A Payroll Update For The Upcoming Offseason

Now a week removed from that disappointment of an ALCS, I find myself slowly recovering from an abrupt end for the Astros. I needed a few days to digest what I just watched, specifically the letdown from that high following Game 5 to contemplating why I even follow baseball once Game 7 finished. As much as I think about baseball in terms of numbers and trends, the emotional ties to this club dating back to childhood are never fully abandoned. Except for two exceptions, every October/November — early or late — always ends with some sense of mourning.

But even with the World Series raging on, the baseball world doesn’t stop. In the week since Cristian Javier lasted only ¹⁄₃ of an inning in a Game 7 start, the dynamics surrounding the Astros have begun to shift. Dusty Baker is no longer the manager. While I possess no inside knowledge, the odds feel at least moderately high that either Joe Espada or Brad Ausmus will end up with the job. Dana Brown enters his first real offseason as the club’s general manager. The front office structure has already begun to change, with the Astros parting ways with assistant general manager Bill Firkus and farm director Sara Goodrum. Brown now has the opportunity to mold the front office into his image. Of course, we can’t discuss the front office without noting how involved Jim Crane and Jeff Bagwell have become with the operation in recent years.

All of that stuff will be sorted in the coming weeks, though. But there are certain things fairly set in stone, such as player payroll, especially for a contender with no intention to tear it down. The Astros' immediate course largely hinges on how much Crane feels like spending. For the first time since 2020, which the Astros didn’t pay due to Major League Baseball suspending tax payments for that season, the club is faced with the possibility of exceeding the first CBT threshold ($237 million) for the upcoming 2024 season. Depending on your source of player payroll information, the Astros have anywhere from slightly over $9 million to spend all the way down to roughly $1.8 million. Once arbitration passes, we’ll have a better sense of the exact amount of money that Houston has to work with before hitting the threshold.

But with the number of needs on the roster, mainly in the bullpen, backup catcher, and possibly the outfield, it is currently a stretch to reasonably expect Crane and Brown will be able to duck the tax next season. Héctor Neris, for example, is likely to have several suitors who may ultimately offer more than the Astros feel comfortable with, especially with two years remaining on Rafael Montero’s ill-advised contract from last offseason. The same thought applies to Phil Maton and, to a lesser degree, Ryne Stanek. Pitching depth was arguably this club’s biggest weakness in 2023 and it will cost some money to address. It sounds like Michael Brantley may retire, which could leave a hole in the outfield. Yainer Díaz is poised to become the primary catcher, but the Astros will need to find someone to become his backup. In other words, there are enough holes to fill on the roster to easily spend up to and likely exceed the first-level threshold.

Arbitration is another factor to consider with Spotrac currently projecting $39.7 million to those eligible players in 2024 salaries. Both Kyle Tucker and Framber Valdez are due for another round and will become increasingly expensive. Mauricio Dubón, Chas McCormick, José Urquidy, Luis García, and Bryan Abreu are also arbitration-eligible for the first or second time this offseason. While their projected raises aren’t dramatic at least on an individual level, the net effect will be felt. In turn, the Astros are likely to have one of the most expensive rosters in the game, with only the Mets, Padres, and Yankees currently projected to have a higher CBT payroll. However, with a club ready to compete for another championship, it would make little, rather, no sense for Crane to avoid the first-level tax threshold again. For context, when the Astros exceeded only the first-level threshold back in 2020 before the pandemic, the organization was on the hook for only a paltry $3,263,800 before the payment was suspended. Draft pick penalties don’t apply unless a club exceeds $40 million over the initial tax threshold. From a short- and long-term viewpoint, it would behoove the Astros to act aggressively this offseason with a window that remains open for at least one more season.

With that said, the Astros also have to weigh what their future possibly looks like starting in 2025. Jose Altuve and Alex Bregman are scheduled to enter free agency once their current contracts expire after the 2024 season. Justin Verlander has a vested option for 2025 on the table. Ryan Pressly also has a mutual option for 2025. Kendall Graveman is off the books by this time next year. Tucker and Valdez will possibly enter free agency two years from now. Odds are that the Astros will aim to compete again in 2025, especially if one or both of Altuve and Bregman are signed to extensions. But there is plenty of uncertainty to consider until something happens or doesn’t on the extension front.

At this point, the decisions and financial willingness to spend of the Astros’ top brass will likely determine how long this window remains open. Once the 2024 season ends, Houston has a chance to reset a bit in terms of payroll obligations, with Yordan Alvarez, Lance McCullers Jr., and Cristian Javier representing the only committed salaries through at least 2026. But if the Astros remain serious about winning in 2024, which I believe is the case, then I’d advise that the organization exceeds the first-level tax threshold this season with a chance to reset it the following season. After all, contention windows for most clubs aren’t open perpetually and the Astros have a prime opportunity to make one more push into October. The tough questions will come regardless, starting in 2025. So, why not take advantage when the opportunity is present?