By 5 p.m. today, the Pirates have to give Russell Martin a qualifying offer, valued at $15.3 million. This is procedural, to ensure they get a draft pick if Martin signs with another team. But if the Pirates re-sign Martin, something they have stated they hope to do while preparing for the probable eventuality that they don’t, it won’t be for one year and $15.3 million.
Quick recap: $15.3 million represents the average of the top 125 largest contracts from the just-finished season. Teams must offer a one-year, $15.3 million contract to their free agents -- who have spent the whole season on their team -- in order to get a draft pick after the first round if the player signs elsewhere. The old team doesn’t get the signing team’s pick; the pick just vanishes.The signing team loses its first-round draft pick, unless they pick in the top 10, when they lose their next-highest pick. Read more about the history of free-agent compensation in today’s paper.
If the Pirates re-sign Martin, it’ll be for three or four years and more than $10 million per year. Let’s look at what that might do to their payroll.
Under contract
These players are already under contract in 2015 on long-term deals.
Andrew McCutchen: $10 million
Charlie Morton: $8 million
Starling Marte: $1 million
Jose Tabata is no longer on the 40-man roster but is owed $4 million in 2015.
Total: $19 million ($23 million with Tabata)
Arbitration eligible
These players are eligible for salary arbitration. MLB Trade Rumors puts together arbitration salary projections, and we will use those as a baseline, with some tweaks, for this section. They do a great job, so make sure to check it out.
2014 salaries in parentheses
Neil Walker: $8.6 million ($5.75 million in ’14)
Gaby Sanchez: $2.7 million ($2.3 million)
Ike Davis: $4.4 million ($3.5 million)
Mark Melancon: $7.6 million ($2,595,000)
Travis Snider: $2 million ($1.2 million)
Chris Stewart: $1.3 million ($1 million)
Pedro Alvarez: $5.5 million ($4.25 million)
Tony Watson: $2 million ($518,500)
Josh Harrison: $2.2 million ($513,000)
Jared Hughes: $1.1 million (unknown, more than $500,000 minimum)
Vance Worley: $2.9 million ($527,500)
Total: $40.3 million
Couple things here. MLBTR notes that Melancon’s high number of saves and holds gives him an unusually high projected salary, so he probably won’t get quite that high. $5 million is a conservative estimate. The Pirates will probably not keep Davis and Alvarez if Alvarez is not playing first base, and the easiest solution is to do something with Davis. If Alvarez returns to third, they could trade Harrison, whose value might never get higher, but that would leave them short-handed if Alvarez’s throwing issues return. It is safe to assume that one of the first basemen will not be here and we can take away another $5 million.
New total for 10 arbitration-eligible players: $32.7 million
Grand total: $51.7 million ($55.7 million with Tabata)
Pre-arb players
If the Pirates add no one else and supplement their 14 players with long-term contracts or arbitration salaries with 11 players making at or around the major league minimum, they will add another $500,000 or so per player, or $5.5 million.
Grand total: $57.2 million (61.2 million with Tabata)
Add the rest of the minor leaguers on the 40-man roster, and the roughly $10-11 million for insurance and pension benefits, and you’re at about $70 million.
The Pirates finished 2014 with an $82.1 million payroll. It has grown roughly $10 million for each of the past three years. Pirates president Frank Coonelly told the Post-Gazette last week that it has the capacity to continue to grow at that rate -- about $10 million a year, or 17 percent. Let’s put the cap at $92 million for the sake of argument.
(I’m ignoring, for the moment, the arguments for the Pirates pushing the payroll much higher because of the influx of national TV revenue from MLB, revenue sharing, record attendance and such. A worthy discussion, but for another time; I’m focusing on what they will most likely do.)
So, $92 million. Signing Martin will take at least three years, maybe four, and more than $10 million a year, probably in the $12-14 million per year range. These estimates come from looking at similar contracts, like the ones given to Miguel Montero and Yadier Molina, and industry expectations, like these from ESPN’s Buster Olney. The Cubs, Red Sox, Blue Jays, Dodgers and Yankees could all be interested in Martin, and others likely as well. Martin told me in August he wants a fair deal, but he will test the market, knowing this is his last chance at a big contract, so no hometown discount. Let’s say four years and $56 million gets it done.
The Pirates’ current front office has practiced mañana economics, back-loading the contracts of McCutchen, Tabata, Marte and Morton, though they didn’t do that with Martin’s two-year, $17 million deal. It’s possible we could see a breakdown in the style of $10 million, $12 million, $16 million, $18 million. So take away the $500,000 minimum salary of Tony Sanchez or Elias Diaz, or the $1.3 million projection for Stewart, and add $9.5 million. That takes the 2015 payroll to about $80 million. A straight breakdown of $14 million per year would put the payroll at $84 million.
There is still room there to sign a pitcher, which they’ll need to do, but not much. Their rotation is currently Gerrit Cole, Jeff Locke and Vance Worley until Morton gets back from his hip surgery, which might not be in time to start the season. Coonelly told the Post-Gazette that the Pirates have interest in re-signing both Francisco Liriano and Edinson Volquez, but they probably won’t have room for both -- and might not have room for Liriano -- if they sign Martin. Even if they go after another, less expensive pitcher -- Brett Anderson, Chris Young, Justin Masterson -- that might be all they have room for.
Issues could arise next year, when McCutchen, Morton, Marte and Martin, in our hypothetical, will be due $36 million. Morton could come off the books after 2016 if the Pirates decline his option, but Walker isn’t getting any less expensive. One option – trade Walker and move Harrison to second, but that assumes Alvarez can handle defensive duties at third.
The Pirates can certainly afford Martin if they choose, even going forward for the length of his contract if their payroll continues to increase at its current rate. But unless the payroll increases more drastically, signing Martin might restrict what they do elsewhere, especially going after starting pitchers. This is not meant as an argument for or against, just a look at the ramifications of signing Martin.
First Published: March 24, 2016, 5:06 p.m.
