clock menu more-arrow no yes mobile

Filed under:

Financial implications of the Prince Fielder- Ian Kinsler trade.

The Tigers sent Prince Fielder and $ 30 million to the Texas Rangers for Ian Kinsler. Let’s follow the money and examine the implications of the trade.

Winslow Townson

When the Tigers sent Prince Fielder to Texas for Ian Kinsler, they unloaded their second biggest financial obligation both in terms of salary and years, while filling a need at second base that was growing more expensive to fill in every direction they looked. So let's look at the financial details of the trade, and see the kind of impact it has on Tiger finances going forward:

Prince Fielder signed a nine year, $214 million contract before the 2012 season. He has seven years at $24 million per year remaining on the deal. That’s $168 million, of which the Rangers pay $138 million, or just under $20 million per season. That $30 million difference in Fielder's salary will be paid by the Tigers over the final five years of his contract, beginning in 2016, so that doesn't directly affect the 2014 payroll.

Ian Kinsler has four years left at a total of $57 million, plus an option for 2018. He will be 35 when it comes time to exercise or decline that option. Let’s say $67 million over five years, or 13.4 million per year.

About Kinsler’s 2018 option- it’s a club option for $ 0 million with a $5 million buyout. So, if Kinsler is playing any kind of decent baseball at age 35, depending on what other options the team has at the time, they can keep him for a net $5 million vs letting him go.

Total dollars spent, the Tigers owed Prince $168 million, but now owe Kinsler and the Rangers a total of $97 million. That’s a savings of 71 million. Or $76 million if they decline the option.

How about signing Scherzer and/ or Cabrera?

Dombrowski made one comment about the money that stands out, and it has to do with extending Max Scherzer

"It makes it perhaps more possible. As we've talked about in the past, we have a lot of stars on our club, They're well paid stars and under any circumstances, even with an owner like Mike Ilitch, you can only be in a position where you have so many of those types of players," Dombrowski told reporters on this evening's conference call. "Does it make it probable? I can'’t say that. But it makes it more possible going forward."

Cabrera is signed for the next two seasons at $22 million per season. He would surely be due for a raise if they are going to extend his contract, but it will likely be more in the range of $5- 8 million per season on top of his current salary.

What about the payroll in 2014? The Tigers will pay Kinsler $8 million less than they’d have had to pay Fielder. As the chart below shows, prior to the trade, Payroll was just over $157 million, including arbitration estimates for nine players.

The chart below shows the payroll status prior to the Fielder / Kinsler trade:

Salary status 2013 Salaries 2014 Salaries Average Annual Value (AAV)
Free agents $21.975 million $0 ($21.975 million in 2013)
Players under contract $97.8 million $107.8 million $110,059,064
Arbitration eligible players $26.35 million $43.3 million $43,300,000
Non Arbitration eligible $5.0 million $6.265 million $6,265,000
TOTAL $148,693,600* $157,065,000 $159,004,000

How about the luxury tax? The competitive balance tax formula uses the average annual value of multi year contracts and applies that amount each season. They don’t count club options until they're exercised, but they do include buyouts. So, the Tigers will take a "cap hit" for the four years, of $15.5 million for Kinsler's contract That’s $ 8.5 million less than they’d have been hit for Fielder’s contract.

After the trade, Tiger payroll is back down to just above $150.5 million, or a little above where it was at the start of last season. The $ 30 million will be averaged over 7 years, even though it's only paid over the last five years, for a tax hit of $4.286 million per season. The net savings then, is just under $ 5 million per season for the first four years, leaving payroll for tax purposes at $ 154,786,000.

Of course, the Tigers are not quite done shopping yet, and they have not replaced any of the eight free agents who have departed thus far except for Infante, but they are in a better position to add to the payroll without worrying about paying a luxury tax.

How much can they spend?

If the luxury tax threshold is the ceiling, and I'm not saying it is, the Tigers had just about enough room before the trade to sign a closer and a second baseman for about $ 10 million per season, and come in just under the tax trigger. They now have a bit more flexibility, as they have a second baseman, but might want a third baseman or an outfielder, as well as a closer and another relief pitcher or two. Most of those players can be found on short term contracts.

Once the contracts for Torii Hunter, Victor Martinez, and Max Scherzer expire after the 2014 season, the Tigers will have some decisions to make. They now have a good deal more flexibility in making those decisions.

More Roars

Prince traded! | Implications | You weigh in

Who should the Tigers try to trade during the hot stove season?

Offseason target: Andre Ethier | More possibilities

2013 yearbook | Jhonny Peralta

Essay: Jim Leyland’s legacy in Detroit

Follow us on Facebook!