Happy “Let’s Exchange Salary Figures Before We Go To Arbitration Day!”
(That’s not really a holiday. I just made that up.)
Today is the day major league teams and their arbitration-eligible players trade salary figures for the upcoming season. The Royals have nine players eligible for arbitration. As of this writing, all nine are still unsigned.
A quick primer on arbitration: A player with at least three years of service time can make his case before an arbiter for an increase in salary. Those unfortunate souls with less than three years of service are at the mercy of their teams, who have the right to renew their contracts at a dollar value they see fit. (This is ignoring the Super Two designation, which gives a percentage of players who have played for less than three seasons, but very close to that amount, the same opportunity for arbitration.)
Today is the deadline for players and teams to submit their respective numbers. That also means we should expect a flurry of announcements in the coming hours about players reaching deals with the Royals.
Let’s look at what happened last season. The Royals had eight players eligible for arbitration. On the deadline day to exchange figures, three of them (Eric Hosmer, Luke Hochevar and Emilio Bonifacio) reached deals for 2014 the Royals announced around the noon hour. (Two of them – Tim Collins and Brett Hayes – had previously settled.) With nine players still unsigned for 2015, I expect an even larger flurry of deadline signings today.
For those who don’t sign, the next step will be to exchange figures. Which is what this day is really all about. Let’s look again to last year. Greg Holland was a first year arbitration-eligible player who made it to this step. He told the Royals he thought he was worth $5.2 million. The Royals countered with $4.1 million.
At this point, players and teams can still negotiate. Consider the exchange of numbers simply the opening salvo of a negotiation. The team and the player can come together and reach a deal. In the case of Holland, they settled at $4.675 million. Or $25,000 above the midway point.
Should the player and team fail to reach an agreement, they would head to an arbitration hearing sometime in February. At that point, there is no middle ground. Player argues for his salary offer. Team argues for their salary offer. The arbiter picks one. There is no middle ground.
Of course, you are likely aware Dayton Moore has never gone to the final step in arbitration as a general manager. This will be brought up as if he’s some sort of contract wizard. In this case, he’s really not. Arbitration is just something that has become increasingly rare in today’s game. Everyone knows they’re going to get paid and they just want to avoid the acrimony.
Thankfully, we have Major League Trade Rumors and Cot’s Contracts to help us sort though the gory finances. Using the arbitration estimates from Trade Rumors and the contract information from Cot’s, I’ve compiled a spreadsheet of how the Royals finances look at this point for the next two seasons.
I currently have the Royals at close to $113 million. On Thursday, Jeff Passan from Yahoo.com tweeted a list of payroll estimates. This number puts the Royals at the 15th highest payroll among 30 teams. That’s up from number 19 last year. Keep in mind though, with Max Scherzer and James Shields still on the market, the Royals ranking could drop a few spots before the dust settles on the offseason.
This is a good payroll. Or I should say, this is an appropriate amount of money to spend given the Royals market size and revenue streams. I’m not sold they have allocated their funds wisely (I’m still a little perturbed by Kendrys Morales), but that’s for another post.
Some other notes:
— Alex Gordon’s original player option for 2016 is $12.5 million. His contract had salary escalators built-in for things like All-Star selections and Gold Glove awards, pushing it to $14 million.
— Don’t miss the bottom of the table. The Royals owe $1 million each to Bruce Chen and Billy Butler.
— This number will move a little higher when the Royals open the season with Kris Medlin and Luke Hochevar on the disabled list. I could be wrong, but I believe those players on the DL count toward Opening Day payroll. Figure their spots will be taken by someone making close to the major league minimum which will be around $510,000.
— The salary figures for the last four guys on the list are estimates. They will all earn close to the major league minimum. The $525,000 figure is used simply for rounding purposes.
— Yes, I know Brandon Finnegan isn’t going to make the Opening Day roster. His name is simply on the list as the 25th man. Whomever gets that spot will make close to the major league minimum.
— The Salvador Perez contract remains – and will always be – a thing of wonder. As long as Ned Yost doesn’t play him 162 games this coming summer.
— Six current Royals have mutual options in their current contracts. Yes, it’s a meme in Kansas City. Despite Jin Wong’s protestations.
— My pledge to you: I will update this table as the signings and salary updates hit the interwebs.