Payroll realities of signing Trevor Bauer

The Reds will lose three players to free agency at the end of the 2020 season: Trevor Bauer, Anthony DeSclafani and Freddy Galvis. Most of the early offseason talk has been about the club re-signing Bauer, the front-runner for the N.L. Cy Young Award.

It’s way too soon to know for sure what a deal for Bauer would mean for Reds payroll. But thank goodness it’s never, ever too early for semi-informed speculation on fan team sites. So let’s work through a few details of what it would take for the Reds to ink Bauer for 2021. We’ll start by laying out a baseline roster — filled in-house — and see how much that would cost.

A baseline, in-house roster

This baseline roster is comprised of 26 in-house players. It assumes the Reds don’t re-sign Bauer, DeSclafani or Galvis. They move Tyler Mahle and Tejay Antone to the starting rotation. Michael Lorenzen or Hunter Greene might end up in the rotation with Antone in the bullpen, but from a payroll standpoint, it wouldn’t matter. Let’s pencil in Antone. 

• SP: Gray, Castillo, Miley, Mahle, Antone
• RP: Iglesias, Lorenzen, Bradley, Garrett, Sims, R.Stephenson, De Leon, Greene
• C: Barnhart, Casali
• IF: Votto, Moustakas, Farmer, Suarez, Garcia
• OF: Akiyama, Castellanos, Goodwin, Senzel, Winker, Aquino

The baseline assumes the Reds stick with their two veteran catchers. More on that in a minute. Aristides Aquino is the 26th player. Any other in-house option other than Travis Jankowski would cost the same. This isn’t a final product. It’s a baseline from which we can discuss offseason moves.

The baseline roster payroll

Players on a major league roster fall into three categories of payroll: (1) players who have guaranteed contracts, (2) players who have the right to arbitrate their salary, and (3) players in the first three years of service time who work for league minimum. Here’s our baseline roster sorted into those categories: 

Players Under Contract

Nine have guaranteed contracts: 

• Joey Votto ($25 million)
• Mike Moustakas ($14 million)
• Nick Castellanos ($14 million)
• Eugenio Suarez ($10.8 million)
• Sonny Gray ($10.2 million)
• Raisel Iglesias ($9.1 million)
• Wade Miley ($8 million)
• Shogo Akiyama ($7 million)
• Tucker Barnhart ($4.2 million)

That adds up to $102 million.

Players Who Are Pre-Arbitration

Eight of the 26 players would be paid league minimum: Antone, Aquino, De Leon, Farmer, Garcia, Greene, Senzel, Sims. The minimum salary hasn’t been set for 2021, but $600,000 is the (wish I could live in that minimum) salary neighborhood. Round that to $5 million total for our roster.

Players Who Can Arbitrate Salary 

Payroll numbers for the first two categories are well defined. But salary for players with a right to arbitration won’t be known for sure until February 2021. A team may choose to “non-tender” players, which means it doesn’t want to enter the arbitration process and are cutting loose the player. 

After players accrue three years of service time, they are eligible for this category. The typical one who progresses through the arbitration period to free agency has three seasons of arbitration-based salary. But a small percentage of those players, called Super Two players, get four seasons. The only Reds Super Two player in 2021 is Michael Lorenzen. The numbers in parentheses indicate the player’s 2020 salary.

• Arb4: Michael Lorenzen ($3.725m)
• Arb3: Archie Bradley ($4.1m), Curt Casali ($1.46m)
• Arb2: Brian Goodwin ($2.2m)

None of those players will be due substantial arbitration raises. A couple relievers, the second catcher and a non-starting OF. Bradley will move from a closer role to non-closer role. A ballpark salary estimate for those four players combined is $16 million.

The final sub-category is where the Reds will get hit the hardest. Several good players are crossing that line of three-years service time and moving from league minimum salary to arbitration eligibility.

• Arb1: Luis Castillo, Amir Garrett, Tyler Mahle, R.Stephenson, Jesse Winker

Rough guesses for 2021 salaries: Castillo ($6.5 m), Garrett ($2 m), Mahle ($2 m), Stephenson ($1 m), Winker ($2.5 m). That totals $15 million.

Adding it all up, the estimated payroll for the baseline in-house roster is $138 million.

What will Reds ownership be willing to spend?

If 2020 had been a normal season, Reds payroll would have been around $147 million. That level was an all-time record and a jump from $127 million in 2019 and $101 million in 2018. $147 million would have been a few million dollars shy of league average and median payroll.

Here are a few other team payrolls for 2020 assuming a 162-game season had been played:

• $250 million – New York Yankees
• $222 million – LA Dodgers
• $200 million – Chicago Cubs
• $168 million – St. Louis Cardinals
• $97 million – Milwaukee Brewers
• $74 million – Tampa Bay Rays
• $63 million – Pittsburgh Pirates

What can we expect for the Reds payroll in 2021?

Bracketing the effects of the coronavirus, we might have expected Reds ownership to raise payroll to $155-160 million or hold it steady.

But 2020 didn’t play out the way anyone had planned. Player salaries were prorated back to 60 games. Teams did not receive attendance revenues, but were able to sell advertising in the stadium for visual broadcasts. The full broadcast schedule (television, radio, streaming) did play out, including an extra round of postseason games.

We don’t know the net effect of all that yet.

Beyond 2020, considerable uncertainty remains for the 2021 season. Will a normal spring training take place in February and March? Will fans be allowed in stadiums in April and May? If so, will there be capacity limits? Will a segment of fans stay home regardless of whether or not they are permitted to attend?

Those answers depend on the unpredictable course of the virus and the effectiveness of our public and private steps to fight it. Vaccines and therapies are promising, but distribution at quantity will be gradual. Major league owners have to consider the serious possibility of a full 162-game season played with nowhere near the usual number of fans.

Bottom line: Are you kidding? There is no bottom line if the word “line” carries any connotation of final math. Important financial variables are far from settled. We have no idea how the average baseball owner will respond to the uncertainty, let alone what Bob Castellini will do.

Let’s throw a dart

And let’s say that dart lands on $150 million as the number Castellini whispers into the ear of the new President of Baseball Operations or General Manger.

What will Trevor Bauer earn?

Bauer has said he wants to sign a series of 1-year contracts for the rest of his career. We’ll see if he sticks with that now that he’s coming off a Cy Young caliber season. This would be the perfect time to cash in with a multi-year deal, perhaps with annual opt-outs built in.

Several starting pitchers were scheduled to make more than $30 million in 2020. The highest was Gerrit Cole at $36 million. Bauer’s 2020 performance was in that category, but he’s only pitched that well one season. If Bauer sticks with his plan of short contracts, teams will be willing to pay more on an annual basis if they don’t have to worry about out-years.

For this exercise, I’m going with $32 million as Bauer’s 2021 salary. That’s conservative. Yes, Bauer may sign for less to stay with the Reds because of the pitching coaching staff. Or he might sign somewhere else because he likes a particular city, wants to live on a coast, live near his family, has a contact with a manager, pitching coach, or players on another team, etc. The Reds won’t have a monopoly on Trevor Bauer’s vast intangibles. It’s imprudent to rely on that. 

Reds choices

With a $150 million payroll and our baseline roster costing $138 million, the club can’t afford Bauer at $32 million, or even if he comes in a little below that. A payroll $10 million higher wouldn’t reach. Another $20 million beyond our dart? It’s hard to imagine Reds ownership boosting payroll from $147 million to $170 million given economic uncertainty.

What could change that would help?

Nick Castellanos might opt out, saving $14 million. The Reds could gain a little money (~$4 million) by non-tendering Casali and Goodwin and replacing them with low-cost Tyler Stephenson and Mark Payton. They could trade Tucker Barnhart or Archie Bradley and bank a few million more.

Having Bauer at the top of the Reds rotation would make it one of the best in the league, assuming the 2020 version of Wade Miley isn’t putting up 30+ starts. Bauer’s presence might have a positive ripple effect on other Reds pitchers in terms of instruction and ideas. But that increment above what Derek Johnson, Caleb Cotham and Kyle Boddy already provide is hard to quantify.

Making payroll room for Trevor Bauer would come at significant opportunity cost for the Reds.

Cross everything else off your wish list — that bridge at shortstop to get to Jose Garcia, that upgrade in offense for a team that got shut out nine times in 62 games, etc. If Nick Castellanos bids farewell to the Reds, maybe then the club could scrape Bauer money together. But in that eventuality, the Reds would need to invest in more offense. Don’t they have to spend any extra cash on bats no matter what?

The softening free agent market we’ve witnessed the past few years will likely continue or accelerate this offseason. But elite players have proven to inhabit a distinct market, a supply-and-demand exception to falling salaries. Gerrit Cole signed a 9-year, $324 million contract last winter. Stephen Strasburg agreed to 7 years at $245 million.

The Reds are unlikely to have $30+ million to pay Trevor Bauer. Even if they do, that money could be better spent shopping for free agent bargains in the tier below premium. Or use the money to take on the salary of an upgrade through trade. A player like Francisco Lindor, perhaps.