clock menu more-arrow no yes mobile

Filed under:

A Payroll Update Following Victor Caratini’s Signing

Washington Nationals v Houston Astros Photo by Bob Levey/Getty Images

Peaking sometime between November and February during the doldrums of the offseason, there is a general online debate about whether the Astros — rather, Jim Crane — is cheap about player payroll. It usually happens when a notable free agent signs with another club or another former Astro signs elsewhere. So, you know, fairly often. I typically avoid the cheap label for ownership as the organization has spent money during this competitive window. With that said, I do question the rationale of the decisions surrounding certain contracts, especially from last offseason.

With Dana Brown now in charge of the front office, the Astros have shown considerable restraint in free agency this year. Most of that restraint, however, is likely due to Crane limiting the available budget as the club flirts with the first tax threshold of the Collective Bargaining Agreement. Barring an unforeseen development, the Astros are on track to exceed the first CBT threshold — $237 million — for the upcoming 2024 season. However, the exact amount is still to be determined as the offseason isn’t finished yet and there is also the matter of arbitration to resolve.

As currently constructed following Victor Caratini’s signing, this roster is expected to force ownership to pay a Collective Balance Tax for technically the first time in club history. For those who may not recall, the Astros did exceed the first tax threshold back in 2020, but due to the pandemic did not have to pay the tax. The tax payment that season would’ve been around $3.263 million. For 2024, per Cot’s Baseball Contracts, Houston has a projected player payroll of $240.432 million for next season. In turn, the estimated tax payment would be $684,762. So, you know, not big dollars for a baseball team not named the A’s or Pirates. Spotrac estimates a player payroll of over $244 million, with a tax penalty of $1.420 million. Again, it's not exactly an egregious amount to pay for a club looking to contend for a World Series title.

But there are more considerations in play than strictly financial. For example, the Astros are also in line for draft pick penalties, especially if Jose Altuve and/or Alex Bregman choose to sign elsewhere next offseason. Of course, this depends on the organization applying the qualifying offer tag to both players, which they will do if a new contract agreement isn’t reached. But if the Astros remain over the first tax threshold, then any compensation pick obtained by losing a qualifying free agent would move from between the second and third rounds of the MLB Draft to after the fourth round. Enough of a difference for a club to consider cutting costs to duck the tax if the season goes sideways by the trade deadline.

Looking ahead, the Astros are likely to prioritize flexibility, especially for the trade deadline, in the event the organization decides to buy...or sell. Yes, selling remains a possibility if the season goes sideways. If that occurs, Crane would possibly like to dip below the tax threshold to avoid paying a tax while potentially keeping any compensation picks for Altuve and, more likely, Bregman, between the second and third rounds. But if the club remains competitive by the trade deadline, then the room under the first tax threshold and the second ($257 million) could be used to bolster the roster for another deep postseason run.