The Rangers' 2012 Payroll Situation: $100MM And Counting?

That's some $20 body language right there."I'm not doing it anymore. This is my last year of doing it. We're going to play within our means from now on." -- Tom Hicks in May 2002, less than 24 months before the Rangers' payroll sank from $100 million to $55 million; from 2004-10, the Rangers' Opening Day payrolls averaged just $64 million

Damn, have we come a long way. We've witnessed the successful advancement of the Rangers from a state of virtual hopelessness (particularly during the mid-aughts) to a state of joy back over to a state of agonizing wistfulness. We've personally experienced the kind of highs that few of us ever thought we'd get the chance to experience during the darker years of the Tom Hicks era -- and now, in a certain sense, we've experienced the lowest of imaginable lows. How could they have have been beaten so mercilessly and betrayed so callously by the gods of randomness and probability during the final hour of Game 6? How on earth could they have stumbled on the 27th and 30th outs, with two-strike counts safely in hand both times? I'm still having trouble coming to grips with this.

I digress, however, because it's not my intention to bring the collective mood of the fan base down any further than it has already fallen. As of this morning, I'm far, far more interested in talking about the Rangers coming full circle ... about the Rangers, after nine long years, being positioned to rejoin baseball's $100 million fraternity.

With regular-season attendance (and all of the related parking/concessions/merchandise revenue streams) rocketing to lofty new heights, a welcome infusion of cash stemming from those back-to-back World Series appearances flowing into the coffers (both directly from post-season revenues and indirectly from season-ticket sales), an extremely lucrative $80 million per year television deal looming on the horizon, and a well-capitalized ownership group undergirding the baseball operations department, we have every reason to believe that Texas will commit the funds necessary to sustain the core of the team and improve at the roster spots that are in need of, well, improvement.

Before we can pin down how much money the Rangers are going to have to work with this winter, however, we have to figure out (a) how much money they already have committed to their 2012 roster, (b) how much they're likely going to commit beyond that amount in order to retain their arbitration- and option-eligible talent, and (c) how much they're likely going to have committed by the time pitchers and catchers report to Surprise in 3½ months. Here, then, is where the Rangers are positioned as of right now:

SIGNED FOR 2012 ($68,250,000)

* DH Michael Young -- $16 million (FA-eligible after 2013)
OF Josh Hamilton -- $15.25 million (FA-eligible after 2012)
3B Adrian Beltre -- $15 million (FA-eligible after 2015-16)
2B Ian Kinsler -- $7 million ($10 million 2013 team option, then FA-eligible)
RHP Scott Feldman -- $6.5 million (2012-13 team options, then FA-eligible) 
RHP Koji Uehara -- $4 million (FA-eligible after 2014)
C Yorvit Torrealba -- $3.25 million (FA-eligible after 2012)
OF Leonys Martin -- $1.25 million (FA-eligible after 2017-18) 

[* It is amusing to me that the media, armed with the requisite info-gathering power/access to get this right, has still not been able to reach a clear consensus on the exact structure of Young's deal. My long-standing suspicion has been that Young is not getting paid $16 million per at this point, as his original five-year, $80 million deal contained a significant deferred money component, and it was reported nearly three years ago by FOXSports.com's Ken Rosenthal that Young was paid more than $10 million at the outset of his five-year deal that took the form of an upfront signing bonus. I suspect that Young will actually bank something closer to $13-14 million in 2012, but, hell, even the official payroll databases treat his annual salary as a $16 million commitment, so I might as well roll with that. Adjust accordingly, if you disagree.]

Very straightforward. As is the case with each of the lists that follow, there is some wiggle room in play here -- Texas could, for example, ship Torrealba out and roll with a cheaper backup catching solution behind Napoli (though I don't think that sounds like a real great idea), or cede to Uehara's purported desire to return to Baltimore and clear most or all of his committed salary off the books in the process. It's also possible (in theory, at least) that the Rangers could trade Young or Feldman and free up a lot of cash in the process, but neither of those possibilities seems particularly realistic. 

ARBITRATION-ELIGIBLE FOR 2012 (est. $30,250,000)

C Mike Napoli -- est. $9.25 million (FA-eligible after 2012)
OF Nelson Cruz -- est. $5.5 million (FA-eligible after 2013)
RHP Mike Adams -- est. $4.75 million (FA-eligible after 2012)
OF David Murphy -- est. $3 million (FA-eligible after 2013)
SS Elvis Andrus -- est. $2.5 million (FA-eligible after 2014)
LHP Matt Harrison -- est. $2.5 million (FA-eligible after 2014)
RHP Mark Lowe -- est. $2 million (FA-eligible after 2012) 
IF Andres Blanco -- est. $0.75 million (FA-eligible after 2014) 

Lots of educated guesswork here, but I feel reasonably confident in these figures given a margin of error of about $300,000 in either direction. With the possible exceptions of David Murphy, Andres Blanco, and Mark Lowe, every player that you see listed here is a virtual lock to return to the Rangers next year -- and one important thing to keep in mind is that even if the Rangers do decide to cut bait with one of those three, they'll probably still be spending comparable (or greater) amounts on their replacements. Case in point: they could probably find a better fourth outfielder than Murphy if they really worked hard at it, but it's improbable that he would come any cheaper than $3 million.

Napoli, by virtue of turning in an historic offensive season at a position where offense is generally scarce, nabs either a huge pay raise via arbitration -- $10 million isn't totally out of reach -- or a security-conferring multi-year extension. Cruz could also be in line for such a deal, but the organization's preference may be to ride out his final two years of arbitration eligibility on a year-to-year basis. Adams gets rewarded handsomely as a premier setup man in his final season of arbitration eligibility, and first-time arbitration eligibles Elvis Andrus and Matt Harrison each benefit from their efforts with a pair of deals that set nice salary baselines for the 2013-14 seasons.

TEAM OPTIONS FOR 2012 ($3,250,000)

Colby Lewis -- $3.25 million ($250,000 buyout)

A total no-brainer. Despite fighting a losing season-long battle with the home run ball (a problem which may or may not be tied to the hip problems that required pain-relieving injections at some indeterminate point during the season), the logical assumption is that he'll be able to turn in another 180-200 innings of high-3.00s to low-4.00s ERA baseball, and that he'll still function as a very serviceable and very cost-effective mid-rotation innings-eater. 

ON THE FENCE FOR 2012 (est. $2.75 million)

RHP Darren O'Day -- est. $1.5 million via arbitration (FA-eligible after 2014)
RHP Yoshinori Tateyama -- est. $1.25 million team option (FA-eligible after 2016) 

My personal belief is that the Rangers will cut O'Day loose and stick with Tateyama as their sidewinding righty-killer, but there are a couple of things that could throw that projection off the tracks: (a) O'Day, for all of his struggles with the injury bug this past season, is a good seven years younger than Tateyama, and (b) despite the obviously flawed logic behind throwing a right-handed sidearmer at a left-handed hitter, O'Day has at least demonstrated in the past that he can beat left-handed batters (albeit in a limited sample), whereas Tateyama has not. In any event, I think only one of Tateyama or O'Day returns next season, and as such, only one is included in this payroll projection.

INDENTURED FOR 2012 (est. $450,000 per player, or $2,700,000)

OF Julio Borbon
RHP Neftali Feliz 
OF Craig Gentry
LHP Derek Holland
1B Mitch Moreland
RHP Alexi Ogando  

The 2011 league minimum was actually $414,000, but that's not the most accurate number to use in this instance; Ogando, for example, made $430,000 in 2011, and will probably net another small raise on top of that going into next season. Ditto Feliz, who made $457,000 this past season, and Moreland, who made $426,000 this past season, and ... well, you get the idea.

FREE AGENTS FOR 2012

LHP C.J. Wilson -- est. $16-17 million (five years, $80-85 million)
LHP Darren Oliver -- est. $4 million (one year, $4 million)
LHP Mike Gonzalez -- est. $3.5 million (one year, $3.75 million) 
OF Endy Chavez -- est. $2 million (one year, $2 million)
C Matt Treanor -- est. $1 million (one year, $1 million)

None of these five players are included in my preliminary payroll projection, but I would be quite surprised if the Rangers didn't reach some kind of agreement with Oliver, whose desire for a world championship has not yet been satiated and whose roots are so firmly planted in Southlake that it's either Texas or bust for him going forward. Feel free to tack his projected $4 million salary onto the bolded number below if you're so inclined. Gonzalez also wants to return, but unless he's willing to accept a rather substantial downgrade in pay from his expiring two-year, $12 million deal, I don't know that an agreement can be reached. Treanor is likely gone (again), Chavez is more likely gone than not, and Wilson ... well, I'll get back to him in a second.

PRELIMINARY ESTIMATED 2012 PAYROLL: $104-105 MILLION

Yes, that's after accounting for players under contract, arbitration- or option-eligible players, and indentured pre-arbitration "slaves" -- but before adding a single free agency-eligible player, regardless of 2011 team affiliation. Yikes. Once again, though, you can manipulate these numbers to your liking. You can call me an idiot who doesn't have any kind of grasp of how to estimate a player's arbitration payout and lop $5 million off that category's total, or pretend that the likes of Murphy, Uehara, and/or Torrealba aren't going to be back next year and lop another $5-10 million off there. If you can make a convincing argument for it, it's fair game. If you can't, though ... well, then you should probably go ahead and turn your microphone off.

So, what does this all mean? Well, aside from the fact that my previous early-September projection was pretty accurate, it means that unless the Rangers find some way to slash payroll, they're going to have to expand their payroll very close to (or actually into) the $120-125 million range next season in order to sign a top-rotation starter in the vein of C.J. Wilson or Yu Darvish. If you want Prince Fielder or Albert Pujols instead, figure on something closer to $125-130 million. Don't, however, figure on getting two of the aforementioned four big-ticket names -- not unless the Rangers trade Michael Young or Josh Hamilton, or shock and horrify the fan base by non-tendering Mike Napoli. 

Now, are the Rangers actually capable of supporting a $120 million payroll as early as next season? I'd like to think that the answer is 'yes,' and I think the following mid-October quotes from Rangers co-chairman/money man Bob Simpson (via ESPNDallas.com's Richard Durrett) augur pretty well in that regard, but I'm not particularly eager to bet any of my own money on that actually happening:

"Our challenge is going to be to keep this level of talent together and we know that. We’re going to step up and put some money in, ask the fans to support us and help us and see if we can’t deliver something like this every year. We want a great fan experience. We’re committed to sustaining this level of play. ... Maybe eventually [Rangers fans can expect a top-five budget] as we transition. I think rather than have a payroll goal, we have a talent and level of play goal. Money can’t buy success by itself. That’s been proved over and over again.

"What I would recommend to the owners is support this management, support this talent and if we have to step up from time to time financially, we will. Unlike some other teams, there’s been no money taken out by the owners. We expect to put money in every year for several years until we get to the sustained big-time and also until our TV contract steps up in 2015. We are committed and want to keep this level of play. You can’t ever guarantee it because it’s a competitive world. But our philosophy is to sustain this level of play and we know it’s going to cost more money. We’ll do everything within reason to keep it there and keep this going."

One key point in closing, via Grantland's Jonah Keri: that competitive advantage derived from the Rangers' $1.6 billion deal with FOX Sports won't exist forever. Other teams will slowly but surely ink media rights deals that guarantee similar or greater annual payoffs, and, as time elapses, the Rangers' financial edge just won't look quite as, well, edgy as it does now. To that end, there is some logic behind the idea of spending heavily now -- provided that the Rangers spend on the right players -- on a Yu Darvish or the like, and worrying about being compensated by FOX Sports later. If the Rangers indeed conform with that line of thinking ... well, then this is going to be one busy off-season.