Reds Insider: On the payroll

Saturday, November 10, 2007

On the payroll

The Reds don't tell you what their player payroll will be. At least, they haven't since the year they moved into Great American Ball Park. They upped it from $45 million to about $60 million that year.

I've stopped asking. But I keep guessing. My guess is they'll be around $75 million for 2008. When you take Eric Milton's $8.5 million off the books, they would seem to have a lot of money to play with going into the free agency season. Not so.

Consider: The club owes its 13 players under contract for next year $59.72 million – Adam Dunn ($13 million), Ken Griffey Jr. ($12.5 million), Aaron Harang ($6.75 million), Bronson Arroyo ($6.5 million), Alex Gonzalez ($4.62 million), Ryan Freel ($3 million), Mike Stanton ($3 million), David Weathers ($2.75 million), David Ross ($2.5 million), Scott Hatteberg ($1.85 million), Javier Valentin ($1.53 million) Juan Castro ($975,000) and Todd Coffey $925,000).

Three players – Brandon Phillips, Matt Belisle and Jorge Cantu – are eligible for arbitration. They’re going to push the payroll to $65 million or more.

The rest of the roster will be made up of guys making around the big league minimum of $380,000. But that will push the payroll to close to last year’s level of $68.9 million.

So I wouldn't expect the Reds to be able to bid for any top-tier free agents -- unless my guess is wrong and the payroll going to be considerably more than $75 million.

41 Comments:

at 7:40 PM

Anonymous said...

The free agent selection just isn't worth it this year. They'd be better off working on some major trades

at 7:41 PM

Anonymous said...

If they want to make a push the payroll needs to be around 85mil. If not there was no reason to pick up Dunn's contract because they aren't serious about winning.

at 8:45 PM

Anonymous said...

What I get tired of is everyone pi##$$% and moaning about how the Reds arent serious about winning. One would have to think every organization in the MLB is serious about winning otherwise they wouldnt be here in the first place.

The fact that is true is that the REDS arent big spenders. Why is this? Maybe because no one will come to the games to where would could have a bigger pay roll, or maybe it is because we have some of the lowest ticket prices in the league.

So, yeah maybe some dont think the REDS are serious, but I do. We didnt have the biggest payroll in 90 but i didnt hear anyone complaining then. You win and you lose its a cyclical thing in baseball. With the REDS that down seems to be more frequent than the up.

at 10:30 PM

Anonymous said...

Preach on Money Mike! You nailed it!

at 10:34 PM

Anonymous said...

If the Reds are going to refuse to spend at least 90-100M then Castellini should have never bought this franchise. They have no problem asking the ticket buying public to pony up more cash every year but they refuse to but out a competitive budget. If the Reds lowball again this year I think the fans should just stay home and do something better with their time.

at 11:56 PM

Apple a la Mode said...

Hey John-
Do the Reds count Junior's deferred money as a part of this year's budget?

at 11:57 PM

Anonymous said...

imho fwiw

this may not sell a lot of tix Mr. Fey, but would you not agree that this linueup would not only be respectable, but free up enough $$$ to go after a couple legitimate #3 starters.

1. Hopper
2. Keppinger
3. Hamilton
4. BP (should have his 1st GG)
5. Votto
6. Encarnacion
7. Valentin (Ross backup)
8. Freel

I would not mind replacing Bruce with Freel, however considering the likelihood of injury from any of the other starters Freel or Kep may easily slide in to replace an injured IF or OF. That being said, the lineup may look better switching Hopper and Freel and replacing Freel with Bruce and moving Kep to leadoff with Bruce second.

Although, this strategy may not sell tickets initially it will inevitably free up cap space for a more than respectable #3 and an above average relief corps.

I would be interested in your thoughts Mr. Fey?

Regards.

PS: I love Jr. He's been my favorite player since I was eight, but I want the Reds to win a ring.

at 12:07 AM

Anonymous said...

imho fwiw

this may not sell a lot of tix Mr. Fay, but would you not agree that this linueup would not only be respectable, but free up enough $$$ to go after a couple legitimate #3 starters.

1. Hopper
2. Keppinger
3. Hamilton
4. BP (should have his 1st GG)
5. Votto
6. Encarnacion
7. Valentin (Ross backup)
8. Freel

I would not mind replacing Bruce with Freel, however considering the likelihood of injury from any of the other starters Freel or Kep may easily slide in to replace an injured IF or OF. That being said, the lineup may look better switching Hopper and Freel and replacing Freel with Bruce and moving Kep to leadoff with Bruce second.

Although, this strategy may not sell tickets initially it will inevitably free up cap space for a more than respectable #3 and an above average relief corps.

I would be interested in your thoughts Mr. Fay?

Regards.

PS: Jr. is my favorite player and has been since Larkin retired.

at 1:14 AM

Joe McManus said...

Anon 10:34, don't be ridiculous.

$61,289,667

$54,424,000

$52,067,546

$69,654,980

The first three numbers are the Indians, Rockies and Diamondbacks payrolls from last year...three of the four final teams in the playoffs. The last number is the Reds payroll last year. Get the picture?

at 2:21 AM

Anonymous said...

Here's a very realistic trade the Reds could pull off that would be far better than throwing money at any of the worthless free agent SPs out there this offseason. Trade Josh Hamilton to the White Sox in exchange for SP Jon Garland. The White Sox need a CF, and we need another starter behind Harang and Arroyo who can give us 200+ IP. He's primarily a groundball pitcher and is still relatively young at 28. He only has one year left on his contract, so we would probably want to talk with his agent about an extension prior to making the deal. Losing Hamilton would hurt some, but we can get by with a Hopper/Freel combo, which would at least give us a true leadoff hitter in our lineup throughout the year. Plus, this would open up a spot for Jay Bruce, who has rotated between RF and CF throughout his 2+ years in the minors. Either way, we need a No. 3 starter that we can rely on, and I believe this is the best way to achieve this goal without having to rush Homer into a prominent role.

at 9:36 AM

Anonymous said...

It's not how much you spend - it's how you spend it. Arizona and Colorado are showing us the way. We have far more value in Brandon Phillips or Josh Hamilton than we do in Ken Griffey, Jr. - spend it smart, as Krivsky has done, or spend it dumb, as Bowden did. We're gettin' there.

at 10:10 AM

Anonymous said...

Its pretty simple fans come when you win. That is the way it is. If the Reds are too cheap to compete then sell the team. They got the stadium pretty much for free so fans are tired of the excuses.

at 10:53 AM

Anonymous said...

The Reds spend about 47% of their revenue on payroll. That is 5th in the division. The Reds make money its just a matter of if they want to spend it or line their pockets with it.

at 12:18 PM

Anonymous said...

John, while I have seen most National publications list Griffeys 08 number at 9-9.5 mil(6 mil in salary and 3-3.5 into the deferred fund) your point is well taken nevertheless. I think the main issue is that the 08 Reds have 2 routes to go. One is to hold onto ALL of their good young position players and work them in during the season and slightly improve the pitching with low level free agents and their own young guys, and not have a great chance to contend for another year or two. The other route is if they want to contend in 08 they are going to have to trade some combination of young position players to get established pitching.

at 12:19 PM

Mr. Redlegs said...

What's so realistic about a trade of Hamilton for a pitcher who will walk away in one year?

You are under the impression that Garland will be enough to make the Reds a division challenger for 2008.

Most of us are under the impression a bullpen still has to be fixed, so trading Hamilton for just one part of the equation--especially since a top-tier starter like Garland will have huge offers in his walk year--would be ridiculous.

at 12:22 PM

Mr. Redlegs said...

Joe, and just how did the Rockies, Indians and Diamondbacks achieve those low payrolls?

Player development. years and years of excellent scouting, drafting and mentoring.

What's the Reds' biggest issue? They have absolutely no depth whatsoever from their system.

So it's not about payrolls achieved, but assets acquired the right way through development.

at 12:25 PM

Mr. Redlegs said...

Oon one hand some of you complain about the Reds being too cheap to compete and then on the other some of you complain about the size of the payroll.

Which is it?

at 12:29 PM

John Fay said...

The Reds have always counted Griffey's salary at $12.5 million.

at 1:06 PM

Anonymous said...

Counting Griffey's salary as 12.5 defeats the purpose of the way he structured it. Just shows how cheap they really are.

at 1:17 PM

Mr. Redlegs said...

Ponder this one. . . .

If I amortized it correctly, and that's a HUGE if, the Reds owe Griffey $3.771 million a year in deferred monies from 2009-2024, or roughly $90.51 million, with $57.5 mil in principal and $33.1 mil in accrued interest.

Yaw-suh.

So the question begs: Trading Griffey in 2008 brings them how much payroll relief? Not many teams are going to take the full hit on the $12.5 mil, soooooooo . . . .

If the Reds are having to pay (say) half that amount in 2008, not to mention negotiating with his new team over the $4 million buyout for 2009, isn't his production and gate worth more than $6.25 million?

at 1:20 PM

Mr. Redlegs said...

Most teams count deferred and "dead" contract monies toward that year's payroll because it's real money having to be paid out.

That's not cheap, that's not stupid. That's done for tax reasons. They call it loosleaders, but the IRS calls it illegal, otherwise.

at 2:03 PM

Anonymous said...

Mikey..the Reds may be serious...yet like the Bengals ..they are clueless

They aint gonna win with Dusty Baker, Dick Pole and Wayne Krivsky running things. Simple as that.

As is the case with Mike Brown and the Bengals..money is being spent...sadly, just foolishly.. and much of the time on players that don't warrant such big salaries

I love everyones passion ..its just unfortunate certain realities have not yet hit home to many.

Between the two clubs..and for what 18 years ..we have had one or two winning seasons.???

Why the heck would anyone trade Josh Hamiliton..he is one of the bright spots on this pathetic team?

Freel needs gone at 4 million a year.. Good hustle.. no talent

Mark T look at contract extensions Wayne has givenn..dont tell us he is smart

at 2:04 PM

Anonymous said...

It makes no sense if the Reds count Griffeys salary at 12.5 mil when they pay him 6 mil and put 3-3.5 mil into the deferred fund. I knew Lindners group used accounting that was different than the rest of mlb but I didn't know if this group did too. I thought the reason Jr. tried to help the Reds out by deferring so much was so only a portion of the deferred was payed out and debited each year that was less than the full amount for that year so less dollars put in now but given years to grow invested gets to the higher dollars when it would get to payment time.

at 2:19 PM

Anonymous said...

There is some truth to what Joe said about the way the current Reds are made up, they have basically two routes to go. This is similar to what Billy Beane said a few days ago relative to the A's situation and they spend less than the Reds but have better scouting recently. Also, regarding what Mark T. said, the Rockies did a great job in 07 with a 51 million dollar payroll, but exactly one-third was paid out to one player(Todd Helton at 17 mil) whose production is way down from what it used to be. They had a few modest veterans, but a lot of good young and temporarily inexpensive players that THEY developed. Too many people in this town assume the Reds turn with that part will come. We fans know virtually nothing about how the Reds scouting, drafting, signing and developing practices stack up with the rest of mlb.

at 2:36 PM

Chris at Redleg Nation said...

John listed all the guys who are under contract - it's interesting that every single one of those contracts, except for Ken Griffey, was inked by Wayne Krivsky.

On one hand, it's a sign of how radically he's transformed the team in his two years (and how it's definitely fair to hold him accountable for the state of how the budget (whatever it is) is spent. But it's also a big sign of how empty the cupboard was when he arrived.

at 2:39 PM

Anonymous said...

any chance of us trading Stanton for some used BP balls or something....I can do what he does for a 3MM a year....

on another note I love most of the players on our team...but its just so depressing to know that they will have to leave at some point...i guess I can make 2 unrealistic prayers....the reds spend more $$$ and an MLB Salary Cap....both are a joke haha

at 2:43 PM

Anonymous said...

Anon 1:06 your comment is the one that makes no sense. The way contract is set up saves the Reds money and cost Griff. The way you should think about it is while his contract works out to be approx. 12.5 million a year the deferred part will be worth less when he recieves it because of the present value of money factor stating that a dollar today is not going to be worth the same thing in a year.

So to sum up, the REDS arent being cheap in the structuring of Jr.'s contract they are being smart by saving themselves money. This is the same conceptif if someone ever wins the lottery. So yeah the Reds might report that they are given Griff. 12.5 M a year, but in reality they are giving him something much less when the present value is factored in.

at 4:44 PM

Phill said...

This year around ALL of baseball it's been said repeatedly that money for free agents isn't going to cut it for anyone really. The Reds have many needs and not many ways to fulfill them.

A overpaid #4 starter isn't going to help the bullpen get better. The Reds have to hope that from within guys like Homer Bailey or Matt Beslisle can get it together and become more productive next season to shore up the starting rotation.

As for trading Josh Hamilton. I don't see why if the return was good you wouldn't trade him. Look at how much time he was gone last season and how a guy like Norris Hopper easily filled the role. He wasn't a home run hitter but good god, the Reds got enough of em.

Maybe a Freel to White Sox trade for well...anything. I mean the White Sox fans loved Darin Erstad who is essentially the same as Freel. All heart, constantly getting hurt because of it, not that great of an actual ballplayer.

Increasing the payroll will do very little to make the team a competitor. Things like guys stepping up is what will do it. People complaining about the farm system being bad, well quit screaming for the heads of every single GM and let somebody BUILD it.

at 8:02 PM

Anonymous said...

Mr. Redlegs, in no way did I imply that after trading for Garland that we should just sit on our hands for the rest of the offseason and not do anything else. I obviously realize that we need some serious help in the bullpen. I'm not an idiot. I was simply saying that the trade would be a good way to obtain a guy who can give us 200 innings, without wasting money on a guy like Silva who hasn't had an ERA below 4.00 in any season. Now, if it will be impossible to re-sign Garland and we know that going into the trade, then obviously we shouldn't do it. Don't get angry with me. I don't run the team. I'm just a fan like yourself, discussing ways to improve the ballclub.

at 8:54 PM

Anonymous said...

I would much rather trade Josh Hamilton for a much younger pitcher that is going to have more years with the team such as Tim Lincicum or Scott Kazmir in which both GM's said they are willing to trade them for the right price but and both of the GM's are stupid enough to trade them. But I doubt the D-Rays are not going to want Josh Hamilton back.

Another intriguing name may be AJ Burnett.

at 9:54 PM

Apple a la Mode said...

But John, look at the math--if the Reds have $4MM of his 2008 salary due in, lets say, 2018, AND they can make 5% per annum (which is conservative) in income off that money before they have to pay it to Griffey, that means the cost of that $12.5 MM contact is actually $10.5 MM... whether the Reds say it's $12.5 MM or not. Also, where is your inclusion of the luxury tax money the Reds will get? It will be considerably higher this year. I think a great article, and one that would bring great notoriety to a writer, would be an analysis of the smoke-and--mirrors that goes on in MLB budgeting.

at 11:12 PM

Anonymous said...

I am sure the Reds "count" Jr's salary under this year because this is the year he is getting paid for. I can only imagine the uproar from the fair-weather group here in Cincinnati if his salary was "counted" against the budget in future years. The deferral was intended to free up cash to spend, which they did, wisely or not.

On a separate note, I don't think you can invest anything substantial in Hamilton quite yet, not until he proves ge can stay healthy. He was very impressive this year when he played and we can all hope he can continue to produce. However, with the depth in the outfield and the inability to move Dunn until June, I'd say it would be ok to trade Hamilton if it brought in pitching help.

at 9:49 AM

Mr. Redlegs said...

Why are some of you so bent about the Griffey deferred money? It's not a big surprise. That contract info has been around since 2000.

The Reds have been forced, by terms of the contract, to put away the deferred money at a certain date(s) each year so that it collects the 4 percent interest.

This is absolutely no different than any other deferred portions of a MLB contract. The agent and team know exactly to the penny how much should be deposited into that account, and the amortization table tells you the exact accrued amount, just like your mortgage payments.

Really, I have no idea why you're bitching. The contract is there, it's been there, and in 2000, no one was bitching about landing Junior below market.

Griffey deferred $57.5 million to sign with the Reds. Think about that. An average of $6.38 million per year.

And there's no question whatsoever that if Griffey had become a free agent in 2001 he would gotten the $17-$20 mil a year contract that was being passed out to A-Rod, Manny, Bonds, Giambi, Jeter, etc. around that time.

The contract is what it is--nothing more or less.

at 12:49 PM

Anonymous said...

Those of you that say the Reds do not need to spend some more money to be competitive -- do you work for the Reds? Otherwise, you would not say such a thing.

The Team that won the world series had a payroll of 140M or so.

The team (the Cubs) that won our division had a payroll of around 90M-100+M. The Cardinals -- the team that won it the year before had a similar payroll.

Ultimately, the Rockies, Indians, D-Backs did not win the WS. The Yankees and Angels had high payrolls & they, like Boston, are contenders EVERY year. The Rockies, Indians, and D-Backs have not been -- other than when the Indians and D-Backs had close 100M payrolls in the past.

While spending money does not guarantee anything, it does dramatically increase the odds. Also, the Indians and D-Back did previously have big payrolls & got high compensatory picks when they let some of those players walk allowing them to have the relatively young inexpensive talent. Their payroll will increase in order to keep their current rosters.

In today's market -- Griffey is not a bad deal -- but the Reds will not compete with this roster. They need relief pitching and another starter -- however, the Reds are not likely to outbid anyone unless they increase their payroll to at least the 85-90M range -- still less than Chicago and St. Louis.

If the Reds put on a winning product, people will come watch. That is true in virtually every major league city with the possible exception of Atlanta. The Indians in the 1980s and early 1990s stunk -- and would sometimes draw less than 10k people to a game -- I lived there during that period and know that to be true.

The Indians put on a winning product, increased payroll to 95M through in or about 2001 -- and were a sellout every game from the mid-1990s through 2002 season or so -- at which time they missed the playoffs because they dropped payroll.

Those of you who say you don't need to spend are not paying attention to history. YOU do need to be in the top half of payroll to compete every year. The Reds are in the bottom half. Spend money to make money -- the Reds need to do that. They need to spend to win.

Stanley

at 1:13 PM

Anonymous said...

I agree with Mr. Redlegs about Griffey's salary. It is what it is. The Reds aren't going to trade him anyway (in part because of the salary numbers, in part because he will be 38, is injured often, and is on the downside of his career). I am a huge Griffey fan but it's a fact that nobody will give the Reds anywhere equal return for his current value (however you define it).

If the Reds want to go with a youth movement then they need to trade Dunn (who strikes out 160 times per year) and use whatever savings that have left over to correct the bullpen (which is the biggest issue they have). Personally, I don't think the Reds will go with the youth movement but until they improve the overall pitching on this team they aren't going to improve much.

I wonder if Baker knew this before signing on (not that he will make much difference).

at 2:49 PM

Anonymous said...

Stanley,

I agree with you 100% but you are fighting a losing battle. People on here are very narrow minded and look at 1 good season by low payroll teams as organizational success. Hopefully the owner sees the light but I doubt it.

Steve

at 3:50 PM

Al in Ohio said...

For the love of God, people.

Do you honestly think that any GM in the major leagues is going to trade a #1, 2, or 3 starter straight up for a guy who has played 90 games in his major league career??? You're throwing out names like Garland, Lincecum, Kazmir, and Burnett for Josh Hamilton? Straight up? For a guy who has proved a grand total of nothing about his abilities as an everyday player?

Fans on this blog never cease to amaze me.

at 7:11 PM

Unknown said...

Al in Ohio, you took the words right off my keyboard. There is no way the Reds would be able to get any of those pitchers for Hamilton. I like Josh, but he's still got A LOT to prove...let's not forge his HOF plaque yet. I enjoy the hot stove talk, but we need to to be a little realistic. The way for the Reds to be winners again is through the farm system, and scouting guys who could be bargains on the free agent market. I'd love to be able to trade Pedro Lopez straight up for Cy Young in his prime, but it's not going to happen.

at 8:39 PM

Phill said...

Using strikeouts as a serious reason for getting rid of a player is insanity unless that player does nothing BUT strike out.

Adam Dunn strikes out a lot. What is the difference between a ground out, a fly out and a strike out in a general sense(not taking baserunners into consideration)?

You can use arguements about his defense being bad as a reason to move him but strikeouts is just a lame reason.

at 1:40 AM

Anonymous said...

Phil,
Wow, here comes the classic debate about strikeouts.
Comparing strikeouts with outs recorded when the ball's in play overlooks an important rule. A strikeout is a guaranteed out. A ball in play has a far greater chance of being something besides an out. By all means, put the ball in play.
Dunn was much more valuable this year than last because of his reduced strikeouts and improved batting average. What's even better is the fact that he was able to maintain his home run production while improving in these other areas.
Every offseason, the talk of dangling Dunn as trade bait for pitching occurs. This winter, his trade value is much higher than last year. Don't be surprised if Wayne gets some good offers for him.
The best approach is "buy low, sell high." Which is why trading Dunn isn't such a bad idea. There's alot we could get for him.
We're not going to get much for Hamilton.

at 11:45 AM

Apple a la Mode said...

I'm not bitching about the deferred money--all I'm saying is that the actual cost of Griffey's contract is less than portrayed (by about $2MM per annum) EVEN AFTER THEY PAY HIM THE DEFERRED MONEY because the Reds can make income off of the deferred money before it gets to him. That is why they structure contracts with deferred money: because it costs less. The team wants to portray that they are spending money, so they release the $12.5 MM figure, which is incorrect--Griffey costs about $10.5MM per annum.

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Saturday, November 10, 2007

On the payroll

41 Comments: