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A Quick Payroll Update Following Jake Odorizzi’s Signing

The $210 million tax threshold figure might be the most important number to the Astros in 2021.

MLB: Spring Training-Philadelphia Phillies at Minnesota Twins David Dermer-USA TODAY Sports

The story about the Astros’ offseason was their seeming reluctance to not exceed the $210 million tax threshold for the 2021 season. Although the club technically didn’t pay the tax for exceeding the threshold last season due to the pandemic-shortened season, the ramifications still carry over into the 2021 budget. For example, if Houston exceeds the threshold for a second consecutive season, they would face a 30 percent surcharge — up from 20 percent — on any overage plus a penalty when it comes to draft pick compensation from losing their own free agents with qualifying offers next offseason.

Following the re-signing of Michael Brantley back in January, it did appear that the Astros were, in fact, done adding players of great significance. The payroll in terms of average annual value (AAV) would top out around $200 million or even a tad bit less, depending on the final figures. The original goal for James Click was to leave enough wiggle room in the budget for a potential midseason acquisition, especially if the club was in a position to solidify their postseason standing.

However, the recent injuries to Framber Valdez, who was last season’s ace, and top prospect Forrest Whitley exacerbated an already less than ideal situation as it pertains to starting rotation depth. Even in a normal season, this type of depth issue is a tough hurdle to clear. But following a shortened season when pitchers all over the league will be tested with a more usual workload, it is imperative for clubs to have plenty of depth to absorb those innings. The Astros were starting to run out of those pitchers who could do just that in 2021. Hence why the signing of Jake Odorizzi was such a high priority for this roster.

In terms of payroll complications, I was quite curious to see how the Astros would configure a contract for Odorizzi, who was reportedly looking for $13 to $15 million per season earlier this offseason. It was obvious that Houston would be unable to meet those earlier demands without exceeding the tax threshold, which felt like a non-starter for Jim Crane. When the signing was announced, I suspected both sides reached a more creative agreement to keep the annual value down, especially in 2021, in exchange for some incentives and possibly an option year. That turned out to be the case as Odorizzi’s AAV this season is $7.833 million, which helps keep the Astros below that ever-important $210 million figure.

Astros’ Updated Player Payroll - 2021

Player 2021 Salary & Pro-Rated Signing Bonuses 2021 Average Annual Value (AAV)
Player 2021 Salary & Pro-Rated Signing Bonuses 2021 Average Annual Value (AAV)
Verlander, Justin $33,000,000 $33,000,000
Greinke, Zack $32,875,089 $34,416,667
Altuve, Jose $29,200,000 $23,357,143
Brantley, Michael $16,000,000 $16,000,000
Bregman, Alex $13,000,000 $20,000,000
Correa, Carlos $11,700,000 $11,700,000
Odorizzi, Jake $9,000,000 $7,833,333
Pressly, Ryan $8,750,000 $6,800,000
Gurriel, Yulieski $6,500,000 $7,000,000
McCullers Jr., Lance $6,500,000 $6,500,000
Baez, Pedro $4,750,000 $6,250,000
Smith, Joe $4,000,000 $4,000,000
Maldonado, Martin $3,500,000 $3,500,000
Castro, Jason $3,500,000 $3,500,000
Diaz, Aledmys $3,000,000 $3,000,000
Raley, Brooks $2,000,000 $2,000,000
Stanek, Ryne $1,100,000 $1,100,000
Pruitt, Austin $617,500 $617,500
James, Josh Pre-Arb Pre-Arb
Valdez, Framber Pre-Arb Pre-Arb
Alvarez, Yordan Pre-Arb Pre-Arb
Straw, Myles Pre-Arb Pre-Arb
Tucker, Kyle Pre-Arb Pre-Arb
Urquidy, Jose Pre-Arb Pre-Arb
Toro, Abraham Pre-Arb Pre-Arb
Stubbs, Garrett Pre-Arb Pre-Arb
Javier, Cristian Pre-Arb Pre-Arb
Paredes, Enoli Pre-Arb Pre-Arb
Taylor, Blake Pre-Arb Pre-Arb
Bielak, Brandon Pre-Arb Pre-Arb
Scrubb, Andre Pre-Arb Pre-Arb
Abreu, Bryan Pre-Arb Pre-Arb
Emanuel, Kent Pre-Arb Pre-Arb
Garcia, Luis Pre-Arb Pre-Arb
Jones, Taylor Pre-Arb Pre-Arb
McCormick, Chas Pre-Arb Pre-Arb
Rodriguez, Nivaldo Pre-Arb Pre-Arb
Garcia, Robel Pre-Arb Pre-Arb
Ivey, Tyler Pre-Arb Pre-Arb
Nova, Freudis Pre-Arb Pre-Arb
Solis, Jairo Pre-Arb Pre-Arb
Soloman, Peter Pre-Arb Pre-Arb
Whitley, Forrest Pre-Arb Pre-Arb
0-3 players (8) $5,600,000
Greinke, Zack ($10,333,333)
40-man players-minors $2,250,000
Est. Player Benefits $15,500,000
Projected 40-man CBT Payroll $190,574,643
CB Tax Threshold - 2021 $210,000,000
Amount under Threshold $6,408,690
Source: Cot’s Baseball Contracts

Here are some quick payroll thoughts to keep in mind as Spring Training continues for a couple more weeks:

  • Odorizzi’s signing ought not to preclude the Astros from signing Carlos Correa and/or Lance McCullers Jr. to a contract extension before the season starts, even with more of a limited budget than originally anticipated for the upcoming season. Look at Alex Bregman’s contract extension prior to the 2019 season as a somewhat comparable example, in which the extension was structured to officially begin in 2020 with no changes to 2019 AAV figures. In short, the last year of arbitration can be viewed as a separate contract rather than a part of an extension. That is key for AAV value figures as Houston can keep both Correa and McCullers Jr. at their current amounts for 2021 as to not exceed the threshold for a second consecutive season.
  • Steve Cishek ($2.25M) and Steven Souza Jr. ($1.15M) are both non-roster invitees who could possibly earn a role on the Opening Day roster. Their respective roster numbers aren’t reflected in the table above, but if both players make the cut, the Astros would add a combined $3.4 million in payroll. Using Cot’s Baseball Contracts numbers, that would leave Houston with only $3 million under the $210 million threshold for the season. Something to pay attention to as camp continues.
  • In terms of trimming the budget, there isn’t much “fat” to cut. Aledmys Diaz, who has a $3 million AAV hit this season, is a name to watch in my opinion. Houston does have Abraham Toro on the 40-man roster and he can cover much of the infield as Diaz already does. Plus, he is scheduled to make only the league minimum, which would save roughly $2.4 million in payroll. But Toro’s disappointing 2020 is still a factor to consider and Diaz can play left field if Dusty Baker is left in a sudden pinch. Not likely to happen, mind you, but something to watch just in case.