Goodbye Payroll Flexibility, Hello Red Ink

Much has been made of the length of the Prince Fielder contract and the likelihood (or lack thereof) that Fielder will still be an MVP-caliber hitter into his mid-30s. I don’t think that matters much. The Tigers will be limited in some ways in 2018 by the money they owe Fielder, but he is (of course) the only Tiger currently under contract for that year. The bigger questions are: what will be the impact on Tigers’ personnel decisions over the next 3 years when Justin Verlander, Miguel Cabrera, Fielder AND Victor Martinez are under contract and whether the presence of Fielder’s contract will impact the Tigers desire or ability to extend Verlander or Cabrera when their current contracts expire.

It seems to have become much more difficult in recent years to move a player – even a productive one – who is owed a sizeable amount of money. Cabrera or Verlander could, no doubt, be shipped off (not that we could stomach something like that) and get a decent prospect haul in return. I doubt that the same is true for Victor Martinez. If, following the 2012 season, the Tigers were to decide that there was no room for him at the inn they would probably have to eat a big chunk of salary and accept a couple of marginal prospects in return. That isn’t going to help much as far as keeping the team winning and keeping the team in the black. We’re more likely to see the Tigers try to squeeze Fielder, Cabrera and Martinez in the same lineup for better or worse – even if that means that Martinez does some catching and Cabrera mans the hot corner. So what we’re really looking at as far as how this signing is going to affect personnel decisions over the next 3 years is how Dombrowski and Illitch are going to fill out a competitive roster around those 4 big-money contracts as in 2013 the Tigers will be paying those four between $75 and $80 million. If we assume that the Tigers would still like to keep payroll for the next 3 years at around $120 million (which could still mean lots of red ink if they don’t make the World Series) that definitely limits their options for the remaining spots on the roster.

The model for a roster in a situation like this is what is often dubbed a ‘stars and scrubs’ lineup, like the ones that the St. Louis Cardinals had so much success with in the Pujols/Carpenter era. The basic idea is to keep your overall payroll in the upper middle despite paying a handful of guys a lot of money by trying to get as much production as you possibly can out of cheap players for the rest of the roster. As anyone familiar with these issues is already aware, the most effective way to do this is to have a good farm system that generates productive youngsters to fill roles on the team. Eventually those guys are going to need to be paid something commensurate to their production, so you won’t be able to hold onto them forever (potentially even into their arbitration years) but if you can replace them with equally talented youngsters team quality need not slip. The key – though obviously it’s a great thing to have an MVP candidate earning $500,000 – is to have enough solid talent that you never need pay free agent prices for a guy to give you league average production.

Unfortunately, the Tigers roster as it exists today isn’t built that way. The Tigers do have a lot of positions filled by guys who are or were expected to be ‘average’ or a little bit above and paid market rates. IF you have $75 million plus committed to 4 guys and need to fill a lot of roster spots with well-paid veterans you may have a team that’s quite good but it will be extremely expensive. Maybe not Yankee expensive, but expensive enough to push the luxury tax boundary. It appears that the Tigers payroll will be about $135 million this year with lots of arb raises coming in 2013. That said, the Tigers made this deal to win now and they aren’t likely to make any moves in the near term just to cut payroll for that reason alone. That and, as I mentioned earlier, it’s difficult to find any takers for a guy who’s getting paid as much as or more than he’s worth. Inge could be cut, but you won’t be able to free up any cash by doing that. The same is true for Delmon Young. The rest of the Tigers well-paid vets are genuinely necessary if not downright irreplaceable.

I’m going to assume (since I am filled to the brim with post-signing optimism) that there is no chance of a Chicago-style implosion leading to a mid-season drive to dump salaries, so if the Tigers are in it to win it all the way through this season the action will start next November. Scherzer, Coke and Porcello (and Kelly, I suppose) will be in their second arbitration years and expecting a raise, as will Boesch, Jackson, Avila and Fister in their first years of arb. Balester and Schlereth will also be first-year eligibles and Kelly will be in his second, for what that’s worth. That’s a fairly sizeable chunk of the roster. Inge and Delmon Young will be free agents and with or without Fielder those are two guys that the Tigers shouldn’t have been interested in extending – at least at anything close to what they’re being paid now. With the elimination of Type-B free agency, they’re probably not worth offering arbitration to (even as a high-risk gamble) either. Ryan Raburn and Jose Valverde will be free agents as well and those decisions may be impacted by this new salary pressure. Octavio Dotel and Jhonny Peralta both have club options for 2013, their salaries are fair and if Peralta hits like he did last year downright club-favorable. Still, if money is tight one or both might see their option declined for fiscal reasons alone. Joaquin Benoit and Ramon Santiago are under contract through 2013, but will be free agents after.

The big problem for the Tigers in building a competitive team around the four horsemen without winding up with a $150 million payroll that even Illitch can’t fund is the lack of positional talent in the minors that is ready or nearly ready to contribute. The Tigers have exactly one blue chipper, Castellanos, and chances are we’ll see him occupying either third base or a corner outfield spot in 2013 or 2014 whether or not he is really ready for it. Retaining Inge, Young or Raburn won’t be much of a possibility following this season – especially if any of them actually play well – nor will we likely see any free agents signed to fill those positions. However much Leyland may love him, it’s hard to imagine Don Kelly not becoming a salary casualty with cheaper utility options available. After 2012 we may see Cabrera at third, Santiago full-time at second and Andy Dirks getting the majority of the starts in left with low-ceiling youngsters like Justin Henry and Ben Guez as backups. For 2014 it’s anyone’s guess how those vacancies in the middle infield will be filled.

The only way for the Tigers to really cut payroll for positional players would be to decline Peralta’s option – but unless they would be content with Santiago and Henry et al. there aren’t a lot of options there. Peralta is a cog. Where the team can and probably will look at cutting payroll – or at the very least restraining it’s growth – is on the pitching staff. While the team has an empty cupboard in the farm system as far as position players are concerned, they have an abundance of pitching talent. Perhaps some will be dealt for bats, I don’t know and can’t predict. If we assume that the Tigers attempt to make do with what they have – if possible – while shunning free agents, I can forecast a likely scenario.

Valverde is going to walk: closers are always overpaid, even when they are great, and the easiest way for a team on a budget to cut payroll is by turning a non-closer (with a non-closer salary) into a closer. Since Benoit is on the record not wanting to close, ever, who will actually do it come 2013 is an open question. Dan Shlereth and Phil Coke should be non-tendered or traded to avoid paying those arbitration raises – not because they won’t be worth the money but because the Tigers have many in-house options to fill those left-handed relief vacancies. [Personally I'm picturing Andy Oliver and Austin Wood.] Whether or not the team can or should exercise Dotel’s option will depend on a number of factors including Brayan Villarreal‘s and Casey Crosby‘s development and Al Alburquerque‘s health. Dotel might even be kept and then used as a budget closer.

In the rotation, we’re likely to see a prospect in the 5 spot. The big questions will surround arbitration-eligible Porcello, Scherzer and Fister. All three could become quite expensive following a good 2012 and all could have real value in trade next offseason, should management want to make a move. Again, the Tigers do have an abundance of pitching prospects in the upper majors. We don’t know how exactly those guys will develop this season, or what how they would ultimately fare in the bigs, but they are there. If things go poorly, the Tigers will have difficulty finding a decent fifth starter for 2012 and 2013 from within the organization, but if things go well they could potentially replace all three of their arbitration-eligibles with guys earning the league minimum for real production and get a decent return in trade. That (and probably only that) could allow the Tigers to maintain a playoff-caliber team with a salary in the top 10 but not the top 5 for 2013 and 2014.

As for what happens when Verlander’s and Cabrera’s contracts expire? That’s an equally interesting vein of speculation at the moment, but to be frank I don’t have a clue. I would have to imagine that the single most important factor would be whether or not Mike Illitch is still with us in the winter of 2014 – and let’s all drink to his health.

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  • Sam Genson

    Who is to say that the Tigers can’t afford a $150 Mill payroll? greater attendance and merchansing, playoff revenue, a new TV contract, and Illitch’s willingness to not make a profit on this businbess venture make it seem like the Tigers could operate on a high level of salary if needed.

    Granted, it would be better NOT to, so hopefully the scouting and development changes the Tigers have implemented over the past year can have a heavily positive impact.

    You make a logical argument Chris…but this deal shows us that logic is not always the answer when it comes to the Tigers

    • ChrisHannum

      @Sam Genson Do you happen to know the details of the Tigers current TV deal or when it expires?

      • garretkc

        @ChrisHannum@Sam Genson Twins reporter and columnist Phil Mackey on Twitter: “Tigers’ current TV deal worth about $40m/yr according to Forbes, but they might be on verge of opting out for new one worth $50-55m/yr.”

    • JohnJParent

      @Sam Genson I totally agree. It’s not as if Mr. Ilitch is broke. He CAN afford to spend like the Yankees if he so chooses. People forget the 90s, when the Red Wings had the highest payroll in the NHL every year and they won. Mr. I has seen that spending big works and now he’s choosing to do so with the Tigers. They didn’t have to sell off everyone in the wake of 2008 and they won’t have to in the fall of 2012, either. Will they make a profit? Maybe not, but if the owner is willing, I’m all for it.

  • valordesign

    Being brutally honest, this deal in terms of it being good vaue for the team, only makes sense for the first year. After that, if V-Mart can come back healthy, Fielder does not really fit in well enough to justify a 24 mill per year contract. Sure, it will make them better for a good 3 to 4 years, but once the string of players reach the end of their contract and Fielders numbers begin to decline that is when shit will hit the fan. I realize this contract was born out of Illitch’s desire for a championship befor he kicks the bucket and he has done so much good for the team, I say what the heck, he deserves to go all in. One thing is for sure though, count me among those who can’t wait to see this devastating lineup in action, it should be a fun year.

  • sportz

    Chris, those are a lot of negative assumptions.I’m not sure where to start to refute some.

    I vehemntly disagree about VMART being untradeable..I belive paired with one of our 2014 SP, hthey will bring a haul to a team willing to transition from suspect to prospect (i.e.KC Royals being a deft example).

    The misguided notion that Mr. Illitch would allow 3-5MM to reduce his teams chances of winning by forcing them to use lower caliber seciondary players is foolish. Shrewd large spending businessmen dont spend 130MM on payroll and then cheap out on 5MM.

    I understand your premise, but its flawed and not real world.

    • ChrisHannum

      @sportz Nah. 34-year-old, 13 million dollar DHs that missed the whole last season due to injury have no more appeal than an Alfonso Soriano.

  • funkytime

    Very interesting article. I agree with Sam though that the fact that they even made this signing seems to indicate to me that Illitch is willing to raise our payroll for coming seasons. And I do think the Tigers will see an increase in revenue as well.

    My main concern going forward is unless Cabrera successfully makes the transition to either 3rd base or a corner outfield spot, this will likely lead to him walking at the end of his contract. And as good as Fielder is, he’s no Miguel Cabrera.

    • Sam Genson

      @funkytime Actually, Fielder is pretty close to Miguel. I think the Tigers brass knew exactly what they were doing with this deal. The fans seem to not give them enough credit for also looking into personality issues. As long as Jim Leyland has been here, the Tigers clubhouse has been a cohesive unit, heck, even Sheff got along with most everyone

      • funkytime

        @Sam Genson He may be pretty close, but he’s still no Miguel Cabrera. Look up the top 8 similar players through age 28 to Cabrera on baseball reference and they’re all in the HOF or are first ballot locks. Only one of Fielder’s top 8 are in the HOF.

        Cabrera also seems like the type of guy that’s going to age a hell of a lot better. No one would think it near as risky if Cabrera signed an extension through the age of 35 like Fielder has. And frankly he could get a hell of a lot more than $23.8 mil a year on the open market.

  • opus132

    The worst thing about the Fielder acquisition is the lost draft picks. We have no second baseman and a shortstop who will probably be a defensive liability in the very near future. We have no money to nab a free agent any more, assuming that there would be a middle infielder out there, and now we don’t have high draft choices. Maybe we can trade pitching, but it looks like our middle infield, which has been a problem since Guillen got old in 2007 and the Sizemore experiment failed (or was allowed to fail), will bedevil us into the foreseeable future. We were supposed to bash the league into submission in 2008, as I recall. I would not bet on the Tigers winning the division in 2012.

    • Sam Genson

      @opus132 I am not sure where to even start with this….

      The Tigers lose exactly 1 draft pick – their first rounder. So, they are trading a possibility for a known quantity. Put it this way, would you trade Rick Porcello for Prince Fielder straight up? I would!

      Why do you say we have no money? There is no salary cap in baseball and Mike Illitch is worth well over 1 BILLION dollars (and makes more money every day). The Tigers have as much money as Mike Illitch allows them to have…and seeing as how they just signed one of the premier sluggers in the game to a $214 Million deal, I think don’t think he will close his wallet now and say “WHOA, 3 Million…I just cant spring that right now”.

      If by Middle Infield, you mean 2nd base,then yes, it is a problem. However, Jhonny Peralta is at SS and is not exactly the worst player in the AL Central. While he may regress he will likely still be above average. With 2B…well, outside of about 3-4 teams (NYY, BOS, TEX, LAA) that is a weak position for everyone in the AL.

      Alo, any comparisons to 2008 are Sharpian. 2008 failed because of crappy pitching and injuries. The 2012 pitching projects to be WORLDS better than 2008. Is a playoff spot locked up? No, but that is why they play the games. I would rather be in the drivers seat than continually crossing my fingers though

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  • garretkc

    I finally got around to reading this whole thing. Really interesting stuff.

  • ChrisHannum

    I should have ended this piece with a slightly different caveat: “If Mike Illitch is willing to maintain a top-5 payroll out of his own pocket (and I think the Tigers will be in an approximate tie for 5th this season) none of these hard decisions will need to be made”

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