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AngelsWin.com Today: 2020 Angelswin.com Primer Series: Finances

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By Robert Cunningham, Angelswin.com Senior Writer

As the Angels enter the 2019-2020 off-season, Billy Eppler is faced with the daunting task of taking Moreno's proposed increase in team payroll and creating a contending club out of the available resource pool. Currently, the Angels 40-man roster stands at 40 players as of November 28th, 2019.

In order to begin the discussion about available finances, the author has examined the Angels 40-man roster and assuming the Angels retain the current set of 40 players and use MLBTradeRumors.com's estimated arbitration salaries, 2020 Club Payroll will be approximately $162M and Actual Club Payroll (Average Annual Value (AAV) payroll) will be approximately $151M as seen below:

2020 Projected Payroll

A couple of notes regarding the table above:

  1. Injured List $$ indicates a nominal number for MLB players that spend time on the Injured List and is an educated guess based on information provided by the Orange County Register's Jeff Fletcher.
  2. Payouts refers to any and all money expended on players no longer on the 40-man roster. In this case the $1M number was Kole Calhoun's option year buyout.
  3. Subtract Non-Roster is simply the 14 players not on the 26-man roster making League-minimum salaries that do not count toward the total payroll numbers. In this case 14 x $600K = $8.4M
  4. Benefits refers to Player Benefit Costs and is an educated guess (also based on information provided by Jeff Fletcher) on how much every team pays toward that fund. Below is the relevant excerpt of the Collective Bargaining Agreement that shows how it is applied to the payroll calculation:

Determination of Actual Payroll

To be clear this estimate is exactly that, an educated guess. The only difference between '2020 Club Payroll' and 'Actual Club Payroll' is that in the latter you are accounting for the multi-year guaranteed contracts (average annual value of them) and how close that places the team to the Competitive Balance Tax (CBT) threshold for that season (in this case $208M for 2020).

So Eppler starts the season with approximately $147M in 2020 Club Payroll and $136M in Actual Club Payroll (AAV) and when you adjust for Player Benefits, non-roster players, Injury List (IL) payout estimates and Calhoun's $1M option buyout, the Angels start the season at $162M (2020 Club Payroll) and $151M (Actual Club Payroll).

This means that, based on Moreno's own words about raising 2020 Club Payroll, the team probably has at least $25M+ to spend in free agency and trade and likely that number is closer $30M-$40, if not more. Fortunately, because of this, the Halos have more options this off-season in terms of money and resources (both MLB-ready players, farm prospects, and International Signing money) to address their needs and create better depth across the roster.

If the Angels really are courting Gerrit Cole (and they should be), he will likely get the Angels close to their spending limit all by himself on a back loaded contract. In order to make other moves, Eppler will have to get creative in the trade market as well as executing savvy low-level free agent signings to fill in the rest of the roster. This may require Moreno to get awfully close to, or even exceed, the Luxury Tax threshold of $208M, although the team will likely stay under that number, barring a truly unexpected all-in over the next two seasons (a precise window they can escape by the way once Pujols contract expires after 2021).

Expectations are high for Eppler to create a winner in his current, last year as General Manager so Angelswin.com members and fans should expect at least one large free agent signing with perhaps 1-3 lower-level pickups. In addition to that it will not be surprising to see 1-3 trades executed to bring in additional pitching and positional needs.

All of this will be covered further as we dive deeper into the 2020 Angelswin.com Primer Series!

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33 minutes ago, Chuckster70 said:

Good stuff, @ettin I'm going to pin this on the top of the forum. 

This is great to circle back to when trying to figure out how much we could and should spend this offseason. #ItsNotMyMoney

I will update it periodically as we acquire players too, to keep everyone approximately updated on totals.

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For those of you out there asking the question about how much Arte should spend I would like to share the projected outlook on Actual Club Payroll (Average Annual Value) for the next few seasons based on the current 40-man roster (which includes Bundy):

Capture.PNG

Specifically I highlighted 2022 and 2026 for a reason (note this does not include Benefits, etc.).

The idea that Arte could spend more is actually supported by this data. If, hypothetically, Moreno and Eppler splurged on Cole (~$33M AAV) and Rendon (~$35M AAV), that would be an additional ~$68M each year over, probably, the next 7 years.

That would mean that 2020 Actual Club Payroll would, with Benefits, shoot up to about $225M, right below the 1st Surcharge Threshold at $228M. The following year it would pop up a touch to about $232M.

However, in 2022, once Pujols' contract drops off the books, it would drop back down to about $211M, which should be right below or at the CBT threshold for that season (once the new Collective Bargaining Agreement has been signed and those new thresholds are set). It would be very easy to drop a reliever or two off the books to slide under the CBT threshold and reset the Luxury Tax rate and become a "non-offender" again.

Then for 2023 and 2024 you could rinse and repeat going over the CBT threshold again (Ohtani extension) and then slide out from under it in 2025.

Lather, rinse, repeat.

Now will Moreno authorize this? I actually think it is a possibility but the key players have to agree to terms and that is the other difficult part of this equation. More specifically I think Gerrit Cole and Anthony Rendon are the targets in this hypothetical scenario but signing even one superstar is difficult much less two, so it is a long shot but doable from a long-term budget perspective if Arte is willing to go that distance.

I speak more about it in the rest of the Primer Series.

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Update for:

+ Rendon (I guessed at year-to-year Club Payroll starting at $26,000,000 for 2020)

- Cozart (-$12.7M)

- Fernandez (Passed through waivers the other day leaving one spot open on the 40-man)

 

Capture.PNG

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24 minutes ago, ettin said:

Update for:

+ Rendon (I guessed at year-to-year Club Payroll starting at $26,000,000 for 2020)

- Cozart (-$12.7M)

- Fernandez (Passed through waivers the other day leaving one spot open on the 40-man)

 

 

Rodriguez.  @Lou?

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On 12/11/2019 at 8:04 PM, ettin said:

Update for:

+ Rendon (I guessed at year-to-year Club Payroll starting at $26,000,000 for 2020)

- Cozart (-$12.7M)

- Fernandez (Passed through waivers the other day leaving one spot open on the 40-man)

 

Capture.PNG

I am working on finding out Rendon’s breakdown but I’d be surprised if the salary is really that low in 2020. That’s a pretty significant drop, which means somewhere else he’d have to make $44M? 
 

Anyway, hopefully I’ll be able to report it within a day or two. 

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3 minutes ago, Jeff Fletcher said:

I am working on finding out Rendon’s breakdown but I’d be surprised if the salary is really that low in 2020. That’s a pretty significant drop, which means somewhere else he’d have to make $44M? 
 

Anyway, hopefully I’ll be able to report it within a day or two. 

not if it's divided up over the 6 remaining years. 

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10 minutes ago, Jeff Fletcher said:

I am working on finding out Rendon’s breakdown but I’d be surprised if the salary is really that low in 2020. That’s a pretty significant drop, which means somewhere else he’d have to make $44M? 
 

Anyway, hopefully I’ll be able to report it within a day or two. 

How accurate is this:

I don't know who that is and I haven't seen it reported anywhere else.

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11 minutes ago, tdawg87 said:

How accurate is this:

I don't know who that is and I haven't seen it reported anywhere else.

I haven’t seen that reported by anyone in the media and I haven’t been able to get it myself. It should be filed soon with MLB (after he passes his physical) and then I’ll get it from there. 
 

If that’s what it is, it would be pretty good for the Angels. 

Edited by Jeff Fletcher

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6 minutes ago, Jeff Fletcher said:

I haven’t seen that reported by anyone in the media and I haven’t been able to get it myself. It should be filed soon with MLB (after he passes his physical) and then I’ll get it from there. 
 

If that’s what it is, it would be pretty good for the Angels. 

Yeah I just kind of assumed it would be backloaded quite a bit for at least 2020 but please let me know when you find out as I'd like to update it properly. Thanks!

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27 minutes ago, Dochalo said:

I guess they're not expecting Albert to retire early.  

At this point, I’d settle for a primary role as a bench player. He’s not going anywhere, but if Maddon and Pujols can just grasp that he isn’t a better option than whoever else we have, that’d be great. In no way is Albert a legitimate 1B on a team with playoff aspirations, especially if our catcher also has no bat. 

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Updated to reflect Rendon's reported salary structure per COTS (thanks for the heads up @John Smith !):

Capture.PNG

Note that Rendon received a $4M signing bonus which was paid immediately in 2020, thus the adjusted 2020 Club Payroll number.

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