2024/25 arbitration raises

[Frobby]

As we wonder about future payrolls, we should think about what some of our key players are going to cost if they aren’t traded away.   Here’s my estimate for 2024/25, all of which could be off base depending on injuries and performance, but collectively should be in the ballpark.

Santander ($7.4 mm in 2022): $11 mm, FA

Means ($2.975 mm): $4.5 mm, FA

Mullins ($4.1 mm): $7 mm, $11 mm

Hays: ($3.2 mm): $5.5 mm, $9 mm

Voth ($1.7 - $2 mm): $3 mm, $5 mm

Tate ($1.5 mm): $3 mm, $5 mm

Mateo ($2 mm): $4 mm, $7 mm

Mountcastle ($720 k): $3.5 mm, $6.5 mm

Perez ($720 k): $1.5 mm, $3 mm

Akin ($720 k): $1.5 mm, $3 mm

Urias ($720 k): $2.5 mm, $4.5 mm

Wells ($720 k): $2 mm, $4 mm

Rutschman ($720 k): $720 k, $5 mm

Kremer ($720 k): $720 k, $3 mm

Baker ($720 k): $720 k, $1.5 mm

Bautista ($720 k): $720 k, $2.5 mm

Bradish: ($720 k): $720 k, $3 mm

These 17 players are costing us about $30 mm in 2023.   In 2024 they’ll cost in the range of $53 mm, and then in 2025 even with the loss of Santander and Means to free agency, they’ll cost in the range of $73 mm.  So, just by standing pat and not replacing any of these players who become free agents, this group would cost $23 mm more now in 2024 and $43 mm more in 2025.

I didn’t include on the list Zimmermann, Watkins or McKenna, who I figure will get squeezed out at some point.  They’d all be Arb-eligible in 2025 if they were on the roster for most of 2023 and 2024.

Now, obviously we may trade some of these players, they could get hurt or fall to the wayside for one reason or another.   And, we’ll lose the Gibson/Frazier $18 mm after this year and some McCann salary the next.  But, the point is that when the team does it’s projected budgets, it needs to consider not only the current season, but what’s coming down the road in terms of Arb raises etc.

 

 

[HakunaSakata]

Appreciate the time and effort that went into projecting out these numbers, but I'm not willing to give the Orioles a free pass on their overall cheapness and reluctance to invest any money in notable FAs because of expected inflation. 

[NCRaven]

I don’t see anything about a free pass in the post.

[Frobby]

5 minutes ago, HakunaSakata said:

Appreciate the time and effort that went into projecting out these numbers, but I'm not willing to give the Orioles a free pass on their overall cheapness and reluctance to invest any money in notable FAs because of expected inflation. 

I didn’t mean to suggest this as an excuse.  Obviously they should have room to move up anyway.  Really though when you are looking at signing players to contracts of 3+ years, you do need to be looking ahead to what your payroll will look like in the later years of the deal.

[Just Regular]

Yes please on Bradish and Kremer having two years such that they pull $3mm as Arb1's!

Elias' handpicked guys are coming for the LF, RF, SS and 2B jobs soon.      It'll be interesting to see if Basallo, Fabian or Beavers can push for the 1B and CF jobs by 2025.

I'd guess the Club's best case OD lineup then (assuming Jackson Holliday avoids soft tissue injuries that spring) goes like: LF Cowser, 3B Gunnar, C Adley, RF Mayo, DH Kjerstad, 1B Mountcastle, CF Mullins, 2B Nor-burg, SS Holliday.  

The Hays-Mateo-Urias ~$20mm for 2025 I'm going to guess funnels back towards "that year's Kyle Gibson".    Mullins-Mountcastle is another pre-free agency ~$20mm where kids may enjoy the same $$$/WAR edge Kyle Stowers has on Trey Mancini now.

It does help clarify, as the Club is improving, good chance these are our last 1-2 years of enjoying some medium good players.     If FA markets stay as fast this CBA as they were this year, I can already glimpse Christmas next year when other Clubs have already signed Means and Santander.     The young blue chips may make that all okay.

 

Edited January 24, 2023 by Just Regular

[HakunaSakata]

3 minutes ago, NCRaven said:

I don’t see anything about a free pass in the post.

Just a general comment...not directed at @Frobby.

My takeaway is that even in two or three years the Oriole's will still be a team with a projected payroll much lower than it should actually be (based on earnings, marketing size, etc.).

[Sports Guy]

I think a lot of those numbers are off by a good amount unless injuries/poor play occur.

[wildcard]

1 hour ago, Frobby said:

As we wonder about future payrolls, we should think about what some of our key players are going to cost if they aren’t traded away.   Here’s my estimate for 2024/25, all of which could be off base depending on injuries and performance, but collectively should be in the ballpark.

Santander ($7.4 mm in 2022): $11 mm, FA

Means ($2.975 mm): $4.5 mm, FA

Mullins ($4.1 mm): $7 mm, $11 mm

Hays: ($3.2 mm): $5.5 mm, $9 mm

Voth ($1.7 - $2 mm): $3 mm, $5 mm

Tate ($1.5 mm): $3 mm, $5 mm

Mateo ($2 mm): $4 mm, $7 mm

Mountcastle ($720 k): $3.5 mm, $6.5 mm

Perez ($720 k): $1.5 mm, $3 mm

Akin ($720 k): $1.5 mm, $3 mm

Urias ($720 k): $2.5 mm, $4.5 mm

Wells ($720 k): $2 mm, $4 mm

Rutschman ($720 k): $720 k, $5 mm

Kremer ($720 k): $720 k, $3 mm

Baker ($720 k): $720 k, $1.5 mm

Bautista ($720 k): $720 k, $2.5 mm

Bradish: ($720 k): $720 k, $3 mm

These 17 players are costing us about $30 mm in 2023.   In 2024 they’ll cost in the range of $53 mm, and then in 2025 even with the loss of Santander and Means to free agency, they’ll cost in the range of $73 mm.  So, just by standing pat and not replacing any of these players who become free agents, this group would cost $23 mm more now in 2024 and $43 mm more in 2025.

I didn’t include on the list Zimmermann, Watkins or McKenna, who I figure will get squeezed out at some point.  They’d all be Arb-eligible in 2025 if they were on the roster for most of 2023 and 2024.

Now, obviously we may trade some of these players, they could get hurt or fall to the wayside for one reason or another.   And, we’ll lose the Gibson/Frazier $18 mm after this year and some McCann salary the next.  But, the point is that when the team does it’s projected budgets, it needs to consider not only the current season, but what’s coming down the road in terms of Arb raises etc.

 

 

A valiant effort.  But when there are players like Ortiz, Westburg, Grayson, Cowser, Norby and Hall they are probably going to push players like Mateo and Urias out.  I don't see Santander being with the team in 2024 because I don't see them signing him to a long term contract and they are not going to want him to walk without a return. 

Depending on how Means does when he comes back  he could get a contract extension.

I know you mentioned trades may change the picture so I am agreeing with you on that.

Edited January 24, 2023 by wildcard

[AnythingO's]

40 minutes ago, HakunaSakata said:

My takeaway is that even in two or three years the Oriole's will still be a team with a projected payroll much lower than it should actually be (based on earnings, marketing size, etc.).

We "believe" that but the only data I have found doesn't support that unless Revenue significantly increases. The new MLB media deal will help but I have not seen estimates of how much, and increased attendance would help but again by how much. Look at the numbers below, they only have about $130 M to play with and that includes salaries and Operating Income (profit) I can't see JA agreeing to less than a $50 M profit so without additional Revenue, Salaries are $80 M. I'm assuming Op Cost rises to $105 M and Payroll+Expenses is $20 M over Salaries. Use a Revenue of $255 M. I can't tell what is included in the Revenue figure but absent any other data this is what we have to work with.

 

Year	Revenue	Salaries	Payroll + Expenses	Revenue - Expenses	Operating Income	Operating Cost
2014	245	110	122	123	31.4	91.6
2015	239	118.9	137	102	8.8	93.2
2016	253	147.7	162	91	-2.1	93.1
2017	252	164.3	183	69	-26	95
2018	251	143	161	90	-6.5	96.5
2019	256	61.1	103	153	57	96
2020	115	23.9	43	72	-23	95
2021	251	45.7	66	185	83	102

[Frobby]

12 minutes ago, AnythingO's said:

We "believe" that but the only data I have found doesn't support that unless Revenue significantly increases. The new MLB media deal will help but I have not seen estimates of how much, and increased attendance would help but again by how much. Look at the numbers below, they only have about $130 M to play with and that includes salaries and Operating Income (profit) I can't see JA agreeing to less than a $50 M profit so without additional Revenue, Salaries are $80 M. I'm assuming Op Cost rises to $105 M and Payroll+Expenses is $20 M over Salaries. Use a Revenue of $255 M. I can't tell what is included in the Revenue figure but absent any other data this is what we have to work with.

 

Year	Revenue	Salaries	Payroll + Expenses	Revenue - Expenses	Operating Income	Operating Cost
2014	245	110	122	123	31.4	91.6
2015	239	118.9	137	102	8.8	93.2
2016	253	147.7	162	91	-2.1	93.1
2017	252	164.3	183	69	-26	95
2018	251	143	161	90	-6.5	96.5
2019	256	61.1	103	153	57	96
2020	115	23.9	43	72	-23	95
2021	251	45.7	66	185	83	102

Why can’t you see John agreeing to a profit of less than $50 mm?   That’s certainly not how most teams operate.  Your own numbers show that’s not how the O’s have operated historically.  

There are two ways to look at the large operating profits over the last few years:

1.  They are a byproduct of rebuilding, which means cutting payroll in order to get younger and give young players an opportunity to develop.  

2.  The Angelos family is no longer able to generate large profits through the law firm and so now it needs to suck more profits out of the Orioles to maintain their lifestyle.  

Personally, I believe it’s more the byproduct of rebuilding.   But, it could be the latter.  Time will tell.


 

[AnythingO's]

25 minutes ago, Frobby said:

Why can’t you see John agreeing to a profit of less than $50 mm?   That’s certainly not how most teams operate.  Your own numbers show that’s not how the O’s have operated historically. 
 

IMO the law firm is living off the declining revenue of their past lawsuit victories and their business is declining without PA to bring in new work. Maybe Louis can make a go of it, have partners who manage different practices, etc. My understanding was PA was the only partner before. I believe John wants the law firm sold/closed as he views it as a drain on family finances. JA sees himself as a successful businessman but other than the last few years, helped by the teardown, has never shown himself to be successful. I picked $50 M as it is about 5% of a $1 B asset, as a ROI, maybe he is OK with $25 M, maybe Revenue rises to $275-300 M. I don't see JA running a deficit like PA because he has no other revenue stream like PA had with the law firm.

[Frobby]

10 minutes ago, AnythingO's said:

IMO the law firm is living off the declining revenue of their past lawsuit victories and their business is declining without PA to bring in new work. Maybe Louis can make a go of it, have partners who manage different practices, etc. My understanding was PA was the only partner before. I believe John wants the law firm sold/closed as he views it as a drain on family finances. JA sees himself as a successful businessman but other than the last few years, helped by the teardown, has never shown himself to be successful. I picked $50 M as it is about 5% of a $1 B asset, as a ROI, maybe he is OK with $25 M, maybe Revenue rises to $275-300 M. I don't see JA running a deficit like PA because he has no other revenue stream like PA had with the law firm.

I don’t really understand the ins and outs of the law firm, but 5 years ago their website listed over 60 attorneys and now they list 22.  I don’t know that it’s a “drain” on family resources but it’s not generating cash the way it used to.  

[AnythingO's]

2 minutes ago, Frobby said:

I don’t really understand the ins and outs of the law firm, but 5 years ago their website listed over 60 attorneys and now they list 22.  I don’t know that it’s a “drain” on family resources but it’s not generating cash the way it used to.  

I remember reading specifically that PA was the only partner back then. Louis says he put the firm in his name because he is the only attorney in the family and the "partner" needed to be an attorney. The drop in # of attorneys lends credence to the firm shrinking and possibly being a financial drain. It doesn't mean Louis can't make a go of it going forward but the firm certainly won't be a revenue stream for JA and the family like it was under PA.

[E-D-D-I-E]

9 hours ago, AnythingO's said:

We "believe" that but the only data I have found doesn't support that unless Revenue significantly increases. The new MLB media deal will help but I have not seen estimates of how much, and increased attendance would help but again by how much. Look at the numbers below, they only have about $130 M to play with and that includes salaries and Operating Income (profit) I can't see JA agreeing to less than a $50 M profit so without additional Revenue, Salaries are $80 M. I'm assuming Op Cost rises to $105 M and Payroll+Expenses is $20 M over Salaries. Use a Revenue of $255 M. I can't tell what is included in the Revenue figure but absent any other data this is what we have to work with.

 

Year	Revenue	Salaries	Payroll + Expenses	Revenue - Expenses	Operating Income	Operating Cost
2014	245	110	122	123	31.4	91.6
2015	239	118.9	137	102	8.8	93.2
2016	253	147.7	162	91	-2.1	93.1
2017	252	164.3	183	69	-26	95
2018	251	143	161	90	-6.5	96.5
2019	256	61.1	103	153	57	96
2020	115	23.9	43	72	-23	95
2021	251	45.7	66	185	83	102

Attendance in MLB is down like 13 years in a row. It is unlikely to see growth in that department. Especially with the gap between have and have nots, ever growing.