The Rangers' 2013 Payroll Situation: $110MM And Counting?

So much money. So much #leadership."It will be [safe to say that there will be a nine-figure payroll next season]. Success follows success. By 2015 the goal is that this team will be self-sustaining, but our payroll may be another 40 or 50 percent higher. So that will move you up to a level where you should field a great team year after year. We just need to bridge the gap [between now and the TV contract] to get this great franchise to permanent success." - Rangers owner Bob Simpson on November 8th, 2011

They suffered yet another heartwrenching finish in 2012, one that saw their season end several rounds earlier than it did each of the previous two years, and based on much of the feedback that I've seen and received over the last month and a half, I can't help but feel like the fan base is still locked in a state of disbelief over how it all went down.

The reality, however, is that there will come a day when the cloud of lethargy hanging over the fan base will break, and this is the time of year when monster transactions flow freely and dreams of baseball grandeur begin anew. Our lingering disappointment could be obliterated in a moment's time at any moment during the next couple months. That's the beauty of hot stove season -- there's no direction you can look other than forward.

And when you start looking forward and digging into the business of possible moves that the Rangers could make during the 2012-13 off-season, you find that payroll will, as always, be a key determinant of just how much additional value they can pump into their roster. Team ownership supported Bob Simpson's bark with financial bite, as the Rangers' 2012 Opening Day payroll ($120.5 million) ranked as the sixth-highest in baseball; just two years earlier under the crumbling regime of Tom Hicks, that figure was $55.3 million, or the fourth-lowest mark in baseball. That's a 218 percent increase over two years.

Now, granted, it does get a hell of a lot easier to jack the payroll when you're running record attendance numbers and nearly maxing out some of your income streams, but ownership has both the motivation and the means to adequately capitalize the Rangers through the foreseeable future, and one hopes that will help prevent another extended stretch of mediocrity (or worse) from descending upon the Rangers as they prepare to tackle several upcoming waves of roster turnover. Money can't fix a broken team on its own, but it can help sustain and augment a foundationally sound talent base, and there's value in having the wherewithal to get (and keep) the players you want.

Earlier this week, however, MLB.com's T.R. Sullivan may have tempered some of the grander payroll expectations lingering out there when he noted that the Rangers, according to their preliminary projections, would "likely spend around the same as this past season, somewhere between $120-130 million." If we take that projection and run with it, we can back into an estimated off-season budget by determining (a) how much money the Rangers have already committed to their 2013 roster, and (b) how much money they're likely going to commit beyond that amount to retain their arbitration-eligible players. Here, then, is what their 2013 payroll situation looks like (via Cot's Baseball Contracts):

SIGNED FOR 2013 (10 PLAYERS @ $86.35 MILLION*)

DH Michael Young -- $16 million (FA-eligible after 2013)
3B Adrian Beltre -- $16 million (FA-eligible after 2015-16)
2B Ian Kinsler -- $13 million (FA-eligible after 2017-18)
OF Nelson Cruz -- $10.75 million (FA-eligible after 2013)
SP Yu Darvish -- $9.5 million (FA-eligible after 2016-17)
CL Joe Nathan -- $7 million (FA-eligible after 2013)
SS Elvis Andrus -- $5.05 million (FA-eligible after 2014)
OF Leonys Martin -- $3.25 million (FA-eligible after 2018 at earliest)
SP Derek Holland -- $3.2 million (FA-eligible after 2016-18)
SP Colby Lewis -- $2 million (FA-eligible after 2013)

[* The $86.35 million total includes Scott Feldman's $600,000 buyout for 2013, which Cot's included as part of the Rangers' guaranteed 2013 obligations. In the cases of Nelson Cruz, Elvis Andrus, and Leonys Martin, prorated shares of their original signing bonuses have been added onto their 2013 base salaries (which conforms with baseball's payroll reporting conventions). Yu Darvish is also linked to a $51.7 million posting fee which the Rangers recorded as an intangible asset and are amortizing over six years for accounting/tax purposes; no portion of the posting fee is included for payroll reporting purposes, though. It is unclear to what extent the Darvish posting fee affects the club's internal budget.]

This, I think, is pretty straightforward, and it's difficult to imagine more than one of these names being gone in four and a half months. Elvis Andrus has, of course, been the subject of growing trade speculation over the course of these last few months, and I imagine the smoke is only going to intensify as we near the winter meetings in early December ... but as a practical matter, Elvis probably isn't going anywhere, because a trade will require (a) a huge bounty of returning talent, large enough that the Rangers feel they have no other choice but to pull the trigger; (b) organizational certainty that they can live without Elvis long term (and that they can't re-sign him); and (c) some amount of confidence that Jurickson Profar, who has 17 plate appearances above AA ball, will be ready very, very soon.

Conditions (b) and (c) are iffy, but you can get around them if the trade is right. You can't get around (a), though, because Elvis's tour of duty in Texas almost certainly figures to roll on if they can't find a tremendous return for him. Kinsler, Cruz, and Holland are all names that could conceivably be moved, but none of the three fared particularly well in 2012, and I have my doubts that anyone will come calling on those three with offers that the Rangers find too enticing to pass up. Young, meanwhile, could be the one player that the Rangers actively work to find a new home for, although the best case scenario there -- from a roster construction standpoint, that is -- probably revolves around Texas netting only a marginal player or two for some salary relief that they burn on a superior 1B/DH option. Is he going anywhere yet this winter? Probably not!

ARBITRATION-ELIGIBLE FOR 2012 (4 PLAYERS @ EST. $17.8 MILLION)

SP Matt Harrison -- est. $6.1 million (FA-eligible after 2014)
OF David Murphy -- est. $5.6 million (FA-eligible after 2013)
SP/RP Neftali Feliz -- est. $3.1 million (FA-eligible after 2015)
C Geovany Soto -- est. $3 million (FA-eligible after 2013) *

[All arbitration salary projections courtesy of Matt Swartz and MLB Trade Rumors, who together created a model that strips some of the guesswork and subjectivity out of the arbitration projection game. It is important to note that Soto will likely be non-tendered -- his arbitration projection is $4.6 million for 2013 -- and that the $3 million figure listed above is my guess at what he will pull down through a non-arbitration deal with Texas. If you believe that's a faulty adjustment or that Soto won't be back, adjust accordingly; however, keep in mind that even if Soto does leave, there's a strong chance that Texas will end up dropping $2-3 million on some different No. 2 catcher anyway.]

I feel that this group bears a vague resemblance to the above guaranteed contract group in that you can sort of squint and tilt your head to one side and envision different scenarios where either of Harrison or Murphy are traded this winter. Again, though, it's far likelier than not that they both begin the 2013 season as relatively significant pieces of the Rangers' roster. Feliz figures to be rehabbing deep into the summer months and may or may not make it back to the majors in 2013 in a relief capacity; regardless of how his convalescence plays out, though, he'll get paid and continue to accrue major league service time, so the sooner he can resume generating value, the better.

INDENTURED FOR 2012 (11 PLAYERS @ $500,000/PLAYER, OR $5.5 MILLION)

SP Alexi Ogando
SP Martin Perez
1B Mitch Moreland
OF Craig Gentry
CIF Brandon Snyder/Mike Olt/comparable player
RP Wilmer Font
RP Robbie Ross
RP Tanner Scheppers
RP Michael Kirkman
Catcher X
Outfielder X
Reliever X
Reliever Y

So as to avoid any confusion about what I'm doing here, I'm filling in the 13 remaining blanks on the Opening Day 25-man roster with pre-arbitration guys who are making the league minimum -- $490,000 in 2013 -- or close enough to the minimum that it all centers around an average of $500,000 per player. No, they're not going to go into the season with gaping holes behind the plate, in the outfield, and in the bullpen; I also strongly doubt that they'll go into the season with Martin Perez as their No. 5 starter. The idea here is to give us a payroll baseline that we can adjust accordingly if/when some higher-dollar acquisitions come down the pipeline.

And no, I'm not assuming any free agent re-signings. I don't know what basis you would have for assuming the returns of Josh Hamilton or Ryan Dempster or Mike Napoli or Mike Adams or Koji Uehara or Mark Lowe at this point in time; sure, they could end up signing comparable players for comparable prices, but the entire idea here is to figure out where their salary projection is before they make any off-season moves.

FREE AGENTS FOR 2012 (9 PLAYERS)

SP Ryan Dempster ($14 million in 2012)
OF Josh Hamilton ($13.75 million in 2012)
C/1B Mike Napoli ($9.4 million in 2012)
SP Scott Feldman ($6.5 million in 2012; 2013 option declined, $600K buyout)
SP Roy Oswalt ($5 million in 2012)
RP Mike Adams ($4.4 million in 2012)
RP Koji Uehara ($4 million in 2012)
RP Mark Lowe ($1.7 million in 2012)
RP Yoshinori Tateyama ($1 million in 2012; 2013 option declined, buyout unknown)

If you crammed the business end of a loaded gun into my ear and told me to pick the player on this list who is the likeliest to re-sign with Texas, I'd take Uehara. After him, I'd take Napoli. After him, I'd take Tateyama (on a minor league deal). And after the three of them, I'd take nobody -- Dempster didn't fare well here and is probably headed back to the Senior Circuit, Feldman/Oswalt are history, Adams will likely land elsewhere as a setup man, Lowe feels like he's run his course in Texas, and Hamilton will almost certainly prove too rich for the Rangers' blood.

So, adding everything up, those 25 players I've slotted for the Opening Day roster -- including 13 pre-arbitration players, some of whom are roster plugs -- plus Feliz's $3.1 million arbitration projection plus Lewis's $2 million salary plus Feldman's $600,000 buyout comes out to:

PRELIMINARY ESTIMATED 2013 PAYROLL: $110.65 MILLION

That, again, is their baseline 2013 payroll obligation. They could conceivably end up lopping a few million dollars off that total if they should manage to shed some of that obligation by trading Young or Kinsler or Cruz, or if Swartz's arbitration projection model completely breaks down with the Rangers and Murphy/Harrison/Feliz collectively bank less than $14.8 million, or if they dump Soto and end up going really, really cheap at backup catcher. I'm not betting on any of those things happening, though, and, ultimately, I think that $110.65 million figure is a pretty accurate reflection of what the Rangers' front office/ownership expects to commit for 2013 before adding any free agents/trade acquisitions.

And that, in conjunction with Sullivan's reported $120-130 million budget, brings the Rangers' decision to not make a qualifying one-year offer to Mike Napoli into clearer focus. I imagine there was some pretty significant trepidation in the room about making a $13.3 million offer to Napoli that, if accepted, would have jacked the estimated payroll to $124 million before doing anything about the outfield, the starting rotation, or the bullpen. I dig Napoli as much as the next guy, but he's now more than a year removed from his monster 2011 campaign, and 2012-like production is much closer to what you can expect out of him going forward than 2011-like production. Monster power is great, but the offensive plunge was alarming, the defense behind the plate looked more suspect than it did a year before, and he's now on the wrong side of 30. I'd like to see him back, but I get why the offer wasn't made.

I think this should also serve to temper some of the expectations being bandied about as far as the Rangers making a serious run at a marquee free agent such as Zack Greinke -- sure, they could backload the hell out of such a deal in anticipation of another $30-plus million in expiring contracts coming off the books next winter (and, for that matter, in anticipation of their coffer-filling TV deal with FOX Sports Southwest that begins in 2015), but they would still end up around $125-130 million for 2013 just by adding Greinke alone, and before addressing any of their other roster holes. To make that work, ownership would need to be prepared to move above and beyond the $140 million mark for next season, or they would need to shed some of their existing payroll obligations. 

And, again, Sullivan's reported $120-130 million figure was, in his own words, a "preliminary" payroll projection. I don't think that's a hard cap so much as it is a budgetary preference -- if the right opportunity presents itself along the lines of a marquee free agent or an expensive trade option coming into play, and if the front office can sell ownership on it, then you could end up seeing something north of $140 million next season. I think it's reasonable to assume there's some amount of wiggle room in there that would permit them to add special over-budget exceptions.

One big question, though, is whether front office is sold enough on any of the currently available options to commence with a serious sales pitch to ownership while knowing that it could be a very tight fit salary-wise, and that it could blow most of the Rangers' flexibility to add payroll at the 2013 trade deadline.

Greinke? Perhaps. B.J. Upton? Iffy. Josh Hamilton? Doubt it. Nick Swisher? On the fence. You get my point.

The other big question here is where they should actually choose to allocate their remaining resources. If we assume a modest payroll increase to the upper end of Sullivan's reported projection ($130 million), the Rangers have about $20 million left to add a No. 1 catcher, an outfielder, a starting pitcher, and at least two relievers. From those facts, you can pretty easily infer that there are trades incoming -- yes, they could obtain all of those pieces on the open market, but $20 million spread out across that set of needs isn't going to get you very far in free agency, and I think it's logical to conclude that at least a few of their identifiable roster holes will be addressed by swapping in-house talent for less expensive players with multiple years of club control remaining. 

Alternatively, they could address their outfield depth problem by going ahead and moving Ian Kinsler into a COF spot, summoning Jurickson Profar to play second base, and holding steady with Elvis Andrus, which would open things up a bit more as far as the payroll situation is concerned. (Then again, I'm not the staunchest adherent of the Kinsler-to-COF idea.) Or they could end up moving Andrus in a deal for a starting pitcher or corner outfielder that opens up the shortstop position for Profar while simultaneously attacking one of those other roster holes; that, however, would require conditions (a) through (c) all being met, and I still think it's likelier than not that Elvis stays put this winter.

Also, keep in mind that I'm more concerned about Texas shoring up the corner outfield spots than I am center field; it's a bit risky, but I'm on board with a platoon-type 50-50 playing time setup in center field consisting of Leonys Martin and Craig Gentry that helps maximize each player's offensive output while protecting them both from overexposure. This kind of setup would require Ron Washington's unconditional support to work, though, and I think you can understand why I'm quite hesitant about taht condition. If he's completely off board with the idea, or doesn't trust Martin and/or Gentry for whatever reason, then yeah, they're going to need a CF-capable outfielder.

The bigger issues, though, may be at catcher and the starting rotation, and that's because the depth is sketchier at both areas. Even in a worst-case scenario where the Rangers grab some fifth outfielder fresh off the scrap heap, you still have above-replacement starters at both COF spots in David Murphy and Nelson Cruz, and you have a decent CF pairing in Martin/Gentry. Your outfield probably won't thrive if you roll only with internal options, but it could be worse. At catcher, though, there are no internal above-replacement options, and I'm doubtful about Martin Perez's chances of performing at the level of even an league-average No. 5 starter if he opens the 2013 season in the rotation. If everything else goes to hell, you can plug him in and hope for the best, but he's just not ready.

Despite the rather negative tenor of those last few paragraphs, it's not my intention to go full-on doom and gloom with this post, nor do I think this is going to be a doom-and-gloom-type off-season for the Rangers. They have some pretty significant holes in their projected roster that need to be squared away, and they're going to have to pull it off on a reasonable budget with a relatively weak free agent class, but do bear in mind that they still project as the best team in the AL West for 2013 -- per ESPN.com's Dan Szymborski -- before adding a single free agent or consummating a single trade.

That, of course, didn't end so well for Texas in 2012, as the early-season "best team in baseball" with the biggest and brightest pre-season projection collapsed at the finish line. I absolutely get the skepticism over being the best team "on paper." In the end, though, what else can you really do other than maximize your post-season chances and then hope to emerge victorious from a series of weighted October dice rolls?

It's that first part, the "maximize your post-season chances" bit, that we're focused on right now, and suffice it to say that it's much easier to do that with financially supportive ownership and a top 5-6 payroll than it was during the latter years of, uhm, that other guy who keeps making headlines for all the wrong reasons.