Facing facts

[wildcard]

I believe that the O's are at or close to their budget limit and are unlikely to make another big signing.

In 2015 payroll for the whole year was about 117m. They are currently at 137m but have deferred 11m so the payroll they have to pay is about 126m.

In some ways fans should give Peter credit for raising payroll in spite of the fact that revenues decreased in 2015. It appears he has stayed on the course of adding about 10m to the budget each year since Duquette arrived.

There is a whole discussion about what should happen, how Peter should spend more, can afford to spend more, etc. That is out of the realm of what does happen. I am not going there. This post is about what does happen year over year.

So fans that would like to sign additional players for 10m+ per year are probably going to be disappointed. The Oriole Way under Dan and Buck is to give opportunities in some places on the roster to inexpensive players. That probably will happen in right, left and the 5th starter this year.

I am not saying that as fans we have to like it, but budget over that last 4 years has ruled and it looks like that will continue in 2016.

That doesn't mean Dan can't work a trade. But even then he is not going to take on large amounts of salary IMO.

The O's have 90% of the core in place. The last 10% will probably be position battles in ST.

Bottom line: I don't expect the payroll to go up much more at this point. JMO.

[birrman54]

"We'd like to a sign a top-of-the-rotation starter, and by that I mean a one, two or three starter. I don't think there's all that many No. 1 starters, but there's a couple of twos and threes that we could be very competitive on."

"We have pretty good flexibility in our major league payroll"

They also allegedly still had an offer for Cespedes.

I don't quite get why we weren't in on Fister since they had claimed they were interested and he signed for one year.

I'm assuming Latos is demanding too much, or isn't healthy - nobody else seems to be on him yet either.

I doubt we have enough prospect depth to trade for anyone who would be considered an improvement over Worley. If that's our 5th starter it's a pretty disappointing approach from someone who has traded away a huge portion of our pitching depth for short term sub-optimal improvements.

[Can_of_corn]

"We'd like to a sign a top-of-the-rotation starter, and by that I mean a one, two or three starter. I don't think there's all that many No. 1 starters, but there's a couple of twos and threes that we could be very competitive on."

"We have pretty good flexibility in our major league payroll"

They also allegedly still had an offer for Cespedes.

I don't quite get why we weren't in on Fister since they had claimed they were interested and he signed for one year.

I'm assuming Latos is demanding too much, or isn't healthy - nobody else seems to be on him yet either.

I doubt we have enough prospect depth to trade for anyone who would be considered an improvement over Worley. If that's our 5th starter it's a pretty disappointing approach from someone who has traded away a huge portion of our pitching depth for short term sub-optimal improvements.

Just because Fister took a one year deal with the Astros does not mean he would have accepted a one year deal with the O's.

[Redskins Rick]

"We'd like to a sign a top-of-the-rotation starter, and by that I mean a one, two or three starter. I don't think there's all that many No. 1 starters, but there's a couple of twos and threes that we could be very competitive on."

"We have pretty good flexibility in our major league payroll"

They also allegedly still had an offer for Cespedes.

I don't quite get why we weren't in on Fister since they had claimed they were interested and he signed for one year.

I'm assuming Latos is demanding too much, or isn't healthy - nobody else seems to be on him yet either.

I doubt we have enough prospect depth to trade for anyone who would be considered an improvement over Worley. If that's our 5th starter it's a pretty disappointing approach from someone who has traded away a huge portion of our pitching depth for short term sub-optimal improvements.

I think there was mixed feeling in the organization about the worthiness of Fister.

Considering how expensive pitching has become, who exactly at the number 2 or 3 slot, can the team be competition on?

I think they thought highly enough of Cespedes to bend the budget for.

Ago, just my own thoughts.

[Frobby]

They are currently at 137m but have deferred 11m so the payroll they have to pay is about 126m.

I found this in the CBA yesterday:

Deferred compensation obligations incurred in a Contract executed on or after September 30, 2002 must be fully funded by the Club, in an amount equal to the present value of the total deferred compensation obligation, on or before the second July 1 following the championship season in which the deferred compensation is earned. For purposes of this Article XVI, full funding of the present value of deferred compensation obligations shall mean that the Club must have funded, for the duration of and without interruption in each year, the current present value of the then outstanding deferred payments, discounted by 5% annually. If the prime interest rate in effect at The J.P. Morgan Chase Bank on the immediately preceding November 1 is 7% or higher, the Parties shall meet and confer regarding this Article XVI discount rate and may, with due notice to the Clubs, amend such discount rate effective the next succeeding July 1.

* * *

Unless the Uniform Player's Contract provides otherwise, a Club may fund deferred compensation obligations in such manner as it elects, provided that: (a) the funding method used by the Club must be such that the amount(s) funded are exclusively for the uses and purposes of satisfying the deferred compensation obligation(s) being funded; (b) the amount(s) funded are maintained in the form of unencumbered assets comprising cash or cash equivalents and/or registered and unrestricted readily marketable securities, unless a Club obtains the Parties' prior written authorization of an alternative form; and © such amount(s) funded are subject to the claims of the Club's general creditors. Each Club shall certify quarterly to the Office of the Commissioner by January 31, April 30, July 31, and October 31 of each year (and the Office of the Commissioner shall provide such certifications to the Association within 30 days of their receipt) the manner in which its deferred compensation obligations that were required to be funded by the immediately preceding July 1 have been funded. In addition, upon each quarterly certification, each Club shall provide to the Office of the Commissioner all records relating to its deferred compensation funding arrangements, and the Office of the Commissioner shall supply any such records to the Association upon request.

If I understand how this works, the Orioles by July 1 will need to have funded (at a discount rate of 5% per annum) (1) $4.5 mm of Ubaldo's deferred comp for 2014-15, and (2) whatever Hardy's deferred comp was for 2015. Starting July 1, 2017 they will need to fund another year of Ubaldo and Hardy's deferred comp, plus $6 mm of Davis' and $1 mm of O'Day's.

"Funded" means that the discounted amount has been set aside (either in cash or marketable securities and can't be used for other business purposes of the team.

The bottom line of this is that even when salaries are deferred, the team still has to put money aside to ensure it can meet the deferred obligations when they come due.

[weams]

I found this in the CBA yesterday:

If I understand how this works, the Orioles by July 1 will need to have funded (at a discount rate of 5% per annum) (1) $4.5 mm of Ubaldo's deferred comp for 2014-15, and (2) whatever Hardy's deferred comp was for 2015. Starting July 1, 2017 they will need to fund another year of Ubaldo and Hardy's deferred comp, plus $6 mm of Davis' and $1 mm of O'Day's.

"Funded" means that the discounted amount has been set aside (either in cash or marketable securities and can't be used for other business purposes of the team.

The bottom line of this is that even when salaries are deferred, the team still has to put money aside to ensure it can meet the deferred obligations when they come due.

Now. Those are facts.

[Redskins Rick]

For all the people who say signing Chris Davis will cost this team in the long term i will say this. If we hadnt signed Davis the outcry would have been greater.Im glad we signed Davis. My problem with the signing wasnt the money that couldnt be spent elsewhere, its that apparently the Orioles bid against themselves for his services.

Roy, good stuff, and I agree.

[Aristotelian]

For all the people who say signing Chris Davis will cost this team in the long term i will say this. If we hadnt signed Davis the outcry would have been greater.Im glad we signed Davis. My problem with the signing wasnt the money that couldnt be spent elsewhere, its that apparently the Orioles bid against themselves for his services.

It depends. If we had used that money to sign, for example, Cespedes and Kazmir, I think folks would be pretty happy. The other reality that has beco.e clear is that even if budget has some flexibility, the owner will only sign off on certain players and will not spend money on pitchers even when that is our most glaring need. That limits Dans options and hurts our ability to negotiate.

[wildcard]

I found this in the CBA yesterday:

If I understand how this works, the Orioles by July 1 will need to have funded (at a discount rate of 5% per annum) (1) $4.5 mm of Ubaldo's deferred comp for 2014-15, and (2) whatever Hardy's deferred comp was for 2015. Starting July 1, 2017 they will need to fund another year of Ubaldo and Hardy's deferred comp, plus $6 mm of Davis' and $1 mm of O'Day's.

"Funded" means that the discounted amount has been set aside (either in cash or marketable securities and can't be used for other business purposes of the team.

The bottom line of this is that even when salaries are deferred, the team still has to put money aside to ensure it can meet the deferred obligations when they come due.

This CBA clause appears to be about the solvency of the franchise not the payroll level. The O's are profitable year over year. They do not have a debt problem. This is strictly accounting for the club to handle IMO.

[weams]

This CBA clause appears to be about the solvency of the franchise not the payroll level. The O's are profitable year over year. They does not have a debt problem. This is strictly accounting for the club to handle IMO.

Orioles were on MLB debt watch for many seasons. It may be an accounting issue, but it is a mandated escrow. It appears to be relevant.

[Redskins Rick]

Orioles were on MLB debt watch for many seasons. It may be an accounting issue, but it is a mandated escrow. It appears to be relevant.

Wasn't this because MLB changed how much debt the principal owner can have against his share of the club?

[wildcard]

Orioles were on MLB debt watch for many seasons. It may be an accounting issue, but it is a mandated escrow. It appears to be relevant.

It doesn't stand in the way of the O's signing players. The apparent budget level that the club have does affect signing players. The O's have added about 10m per year over the last four years. They limit how much they spend to that level if history means anything.

Accounting for CBA escrow, Insurance on player long term contracts, Benefits, Minor league operations, etc are all cost of doing business that the O's have to management but don't seem to have an affect of their payroll limits.

[Redskins Rick]

One could hope that if MASN was ever resolved, that might clear up some uncertainty about future revenues.

[weams]

Wasn't this because MLB changed how much debt the principal owner can have against his share of the club?

It doesn't matter who you owe your money to, it matters that you owe it. Now if the owner wants to gift the money and he still meats the personal solvency requirements, I guess he could. No one does.

[weams]

It doesn't stand in the way of the O's signing players. The apparent budget level that the club have does affect signing players. The O's have added about 10m per year over the last four years. They limit how much they spend to that level if history means anything.

Accounting for CBA escrow, Insurance on player long term contracts, Benefits, Minor league operations, etc are all cost of doing business that the O's have to management but don't seem to have an affect of their payroll limits.

What if Mr. Angelos said, "The budget is 180 million." He evidently has a way of making what he want occur.