And when I say "3 pitchers" I clearly don't mean Hamels and two reclamation projects. We NEED Cole. Adding a pitcher who can throw 200 innings and give you a 3.00 ERA is such a huge deal for this team. He alone will add 7-8 wins, or perhaps more, over last year's team. But that doesn't quite move the needle far enough, does it?

Which is why we need a legitimate #3 starter behind him. Ryu or Wheeler probably push Ohtani to the #3 spot in the rotation, which is kind of ridiculous, but honestly given his likely innings limit isn't out if the question. Odorizzi is a nice option but I would be absolutely fine with Eppler not wanting to sacrifice a draft pick for him. Madbum is a nice piece but there are serious concerns moving forward. Ultimately, we really need a guy like Wheeler, who has his own concerns but has the talent of a Frontline starter. A 1-2-3 of Cole, Wheeler, and Ohtani is as good as any in baseball. Fight me. It also allows the back end to be questionable, with guys like Canning, Heaney, and Peters.

But the point remains here: Arte cannot blow his load on Cole and think that's good enough. It just isn't. We also need to not only replace Skaggs (RIP), we need someone better.

Mr. Moreno, you have Trout locked up for the rest of his career. Do you really want to be the owner who refused to surround him with enough talent to take him to the World Series? And yes, I use the word "refuse" because you have the money. You obviously want to win. Do what it takes. This is the time to do it. He's not getting any younger.

Gerrit Cole alone puts the Angels almost at least year's payroll, but you know his contact will be backloaded. With the way or current contacts are expiring in 2-3 years, and the duration of his contract being 3-4 years beyond that, it's the right circumstance where you'll see the Angels probably offer him 25 million the first year. The consensus send to be that Arte will likely up the payroll by another 15 million.

So beyond Cole and his backloaded contract, the consensus send to be the Angels will have an additional 20-25 million to work with. I can't picture Eppler sacrificing two international bonus slots or draft picks. So I think he'll go in hard after Ryu, who figures to command around 18 million a year. I don't think you backload a 3 year contract like that, so I figure beyond Ryu, it'll be down to 7 million to play with.

At that point, I think Eppler will be faced with a decision. Pursue another starter in the 5-10 million range, supplement the bullpen with a quality piece, or go in hard after a catcher. 

The candidates here would be basically Wade Miley/Rich Hill or Travis D'Arnaud/Robinson Chirinos. Because they already traded for Max Stassi, I don't think they'll go in after an offensive presence to plain with him, particularly when they already have one of those in Kevan Smith. So I think it would indeed come down to a pitcher.

This would be Eppler's best opportunity to build that 6-man rotation he was so keen on before. Cole will stay on his every 5th day schedule, but the rest would move into more of a once a week role. MLBTR thinks this last starter would be someone like Wade Miley, but there's very little in his peripheral numbers to suggest his success in the last year and a half is sustainable, or can last over an extended period of time. If it doesn't work out in the rotation, Miley is the sort that would be a sunken cost, but Rich Hill is the sort that can be shifted to relief if he couldn't maintain his success in the rotation, or if someone like Barria or Sandoval outpitched him. 

So I think Rich Hill will be the last starter he signs.

If Eppler signs Gerrit Cole, Hyun Jin Ryu, and Rich Hill I would be a happy camper. There's no doubt that rotation would have health question marks surrounding Ryu, Ohtani, Hill, Heaney and Canning. But again, picking once a week reduces the wear and tear, and Barria, Suarez, Sandoval in AAA as well as Pena working in relief gives the Angels enough depth to absorb some maladies. And because they'll have held onto most of their prospect currency, you know they'd be in position to supplement that rotation at the trade deadline if necessary. 

But if healthy, Cole-Ryu-Ohtani-Hill-Canning- Heaney has playoff caliber upside. And that's what you're looking for. Because it's a safe bet to make that the offense will improve next year simply by Simmons and Upton being healthy, young guys like Rengifo and Thaiss having another year under their belt and the addition of a truly game changing talent like Adell or even Marsh. 

 

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@Jeff Fletcher. Thanks for adding the piece about how backloaded contracts can affect the CBT threshold. It's not something that has been in play before but Eppler's team will need to manage it more closely this year as they add payroll. Even if they go big and backload Cole and Wheeler, for example, they may not go over the CBT. It depends on their other acquisitions. And if they do go over this year there are expiring contracts the next three years which could get them back below the cap - Simmons, Cozart, Pujols, Upton.

I think it's going to be a fascinating offseason for the Angels.

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1 hour ago, Jeff Fletcher said:

Where are you getting that? Consensus of who? Based on what?

That's all AngelsWin right there. I'm not saying it's right, but it seems to fit what has been shared so far, which is that payroll will increase, but will not approach or exceed the luxury tax mark.

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When payroll has fluctuated between 170-180 million, 5 million isn’t really an increase. If that’s it, it’s hardly worth saying, “Payroll is going up.”

10 million would pass the test of the quotation, but barely. It’s an increase, but hardly something worth making a quote over.

15 isn’t an unreasonable assumption based on Arte’s statement. It could be more, it could be less, but it’s hardly beyond reason to speculate with that number in mind. 

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6 hours ago, Sean-Regan said:

When payroll has fluctuated between 170-180 million, 5 million isn’t really an increase. If that’s it, it’s hardly worth saying, “Payroll is going up.”

10 million would pass the test of the quotation, but barely. It’s an increase, but hardly something worth making a quote over.

15 isn’t an unreasonable assumption based on Arte’s statement. It could be more, it could be less, but it’s hardly beyond reason to speculate with that number in mind. 

Maybe he was just saying it to placate the fans and it’s only going up $5M, which wouldn’t really be going up at all because last year they were basically around $5M below their budget. 
 

Or maybe it’s going up by $40M because he’s pissed and wants to win ASAP.

I would believe either scenario.

Also, we may never know what their limit is because they aren’t going to spend it if they don’t find the right guys to take it. 

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1 hour ago, Jeff Fletcher said:

Maybe he was just saying it to placate the fans and it’s only going up $5M, which wouldn’t really be going up at all because last year they were basically around $5M below their budget. 
 

They ended up $5 M below budget last year?

I remember Eppler saying he got approval to increase the budget when he signed Cody Allen. Might be wrong, didn't that happen?

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8 minutes ago, RBM said:

They ended up $5 M below budget last year?

I remember Eppler saying he got approval to increase the budget when he signed Cody Allen. Might be wrong, didn't that happen?

Yes. He said that. 
 

I think that was a little bit of semantics because they usually try to save something to add if they need it during the season, and this year they didn’t have to use it. 
 

I also think in January they were budgeting for some of the guys (Cahill and Harvey) to reach performance bonuses and none of them did. 

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Just now, Jeff Fletcher said:

 

I also think in January they were budgeting for some of the guys (Cahill and Harvey) to reach performance bonuses and none of them did. 

I imagine the Angels CFO lol'd when he added their performance bonuses to the budget

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Arte gets two big thumbs up from me after keeping Trout an Angel for life with that contract he gave him, but if he doesn't go all in this offseason to put a legit contender on the field with the amount of FA superstars available, he's never going to do it. There is literally endless options to fill out a top tier staff this offseason and really good catchers, but he won't have to spend an extra dime on anyone else around the diamond outside of the battery with the depth we have at middle/corner infield and two budding stars in the outfield in Marsh and Adell. 

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3 hours ago, Jeff Fletcher said:

Maybe he was just saying it to placate the fans and it’s only going up $5M, which wouldn’t really be going up at all because last year they were basically around $5M below their budget. 
 

Or maybe it’s going up by $40M because he’s pissed and wants to win ASAP.

I would believe either scenario.

Also, we may never know what their limit is because they aren’t going to spend it if they don’t find the right guys to take it. 

Yep. Either is possible. But for the moment, I’ll stick with what seems most likely to me. I could definitely be wrong. That’s nothing new, though. 

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1 hour ago, Chuckster70 said:

Arte gets two big thumbs up from me after keeping Trout an Angel for life with that contract he gave him, but if he doesn't go all in this offseason to put a legit contender on the field with the amount of FA superstars available, he's never going to do it. There is literally endless options to fill out a top tier staff this offseason and really good catchers, but he won't have to spend an extra dime on anyone else around the diamond outside of the battery with the depth we have at middle/corner infield and two budding stars in the outfield in Marsh and Adell. 

It's really the ideal situation for a team with great players but lacking rotation. It will never be this easy to fix a rotation and become a contender

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1 hour ago, Erstad Grit said:

It's really the ideal situation for a team with great players but lacking rotation. It will never be this easy to fix a rotation and become a contender

Yep. 

Arte has no excuses if he swings and misses on this year's crop of talent.

It would be like striking out with a beach ball that was underhanded to you from 5 feet away.

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1 hour ago, Chuckster70 said:

Yep. 

Arte has no excuses if he swings and misses on this year's crop of talent.

It would be like striking out with a beach ball that was underhanded to you from 5 feet away.

Or five putting from 2 feet away

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