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Monday, December 5, 2022

Initial Estimate for the Pittsburgh Pirates 2023 Opening Day Payroll

As I indicated last week, after MLB Trade Rumors released their arbitration estimates for 2023, it is now officially time to release my initial payroll estimate for next season.

This basically works on the assumption that the team will do nothing over the offseason—no trades, no extensions, no free agent signings—just go with the status quo and only use in house options.

Of course, this isn’t realistic; however, I feel it’s an appropriate way to start the offseason projection. There’s no way of knowing what moves the team will make, so creating a baseline with all internal players shows basically where the team would be at the absolute minimum and adjusting from there every time a move is made.

Speaking of moves, the team made a few waiver claims this week—see below for more on those—but I intentionally left them out of this projection. This is the absolute starting point, and all moves will adjust this figure from here on out.

Guaranteed Salaries: $16,750,000

Not a lot to speak of here. Both Ke’Bryan Hayes and Bryan Reynolds signed extensions at the start of last season, cementing their salaries for 2023.

Arbitration Salaries: $10,800,000

This total includes five out of the six arbitration eligible players that I touched on last week—for now, only Duane Underwood Jr. was treated as a nontender.

When payroll estimates start to come out nationally, these are what will be reported, as if the team is going to start the season with seven players and a $27,550,000 payroll.

Don’t believe them, you’re smarter than that.

Pre-arbitration Salaries: $14,865,000

The rest of the roster was filled out with minimum salaries to get to 26 spots.

Last season, the Pirates treated minimum salaries a little differently than they have in the past, paying players in certain service buckets the same across the board: $705,000 for less than one year of service, $715,000 for between one and two, and $725,000 for between two and three. For some reason Greg Allen was the only player who didn’t fit this mold at two plus and $800,000. I would love to know why, but I digress.

I used the same practice for 2023, finding how much each level was above the minimum percentage wise and applying that to the new minimum for 2023 ($720,000). I came up with $725,000, $735,000, and $745,000.

I applied this process to 18 of the 20 minimum players on the roster—Chase De Jong and Manny Bañuelos made $875,000 and $800,000 last season, respectively—with Max Kranick opening the season on the 60-day IL.

Minor League Salary: $2,097,660

For the most part, players assigned to the minors make a lower rate than they would otherwise while in the majors.

The minimums for 2023 are $117,400 for players on second contracts or with prior major league service and $58,800 for players on their first contracts. Some players make more depending on what they made the prior season.

This accounts for 13 players, with the final spot left open due to Kranick being off the roster and not selecting a contract to take his place.

2023 Payroll Projection: $44,512,660

I have all my spreadsheets updated and you can follow along here as I update them throughout the offseason.

Offseason Calendar Update

No updates here as of this week

Pirates Payroll Updates

—The Pirates claimed Ali Sánchez and Beau Sulser off waivers this week. The team had one open spot open since the end of the season, but designated José Godoy to make room for the second transaction.

Both players have less than a year of service—.060 for Sánchez and .045 for Sulser—meaning both come with six years of contractual control remaining. However, Sulser has two options remaining, while Sánchez is out. While using his third option this season, Sánchez also completed his fifth full year, meaning he will not qualify for an extra option.

Swapping out Jason Delay for Sánchez in my projection resulted in no difference, but Sulser came with a slightly lower minor league split than Miguel Yajure, lowering the payroll projection by $33,544.

Since he’s been outrighted before, Godoy can elect free agency in lieu of accepting an outright assignment if he clears waivers. That seems like the likely outcome, as he would just become a minor league free agent not long after accepting the assignment anyway.

—For 2023, the payroll estimate stands at $44,479,116 for the Labor Relations Department, while it’s $60,895,783 for CBT purposes.

+ posts

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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JimEastTennessee

Nice write up in the PG Ethan 🙂
What part of Altoona do you live in? I grew up in Hileman Heights, in the old Hileman farm house; Brush Mountain and Brush Run were my playground.

https://www.post-gazette.com/sports/pirates/2022/10/25/pirates-ethan-hullihen-payroll-spreadsheeting-roster-service-cba-mlb-fan/stories/202210200115

Frank

Ethan. Very nice article by Jason Mackey in the Post Gazette about the fine work you do. Thank you for all the information which you provide us on Pirates Prospects. I always enjoy the articles you submit.

bianco599

I wish baseball had relegation like European football. Been a bucco fan since birth in 1979 but it gets tougher every day to care about them. I occasionally see people with Pirate hats where I live in SC. I try to strike up a conversation. Usually just get a response of I like the Steelers or the hat. Never a actual fan of the team.

Anthony

If you really THINK about it, MLB is already set up as a relegation-promotion league from a purely economic standpoint 🤔. But instead of wins-losses that are the determinant, it’s market size, local media contracts, and how ownership can shelter ”non-baseball” revenues (RSNs) from the league. Nonetheless, the empirical evidence suggests that the effect of relegation-promotion on competitive balance remains unclear.

bianco599

My empirical brain just wants them to spend money. Not a lot. I think the last time I remember being excited about a signing was when I saw the ESPN tracker say they signed Derek Bell. Ole Operation Shutdown. So you can see my standards are pretty low. I may buy a Freddy Sanchez t-shirt jersey just to continue living in the past.

pikebishop65

As far as just spending money, look at the Angels, they gave the richest contract in baseball at that time, to Albert Pujols, who played a majority of that time with the best hitter in baseball, Trout, and the freak talent Otani! Ten years and they got one post season appearance where they got swept 3-0!

bianco599

Not talking richest in the game spending. Talking some one who will make a difference and cost maybe 15 million a season. Just some one to get excited about.

pikebishop65

Yes, as I said elsewhere this better be the winter where Cherington’s “sign and trade for pitching” starts being evident. One or two mid range starters for 2-3 year deals, not sign to trade at the break. They need some stability, as none of the young starters have truly broken out.

bianco599

Agree. A few may have broken out in acne but it would be nice to get a few starters like you said. I keep holding out hope for Keller. And I will until he is on another team. Hope he continues to improve.

Last edited 1 month ago by bianco599
docdon385

After watching the last couple of weeks of real baseball on TV and comparing the lineups of those teams and their payrolls to the Pirate’s roster and projected payroll makes it very difficult to find reasons to believe the Pirates are anywhere near being able to compete for respectability let alone championships unless there are some dramatic changes in how the Pirates do business.

skliesen

There’s a formula for smaller market/revenue teams to compete for a playoff spot. Tim has explained it pretty well on numerous occasions in the past.

Starts with having a good, young core of talented players coming up together. Next, fill in holes by either signing “desirable” FA’s, or trading from prospect depth for “desirable” MLB players to create a window of competitiveness.

From an economic standpoint, a lower revenue team can purposely lower payroll in a season or more, in order to spend more when the team is in the “window.”

Sprinkle in what the Rays do, which is trade productive MLB players several seasons before FA to bring in lower cost players with more years of control to lengthen their competitive window. And low and behold, Pirates, or Orioles, or A’s, or Royals, or Reds, or Brewers, or… can play October baseball just like the Yankees and Dodgers.

And as the 80 something win Braves of last season, and the 80 something win Pads and Phils of this season have demonstrated, anything is possible if you just get into the tournament.

Anthony

For as much as you comment, you should take the time to truly learn the economic landscape that is ML baseball and the basic fundamentals behind operating an MLB franchise.

There is so much information out there to help you. Do a deep dive: research, reconcile from various sources, look at similarities and differences among multiple teams, familiarize yourself with the different revenue drivers, understand the fixed and variable costs in the game, and think about working capital requirements and typical debt structures, then use this data, formation, and some independent analysis to develop an operating statement and build a model that will allow you to perform a sensitivity analysis. It will be enlightening!

If you’re gonna have payroll envy, maybe this just isn’t the team for you 🤷🏻‍♂️.

Rob Baran

What were your findings – summary version?

skliesen

First, just because you felt driven to do a “deep dive” into the MLB Economic System, doesn’t mean the rest of us have to in order to speak somewhat intelligently on the subject.

Next, it’s ok for Pirates fans to have payroll envy because clearly BN is one of the most miserly Owners in MLB. Even for those of us, like myself, who believe payroll spending is far overvalued in MLB, it is quite clear BN doesn’t give management necessary resources to compete properly.

Anthony

Struck a nerve.

Complaining does not equal intelligence.

RAS TN

As a fan, the only hope is that what prospects they have do develop further and actually become real major league players and they do it in mass…There will be no significant FA signings, maybe a filler here or there…It’s not a pretty picture…

pikebishop65

Cherington has made it clear, he intends to sign and trade for pitching and concentrate on drafting and developing position players. This is the year the checkbook needs to open for one or two AJ Burnett types,(2 and 3 year deals), because the pitching is 1-2 years behind in this rebuild. Don’t see any of these guys (maybe Contreras) as Drabek or Smiley circa 1987.

bianco599

I’d take Todd Ritchie or Josh Fogg. Or an Oliver Perez (as a SP or RP).

RAS TN

Now we’re talking finally getting to the correct level for payroll…

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