General manager Walt Jocketty has made a couple moves so far this off-season, neither with significant payroll implications. In fact, the salaries going to Brayan Pena and Skip Schumaker are roughly equal to what Ryan Hanigan and Xavier Paul would have earned in 2014.
But profound (and big money) decisions Ã¢â‚¬â€œ trading Brandon Phillips, Mike Leake and/or Homer Bailey, signing Shin-Soo Choo, etc Ã¢â‚¬â€œ lie ahead.
What constraints on payroll will Jocketty likely face in making these moves?
To estimate payroll commitments for 2014 at this time of the year you have to make a few assumptions (or best guesses). Try these: Brayan Pena will replace Ryan Hanigan. Skip Schumaker will replace Xavier Paul. Billy Hamilton will make the club.Ã‚Â In that scenario, here are the current payroll commitments [in millions of dollars]:
Thirteen players have guaranteed contracts for 2014: Votto (12), Phillips (11), Bruce (10), Cueto (10), Ludwick (8.5), Latos (7.25), Broxton (7.0), Chapman (5.7), Marshall (5.5), Schumaker (2.5), Ondrusek (1.35), Pena (1.25) and Hannahan (1).
Six players are pre-arbitration and will earn league minimum: Cozart (.5), Frazier (.5), Mesoraco (.5), Hoover (.5), Cingrani (.5) and Hamilton (.5).
Five additional players are arbitration eligible, so their salaries havenÃ¢â‚¬â„¢t been determined. Estimates by Matt Schwartz for MLBTR for their settlements are: Bailey (9.3), Leake (5.9), Heisey (1.7), Simon (1.6) and LeCure (1).
Bottom line: The estimated total payroll for those 24 players is $106 million. One roster slot (Choo?) remains unfilled.
There is no single agreed-upon way to measure baseball payroll, but here are numbers for the past six years based on the average of estimates from CotÃ¢â‚¬â„¢s Baseball Contracts and USA Today.
- 2008 – $74 million
- 2009 – $74 million
- 2010 – $75 million
- 2011 – $79 million
- 2012 – $85 million
- 2013 – $107 million
The Castellini Group took ownership of the Reds in 2006. Payroll jumped from the level under previous owner, Carl Lindner, Jr., but then leveled off from 2008 to 2010 and grew modestly in 2011 and 2012. Then, suddenly the Cincinnati Reds’ payroll made an enormous jump in 2013.
Was last seasonÃ¢â‚¬â„¢s surge a one-time spurt that will recede, a new stasis point or the first of many step-wise increases?
Given the current salary commitments of approximately $106 outlined above, itÃ¢â‚¬â„¢s probably safe to rule out the Ã¢â‚¬Å“one-time spurtÃ¢â‚¬Â explanation. At a minimum, payroll will remain around the 2013 level.
It’s possible that Bob Castellini and Walt Jocketty will play the next few months conservatively. They won’t shed current contracts or increase payroll from 2013. In that case, the Reds would have no meaningful payroll to sign the 25th player or to take on additional salary through trades.
But that’s not going to happen. There’s overwhelming reason to expect aggressive trading and spending.
More Money Going Forward
Speculation continues to mount that the Reds will trade Brandon Phillips. Jocketty may use that move primarily to clear payroll space. Or, Phillips might be part of a trade for a center fielder that moves Billy Hamilton to second base. Either way, bidding adieu to BP gives the Reds considerable new budget space.
Further, Bob Castellini has shown that he wants to win and firing the manager alone doesnÃ¢â‚¬â„¢t seem like sufficient change for a deep post-season run. Plus, you donÃ¢â‚¬â„¢t axe the skipper of a 90-win team and then choke off the talent for the handpicked new guy. Castellini and Jocketty naturally want their decision to fire Dusty Baker to look like the right choice. YouÃ¢â‚¬â„¢d expect ownership to open its wallet as much as it can to make hiring Bryan Price look smart.
Finally and happily, the Reds have piles of additional cash available.
Attendance at GABP grew last season by over 168,000 fans. Assuming per person spending of $50 (ticket, parking, concessions, swag), higher attendance generates over $8 million in added revenues. On the other hand, you have to reduce that gain by about half due to losing post-season receipts. But if the club expects attendance in 2014 to remain at least constant and Joey Votto and the boys to earn a few October gates, the front office is looking at a healthy new chunk oÃ¢â‚¬â„¢ change.
As IÃ¢â‚¬â„¢ve written in detail, the Reds will also begin to receive nearly $25 million more in national television revenues this year, tens of millions more from digital platforms, enhanced revenue sharing and soon a lucrative new local media contract.
Put all of that expected revenue together with the Castellini familyÃ¢â‚¬â„¢s rock solid commitment to investing new cash streams back into the team and the Reds could have a payroll of $160 million by 2017. And thatÃ¢â‚¬â„¢s actually a conservative estimate, because theyÃ¢â‚¬â„¢ll have to put a bit of the new money into other aspects of the team beside payroll.
That $22 million bump in payroll from 2012 to 2013?
I believe itÃ¢â‚¬â„¢s explained by ownership recognizing that money is pouring into major league baseball and the Reds will see their ample share. The new spending last season was them acting quickly on that realization. And if thatÃ¢â‚¬â„¢s true, thereÃ¢â‚¬â„¢s more to come.
When the budget scolds in the local media claim the Reds Ã¢â‚¬Å“donÃ¢â‚¬â„¢t have the moneyÃ¢â‚¬Â for upgrades to the roster, donÃ¢â‚¬â„¢t buy it. They said that last year, too. Besides, this is a great time of year to talk about spending other people’s money.
No, the payroll wonÃ¢â‚¬â„¢t remain anywhere near $107 million. It can keep rising, maybe by as much as $15 million a season for a few more years – giving Walt Jocketty the room for a few wily and expensive maneuvers.