A 2023 Payroll Rankings Refresher And Thoughts About The Offseason

As a quick opening note, we’re already nine days into 2023, and the Astros still haven’t hired a general manager. Wild, am I right? To be clear, Jim Crane stated back in November he wasn’t going to rush the interviewing process a second time. He was also transparent in saying that he didn’t expect to fill the position before the new year; however, this entire post-World Series direction still feels odd. Better than whatever is happening with the Texans at the moment, although that isn’t necessarily something to brag about.

Regardless of the baseball operations leadership configuration, there wasn’t a lot to necessarily do to the active roster this offseason. The decision to retain or, as actually occurred, let go of Justin Verlander in free agency was always Crane’s decision. Re-signing Rafael Montero to a three-year, $34.5 million contract was an interesting choice considering the volatility potential from year to year, especially for a pitcher who has only had two seasons with a sub-4.00 ERA in his career. But the decision to sign José Abreu further strengthens a lineup that sometimes felt an above-average hitter too short, at least for the next couple of seasons. Even if Abreu’s offensive production takes a bit of a dive by 2025, which is the final season of his new contract, the $19.5 million AAV hit in tax payroll isn’t something to stress over. Bringing back Michael Brantley on a one-year, $12 million contract to split time in left field and designated hitter with Yordan Alvarez is low risk, as long as health permits. In terms of actual signings, there isn’t much to complain about as one looks at this roster as it is today.

That said, the overall spending pattern across baseball this winter has been a bit, let’s say, startling. For one, teams and players didn’t waste their time in December, as noted here by Ben Clemens of FanGraphs. The past decade has conditioned us not to expect this much rapid free-agent movement that early in the offseason. Secondly, the contracts given are generally above the overall consensus heading into the offseason regarding the dollars, the years, or both. Heck, Edwin Diaz signed for how much again? Shortstops, in particular, have signed some interesting contracts this winter. For example, MLB Trade Rumors had Trea Turner signing for eight years, $268 million; in reality, he signed with the Phillies for ten years, $300 million. While the average annual value is lower than the estimate, the number of years, even for someone who projects to age well like Turner, was relatively unexpected. Dansby Swanson was projected to sign for seven years, $154 million. The Cubs matched the years but offered him an extra $23 million above that estimate. Then there is Xander Bogaerts, who signed with the Padres for eleven(!) years, $280 million. Do you want to know why longer contracts are suddenly the rage in baseball? Again, read this post by Ben Clemens at FanGraphs, who does a tremendous job breaking down why clubs and players are interested in these sorts of financial agreements, especially in this age of rising interest rates.

In terms of payroll rankings, due to a spending spree by multiple clubs this offseason, the Astros have slipped a little bit further down the list, now averaging anywhere from 10th to 12th, depending on your site of choice. For additional context, from Cot’s Baseball Contracts, Houston finished 10th in 2022 and 7th in 2021 in the 40-man collective bargaining tax payroll. If the season started today, the organization would rank 11th in payroll projections used for tax calculations.

Interestingly enough, the Astros aren’t even the biggest spender within their division, as both, the Angels and Rangers currently outpace them in overall payroll. Also, the Mariners aren’t terribly far behind, although I doubt Jerry Dipoto will add much more in salary this offseason. Fresh off a World Series title, and adequate space (~$30.2 million) under the first tax threshold level of $233 million, there is the case to be made that the Astros were too lax in free agency. Perhaps they want to keep the coffers reserved for a mid-season acquisition, which is certainly plausible. Considering Crane’s past reluctance to spend significant dollars on free agency, this development isn’t precisely breaking news. But the roster as is didn’t require much tinkering entering the offseason, which made competing for free agents at the current market rate a less desirable option for the organization. It also partly explains why Montero’s new contract was more inflated than anticipated.

The Astros are well-positioned to add payroll if they so desire. An extension for some combination of Kyle Tucker, Framber Valdez, and Cristian Javier would explain the lack of notable activity from the organization outside of Abreu. For as much as Crane has spent in recent years, he usually keeps the payroll commitments under the first-tier threshold. But if multiple extensions come into play later this year, those figures will raise Houston’s payroll ranking and chip away at their current spending room. With Jose Altuve and Alex Bregman only under contract for two more seasons, the opportunity is now to add to this roster, even if it means exceeding the first tax threshold.