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On Thursday, the Oakland Athletics and Jim Johnson agreed to terms on a one-year, $10 million contract. With how much attention was paid to whether Johnson's presence on the payroll would keep the Orioles from upgrading in other areas, it's worth taking this as a chance to look at what they've done.
The idea of the Orioles spending $10 million on a closer was not something to help you sleep easy at night. Not when that closer was Johnson, who torpedoed an unfortunately high number of games between the 2012 playoffs and the 2013 regular season, just the sort of variance from year-to-year you'd expect from a non-Rivera closer. Few teams would be wise to have a $10 million closer. There would be even less wisdom in it for the Orioles when that would be 10% of the total payroll for one reliever who will throw 70 innings.
When they unloaded Johnson onto the Athletics for the paltry return of Jemile Weeks, it was seen as a glorified salary dump. The question of whether the trade would be worth it largely depended on what the Orioles would do instead with that money.
Six weeks later, the Orioles have done two things with the money they saved by trading Johnson. One of them is jack. The other is squat. They ostensibly opened up a hole on the team to create payroll flexibility, only they have not done anything with that flexibility other than load up on fringe major league signings and minor league deals with spring training invites.
Their biggest addition in terms of dollars has been Ryan Webb, who received two years and $4.5 million. This is not the action of a team that ever intended to be a big player in the free agent market, no matter how many reports were written about how aggressive they were at the winter meetings or how many free agents they were chasing. In the end, they've had almost nothing to show for all of that. Their behavior makes it seem like they are rubbing up against some kind of payroll ceiling.
What is the upper limit of the Orioles payroll? This is the big mystery about the team right now. The Orioles had a 2013 Opening Day payroll of about $92 million that ended up at nearly $100 million after the midseason trade acquisitions. Their current estimated payroll for 2014 is $81.8 million. This includes estimations for the five remaining arbitration-eligible players. The new national TV deal negotiated by the league is believed to be worth $25 million to each team.
Given that the Orioles carried nearly $100 million in payroll in 2013 and have this additional stream of revenue, how can it be that they have mostly sat on their hands for a second straight year? They look to continue this pattern for the remainder of the off-season, not being rumored to be involved in any significant free agent pursuit. There is a gap of nearly $40 million between what it feels like their payroll could be and what it currently looks to be.
Not every free agent contract to have been handed out would have been a good idea for the O's. Though second base was a spot of need, playing around with Robinson Cano and a $240 million guarantee would have been a daunting prospect. And while there is a need in the outfield, four years and $60 million to the oft-injured Curtis Granderson may not have been the best expenditure of resources either. Nor would have been four years and $32 million for soft-tossing lefty Jason Vargas.
Last season, for instance, one player many Orioles fans might have liked to see on the team - for his baseball contributions, if not his bro-tacular attitude - was Nick Swisher, who signed a contract with the Indians for four years and $56 million and would have cost a first round pick. He was not significantly better than Nate McLouth.
The team may yet surprise us by going out and getting a pitcher like Ervin Santana, especially since Dan Duquette seems to revel in the added degree of difficulty of having a rotation of fly ball-heavy pitchers in Camden Yards. However, it's much more likely that the team will be assembled from the cast currently in place, with the only question marks being who among the throng for each will be playing at left field, second base, and designated hitter.
Do you think that they made the baseball decision that they were better off without all of these guys at anywhere near these prices? That may be so. The history of contracts handed out to players older than 30 is not kind. Few of this year's crop of free agents were below that magic age.
That said, if the Orioles think this, they have to weigh the benefit of those players before they start to decline. They are good now. A player who can put them closer to the top in the next two years, seasons in which they will still have control of Chris Davis and Matt Wieters before they hit the open market, is a player they should have been thinking strongly about adding to the team. Why continue assembling a patchwork when the core players still here have been successful?
If there's one thing that we've learned in recent memory, it's that you can't count on a crop of touted pitching prospects to pan out and lift the team's fortunes. Scraping by with what's on the junk pile and waiting for the next batch would not be wise, even as exciting as the potential of Kevin Gausman and Dylan Bundy might be. Their group will not develop according to the most rosy scenarios unless the Orioles suddenly discover the methods and luck of the Cardinals franchise.
Could it be that the Orioles were carrying a payroll in excess of their capacity in 2013 and now that debt is coming due? A June 2011 report listed the Orioles as being in violation of MLB's debt service rules; the exact nature or amount of this debt was never pinpointed. Whether it was resolved was never reported. We can surmise that they must have had greater revenue in the successful seasons in 2012 and 2013 compared to the recent past.
It could be that the extra money made in the last two seasons went into covering that past debt. Going up to that $100 million mark may have stretched them yet again. If that was the case, then the assumption that the financial windfall from winning was something in the bank for the future is incorrect. How likely this may be is not something we can know, but it is one possibility.
One other explanation would be if owner Peter Angelos is the sort of miserly owner that many people charge that he is. Bloomberg estimated that the Orioles had $210 million in revenue in 2013. The major league payroll was less than half of that. What kind of other expenses could the Orioles possibly have to come anywhere close to $210 million? Perhaps it's significant, but is it $100 million significant?
Orioles Finances
Orioles Finances
There are probably some areas where the O's could improve the organization without investing in the major league payroll at all, especially in scouting and player development. Some of that extra revenue could be earmarked for those purposes. No team would advertise exact dollar amonts for this because they want to keep their strategy secret, lest they lose an advantage - if they actually get an advantage from their strategy.
Still, for next year, there will be a $25 million guaranteed revenue increase, and big league payroll looks to be stagnant at best, barring a surprising development. Whether the reason is any one of those I've considered above or something else entirely, this lack of payroll growth is a tough pill for me to swallow.
There was reason to believe that keeping most all of the 2012 team intact for 2013 could work. Hey, it worked once, so why not again, right? However, the 2013 showed why you can't just hope for everything to break right again. Some players will be worse than expected. Some will get hurt. An elite bullpen won't just keep being so because it was for one year. Upgrade where you can, when you can.
It's not impossible to think many things could go right and the O's could ride another unlikely wave of success. But if the team struggles and gets nothing worthwhile from areas where everyone knew they needed to improve - left field, second base, designated hitter, starting rotation - then standing pat for a second consecutive off-season will look nothing short of foolish.
