By Robert Cunningham, AngelsWin.com Senior Writer -
As we did last year, in order to begin any conversation about the 2016 season, we need to understand some of the team’s goals, restrictions, and short and long term needs.
Every year the primary goal is to put a winning-caliber team on the field of play to bring home a World Series Championship. Anything less is on a sliding scale of disappointment for the entire organization.
The team budget is still a potential issue this year and it is possible that Arte Moreno will enforce maintaining team payroll below the Competitive Balance Tax (Luxury Tax) threshold.
However he was recently quoted, by Jeff Fletcher, stating that the front office could exceed the tax for the “right player”.
The Luxury Tax threshold for 2016 is $189MM per the current Collective Bargaining Agreement (CBA) as reported at Baseball Prospectus.
If new General Manager Billy Eppler is truly restricted by the Luxury Tax threshold then it seems unlikely the Angels will start the season with a payroll higher than $180MM, give or take.
The reason is the team needs to maintain payroll margin in order to make potential trade’s in-season, or before the deadline, to reinforce or upgrade their roster. Keeping at least $10MM in reserve maintains flexibility.
As it currently stands, if the Angels bring back all of their contracted (including team options), arbitration eligible, and controllable players and you add in benefits and minimum salary players to fill out the 40-man roster, payroll will be approximately $181.9MM based on Average Annual Value (AAV) as seen below:
Per the CBA, Benefits cannot exceed more than 10% of the preceding year’s base number from year to year. The above number represents the maximum dollar amount for 2016 based on the 2015 maximum. It may be slightly lower but for the purposes of this discussion the difference is negligible.
In 2015, the minimum player salary was $507,500. For the purposes of this article it has been assumed that an increase of 1.5% will occur bringing the minimum player salary up to $515,115. It could be more than that but the difference should also be fairly negligible.
The estimated arbitration numbers for Kole Calhoun (Projected Super Two player), Fernando Salas, Hector Santiago, Cesar Ramos, Garrett Richards, and Collin Cowgill were obtained from MLBTradeRumors.com.
There is a small chance that Calhoun misses the Super Two cutoff but it is unlikely based on the estimate reported by the website. If he does miss, it would end up being favorable to the Angels payroll discussion anyway.
Additionally certain players, such as Matt Shoemaker and Efren Navarro, had 2015 salaries that were slightly higher than the league minimum salary, per Baseball-Reference.com. The author has made rough estimates of 2016 increases for those particular players. It should have a negligible impact on the payroll discussion.
Josh Hamilton’s remaining contract is included in the ‘Payouts’ line. When he was traded his remaining contract was restructured and reduced by approximately 13.3% since he no longer had to pay California State Taxes per COTS contracts.
The AAV represents that restructured value minus the approximately $7MM ($1.4MM AAV) the Rangers now carry on their payroll. Because the precise details are not known this number may be off a bit but the difference should be minor.
Also David Murphy and David DeJesus are included in the total, above, but both of those figures, $7MM and $5MM respectively, are team options that may or may not be picked up. If they are not picked up the team must still pay their contractual buyouts.
So Billy Eppler, who just signed a 4-year contract, will potentially be faced with very little wiggle room to work with in free agency in his first year in office.
It is also possible that the outstanding stadium issue, in the form of a large capital outlay to renovate or build a new park, could impact a decision to limit or even cut spending on team payroll.
As was stated last year the caveat to all of this payroll discussion is that Arte has consistently and fully funded team payroll so these known or perceived budget issues may just be guidelines and could be violated at Moreno’s whim (see the link at the end of paragraph three above).
In fact Moreno did go over the Luxury Tax Threshold once back in 2004, albeit, by a measly $927,000.
The reality is that if Arte authorizes Eppler to exceed the Luxury Tax in 2016, the team, if it doesn’t lavishly spend on free agents, would only spend one year over the threshold because a lot of money comes off the books in 2017:
In fact the Angels only have four guaranteed contracts to pay in 2017 for Pujols, Trout, Hamilton, and Street totaling $77,996,077. In 2018, the Angels will only be paying for Pujols, Trout, and Street totaling $57,083,000.
Of course there will be arbitration cases that increase those numbers, probably by another $40MM in 2017, but that still leaves over $60MM available for the 2017 and 2018 seasons.
Another point to consider is that a new Collective Bargaining Agreement will very likely increase the Luxury Tax Threshold to $200MM or more, beginning in the 2017 season.
If this happens it would certainly allow Billy the freedom to grab a top-tier free agent or two without having to overly sacrifice current roster players or prospects.
That’s what the Angels need right now in order to help rebuild the farm system while simultaneously making shrewd trades to bring in talent to compete. If money is an obstacle Billy will have to creatively tackle the potential payroll restrictions in order to solve the roster composition issues.
It is also important to note that Eppler appears to have a solid scouting and financial background. He has been praised within the Yankees organization for his ability to identify Minor League talent and find reclamation players that add incremental value.
Since Eppler hasn’t provided a lot of sound bites, regarding team needs, we’ll take a stab at it from the outside looking in.
Clearly left field has been a black hole for the Halos the last couple of years. Finding reliable production, preferably from both sides of the plate, is a priority.
Beyond that the Angels have potential concerns at shortstop, designated hitter, second and third base, catcher, the rotation, and the bullpen. Only first base and center and right field have long term, solid contributors.
The short term shopping wish list should include a solid LF, an upgrade at 2B and 3B, a potential replacement SS, a potential veteran catcher, a frontline starter, and a potential bullpen arm, likely a LHP.
Long term the Angels focus should be on the 2016-2020 seasons. Those are the five seasons leading up to Mike Trout’s walk year in 2020 unless he is offered, and signs, another extension.
Every effort should be made to position this team to make a serious playoff push, each and every year between now and the beginning of 2020, to maximize the probability of another Angels World Series Championship.
Billy Eppler will be absolutely critical to that one and only primary goal.
It seems that Arte Moreno and John Carpino have spent due diligence in identifying and bringing in the right candidate with the skill set that the Angels need right now.
Only time will tell the full story but the Eppler acquisition has a positive aura surrounding it out of the gate.
In the next section we will generally discuss the team roster composition, arbitration and option decisions, and a list of likely Angels trade assets.