The Market Is Ripe for Someone to Buy a Prospect

Surely you’ve noticed that a number of prominent free agents have yet to find work. Less surely, but still probably, you’ve noticed that today is February 1, and the start of spring training is only a few weeks away. The good free agents are going to get jobs, and so are many of the worse ones, but we haven’t really seen a delay like this, not on such a large scale, and the reasons for it have been driving the wider baseball conversation over the past month or so. I doubt you’re a baseball fan because you just really like digging into the terms of collective bargaining agreements, but this is where we’ve gotten to. This is what’s up for debate at the moment, because baseball has provided little else.

At the heart of it all is league spending. I suppose it’s more about league spending versus league revenue, but with revenues, we’re mostly stuck with estimates. Spending, we know a lot more about. So let me show you a plot. I’ve spent a lot of time today navigating around Cot’s Contracts. That site includes opening-day payroll information going back to 2000, and there are also projected opening-day payrolls for 2018, including league minimums for roster filler.

Here, observe 19 years of average and median league payrolls. Note that this is showing regular payrolls, and not payrolls as calculated for tax purposes. This is just raw spending.

Up, and up, and up, and — whoa, hey there. The average opening-day payroll in 2017 was about $137 million. Right now, the projected average opening-day payroll in 2018 is about $126 million. That’s a drop of about $11 million, or about 8%, and Craig Edwards is going to have more on this fairly soon. This is something to keep an eye on, even though the gap could still entirely disappear as the rest of the free agents sign contracts. Again, because of the slow offseason, these numbers aren’t close to being set in stone.

So that’s what’s happening across the league. What of the team-by-team breakdown? Here are the current projected opening-day payrolls, and, again, these reflect actual payrolls, and not payrolls for tax purposes. That’s important, for teams around the competitive-balance-tax threshold, but these are the numbers I gathered, so these are the numbers I’m publishing.

Nothing here can be considered perfectly accurate. Teams do their own internal accounting, and there are, for many players, performance-based incentives that are more or less likely to be met. But these are pretty good estimates, all presumably within a few millions of dollars, so you can see how things spread out. Cot’s Contracts pegs the Red Sox as presently having the highest 2018 payroll, with the Giants behind them. And the A’s are pegged as presently having the lowest 2018 payroll, with the Phillies in front of them.

The Phillies! It makes sense, and it also doesn’t. So I’ve done something similar to what Craig did back in the middle of November. For every team, I calculated the average opening-day payroll between 2013 and 2017. Then I subtracted those averages from the current 2018 projections. Here’s one last plot, which hints at which teams are investing more, and which teams should have some wiggle room.

Astros payroll has surged, which — yeah. They tore everything down, with the specific dream of becoming really really good, right now. Mission accomplished. Mariners payroll has increased the second-most from the previous five-year average, and then the Indians are in third. You know how to read a graph.

The Phillies are at the other end. They’re down about $71 million from where they were. When they were good, the Phillies were among the biggest spenders around, but there are only so many ways to spend when your club is rebuilding. Toward the right side, you also see the Yankees and the Dodgers, although those processes are different — as has been published in several places, both those clubs are trying to get under the tax threshold, in anticipation of a spending spree several months from now.

And here we can move on to the real point of this. We know the Yankees are trying to stay under the threshold. We know the Dodgers are also trying to stay under the threshold. Both teams could afford to exceed said threshold, because both teams pull in unbelievable revenue, but this is the reality in which we find ourselves. Both teams have decided that staying under the soft cap is the best long-term decision. It’s a near guarantee they’re going to hold themselves to that. Both teams would still like to get better. In order to do so, money would have to be shed. The most obvious contract the Yankees would like to lose belongs to Jacoby Ellsbury, who’s due about another $68 million. The most obvious contract the Dodgers would like to lose belongs to Matt Kemp, who’s due about another $43 million.

Travis wrote a month and a half ago about baseball adopting the NBA-style trade. Almost immediately after that post was published, such a trade took place, with the Padres basically buying Bryan Mitchell from the Yankees at the cost of Chase Headley’s contract. There’s room for something here, and there’s so much room, in fact, a move might be inevitable. It’s more complicated with the Yankees and Ellsbury, because Ellsbury has a no-trade clause, and he just simply costs more. But the Dodgers should be able to facilitate something. Maybe even quite soon.

Andy McCullough recently reported that Yu Darvish would like to return to the Dodgers, if possible. The Dodgers like Darvish, who, of course, remains a free agent. The Dodgers believe they need to shed money in order to make room for Darvish, and they’ve tested the market. Clearly, there’s no agreement yet, on anything. But everything is negotiable. Let’s say the Dodgers want to deal away Matt Kemp. There are teams that could pay Matt Kemp. Teams that might have a use for him, or teams that might just immediately designate him for assignment. There’s the chance to effectively buy a prospect.

Taking Kemp off the Dodgers’ hands might be considered doing them a favor, but Kemp is under contract only two more years, and for the teams best positioned to take him on, well, they shouldn’t really care what the Dodgers might do. Refer back to the previous plot. The Phillies could very, very easily afford to assume Kemp’s deal. The same is true of the White Sox. The same is true of the Padres, the same is true of the Rangers, and the same is true of the Tigers. You might argue the same could even be true of the A’s, and the Orioles. It doesn’t matter whether these teams might have any use for Kemp at all. He’s no longer a valuable baseball player. The point would be to take Kemp, in order to receive the value the Dodgers would have to include.

One possibility might be Yadier Alvarez. There’s a number of possibilities. I won’t review all of them, but my favorite is Wilmer Font. Font is 27 years old and he has hardly any major-league experience, but he has a good arm and he was absolutely dominant last season as a starter in Triple-A. He throws a fastball in the mid-90s, and over 25 Triple-A starts, he had 178 strikeouts to go with just 35 walks. Font is old for a traditional prospect, but the big appeal would be that he’s major-league ready right now, prepared to step into a rotation. He’d be under long-term control, and if Font were a regular free agent, he’d definitely be highly sought after. Because of the Dodgers’ organizational depth, Font’s isn’t a familiar name. But he could be the key to relieving the Dodgers of the Matt Kemp burden, and that, in turn, could be the key to the Dodgers re-signing Yu Darvish.

Now, I can’t pretend to know exactly how the Dodgers feel about Wilmer Font in particular. And the Dodgers are certainly known for highly valuing their cost-controlled players. It’s no coincidence they haven’t been able to shed money yet, because they’ve certainly attempted to package young players of lesser value. And there’s another consideration: With so many teams seemingly positioned to assume dead money, that creates a certain kind of market, where the Dodgers — or a similar team, like the Yankees — could shop around until someone agrees to receive less value, with the big contract. Teams work against each other in every way, which is why these things are never simple.

But, in the case of the Dodgers, and Kemp, and Darvish, something ought to be possible. If the Dodgers want Darvish, they should probably move Kemp. And if the Dodgers want to move Kemp, there are several teams that could afford him. The Dodgers would just need to be willing to give up a young player of significance. They wouldn’t be comfortable with that, necessarily. That front office would never be comfortable with such a thing. If anything, it’s the Dodgers who’re accustomed to being on the other side of this sort of transaction. But if I’m, say, the Phillies or the White Sox, I’m trying for Font. And if the Dodgers relent, there’s a deal to be made. Everyone wins.

Jeff made Lookout Landing a thing, but he does not still write there about the Mariners. He does write here, sometimes about the Mariners, but usually not.

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6 years ago

With regards to the average & median payroll graph…

One plausible explanation for the sudden drop after decades of salary growth is that, for a while, the luxury tax was high relative to both MLB team average revenue and MLB team average payroll. As both revenues and salaries have grown, so has the luxury tax – albeit at a much slower pace. Teams could be reaching some (MLB average salary) arbitrary payroll value at which average salaries asymptotically approach but attempt to stay below.

6 years ago
Reply to  tb.25

The NFL’s salary cap seems to be increasing at a significantly higher rate than MLB’s luxury tax threshold.

6 years ago
Reply to  tb.25

There isn’t a drop is salary growth.

Comparing opening day payroll to ‘a couple months before opening day payroll’ will almost always give the impression of payroll drop. Several hundred millions will be spent between now and opening day- on FAs and contract extensions for young stars.

Bobby Ayala
6 years ago
Reply to  ThomServo

…especially when the Cot’s projections for 2018 are completely thrown by the large number of free agents still available. The onus of this article is graph that only looks skewed because of incomplete information. Come on Jeff, you can do better.

6 years ago
Reply to  Bobby Ayala

He’s not using the graphs to suggest that opening day payrolls will remain this far below historical trend. He’s using them to suggest that there are many teams with the ability to add many dollars to their opening day payrolls.
Come on Bobby, you can do better at reading.

6 years ago
Reply to  ThomServo

And arbitrations are still happening, right?

Dave T
6 years ago
Reply to  LHPSU

Yes regarding arbitration still happening, but the numbers at Cot’s include estimates for arbitration-eligible players who haven’t yet finalized a salary. The estimates may not be perfect, but they should be close enough for this exercise.