It’s Time for the White Sox to Have a Big Market Payroll
It’s time for change on the South Side, and by that I mean change, change, and more change. Enough change to crack open a dozen piggy banks. No, make it one million piggy banks.
For the Chicago White Sox, it’s time spend. The man in the photo above is White Sox Chairman Jerry Reinsdorf. In this particular photo, he’s signing autographs during the ten-year anniversary celebration of the White Sox’s 2005 World Series victory. If Reinsdorf wants to see another one of those in his lifetime, he’ll need to sign more than baseballs.
It’s time to sign checks, and blank ones at that.
Here’s where the White Sox stacked up against foes in the scheme of league wide payroll for the 2015 season.
13. Chicago Cubs $119,006,885
14. Cincinnati Reds $117,197,072
15. Chicago White Sox $115,238,678
16. Kansas City Royals $113,618,650
17. Baltimore Orioles $110,146,097
By definition, that payroll is middle of the pack. This is despite being one of the few true big market teams in the league. Of course, this is skewed a bit because the White Sox share their market with the Chicago Cubs, which significantly dilutes their market share. However, dual market teams like the Los Angeles Dodgers and Los Angeles Angels don’t seem to find this to be much of a problem as their payrolls checked in at #1: $272,789,040 and #7: $150,933,083 respectively.
It’s easy to point to the Cubs having a similar payroll as a reason to not chastise the White Sox, but it’s important to remember that the Cubs sport an even more cost effective positional core and just handed out a $155 million deal to a single player last offseason. That figure is twice as much as the White Sox spent on their largest contract in franchise history (Jose Abreu: 6-years, $68 million).
In fact the White Sox have yet to ever ink a player to a deal eclipsing the $100 million mark, which puts them in a small group.
Teams with smaller markets than the White Sox; the Philadelphia Phillies, Detroit Tigers, Cincinnati Reds, Seattle Mariners, and Texas Rangers, all boasted higher payrolls in 2015.
Suffice it to say, a median payroll in the first year of a three-year, win-now window just won’t get it done, and if the White Sox expect a small bump to do the trick in ’16, then they should count their losses before they happen.
I think a team in Chicago in the midst of a supposed playoff window should be walking the $150 million line. Now, this isn’t just driven by my subjective desire for the White Sox to win or the fact that after all, it isn’t my money, but rather I think that’s the amount of payroll space they’ll need in order to truly retool this club for contention.
Even at $150 million, the White Sox would still likely be on the periphery of the top five in regards to MLB payrolls.
The fact is, money talks and the White Sox need to buy back some of their fanbase, especially after the polarizing move of retaining lame duck manager Robin Ventura.
The 2014 season saw the White Sox rake in $227 million in revenue, with $112 million going to players. When all was said and done, the team had an operating income of $31.9 million, per Forbes.
Granted that figure is EBITDA, which doesn’t reflect interest, taxes, depreciation, and amortization. Still it shows that the White Sox at least have a positive cash flow and are profiting from an operational standpoint.
It’s worth noting that they lost $2.7 million in operating income after their dismal 2013 season, so as conventional wisdom would suggest, winning on the field typically correlates to better earnings.
It’s not as if the White Sox didn’t open the wallet a bit before the 2015 season. They dolled out contracts to Melky Cabrera (3-years, $42 million), David Robertson (4-years, $46 million), and Adam LaRoche (2-years, $25 million).
The White Sox need to sign someone who truly moves the needle.
The key is that the White Sox have been precluded from making truly impact signings that snag players away from the game’s highest stratosphere. In other words, they don’t sign guys that truly move the needle. (Jose Abreu serving as a recent exception).
2015 proved that their robust core can’t be augmented with fringe supplemental pieces, or aging veterans. LaRoche was a cost-effective signing. Had he played to his career numbers, his contract would have held relative value, especially since he offered plus defense at first base.
What the White Sox should learn from LaRoche, is that it’s time to stop allocating resources to aging stars with the hope that value can be squeezed out of them.
Big-ticket position players last offseason, like Russell Martin, Victor Martinez, Hanley Ramirez, and Pablo Sandoval didn’t instill much confidence in the model of throwing money at a core piece.
But the principle that the White Sox failed to commit to any of these guys remains. In hindsight, they were smart to stay away from the aforementioned names, but the landscape looks very different this offseason and not landing at least one big-ticket item won’t sit well with fans.
Here are some of the position player names out there:
1B/DH Chris Davis
IF/OF Ben Zobrist
SS Ian Desmond
OF Justin Upton
OF Alex Gordon
Instead of looking to surround a core through free agency, the White Sox need to add a core piece through the open market. It should be about shifting the money to one or two elite guys, rather than trying to hit on potentially three or four impact secondary pieces.
Now what I’m about to propose is something I think is highly unlikely to happen in this exact iteration, but I just want to illustrate a way the White Sox can turn this club around solely by opening up the wallet.
Free agents to sign:
RF Jason Heyward: 7-years, $180 million (4-year opt out clause)
2B Ben Zobrist: (3-years, $45 million)
SP Jordan Zimmerman (5-years, $110 million)
Oct 12, 2015; Chicago, IL, USA; St. Louis Cardinals right fielder Jason Heyward (22) hits a two run home run during the sixth inning against the Chicago Cubs in game three of the NLDS at Wrigley Field. Mandatory Credit: Jerry Lai-USA TODAY Sports
It starts with making a bonafide push for Jason Heyward. The White Sox were eager to spend on Japanese pitching star Masahiro Tanaka mainly because his age fit the bill. While the White Sox fell short on Tanaka, they reportedly offered over $100 million dollars for him.
According to ESPN’s Doug Padilla, the White Sox won’t shy away from future pursuits.
"“It was a substantial economic offer and if a similar situation presents itself in terms of the ability to find a long-term solution for one of our needs, we’ll be able to dip into those resources again I believe, as was the case with Abreu,” Hahn said."
The White Sox were willing to go the distance with Jeff Samardzija, hoping to ink the right-hander to a preseason extension of similar financial ilk. Now that Samardzija has pitched his way out of town, and maybe any sane town for that matter, Jason Heyward is starting to appear like a match made in heaven for the White Sox.
The 26 year-old outfielder posted a .293/.359/.439 line last season, with 33 doubles and 13 home runs. While he may never replicate his 27 homer season in 2012, he has the build of a power hitter. Coming in at 245 pounds with a 6’5″ frame, Heyward looks every bit like a guy who should mash 25 plus home runs annually.
I think a move to U.S. Cellular field might do wonders for him.
Good plate approach: Check
Base stealing accumen: Check
Paying for prime years: Check
Left-handed hitter: Check
Gold Glove defense: Check
Check. That’s what Jerry Reinsdorf needs to sign the second week of November. Jason Heyward brings with him two skill sets that the White Sox are fundamentally unsound in. He can steal bags (23 stolen bases in ’15) and actually look like a ballplayer in the outfield, sporting plus-plus defense.
I’m very skeptical that Jason Heyward will break the $200 million barrier. We’re still talking about a guy who has a career .784 OPS and I just don’t see him being paid like a batting champion. He was still good for 6.5 WAR in 2015, the 15th best mark in baseball. That was ahead of the likes of Anthony Rizzo, Buster Posey, and Nolan Arenado, so that shows just how much value his glove holds.
Jason Heyward is a match made in heaven for the White Sox.
With a little more power, this is an MVP-calibar player and you’re paying for his prime years, so the price tag will undoubtedly be substantial. I like the idea of offering Heyward an opt-out clause, that would allow him to leverage himself into another monster contract at just the tender age of 29.
It’s all about front loading the deal. Think of a structure that pays him $100 million before the opt-out, so an annual average of $25 million. That’s not a bad deal to take. Then there’s still $80 million guaranteed on the table over three years if he so chooses to remain on the South Side.
See the difference. Instead of allocating $15 million to a third baseman and $10 million to a solid catcher, just prioritize the funds so that they lead to a real game-changer. It doesn’t hedge your bets, but for the White Sox maybe that’s a good thing because they missed on about three to four players last offseason. I’d rather have one mistake than four. Less systemic risk you could say.
But wait. I’m not done. Next is bringing in a quality veteran, like Ben Zobrist. Zobrist can take over the full-time duties at second immediately. Here’s the thing: If we’re really looking at 2016 as a target year then the White Sox can’t bet on Carlos Sanchez not floundering close to the .466 OPS guy he was before the All-Star break.
A roster can still carry Ben Zobrist and Micah Johnson, with Johnson being a left-handed bat and speed weapon off the bench. Carlos Sanchez and/or Tyler Saladino are now able to be used as pot sweeteners in a different deal.
Zobrist had a .276/.359/.450 slash line in ’15, with 52 extra-base hits. Talk about moving the needle a bit. 3-years, $45 million gets it done. Now will the back-end of that deal likely be albatross? Maybe, but it’s time for the White Sox to start taking these risks.
So Zobrist’s 37 year-old season may not be worth $15 million, but you’re paying for him to be a championship piece in 2016 or 2017, and that’s what really matters. Plus, it won’t cost a draft pick to sign him and that should go at a premium price for a team still gunning to retool its farm system.
I don’t think the White Sox can live without a quality right-handed starter in 2016. I think it’s premature to expect that Frank Montas or Erik Johnson can immediately be effective as the only right hander in the rotation. And Carson Fulmer is not ready. Period.
There was a reason the White Sox traded for Jeff Samardzija, and while Robin Ventura very strangely never split up the front trio L/R/L (despite Hahn and pundits hammering this point home all offseason) there is value in splitting up the lefties.
In a three game series, the opposition is seeing the ball from a different direction and arm slot three straight nights. Plus, a manager is more apt to sit a potent lefty bat every other night than for two or three consecutive games.
So while right-handed mid range arms like John Lackey, Alfredo Simon, Mike Leake, and Mat Latos will be on the table, signing any of these players doesn’t scream “We mean business. We’re not going to waste the valuable position we’re in of having two superstar players under contract during their cost controlled primes.”
Mat Latos is only 27 and his career ERA of 3.51 means he’s not going to be a bargain. Despite his past elbow and knee injuries, he’ll get paid. So rather than ride the margin, just throw in a little more cash to shift the barometer in a meaningful way.
Top line right-handed arms like Johnny Cueto and Zack Greinke are going to land with teams flush with cash. Then there are left-handed studs like David Price Still then, there’s Hisashi Iwakuma, Scott Kazmir, and even your old friend Jeff Samardzija. Classic economics states that when there is a surplus supply, equilibrium prices are naturally driven down. Jordan Zimmerman’s equilibrium price should be perfect for the White Sox.
David Price will be a $200 million man. Zack Grenike will easily fetch $150 million, while Johnny Cueto is still a good bet for a mega deal despite looking rather human at times in Kansas City. I’m more and more inclined to think that the New York Yankees will overpay for Jeff Samardzija, and you know the Boston Red Sox will be throwing money at arms.
This means Jordan Zimmerman may be there for the picking. His 3.75 FIP and 9.1 H/9 aren’t anything to write home about. Well at least not anything to place in the priority mail bin.
But his 3.32 career ERA looks extremely attractive. The strikeouts were down in 2015 (7.3 SO/9) but he’s still just a year removed from generating 182 whiffs with 2.66 ERA. Had Zimmerman had a big year or been one of only a few frontline guys on the open market, he would have priced himself out of the White Sox’s range, but now I think he’ll toe a reasonable $100 million.
His control (4.21 SO/W ratio) along with his durability (consistently hangs around the 200 inning mark), make him a great number two for Chris Sale.
Jun 8, 2014; San Diego, CA, USA; Washington Nationals starter Jordan Zimmerman (27) delivers a pitch against the San Diego Padres at Petco Park. Mandatory Credit: Kirby Lee-USA TODAY Sports
At 29 years old, this is going to be Zimmerman’s big contract. The Wisconsin native has said in the past that he wants to play close to home and I think 5-years, $110 million in a saturated pitching climate makes him don a White Sox cap.
The added bonus to getting Zimmerman is that if the White Sox really are inclined to move Quintana for an impact bat, the rotation can absorb his loss. The White Sox cannot trade Quintana, Montas, or Johnson this offseason without adding another arm. Pitching depth is crucial.
Finally, it’s time to eat almost all of Adam Laroche’s $13 million in a straight up salary dump. It would be wise of the White Sox to call teams like the Tampa Bay Rays or Pittsburgh Pirates in such a deal.
It’s not just that LaRoche’s 2015 was awful, or that he really can only be a lefty platoon bat at this point but it’s more about the roster spot. If the White Sox acquire an impact right fielder, they can move Melky Cabrera to DH. Then an outfield spot is open for either Trayce Thompson or Avisail Garcia to seize, with the odd-man out being moved in a package for a big-name third baseman.
Retaining LaRoche, could keep a guy like Thompson or Micah Johnson on the periphery of the roster and both are miles ahead in terms of the specific value they could provide to the ’16 club.
So what does this all look like payroll wise?
John Danks, Melky Cabrera, Adam LaRoche, David Robertson, Jose Abreu, Alexei Ramirez (picking up his option makes sense), Chris Sale, Jose Quintana, and Zack Duke are all on the books for a cool $99,716,667 million in 2016, per Spotrac.com.
Arbitration eligible players like Tyler Flowers, Nate Jones, Dan Jennings, Avisail Garcia, and Zach Putnam are expected to make a combined $8.2 million in 2016, per MLBtraderumors.com.
So that is basically a baseline of $108 million.
Jason Heyward: $25 million
Ben Zobrist: $12 million (back loaded contract)
Jordan Zimmerman: $15 million (back loaded contract)
So roughly, a $160 million payroll for 2016, which would have still been behind six teams based on 2015 payrolls. Now, here’s the strategic part.
After the 2016 season, John Dank’s $14,250,000 will come off the books along with Adam LaRoche’s $13 million. That’s $30 million of payroll space right there.
The 2017 payroll will be at a baseline of $68 million, with Abreu, Cabrera, Robertson, Sale, Quintana, Duke, and Eaton all in the fold. Inexpensive pieces like Carlos Rodon, Micah Johnson, Frank Montas, Avisail Garcia, Trayce Thompson, and Carlos Fulmer won’t add much to that total.
So add $62 million (Heyward, Zobrist, Zimmerman) to a $75 million figure and the White Sox’s 2017 payroll is at just $137 million, which is right where a winning payroll needs to be.
Cabrera’s contract comes off the books for 2018, with most of the core remaining intact, making this sustainable payroll even more viable. Abreu’s contract will allow him to earn slight raise for the last three years of his deal and if a third baseman like Todd Frazier is acquired that would add $6 million to the 2016 payroll, but there’s a silver lining to all this for Jerry Reinsdorf.
The 2011 “all-in” payroll was right around $130 million. With a rise in MLB payrolls across the league, “all-in” should look more like $150 million in 2016.
A line up anchored by Jose Abreu, Jason Heyward, and Todd Frazier, augmented by Ben Zobrist, Adam Eaton, and Melky Cabrera has to compete. It just has to. This line up backed by a rotation with Sale, Zimmerman, Quintana, and Rodon… That is the AL Central favorite. There’s no other way around it.
White Sox fans have proved that they show up to the gate when the team wins. Intuitively, this roster should bring an uptick in ticket sales. Jerry Reinsdorf also owns a majority portion of Chicago’s Comcast SportsNet, so needless to say a surge in television ratings is good for him too.
According to Forbes, Kansas City’s postseason run generated an extra $20 million for the franchise in 2014.
So making the playoffs in 2016, could mean millions more in revenue for the White Sox along with whatever Reinsdorf rakes in from enhanced TV ratings. A higher payroll may hurt the White Sox’s bottom line a bit, but a playoff appearance should help offset this.
Even if the White Sox posted a rather small operating profit in a 2016 playoff year, the margins would look much better for 2017 and 2018, once dead money leaves and success hopefully continues.
The White Sox’s most recent operating loss came after the dismal 2013 season, and that’s where they may find themselves again if they fail to capitalize on the primes of their cost-effective core, and the Chicago Cubs vacuum up the casual Chicago baseball fan.
The payroll in 2011, a year the White Sox dubbed themselves as “all-in” was right around $130 million. With a rise in MLB payrolls across the league, “all-in” should look more like $150 million in 2016.
I’m not necessarily advocating all of this as an offseason plan of sorts, I’m just showing that it’s feasible for the purse strings to be loosened much more for the upcoming season. Even shrewd trades will deplete the farm system and if the White Sox really trumpet this three-year championship window and the idea of sustained success, then money is the way to go.
If the White Sox don’t pay the big-market price for winning in 2016, they’ll pay an even bigger one when colored leaves and not fans fill U.S. Cellular Field in the Fall.