The addition of Jordan Zimmermann goes a long way toward completing the Detroit Tigers' starting pitching rotation for the 2016 season. It also uses up a large portion of the available payroll if the team intends on staying below the $189 million luxury tax threshold for the 2016 season. Considering expected arbitration salaries and player benefits, the Tigers are left with under $18 million to pay for 13 players to complete the 25-man roster.
With the departures of David Price, Yoenis Cespedes, Alfredo Simon, Rajai Davis, Alex Avila, Joakim Soria and others, the team shed some $65.2 million from their payroll, but a large amount of that savings is already spent on scheduled salary increases and increases for players eligible for salary arbitration.
Zimmerman will earn a reported $110 million over five years, or an average annual salary of $22 million per season. With the additions of Francisco Rodriquez and Cameron Maybin at another $13.1 million in salaries (with Atlanta's $2.5 million contribution), that's at least another $35.1 million added to the payroll, or more if the team decides to buy out contract options at the end of the 2016 season.
The Tigers retain five players on multi-year contracts that add up to $104.8 million. They also have to pay $6 million of Prince Fielder’s salary to the Texas Rangers. After adding $35.1 million for three new players, that brings the subtotal to $145.9 million for eight players.
* Average annual value estimates include any option buyouts but will not count for tax purposes if option is exercised
The Tigers have five players eligible for arbitration at a projected $17.3 million total. That figure can be reduced by $5.2 million if they non-tender Neftali Feliz. That would put the payroll at $158 million for 12 players. Rounding out the 25-man roster with another 13 players earning near the major league minimum adds another $6.7 million and brings the total to $164.7 million. This might be what you will see on Baseball Reference or Cot's Contracts for the Opening Day payroll, but it is not the number used to determine the luxury tax.
|Signed contracts||$145.9 MM||8 plus Fielder|
|Arbitration eligible||$12.1MM||4 not including Feliz|
|Complete 25 man roster||$6.7 MM||13 at league minimum|
|Subtotal||$ 164.7 MM||25 man payroll|
Calculating payroll for purposes of the luxury tax is different from the Opening Day payroll. If the Tigers hope to avoid paying a luxury tax, they must keep the total 40-man roster payroll -- plus player benefits, buyouts, and bonuses, estimated at about $12 million -- below $189 million. With the hidden $12 million contract bonus tab, this leaves about $177 million for player salaries. For tax purposes, all salaries on the 40-man roster, including those optioned to the minor leagues, are included. Fifteen more players on optional assignment earning $82,500 each adds another $1.2 million to the payroll.
The tax calculator also uses the average annual value of salaries for players on multi-year contracts. That could be more or less than the figures used above, depending whether buyouts are used for Maybin and Rodriguez after the season. These would count against the 2016 payroll for tax purposes. Joe Nathan's $1 million buyout for 2016 counts against the team's 2015 payroll.
|25 man payroll
||$ 164.7 MM
||25 players est
||$12 MM est
||Exact $ TBA
|Complete 40 man roster
||$ 1.2 MM
||15 players optioned
||$ 177.9 MM
|Under tax threshold
||$ 189MM Threshold
If the Tigers non-tender Feliz, that leaves them with about $18 million for 13 players. If you look beyond filling out the roster with players earning the major league minimum, the Tigers have just $11 million, give or take a million bucks, to spend on player salaries. That is not a lot of money for another starting pitcher, some more bullpen help, and maybe an outfielder. They still have to leave room for player performance bonuses, players called up to replace others on the disabled list during the season and those called up in September when rosters expand.
Should the Tigers exceed the $189 million threshold, they would pay a 17.5 percent tax on the amount above the threshold. The terms of any luxury taxes after the 2016 season are not yet known, since the current collective bargaining agreement and the current tax provisions expire at the end of the season.
Needless to say, Avila has his work cut out for him. At a minimum, he will want to add another starting pitcher and a quality reliever. That may be possible if the market breaks the right way, but chances are that the Tigers will have to fill some of the team’s needs by making trades for pre-arbitration eligible players, like they have done in the past with Alex Wilson, Austin Jackson, or Max Scherzer. The more needs they can fill by making trades, the less they need to spend on free agents. That takes some trading genius, which will be necessary to restore the team to contender status in 2016.