An Early Look at an Estimated 2020 Payroll

Once any realistic hopes are gone for playoff contention, there’s not much left to look forward to in sports, especially if a team falls out of contention relatively early. For the Pirates, few individual storylines remain, aside from Bryan Reynolds’ run at a battle title and Rookie of the Year Award. In reality, the rest of the 2019 season should be about finding out what they do or don’t have to build around for next season, while preferably losing as many games as possible in the process (in my opinion).

For many fans, eyes have turned to 2020 as well, and when it comes to the Pirates, the first question is always “Where is payroll going to be?” I’ve seen that question enough times that I thought I would give the people what they want.

This exercise is straight forward enough—look at only the current roster as far as contractual control and salary goes, and project what the roster could look like at the start of 2020 without any external additions. Of course, it’s fair to speculate that the club won’t actually make any “big” free agent signings, but that’s not what I’m really talking about here. The purpose here is to see where the payroll would sit with players only currently in the organization, which will give a good starting point as to where payroll could reasonably be and where the team could go from there.

Of course, with a month still to go in this season, the roster is fluid and all of this is subject to change, but it’s still fun and informative to analyze at the moment.

Projected Roster:

Lineup: Díaz/Stallings, Bell, Frazier, Newman, Moran, Reynolds, Marte, Polanco

Bench: González, Reyes, Díaz/Stallings, Osuna, Martin

Rotation: Archer, Musgrove, Williams, Brault, Keller

Bullpen: Vázquez, Kela, Koehler, Feliz, Rodriguez, Crick, Stratton, Burdi

27-40: Kuhl, Agrazal, Brubaker, Escobar, Hartlieb, Kramer, Markel, Santana, Tucker, Cederlind, Craig, Cruz, Hayes, Marvel

60-day IL: Taillon

Guaranteed Salaries: $36,950,000

This works under the assumption that the club options for Starling Marte and Chris Archer are picked up—with Archer certainly more in question than Marte. However, it also includes the option for Tom Koehler. The Pirates signed Koehler to a non-guaranteed deal with an option for 2020, and I decided to go out on a limb and have them exercise it. Koehler had recently started a rehab assignment, but he is currently on the minor league injury list with a strain to the same shoulder that kept him out all of 2018, so this may be a bad bet on my part. Obviously, it goes without saying that this doesn’t include pending free agents Lonnie Chisenhall, Francisco Liriano, and Melky Cabrera.

In total, this figure is made up of salaries for five players and contracts the team is locked in to for the season, including prorated signing bonuses and buyouts. This total is representative of the lack of long-term commitments the team is currently tied to.

Arbitration Salaries: $30,000,000

Included in this total are salaries for ten arbitration eligible players (Kela, Feliz, Taillon, Díaz, Kuhl, Frazier, Musgrove, Bell, Williams, and González). If the number looks nice and round, well that’s because it is. To be honest, I took an attempt at comparing the current seasons of these players to recent arbitration cases, but it proved too difficult for my analytical mind. I work better in absolutes than assumptions, and that’s all I was doing. So, I decided to average $3 million per player and call it a day. Honestly, I believe this is probably too high, but as you’ll see at the end, it’s really not even doing the legwork that Frank Coonelly claimed it was going to during this previous offseason. So, I personally hate copping out like this, but until we have better estimates, this will have to do.

Also, while it’s completely possible players like Elias Díaz or Erik González could get non-tendered, the roster is really lacking in position players, so we’re going to assume they make the cut at this point.

Pre-arbitration Salaries: $7,660,000

This includes every other player on the 26-man roster (did you remember that, because I didn’t at first) that isn’t on a guaranteed contract—13 in total per my projected roster.

Before I could come up with this amount, I had to calculate a projected minimum salary for 2020. Per the CBA, while the minimum salaries for 2017-2019 were designated, the minimum for 2020 will be “at the 2019 rate per season plus a cost of living adjustment, rounded to the nearest $500, provided that the cost of living adjustment shall not reduce the minimum salary below $555,00.” I’m not sure if the league works off the same standards, but some are currently projecting a 1.6% COLA for social security in 2020, which is based on the consumer price index, so that’s what I built in to my model as well. That took the $555,000 minimum for 2019 to $564,000, which seems reasonable.

For anyone who is unaware, minimum contract amounts are often determined based on service time, so it’s not exactly accurate to enter the same number for every player. To account for this, I compared the raise in minimum salary from 2018 to 2019 for every player I’m accounting for and came to an approximate three percent increase. Therefore, I added a three percent raise on top of the last minimum salary that every player had on the books. This is certainly not a perfect method, but it’s probably better than using one random estimate, and the total should still be within reason of whatever the actual amount ends up being.

With the forty-man roster so bloated this season due to injury, several players who would theoretically be out of options in 2020 had to be sacrificed to get the roster down to forty, including Rookie Davis, Clay Holmes, Dovydas Neverauskas, and Yefry Ramírez. Also, I chose to designate the likes of Alex McRae, Yacksel Ríos, and Montana DuRapau to pare the roster down even more. As you can see, there’s a lot of flotsam and jetsam at the end of the roster as far as relievers go, and you could probably even spare a couple more if you wanted to.

Minor League Salary: $964,400

This is the total allocated for players not on the active roster, which I filled for all 14 possible spots.

Since minimum salaries for minor league players on the 40-man roster are to be determined the same way in 2020 as major league minimums, I used the same 1.8% increase to determine estimates. I came up with $91,800 for players on second contracts or with major league experience, and $46,000 for players new to the 40-man roster. You may notice that I included Chad Kuhl in this section, and this was strictly due to such a full pitching staff. If this truly comes to pass, this number would be higher, due to his arbitration salary and not a $91,800 place holder. It’s possible he receives a split-contract as well, just as Michael Feliz did this season. With both he and Edgar Santana coming off of Tommy John and tons of theoretical bullpen options to open the season, I at least think it’s possible that they both work their way back in Triple-A before the team has to make any further roster decisions.

To determine who would occupy the final spots on the roster, I focused on who would be eligible for the 2020 Rule 5 Draft. This is only my personal opinion, but I think Oneil Cruz and Ke’Bryan Hayes are locks, while Will Craig is close to being one as well. Add in Blake Cederlind and James Marvel, and that’s five new players at the bottom of the roster. Mix and match however you deem fit, though.

Credits: $(2,437,321) 

This is purely an accounting trick for Competitive Balance Tax purposes, but if the Pirates pick up the three options as assumed, they would be able to deduct the amount of prorated buyouts that would have hit the books in years prior. According to Article XXIII(E)(5)(b)(ii) of the CBA:

if the Player ultimately does not receive the Option Buyout, then for the Contract Year covered by that option, no portion of the Buyout shall be included in any Club’s final Actual Club Payroll. In addition, any Club whose final Actual Club Payroll in a previous Contract Year had included that Buyout (or a portion thereof) will receive a deduction (in the full amount of the Buyout included in previous Contract Years) in its final Actual Club Payroll in the Contract Year covered by that option.

In practice, this makes sense; if the buyouts for Marte, Archer, and Koehler had been accounted for in prior years, it only makes sense to deduct those expenses since they were never actually realized. Again, this isn’t actual cash savings, since no cash ever changed hands. It’s simply lowering the final payroll tally for Luxury Tax purposes that was artificially higher in prior years, since you know, the Pirates are ever-so-close to that $208 million threshold for 2020.

2020 Payroll Projection: $73,137,079

As I alluded to already, the refrain among Pirates’ brass has been that the big arbitration class would raise payroll significantly; however, it seems they forgot to add in the significant salaries coming off the books from 2019. By my calculations, the team started 2019 with a $77,522,000 payroll, which is higher than the estimate above. Remember, that’s even factoring in an amount for arbitration that’s probably too high.

So, one would like to think that this gives the Pirates plenty of payroll space to add throughout the offseason and into the regular season; however, after three consecutive offseasons of almost nonexistent spending in free agency, it’s fair at this point to question whether that will happen or not.

While this estimate is nowhere near set in stone, there’s legitimate concern among the fanbase that this is a realistic ballpark payroll wise for where the team will end up. For now, all we can do is what and see.

A longtime Pirates Prospects reader, Ethan has been covering payroll, transactions, and rules in-depth since 2018 and dabbling in these topics for as long as he can remember. He started writing about the Pirates at The Point of Pittsburgh before moving over to Pirates Prospects at the start of the 2019 season.

Always a lover of numbers and finding an answer, Ethan much prefers diving into these topics over what’s actually happening on the field. These under and often incorrectly covered topics are truly his passion, and he does his best to educate fans on subjects they may not always understand, but are important nonetheless.

When he’s not updating his beloved spreadsheets, Ethan works full-time as an accountant, while being a dad to two young daughters and watching too many movies and TV shows at night.

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