The Reds’ front office isn’t generating much news these days. It’s tedium and Ryan Mattheus on the Ohio River. That’s the sleepy nature of rebuild-reboot-recycle, at least as practiced on Joe Nuxhall Way. As a result, Reds fans have become serial users of the off-season snooze-button. Sure, we delight that the Cardinals are in trouble for cheating and the possibility that Major League Baseball will hammer them. But a fan can’t live on schadenfreude alone.
If you blinked (or more likely, covered your eyes) you missed the flicker of drama. The Reds traded two popular players for “near-major-league-ready” prospects. Otherwise, fans have been left to stew, hoping that “near” in that phrase modifies “ready” and not “major league.”
Oh, hey! On Saturday, the club recycled Pedro Villarreal on a minor league deal. Don’t everyone rush off to buy season tickets all at once.
With idle hands being what they are, how about instead we spend some of Bob Castellini’s money! Let’s take stock of where the 2016 payroll stands and how that impacts what might come next.
The $30 Million Surplus
When we last worked through the math, the Reds projected baseline payroll was $104.3 million. Since the end of October, that amount has been reduced by:
- Trading Todd Frazier and replacing him with Eric Jagielo (saving $7.65 million)
- Trading Aroldis Chapman and replacing him with a league-minimum salary pitcher (saving $12.3 million)
- Releasing Jason Bourgeios and replacing him with Scott Schebler (saving $300,000)
Again, this baseline projection assumes the Reds fill available roster spots with players earning league-minimum salaries. Those three moves represent a savings of about $20.3 million, which puts the up-to-date estimate for the Reds 2016 payroll at approximately $84 million. Trading Jay Bruce (would save $12 million) and/or Brandon Phillips (would save $12.5 million) would lower that number further.
The past two seasons, Reds CEO Bob Castellini authorized an Opening Day payroll in the neighborhood of $114-17 million. The Reds didn’t end up spending that much last year because of the mid-season trades of Johnny Cueto and Mike Leake.
That means compared to recent payroll, the Reds have a $30 million surplus. That’s not the Powerball, but it’s not nothing.
The $30 million figure would be even higher if you assume a straight-line projection of the payroll increases we’ve seen since 2009. Remember new local TV contract revenues begin in 2017.
If you’re cynical, you might suspect Reds ownership will simply pocket the reboot-rebuild-recycle windfall. That’s possible and their right to do so. But Bob Castellini has earned the benefit of the doubt that he won’t. Year after year, Castellini has shown Reds fans the money. He’s backed up “we’re going to win” bravado with payroll walk. The Reds payroll-to-revenue ratio (52%) was sixth highest in baseball last year. This confidence might prove misplaced, but Bob Castellini strikes me as a guy who burns with competitiveness and will invest that money back into the club, in the direction his front office wise guys point him.
It’s frustrating to watch other organizations spend tens or hundreds of millions of dollars on free agents. But money doesn’t leverage championships through brute force like it did a decade or more ago. The connection isn’t zero, but the correlation between payroll and wins continues to decline. Those enormous contracts, because they fall well along a player’s aging curve, don’t bring equally big winning in lockstep. In a sense, they’re great equalizers — even truer in an era of drug testing and enforcement. The players producing the most WAR are twentysomethings, a few in their early 30s.
Smart decision-making, not wallet size, matters more than ever. That’s what the Reds face with the $30 million surplus — decisions.
Let’s analyze the pluses and minuses of the options. Keep in mind the strategies aren’t all exclusive. There’s enough money to choose a few.
High Draft Picks
The Reds own the #2 pick in the amateur draft in early June. Based on past years, the signing bonus will be around $6 million, maybe a little more. By comparison, last year the Reds paid the #11 pick, Tyler Stephenson, $3.1 million. The Reds also have the #1 Competitive Equity pick. It takes place at the end of the first round, after all the Qualifying Offer losses and gains are worked out. Last year, it was pick #37. The Astros paid a $4 million signing bonus to that player.
Pros: Kris Bryant
Cons: Danny Hultzen and Tyler Kolek
Seriously, this is how the Reds should and will spend some of their loot. If they don’t, it’s time to cheer for another team. Did I mention Kris Byrant?
Long-Term MLB Free Agents
The Reds could sign a free agent to a contract that extends beyond 2016. As examples, this could be a mid-priced player like Dexter Fowler ($56 million/4 years), or a more expensive player like Justin Upton ($120 million/6 years).
Pros: Player would be on the roster in 2017 and beyond, when the Reds plan to be competitive. Also, adding an impact free agent would help the Reds
sell tickets be better on the field in 2016. Imagine Votto-Mesoraco-Upton-Bruce in the middle of the order for 2-3 years (Upton’s career OPS is 40 points higher than Todd Frazier’s, including a season hitting in San Diego). The Reds first round draft selection is protected this year by virtue of being a top ten pick, so relative to signing a QO free agent in a later year, the lost draft pick hit is smaller.
Cons: The better the Reds are in 2016, the worse their draft pick will be in 2017. The surplus would be “wasted” in part on the 2016 season. If the Reds sign a free agent with a Qualifying Offer attached, they would lose their competitive balance pick. If they wait and sign a long-term free agent next year, there’s a decent chance the draft selection will still be protected.
There is positive value to the Reds being better than otherwise in 2016, although the focus should remain on 2017 and beyond. An unexpected collapse in the market for a top player like Upton (28) might make the needle point in the direction of Makes Sense. Otherwise, there are better uses of the money.
Long-Term International Players
Think Raisel Iglesias ($27 million/7 years). His signing bonus was $5 million, spread out over several years.
Pros: Younger and cheaper than MLB free agents.
Cons: Less proven then MLB free agents.
Recent scouting successes with Aroldis Chapman and Raisel Iglesias offer hope the Reds can acquire meaningful help from international players. The key, as always, is finding the kind of player that has value – like a position player with power and plate discipline. In a related note, signs point to the Reds improving their overseas scouting.
One-Year Free Agents
The Reds could acquire good players who end up seeking a one-year deal. The club’s goal would be to trade them at the July deadline for attractive prospects. This strategy comes straight out of the Cubs recent rebuilding playbook.
Pros: Jake Arrieta and Addison Russell. Limited financial risk with a one-year contract. If successful trading the player, the cost is just a half-season salary.
Cons: The signee might have a bad first half or get injured. The Reds might botch the flip strategy. They might fall in love with the player based on a couple good months and talk themselves into keeping him (cough, cough, Bronson Arroyo). By the middle of 2016, with Homer Bailey back and innings limits largely resolved for the young guns, there’s no place in the rotation for another veteran taking up innings. The Reds need to sort out all their young arms. In fact, that’s the most important goal for the organization in 2016. The same could hold true signing an outfielder.
Add Money to Future Trades to Improve the Return
If and when the Reds trade Jay Bruce and/or Brandon Phillips, they could sweeten the pot by offering to pay salary in exchange for better prospects. The Phillies did this last year when they
unloaded traded Marlon Byrd to the Reds.
Pros: Better prospect improves odds of helping the Reds in the future. Nothing better to do with the money. One-time expenditure. Might make trade easier to sell for other team.
Cons: Prospects are uncertain things. It takes a trade partner to agree. Trades are already delicate enough to add complexity.
I thought the Reds might have tried this already, with either the Frazier or Chapman trades. Maybe they did. Spending a few million to boost the prospect quality is big-time worth it.
The Reds could commit the surplus to future payroll. For example, say they took $25 million from 2016 and divided it equally between the 2017 and 2018 payrolls.
Pros: Other ways to spend the money aren’t promising. An extra $30 million in 2017-18 payroll would make a big difference in the Reds ability to sign impact free agent players.
Cons: There’s no such thing as a lockbox, sucker. Reds will already have more revenues in those out-years with the new FSO contract and because MLB is taking in money faster than they can count it.
See above comments re: Bob Castellini and burning passion for winning. If he says the money saved this year will be spent on top of what was already planned for 2017 and 2018, I trust him. Payroll would jump from $90 million this year to $145 million in 2017 and $155 million in 2018. I’d love to write the column with suggestions of spending that bankroll.
Gritty Acquisition of Grit
The Reds could sign veteran players to multi-year, multi-million dollar contracts for the purpose of grit transference. Likely former Cardinals or former Reds. It’s Jocketty’s signature move. Think Skip Schumaker and Jason Marquis.
Pros: Reinforces that special Reds brand.
Cons: Think Skip Schumaker and Jason Marquis.
No, no, no, please, no. Seriously, I would rather the Reds set the money on fire at home plate (imagine the promotional value) than pay for veteran grit. That’s not how any of this rebuilding or rebooting works. Of all the depressing, horrifying parts of the rebuild-reboot-recycle, “recycle” is the worst. Jerry, the worst.
Steve grew up in Cincinnati a die-hard fan of Sparky’s Big Red Machine. After 25 years living outside of Ohio, mostly in Ann Arbor, he returned to the Queen City in 2004. Contemporary Reds thrills: witnessing Jay Bruce’s 2010 homer and Homer Bailey’s 2013 no-hitter in person. The only place to find Steve’s thoughts of more than 280 characters about the Reds is Redleg Nation, although you can follow his tweets @spmancuso.