The Pirates have spent a lot of money in the past month.
At the July 31 trade deadline the team acquired both Derrek Lee and Ryan Ludwick. Cost: $4.8 million.
At the August 15 draft signing deadline the Bucs inked first round pick Gerrit Cole and second round pick Josh Bell to go with their other 22 signees. Cost: approximately $17 million.
Friday it was reported that the team is close to signing Jose Tabata to a long-term deal (The team has scheduled a press conference with Tabata and Neal Huntington for Sunday morning). Cost: $14.5 million guaranteed, $37.5 million if fully exercised. The team is also reported to be in negotiations with Neil Walker.
Has Bob Nutting lost his mind or somehow morphed into Mark Cuban? Depending on your view of Bob Nutting, the answer is fortunately, or unfortunately, no. In fact the Pirates have been very shrewd. All this spending should go a long way in deflecting any potential criticism the Pirates may get for fielding a team with a very low payroll again in 2012 and going forward.
The Pirates opened the 2011 season with a payroll of $42 million. The team has $10.6 million of financial obligations on the books for 2012 and zero (with the Tabata signing not officially announced) beyond that. Zero. Frank Coonelly and Neal Huntington have done a great job of giving the organization maximum financial flexibility going forward.
Let's look at the numbers. The $10.6 million in '12 consists of four option buyouts (Paul Maholm and Chris Snyder $750K, Ryan Doumit $500K and Ronny Cedeno $200K), $100K bonus to Scott Olsen and salaries of $4 million ($1 million of which is bonus money) to Kevin Correia, $2.2 million ($1.5 million of which is bonus money) to Pedro Alvarez and $2.125 million ($125K of which is bonus money) to Matt Diaz. So let's now figure out what the payroll for 2012 is likely to be. The point here is not to get too caught up with who exactly is or isn't going to be on the roster. I'm going to make some basic assumptions, many of which will surely turn out to be wrong, but they will be useful in putting together a total payroll number. Just to show how low the number may be, I am going to pay 32 players rather than 25.
Assumption 1: None of the four options above are excerised and all four players are allowed to leave via free agency.
Assumption 2: Matt Diaz is released (but paid either way); both Pedro Alvarez and Kevin Correia are on the 25-man roster. 2 roster spots filled. Cost of all the above: $10.625 million
Assumption 3: The following players are on the 25-man roster at about the major league minimum (using $500K for convenience): James McDonald, Brad Lincoln, Tony Watson, Daniel McCutchen, Daniel Moskos, Bryan Morris, Chris Leroux, Neil Walker, Alex Presley, Michael McKenry, Chase d'Arnaud, Xavier Paul, Gorkys Hernandez, Matt Hague. 14 roster spots filled. Cost: $7 million
Assumption 4: The following Arbitration Year 1 players are on the roster with general guesses at salary: Andrew McCutchen $5 million, Charlie Morton $2 million, Garrett Jones $1.5 million, Chris Resop $1 million, Evan Meek $1 million, Brandon Wood $750K. 6 roster spots filled. Cost: $11.250 million
Assumption 5: The following Arbitration Year 2 players are on the roster: Joel Hanrahan $3 million, Jeff Karstens $2.5 million, Ross Ohlendorf $2.5 million, Jose Veras $1.75 million. 4 roster spots filled. Cost: $9.75 million
Assumption 6: The following current players are on the roster: Jose Tabata $750K (per his extension), Jason Grilli, free agent, $750K. 2 roster spots filled. Cost $1.5 million
Assumption 7: Catch all: To this point I have a roster consisting of 16 pitchers and 12 position players. The team is missing a starting shortstop, starting catcher and may also be in need of a first baseman and starting pitcher. The team certainly could pick up Ronny Cedeno's $3 million option and may have conversations about a deal with Chris Snyder, Ryan Doumit and possibly even Derrek Lee. I'm am going to allocate 4 roster spots and $15 million to those spots.
Undoubtedly things will change, but based on the current roster and what exists at the minor league levels this is probably a reasonable estimate of how the roster could begin to take shape next year. This roster of 32 players would cost $55.125 million and includes big pay increases for all the arbitration eligible players. If you cut 7 guys to get to a 25-man roster the Pirates payroll will likely be less than $50 million.
If the team were to pick up Cedeno's option, sign Doumit or Snyder for around $3 million and fill the fifth rotation spot and first base internally the opening day payroll could be very close to this year's number of $42 million. While that might raise some eyebrows, it is highly unlikely that it would draw a rebuke from the MLB Players Association because of the money the PIrates have spent on the draft and the fact that the roster has been built through player development and is still very young.
Overall the Pirates have spent more than any team in the draft over the last four years. They recognize it as their best opportunity to build a competitive team and have taken advantage of the system, apparently to the chagrin of Bud Selig. It's a formula that should pay huge dividends going forward if these players develop as hoped. With a pipeline of cheap talent coming through the system the Bucs should be able to compete while only adding a piece here and there and that is likely to mean the payroll remains around $50 million. Those guessing that the Pirates will be closer to $60 million next year and expecting to see that figure rise going forward are going to be disappointed if they are correlating payroll with winning. If the Martes, Sanchezes, Taillons and Coles of the system arrive in the next few years, the low cost base of the roster will remain in tact.
The reality is salaries will continue to rise as established players get closer to free agency, but overall payroll may still fall short of $60 million in the next few years. Obviously any $10 million/year deal would dramatically change things, but the team's aggressive spending in the draft and at the trade deadline and their efforts to sign players like Tabata and Walker to long-term extensions should keep the MLBPA pacified, at least for the time being. With a ticket price increase on the horizon, I'm not sure it will do the same for the fanbase unless they put a winning product on the field. But realize that all these outlays are well-choreographed to help manage the whole process. Bob Nutting, et al have not lost their collective mind and certainly have not changed how they approach and manage their payroll.
EDIT: Charlie correctly asks in the comments whether it has been determined whether Andrew McCutchen (and Garrett Jones) is a Super Two player and thus arbitration eligible. I'm not sure that has been determined at this point. If neither is, that would lower my numbers by $5.5 million for 2012 and means the Pirates could come in right around or even below this year's opening day payroll of $42 million.