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

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Update to include the Jason Castro signing:

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If the Angels are planning an extension for Simmons, that will likely bring 2020 Club Payroll down to about the same level as Actual Club Payroll, making them nearly equal, give or take. Add a younger starter with a low 2020 salary and that may be about it for the off-season and they will keep room heading into the Trade Deadline, where they are more likely than not to improve the team.

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12 hours ago, Angel Oracle said:

Sign Wood and extend Simba.

Off-season additions: Rendon, Bundy, Teheran, Castro, Ohtani on the mound, Upton healthy, plus maybe Wood 

Off-season subtractions: Calhoun

That would be a nice change from 2019. 

poor Cozart 

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Rounding off to $198 mil makes me think the team might be done in the Free Agent market.  Getting another pitcher will more than likely will come in a trade, where some salary would go the other way in order to keep under the tax and still have a few bucks for the July 31st trade deadline. Most likely LaStella or Goodwin.

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3 hours ago, Stradling said:

Time for an update @ettin  Now that most of the arbitration figures are completed.   

Yeah I was waiting for the official Robles and Bundy numbers to come out. Here we are:

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Between Robles and Bundy nearly $1M was saved off of the MLBTradeRumors.com estimated arbitration numbers that I used in the Primer Series, so assuming a Simmons back-loaded extension (which will probably bring down 2020 Club Payroll) we could end up around $191M or so for both 2020 Club Payroll and Actual Club Payroll (AAV), assuming no other transactions take place.

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3 hours ago, Jeff Fletcher said:

Some of the money you have included in 2020 payroll was already paid in 2019.

Trout and Rendon’s signing bonuses, and Calhoun’s buyout. 

Okay this brings up another interesting point.... It was my understanding that Dec. 2nd was the cut-off date for paying Luxury Tax penalties, which I assumed meant that the "fiscal" year starts and ends on that date. So based on that possibly incorrect understanding on my part I assumed that signings after the Dec. 2nd date were allocated to the 2020 Club and Actual Club (AAV) payrolls?

Case in point is Rendon. It says he was paid his $4M bonus on 12/31/2019 per COTS, so is that a bonus just paid out for the 2019 payroll, if the "fiscal" year ends on Dec. 31st (which makes sense I guess), or is it added to the 2020 payroll because it occurred after Dec. 2nd for paying Luxury Tax (or is the Club payroll have different timing from the Luxury Tax payroll?). Rendon's bonus has to apply to the Luxury Tax per the Collective Bargaining Agreement, so I assumed (possibly incorrectly now) that the bonus was applied to his first season since it occurred after Dec. 2nd?

Appreciate the comment because as I said before I want to ensure I am doing this correctly each year, so any further comments and clarifications from your perspective would be greatly appreciated, Jeff, thanks.

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2 hours ago, ettin said:

Okay this brings up another interesting point.... It was my understanding that Dec. 2nd was the cut-off date for paying Luxury Tax penalties, which I assumed meant that the "fiscal" year starts and ends on that date. So based on that possibly incorrect understanding on my part I assumed that signings after the Dec. 2nd date were allocated to the 2020 Club and Actual Club (AAV) payrolls?

Case in point is Rendon. It says he was paid his $4M bonus on 12/31/2019 per COTS, so is that a bonus just paid out for the 2019 payroll, if the "fiscal" year ends on Dec. 31st (which makes sense I guess), or is it added to the 2020 payroll because it occurred after Dec. 2nd for paying Luxury Tax (or is the Club payroll have different timing from the Luxury Tax payroll?). Rendon's bonus has to apply to the Luxury Tax per the Collective Bargaining Agreement, so I assumed (possibly incorrectly now) that the bonus was applied to his first season since it occurred after Dec. 2nd?

Appreciate the comment because as I said before I want to ensure I am doing this correctly each year, so any further comments and clarifications from your perspective would be greatly appreciated, Jeff, thanks.

This is the same discussion as we had before. As far as the CBA is concerned, there is only one payroll that exists. That’s the one on the right column that uses AAVs. All this stuff about bonuses and backloading is irrelevant to the CBA.
 

What I’m referring to is the actual sum of the salaries paid in a given calendar year. As far as I know, that is the number that Arte and Eppler use to set their budget. We don’t really know exactly how they calculate it, or what they include (coaches? Minor leaguers?). But for simplicity sake, when I refer to their payroll, I am referring to the sum of the salaries, period.

Since we don’t know what their budget is, it’s only relevant to refer to their payroll in relation to their payroll in other years. 

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25 minutes ago, Jeff Fletcher said:

This is the same discussion as we had before. As far as the CBA is concerned, there is only one payroll that exists. That’s the one on the right column that uses AAVs. All this stuff about bonuses and backloading is irrelevant to the CBA.
 

What I’m referring to is the actual sum of the salaries paid in a given calendar year. As far as I know, that is the number that Arte and Eppler use to set their budget. We don’t really know exactly how they calculate it, or what they include (coaches? Minor leaguers?). But for simplicity sake, when I refer to their payroll, I am referring to the sum of the salaries, period.

Since we don’t know what their budget is, it’s only relevant to refer to their payroll in relation to their payroll in other years. 

Understood, what I am actually concerned about is when what you are calling the calendar year ends for payroll purposes. Typically all Major League teams have to pay their yearly luxury tax penalties on Dec. 2nd of each year and I thought (again mistakenly perhaps) that for the purposes of when a years payroll begins and ends, starts and ends on Dec. 2nd, NOT the end of the year (Dec. 31st to be clear).

Sorry Jeff, the point I am trying to understand is this more plainly: Does the 2019 payroll calculation end on Dec. 2nd, 2019 or Dec. 31st, 2019?

It is a little confusing to me because the CBA requires teams to pay their 2019 luxury tax penalties on Dec. 2nd of each year, leaving 29 days of December counting for 2020? If that is the case then Rendon's bonus was paid on Dec. 31st, 2019, so it would count for 2020 as I have in the table?

I am trying to understand what the end dates are exactly for an individual years payroll calculation. It sounds like you are saying it is the calendar year but that doesn't align with the CBA requirement:

 

ARTICLE XXIII—Competitive Balance Tax

A. General Definitions

(1) “Contract Year” shall mean the period from December 2 of one year through and including December 1 of the following year, or such other one-year period to which the Office of the Commissioner and the Association may agree. To the extent that a Contract Year is referenced by a number in connection with a particular calculation, the reference shall be to the calendar year of the championship season that falls in that Contract Year.

(11) “Actual Club Payroll” shall be defined as provided in Section C below. Each Club’s final Actual Club Payroll for a Contract Year in which the Competitive Balance Tax is applicable shall be calculated on the December 2 following that Contract Year and shall be the exclusive figure used for the purpose of determining whether a Club has exceeded the Base Tax or Surcharge Thresholds.

 

Based on (1) above, it sounds like the 2019 season runs from Dec. 2nd, 2018, through Dec. 1st, 2019 and the 2020 season runs from Dec. 2nd, 2019, through Dec. 1st, 2020?

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It’s all 2020. But since it’s only AAV it doesn’t matter when they pay him. 
 

Rendon has a 7 year 245M contact that starts in 2020, so they get dinged exactly 35M every year (20-26) as far as the CBA is concerned. 
 

Payment schedules and signing bonuses are all ignored in the CBA.
 

That’s not what I was talking about though. 

Edited by Jeff Fletcher

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1 hour ago, ettin said:

Based on (1) above, it sounds like the 2019 season runs from Dec. 2nd, 2018, through Dec. 1st, 2019 and the 2020 season runs from Dec. 2nd, 2019, through Dec. 1st, 2020?

For competitive balance tax purposes, yes. But those calculations use AAV. You are referring to this payroll.

I think Jeff is just saying Arte only cares about how much money leaves his bank account each year. Jeff is referring to this payroll, and it's different than above because it's not AAV.

Here is more info on AAV calculation for your payroll (page 118).

Tl;dr. Signing bonus is averaged into AAV, so exact payment timing doesn't matter. 

SmartSelect_20200112-152327_Drive.jpg

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@ettin Yeah. That’s more like it. 
 

If I were you I would not even bother trying to account for the 0-3s, since their salaries will all be something different and since they only get paid that while in the majors. I have been just using $8M as an estimate for all 0-3s.
 

I do this....

Payroll = guaranteed salaries + arb salaries + $8M for 0-3s

Luxury tax payroll = AAVs + arb salaries + $8M + $15M for benefits. 

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6 minutes ago, Jeff Fletcher said:

@ettin Yeah. That’s more like it. 
 

If I were you I would not even bother trying to account for the 0-3s, since their salaries will all be something different and since they only get paid that while in the majors. I have been just using $8M as an estimate for all 0-3s.
 

I do this....

Payroll = guaranteed salaries + arb salaries + $8M for 0-3s

Luxury tax payroll = AAVs + arb salaries + $8M + $15M for benefits. 

Okay Jeff thank you for the inputs, I do appreciate it! You too, @Cosmo_Kramer!

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