The Reds have saved money, but they’ll end up paying for their impatience

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We know MLB suffered unprecedented losses in 2020. Beyond that, the sport faces substantial uncertainty about 2021 revenues. Most major league organizations will respond by cutting payroll this season, the Reds included. The Castellini family has a stated and consistent corporate policy of operating at a break-even level, as is their prerogative. 

What does that mean in practice? Ownership will give a payroll number to general manager Nick Krall. From that, Krall and his staff will do the best they can to build a team. Even then, expect the front office to navigate significant intervention and approval by the Castellini family, as it has in the past. 

We can only guess about the specifics of the Reds 2021 payroll. But let’s take a swing.

The Falling 2021 Baseline

Back in early October, we constructed a baseline Reds payroll of $138 million. That estimate was premised on known guaranteed contracts, early arbitration estimates and completing the roster with pre-arbitration players who earn league minimum salaries. That roster wasn’t a prediction. It was a demonstration of what the bare minimum looked like before offseason moves started. 

The math and mechanics of cutting payroll are simple. Clubs have two ways to accomplish it: trade players under contract and non-tender players scheduled for arbitration raises. Since our constructed October baseline, the Reds have opted for both those routes. They non-tendered four players: Archie Bradley, Curt Casali, Brian Goodwin and Kyle Farmer. They re-acquired Farmer with a split contract. The Reds also traded relievers Raisel Iglesias and Robert Stephenson.

This chart shows how much money these transactions have saved. It compares the baseline roster of 10/1 to the one we would generate today. Our estimates for arbitration awards have been updated to use the model at MLBTR [Method 2].

Here is a list of the last month’s transactions and roster substitutions. Again, the stated replacements are not meant as forecast, only a depiction of what the minimum would look like today: 

• Noé Ramirez ($1.1 million) replaces Iglesias ($9.1 million)
• League minimum pitcher ($570,000) replaces Bradley ($5.7 million)
• Jeff Hoffman ($570,000) replaces Stephenson ($600,000)
• Tyler Stephenson ($570,000) replaces Casali ($2.4 million)
• League minimum outfielder ($570,000) replaces Goodwin ($3.6 million)

Bottom line: The Reds have lowered the baseline roster from ~$138 million to ~$119 million. Part of the Iglesias trade was cash from the Reds to the Angels and we don’t know how much that was. But add that amount to the $119 million commitment. 

Analysis

We don’t know the Reds target payroll number and if they are done slashing. Persistent rumors about the club working hard to trade Sonny Gray are concerning. Gray is a 5-WAR player signed at a 1-WAR price. He’s a veteran leader for the pitching staff. Instead of looking to move it, Gray’s deal should be an untouchable cornerstone for a club where the twin goals of frugality and quality are central. Let’s hope those rumors are wrong. 

If the Reds payroll target for 2021 is about $135 million, they now have ~$15 million of operating room to improve the roster above the baseline. That includes signing free agents and taking on salary in trades. 

Conventional wisdom is the club will add a shortstop. The Reds do, in fact, need a shortstop. They could sign a free agent (Didi Gregorius, Marcus Simeon), trade for a premium tier shortstop (Francisco Lindor, Carlos Correa, Trevor Story), or sign/trade for a lower-tier guy (Nick Ahmed, Freddy Galvis). We laid out various shortstop options a month ago.

Given budget constraints set by ownership, a front office strategy of making cuts in areas of relative surplus (bullpen, catcher, outfield) to create spending opportunity in areas of relative need (shortstop!) makes sense. 

But a separate question is, did the Reds get a reasonable return where they reduced salary?

The answer to that is no.

Curt Casali, Archie Bradley and Raisel Iglesias had or will have value to other teams. But the Reds got basically nothing in return. Nick Krall said they asked for Ramirez in the Iglesias trade due to a preference for a major league player. There’s no logic to that when the player in question is a replacement-level relief pitcher. (Read our analysis of Noé Ramirez, the player acquired for Iglesias.)

If Krall’s rationale sounds eerily familiar, that’s because it summons with terror the memory of the early phase of the Rebuild Reboot when Walt Jocketty said the Reds were looking for “near major league ready” players instead of prospects with more upside. Check the Chicago White Sox for successful execution of the latter course. 

In making these recent moves as they did, the Reds acted as if they had to cut payroll right away, regardless of the return, before they could make subsequent acquisitions. They rushed to non-tender Casali and Bradley before markets for their services — and trade value — developed. At some point in the next few months, a high-payroll team will need a proven closer and Raisel Iglesias, coming off his best season, meets that criteria. It would have been smarter to slow-play dealing off those players.

It feels like the Reds have been in a hurry to stop walking so they can start chewing gum.

It would, of course, be naive not to recognize that every major league roster decision mixes considerations of baseball and money. But it’s hard to escape the feeling the past few weeks that the Castellini family has insisted on prioritizing money and consigning baseball to distant second.

Impatience can be costly. The Reds may pay a heavy price for their haste to save money.