How strange is it that 26-year-old superstars Manny Machado and Bryce Harper are still free agents on February 7th? Years ago, two players of this caliber would have likely signed mega-deals before Christmas. But not in the current MLB climate. Last offseason was like this too, as teams smarten up and see that 10-year mega-deals are not the best long-term investment in a game with an increasing emphasis on youth.
The Orioles were never going to be players for the likes of Harper or Machado. But the hierarchy of an offseason depends on the big fish going early and setting the market, leaving the smaller fish to fall in line accordingly afterward. But if the big fish are still out there, it clogs up the whole process.
When new general manager Mike Elias took over in Baltimore, fans expected a savvy move or two to add some veteran presence to a very young team. But there has been virtually no movement in that regard, with just minor leaguers added to the roster up to this point. It’s obvious now that Elias wants to keep the roster young and the team payroll small this year.
Digging deeper into the payroll arena, Spotrac offers some great information about team finances across MLB. At the beginning of the 2018 season, the Orioles’ payroll stood at $127 million, placing them 20th out of 30 major league teams in terms of payroll size.
Midway through last year, the O’s jettisoned the likes of Machado, Zach Britton, Jonathan Schoop, Kevin Gausman and others, taking a large chunk out of the team payroll in the process. Such is customary in a rebuild.
Now we stand less than a week away from the start of spring training, and the Orioles’ payroll is hovering around $60 million. There are currently only two teams in baseball spending less on their players than the Orioles: the Pittsburgh Pirates at $59 million and the Tampa Bay Rays at $47 million.
The Orioles front office has made it abundantly clear that we should not expect any substantial free agent signings — meaning they don’t plan to hand out anything more than a one-year contract to any of the available free agents at this point. So that $60 million amount could still increase a bit, but we shouldn’t expect it to grow by leaps and bounds.
This is the new normal when you have seven veterans taking up the vast majority of the money while everyone else on the 40-man roster is in their pre-arbitration years. According to Spotrac, Chris Davis accounts for 34% of the team payroll right now and he hit .168 last year. Mark Trumbo occupies 18% of the budget and it’s not a sure thing that he will start the year healthy.
Alex Cobb and Andrew Cashner represent about 30% of the payroll together, and rotation mate Dylan Bundy accounts for about 4%. Rounding out the rest of the Orioles veterans, Jonathan Villar takes up about 8% and Mychal Givens comes in around 3%.
The rest of the roster is made up of rookies and youngsters making the major league minimum. Professional sports is a truly remarkable industry, based on the fact that a team can slash its payroll literally in half from one calendar year to the next. And it begs the question, where does the money go exactly?
If the Orioles were able to operate with a player payroll of $127 million in 2018 and they are only allocating $60 million to the players in 2019, does that difference in funds go to other areas of the business? Are tens of millions of dollars being redirected to international scouting, research and analytics or the stadium? The safe answer is probably some, not likely all.
Cutting payroll makes sense during a rebuild, when pricey veterans are swapped out for cheap youth. But eventually that cycle comes around again, when the cheap youth proves themselves and starts to earn a bit more money, at which point pricey veterans are added to the mix again as a team nears contention.
But should we expect a payroll in the bottom third of MLB to be the new norm for Baltimore? Will the Orioles be willing to ratchet their budget back up into the $120 range in a few years when the team is more competitive?
We keep hearing about the sea change going on in Baltimore with regard to analytics. Last year, the Tampa Bay Rays won 90 games on a budget of $68 million, the smallest in baseball at the time. And they did it by being smarter and being innovative — isn’t that what the Orioles are trying to do too?