Dead Money on 2020 MLB Team Payrolls

Yesterday I took a look at team payrolls, offseason spending, and the outlook for MLB spending on players as a whole compared to the last few years. Today we’ll take a look at one portion of team payrolls most teams would rather avoid. No organization wants to be paying players to play for other teams or to sit in the minors or to simply be out of the game, at least in the abstract. At some point though, teams will kick in money for a trade because the overall savings can be utilized elsewhere, the prospect return is slightly better, or because there is better use of a roster spot. Those payments become dead money.

As in past years, I’ve defined dead money as generally any money a team is paying out to a player who no longer appears on their 40-man roster. There are three types of dead money:

1. Money paid to players who have been released. Those players are free to sign with other teams, but the team releasing the player still owes the money remaining on the contract.
2. Money paid to other teams as compensation for players who have been traded. Generally, we see teams cover a portion of a contract to receive a better return in trade.
3. Money paid to players who are still in the organization but who have been removed from the 40-man roster. Any team could have claimed these players if they were willing to take on the contract, and the player probably could have elected fee agency, but then he would forfeit his right to the guaranteed money.

Here are the teams with the most money on their current payrolls going somewhere other than their roster.

The Red Sox take the stop spot with Rusney Castillo off the 40-man roster and half of David Price‘s salary going with him to Los Angeles, though Castillo’s money doesn’t count against Boston’s competitive balance tax. Seattle coming in at No. 2 is a bit of a surprise given that they sport one of the lower payrolls in the game. Part of their $28 million is offset by the Cardinals’ $4 million payment for Mike Leake, but roughly one quarter of Seattle’s payroll is going somewhere other than to players on the Mariners. The Diamondbacks’ situation is similar to the Red Sox, with Yasmany Tomás in the last year of his deal and the team also paying part of Zack Greinke’s contract with the Astros. For the first time since I’ve been doing this dating back to 2016, the Dodgers are not one of the top two teams. When factoring in Boston’s payment for Price, the club almost nets out. Any team not mentioned above does not have any dead money on the payroll for this season.

Looking at the contract on an individual basis, we’ll group them by player type. First, here are the players who have been released.

For Wright, it is assumed that the Mets are recovering $3 million of his $12 million salary through insurances. For the Rangers, part of Fielder’s money is offset by payments from the Tigers as well as insurance proceeds. Cozart was released by the Giants, but his acquisition came solely as part of being able to essentially purchase Will Wilson as a prospect out of the Angels system.

Here are the players who are still in the organization as of last season but have been removed from the 40-man roster.

Castillo was a below-average hitter in Triple-A in 2019 after posting good numbers the year before. Due to a previous loophole in the competitive balance tax payroll situation, Castillo’s salary does not count towards it and bringing him to the majors would put the Red Sox over the tax level. As for Tomas, he hit pretty well in Triple-A last season but has always struggled defensively. Sierra spent all of 2018 and most of 2019 out with a shoulder injury. Herrera received a domestic violence suspension last season. Castillo and Tomas are in the last year of their contracts while Sierra is owed $8.5 million in 2021.

The biggest group of players where money exchanged hands between teams comes in the form of trades. Usually the amounts are small, but in some cases, like Price, they can be quite substantial.

Bruce was traded to to the Mariners as part of an offset to Cano’s salary so taking on that money was likely a pretty good deal to be able to pay less than market value for Cano’s good seasons and not have to pay for his declining years. The Diamondbacks were able to get a better prospect haul by paying down some of Greinke’s deal while most of the rest of the amounts are smaller in nature, serving more as a deal-finisher than major part of the trade.

In all, there’s about $225 million in dead money this season and that amounts to only around 5% of total money paid to players this year. It’s slightly higher than it was the last couple years at $200 million, but it is in line with averages over the past four seasons.