Saturday, February 2, 2013

Tigers payroll looking ahead: 2014 and beyond

If the Tigers wish to contend beyond their "win now" window of 2011 through 2014, they need to make some moves that sell high on some key players and bring in some major league ready prospect replacements at key positions.

Regardless of the outcome of Max Scherzer's arbitration decision this spring, the Tigers will look to open 2013 with a payroll slightly over $150 million. In my last article, I reviewed the Tigers approximated payroll sustainability and determined that the break even payroll for 2013 would be about $143 million. This means that, Mr Illitch is likely taking a hit this year to win it all, again. Obviously as long as the city of Detroit's most loved billionaire keeps writing the checks, payroll deficit is not an issue. But as much as everyone doesn't want to think about it, there may come a time when the books MUST be balanced. On the Tiger's current revenue, the sustainable payroll level is projected to be around $165 million in 2014 and going forward, thanks to a new TV deal kicking in league wide in 2014. If the Tigers want to retain the services of the best hitter and the best pitcher in the game beyond 2014, as well as many of the other key parts of the team, such as Austin Jackson, Alex Avila, and Doug Fister, they are going to need to find some cheap long term solutions to fill out the rest of the lineup starting around 2014 or 2015, and they should look to deal Max Scherzer and Rick Porcello to accomplish it. Here is how it breaks down. 

First, lets start with the big two, Miguel Cabrera and Justin Verlander. Let's assume the Tigers will offer each an extension going into the final year of their contract. Recent comments from Justin indicate he wants to remain a Tiger for life. To do this, it will likely require an extension in the range of 8 years and $205 million. For the sake of this analysis, I'll assume the contract is fairly evenly distributed, but slightly front loaded. That works out to a tad over $25 million per year. Cabrera will likely require a deal equal to or above what Albert Pujols received, I'll say around 10 years and $264 million. I'm going to front load this deal, starting at 2 years of $30M in 2015 and dropping $1 million each year after. The Tigers would be wise to do this as well. To make this all work, it will require some creativity from the Tigers in order to stay competitive beyond 2014 in regards to the rest of the roster. 

In addition to those two, Austin Jackson, Alex Avila, and Doug Fister all would become free agents in 2016. Lets say the Tigers would want to keep all three. First the easy two. Doug Fister can probably look to get a deal very similar to what Anibal Sanchez just received, 5 years and $75 million. Avila is harder to project as what he could earn will depend on how he performs in the next year or two. If he hits like he did in 2011, he could easily get a deal similar to the deal Miguel Montero just received, 6 years/ $65.9 million.  If he hits closer to what he did in 2012, he likely will only get a 2 or 3 year deal in the $15-$21 million range. I'll choose the former for this example and say he gets the 6/$66MM deal. Now that brings us to Austin Jackson.

Jackson is a Scott Boras client. He won't come cheap, and the Tigers would have to lock him up soon (start of 2014) if they hope to avoid free agency. To do that, I'm thinking he will require a deal like the one Adam Jones signed, 7 years/ $91.65 million. But, with Boras as his agent, and a lack 5.0 WAR center fielders in the game, outside of LA, he could easily get more than that (think Jayson Werth here), or he might be headed to free agency. I'll go with slightly more than the Jones estimate for this analysis, 7yrs/$93M.

This means the key members of the team who will be under control through 2016 are:
Justin Verlander
Doug Fister
Anibal Sanchez
Drew Smyly

Bruce Rondon
Al Albuqureque
Brayan Villarreal

Miguel Cabrera
Prince Fielder
Austin Jackson
Alex Avila
Andy Dirks

For the analysis, I am figuring that the players who have received extensions in the above scenarios received contracts structured closely to the the actual player contracts I compered them to. Players currently on the roster but still under team control beyond 2016, receive arbitration raises modeled after current raises given to similar players over the past few years.

I'm going to assume the Tigers keep Nick Castellanos and Avsail Garcia and they become our eventual everyday 3B and RF respectively around 2015 or so. The logic here is that when Torii Hunter and Victor Martinez depart after 2014, Garcia takes over in RF, Castellanos takes 3B, Cabrera moves to 1B, and shares turns there with Prince at DH.

This obviously leaves some holes on the roster and some guys out of the future picture, namely Max Scherzer, Rick Porcello, Phil Coke, and Brennan Boesch. Everyone else is either a guy still under control until 2017 or beyond, or a prospect that hasn't arrived, or been acquired yet. The bullpen can, for the most part, be filled out by 3 or 4 really good guys, and either a vet signed for a few million each year, or some up and coming prospects. Same with the bench. This leaves 3 key holes. Second base, shortstop, and a 5th starter. 

The Tigers will need to find a way to either internally develop, or deal Scherzer, Porcello, Coke and Boesch for top prospects at shortstop, second base, and starting pitching, who are nearly major league ready. I think that it should be easy to acquire at least two of these needs though trades, and maybe take a chance on the third either by getting a more marginal prospect, or drafting a well developed player and hoping they move quickly. If they cannot accomplish either of these, they will have to look to fill the voids with cheap stop-gap veterans, until they do, which will of course, cost more to bring in.

So, now for the projected payroll totals.

2013 - $151,220,000
2014 - $142,110,000
2015 - $136,450,000 
2016 - $157,940,000
2017 - $170,975,000

A link to the full spreadsheet containing all the values can be found here:

As can be seen, initially, things aren't so bad, and there is room to bring in solutions on short contracts in 2014 and 2015 while waiting for talent to develop. The Tigers may choose to just resign Omar Infante and Jhonny Peralta to two more years, and bring in a veteran 5th starter, or use whomever is hot in the minors that year and wait on the future solution up the middle and in the rotation. But by 2016, that talent MUST be here, or things will get ugly fast, as all the prospects and younger people currently on the roster start to go through arbitration, and key parts will have to be shed to balance the budget. 

Another thing to consider in all of this is that by 2017, the Tigers will be near the end of their TV deal with FOX Sports, and will be looking to renegotiate  Judging by current rates, they stand to at least double their current revenue. That will push sustainable payroll up to around $190 million, easily covering expenses. 

But, as one can never anticipate with the possibility of new owner ship, is just how much and owner is willing to contribute from his own paycheck. Should the ownership of the team change over this time, the team may see payroll be cut, drastically.

What is clear though, there isn't much room to keep everyone AND Scherzer or Rick. And certifiably  baring a huge boot to payroll, add an outside superstar. Not without sacrificing Cabrera and/or Verlander, or another key piece.

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