Projecting the payroll

The arbitration estimates are here! The arbitration estimates are here!

It’s spreadsheet season!

Well, for nerds like me, I guess that’s year-round. But no, this truly is spreadsheet season. It’s time for a payroll projection and it kicks off with the annual release of MLB Trade Rumor’s arbitration estimates.

A quick reminder of how the arbitration process works: Players are eligible for arbitration who have played more than three years in the majors but less than six and who don’t have a signed contract for the upcoming season. There is also a class of players deemed “Super Two” who have less than three years of service, but rank in the top 22 percent of players between two and three years of service. Got that? The Super Two service time varies from year to year. After 2021, it was set at 2.116 years.

Teams have an option with their arbitration-eligible players. They can either tender that player a contract, which buys the team and player time to reach a deal, or they can non-tender a player. That makes the player an immediate free agent and the club is under no financial obligation or penalty. It’s a simple parting of ways. The deadline for that is December 2. There will be a flood of players hitting the market that day.

Meanwhile, players who are tendered a contract will negotiate terms with their club for the upcoming season. If an agreement isn’t reached by mid-January, the two sides will submit what is basically their final offer. That is the exchanging of numbers ahead of the arbitration hearing.

Let’s use Nicky Lopez as an example. Last year he was eligible for arbitration for the first time as a Super Two. (For the purposes of this, we will assume there wasn’t a lockout. The owners’ actions compressed this timeframe. This is how it would normally play out.) The Royals officially tendered a contract to Lopez at the start of December. The club and player continued to negotiate through the winter but were unable to reach an agreement. They then exchanged salary arbitration figures. The Royals said Lopez was worth $2.55 million. Lopez (and his agents) valued him at $2.9 million.

Just because the two sides submitted contract numbers at a deadline, it does not mean they are required to stop negotiating. Sometimes parties will try to find the midpoint and settle. Seems equitable, no? Other times teams employ a “file and trial” tactic. In other words, once arbitration numbers are officially exchanged, the team will cut off negotiations and proceed to the arbitration hearing to be held usually in February.

In the Lopez example, his case did go to an arbitration hearing. The panel sided with the Royals. Lopez made $2.55 in 2022.

This gives us a chance to talk payroll for the Royals in 2023. Before we get to the arbitration estimates, let’s discuss what we know.

The guarantees

The Royals have three guys under contract for the 2023 season. Salvador Perez is set to be the Royals’ biggest earner, banking $20 million. He’s coming off a down offensive year where he hit just .254/.292/.465 with 23 homers, his fewest in a full season since 2016. It adds up to a 108 wRC+ and a 0.5 fWAR. The WAR is ugly because you know how the metrics feel about his defense behind the plate.

Hunter Dozier was worth -1.0 fWAR in 2022. That’s a negative one. He fell two plate appearances short of qualifying for the batting title, which is a measuring stick for leaderboards. I bring this up because had he achieved these 502 PAs, his fWAR would’ve been the worst in the majors. And get this…2022 was the second consecutive year he finished with a -1.0 fWAR. He will earn $7.5 million in 2023. That’s just bad baseball business.

The final contract on the books belongs to Michael A. Taylor. Remember how he got super hot after he returned from the Covid IL and basically couldn’t make an out for a couple of weeks? Yeah, that didn’t last. Taylor finished the year at .254/.313/.357, good for a 90 wRC+. The defense plays, though. Taylor will be in the second year of his two-year deal that pays $4.5 million per season.

Looking at this list, it’s little wonder Dayton Moore isn’t around One Royal Way anymore. It’s impossible to overstate how bad that Dozier contract is.

However, we need to move along…

The arbitration eligibles

Here is the list of Royals players who are eligible for arbitration, along with their estimated salary for 203 and service time following the completion of 2022. The service time, as you will see in a moment, is massively important.

It’s a cool $32.6 million, but this time instead of three players, it’s distributed among 11.

Here’s where I’m going to save the Royals a chunk of change. If they choose to listen to my advice.

To start, they need to non-tender Brad Keller. Yes, they need innings, but Keller is far from a guy you can depend on to deliver those innings. The 2022 season was the third time in the last three full seasons he was unable to complete the year in the rotation. Injuries brought the curtain down early for him in 2019 and 2021. This year, it was ineffectiveness that saw him banished to the bullpen. If that’s his future, a $7 million price tag is a bit much. Pass.

Luke Weaver got an audition and…it didn’t go well. Worth a shot for Emmanuel Rivera I suppose who cooled off after a hot start in the desert. At least it’s evidence that J.J. Picollo is willing to trade a position player who came up through the organization for a flyer on an arm.

There’s no need to explain a Ryan O’Hearn non-tender. He doesn’t fit on this roster and it’s an indictment on the front office that he spent the entire year in Kansas City.

Non-tendering that trio trims $11.5 million. That kind of savings could go to another year of Zack Greinke if one were so inclined.

I may surprise you and say the Royals should offer a contract to Adalberto Mondesi. At this point, there’s no way he is going to fulfill that massive potential he once had. (At least as a Royal.) But he has one year left before he becomes a free agent and if anything, his presence in the lineup (stop laughing) would mean Bobby Witt Jr could move to third full-time. That would give the Royals an improved left side of the infield defensively. There’s value in that.

Mondesi made $3 million last year. MLB Trade Rumors pegs him for the same salary next season. As frustrated as you are with Mondesi’s inability to stay healthy, those repeated trips to the IL have cost the guy millions of dollars.

In the bullpen, Scott Barlow and Josh Staumont are easy tenders for me. I’m a bit surprised that Staumont’s estimate is only for $1 million. I figured he would be a bit higher. The walks and the fact he pitched half the innings in 2022 that he threw in ‘21 probably had an impact on that. Still, if Staumont can get right he will easily be worth that. And you know that Barlow was the best reliever in the bullpen for the Royals. One doesn’t walk away from that.

I’m less sold on Amir Garrett and Taylor Clarke, but they’re inexpensive as far as bullpen arms can go so why not? If a manager can find the right spot to use Garrett, he can be effective. Last year he limited left-handed batters to .106/.253/.136. The walks (16.3 percent BB%) are an issue, but on the flip side, he didn’t allow a home run all year.

Meanwhile, Clarke was seemingly the only guy in the Royals’ bullpen who didn’t walk everyone. Still, he seems like a run-of-the-mill reliever to me. Not a standout power guy, but he can be effective. At $2.6 million for Garrett and $1.5 million for Clarke, both are worth another year for me.

Nicky Lopez lost his value and his starting job in 2022. At $3.4 million, he’s a bit expensive for a utility player on another rebuilding squad but there is still some value there. Just not the 5.9 fWAR he racked up in 2021. His versatility around the infield is a plus and so is his baserunning. An easy “yes” for the tender.

With a rising walk rate and dropping strikeout rate, Kris Bubic took a step back in 2022. And with a strand rate that dropped eight percentage points, his ERA took a massive hit, jumping from 4.43 in 2021 to 5.58 last year. Still, he’s a lock for a tendered contract from the Royals. You just don’t walk away from young starting pitching, especially when you’re bringing in a new pitching coach and overhauling your organizational approach to the craft. Will it work for Bubic? I have no idea. I do know it’s worth $1.8 million to find out.

Finally, that brings us to Brady Singer, the best pitcher on the team in 2022. MLB Trade Rumors estimates he’ll make $2.9 million, and whoo boy, if his performance from last year sticks, that’s some kind of bargain.

Remember how I mentioned above to pay attention to service time? Singer, according to MLB Trade Rumors has 2.156 years of service time. A player needs 172 days (out of 187) in the major leagues for it to count for a full year of service time. Singer, who was sent to Omaha to be stretched out after his April banishment to the bullpen, spent around 23 days in the minors before getting permanently recalled. (He also logged a few days on the restricted list because of his aversion to needles.) But the trip to the minors essentially bought the Royals an extra year of team control. Singer spent all of 2020 and 2021 on the big league roster. Had he not been optioned to Triple-A this year, he would’ve been eligible for free agency after the 2025 season. Now he can’t hit free agency until after 2026.

If the Royals tender contracts to all 11 (as unlikely or unnecessary as that is) their total payroll for those players along with the three on guaranteed deals checks in at $64.8 million.

Ah, but that’s just money to cover 14 players. There’s more!

The remainders

We can’t forget Bobby Witt Jr., Vinnie Pasquantino, Edward Olivares, Daniel Lynch and any of the other Baby Royals. Next year the MLB minimum salary will be $720,000. (Along with bump for the top 100 in WAR who will split a pool of money per the latest collective bargaining agreement.) With 12 spots on the roster yet to be spoken for, the assumption (for now) is all will go to the younger players. That’s an additional $8.64 million at least.

If that’s the case, here is a very early and rough estimate for a 2023 payroll.

Again, this estimate is likely too low, but this is a good jumping-off point. Last year’s Opening Day payroll was $94.8 million according to Cot’s Baseball Contracts. I haven’t heard anyone from the front office comment on the 2023 budget, but I would imagine it would be in the same neighborhood, if not slightly higher. If that’s the case, the Royals can certainly get aggressive in the free agent and trade markets. They’ll have around $30 to $35 million to burn if they listen to my advice on the non-tenders. While they won’t make a major splash, there is plenty of room to add. The same could go for the trade market.

As I’ve said before it’s not the spending money that’s been an issue for the Royals. It’s spending wisely, something they rarely did under Dayton Moore. (Yes, we’re both thinking the same thing…the Dozier contract.)

We are about to see how Picollo unleashed is going to spend that money.