Tigers Pay a Dollar Today to Save Tomorrow

Despite what you might have heard earlier this off-season, the Tigers are not broke. That notion was refuted back in December, as was the idea that the the team would hold a fire sale. Yes, they traded both Curtis Granderson and Edwin Jackson, but those two wouldn’t have had an enormous effect on the 2010 payroll. The much larger contracts of Miguel Cabrera, Magglio Ordonez, and Carlos Guillen still remain. In fact, not only did the Tigers keep those significant salaries, but they actually increased payroll during the off-season.

In 2009, the Tigers opened the season with a $115 million payroll. From that group they shed about $12.5 million when Placido Polanco, Brandon Lyon, Fernando Rodney, and Adam Everett became free agents, and another $1.2 million because Ordonez’s vested option comes in below his 2009 salary. Players due raises, however, more than made up for the $13.7 million in savings. Cabrera, Guillen, Granderson, Dontrelle Willis, Brandon Inge, and Nate Robertson will earn a combined $15.3 million more in 2010 than in 2009. Then there are arbitration cases, many of them in Years 2 and 3, meaning a few players were set to become even more expensive.

Seeing the potential issues ahead, the Tigers made some moves in December. They traded Granderson and the remaining $25.75 million on his contract to the Yankees, while at the same time trading Jackson and his arbitration raises to the Diamondbacks. In return they got players making the league minimum (though it appears Max Scherzer will make $1.5 million from his draft contract). That helped them fill holes, but the team was still incomplete — and payroll was still around the 2009 level. Since then the Tigers have signed free agents Jose Valverde, Adam Everett, and Johnny Damon, and signed Justin Verlander to a five-year, $80 million contract that will pay him $6.85 million in 2010.

All told, according to Cot’s, the Tigers will open the year with a payroll around $130 million, or about $15 million higher than in 2009. How, then, can the team justify trading two productive players in Jackson and Granderson? Why not just keep Granderson, who will earn $5.5 million in 2010, and not sign Damon, who will earn $8 million? The answer is that the Tigers are paying today in order to save on payroll in 2011 and beyond.

Of the 16 Tigers who will earn more than $1 million in 2010, eight or nine will hit free agency in 2011. These include Willis, Robertson, Damon, Inge, Everett, Gerald Laird, Bobby Seay, and Jeremy Bonderman, for a total savings of about $54 million. Signing Damon means having four players — in addition to Ordonez, Guillen, and Ryan Raburn — for two corner outfield and one DH spot. That should allow the Tigers to keep Ordonez’s plate appearances under 540. They could then decline his option and shed another $18 million, bringing the total to $72 million.

Had they kept Jackson and Granderson, the Tigers would have been on the hook for an additional $16.5 million in 2011, assuming the $8.35 million Jackson will earn with the Diamondbacks. They also might not have signed Damon, which would have made it harder to hold Magglio’s plate appearances under 540, perhaps costing them another $18 million. Assuming the worst, that would bring the Tigers 2011 commitments from $55 million to $89.5 million, while their 2010 payroll would still, even without Damon, be around $130 million.

While the Tigers’ financial situation isn’t as harsh as some assumed earlier in the winter, it’s still probably a looming concern. Instead of selling off their expensive players for 50 cents or less on the dollar, they made a few moves to help save on future payroll. This will allow them to remain competitive in 2010 and more flexible come 2011. With a much stronger free agent class on the horizon, the Tigers will be glad they made the moves they did this winter. They might have set the foundation for a strong future.