San Francisco Giants: Breaking Down Financial Situation Heading into Free Agency
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The San Francisco Giants are now champions of the National League West for the second time in three years. The hard work of getting to the Fall Classic and winning another World Series is all that stands between autumn and free agency this winter.
Time flies when you are having fun, and excitement has been the norm at AT&T Park in recent seasons. Plus, speculation about the future, no matter how far off it remains, is always exciting.
Before taking a look at the Giants' financial situation for 2013, let's take a look at the growth of their payroll in recent seasons.
The Giants payroll hovered between $82-$90 million from 2003-2009, though it dipped down to $76 million during the first season without cash cow Barry Bonds on the roster during the miserable 2008 season. Since then, payroll has gone back up to $82 million in 2009, $96 million in 2010, $118 million last season and $131 million this season.
Thus, projecting an increase in payroll of between $13 million and $22 million would make sense given the growth of the payroll during the past few seasons.
Also, revenue from cable contracts keeps pouring into Major League Baseball's coffers. According to the New York Times, new contracts with FOX, ESPN and TBS will boost annual payments to MLB from a current amount of $750 million to $1.55 billion.
Since revenue is shared, every team should be able to boost payroll significantly in the coming years.
One caveat for the Giants is that their ballpark was privately financed rather than built on the backs of the taxpayers like most other stadiums in American sports. Thus, they also have an expensive mortgage to account for.
With that said, the Giants payroll remains to be in good shape.
Though Aaron Rowand, Freddy Sanchez, Aubrey Huff (minus a two million dollar buyout), Jeremy Affeldt and Melky Cabrera are coming off the books, arbitration raises for players with between three and six years of service time, and salary increases to players under contract will eat up most of those savings.
I've estimated arbitration raises for Hunter Pence, Buster Posey (potentially eligible for arbitration next season), Joaquin Arias, Gregor Blanco, Sergio Romo, Santiago Casilla and Jose Mijares; those are my guesses.
I'm also guessing that the Giants will bring Brian Wilson back next season on an incentive-based contract with a base salary of $5 million.
Players who will have between zero and three years of service time entering next season are not arbitration eligible, so I will put their salaries at $500,000, slightly above the league minimum. All other contract information comes from Baseball Prospectus' Cot's Baseball Contracts.
Angel Pagan, Melky Cabrera, Marco Scutaro, Ryan Theriot, Xavier Nady, Jeremy Affeldt, Clay Hensley, Guillermo Mota and Aubrey Huff are all eligible for free agency after this season.
Estimating the 2013 Payroll
Re-signing Scutaro should be a priority this winter.
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Here is what the Giants salary figures look like for next season, including the official numbers from Cot's, numbers for the non-arbitration players and my guesswork on players eligible for arbitration:
CF Gregor Blanco ($1.0 million arbitration estimate)
2B Joaquin Arias ($0.8 million arbitration estimate)
3B Pablo Sandoval ($5.7 million, under contract)
C Buster Posey ($4 million arbitration estimate)
RF Hunter Pence ($14 million arbitration estimate)
1B Brandon Belt ($0.5 million)
SS Brandon Crawford ($0.5 million)
C Hector Sanchez ($0.5 million)
IF Brett Pill ($0.5 million)
OF Justin Christian ($0.5 million)
OF Francisco Peguero ($0.5 million)
IF Aubrey Huff ($2 million buyout of 2013 option)
RHP Matt Cain ($20 million, under contract)
LHP Madison Bumgarner ($0.56 million, under contract)
RHP Tim Lincecum ($22 million, under contract)
LHP Barry Zito ($20 million, under contract)
RHP Ryan Vogelsong ($5 million, under contract)
RHP Brian Wilson ($5 million arbitration estimate)
RHP Sergio Romo ($3 million arbitration estimate)
RHP Santiago Casilla ($4 million arbitration estimate)
RHP George Kontos ($0.5 million)
LHP Javier Lopez ($4.25 million, under contract)
LHP Jose Mijares ($2.0 million arbitration estimate)
LHP Dan Runzler ($0.5 million)
Estimated Total: $117.31 million
Long-term deals for Lincecum and Posey would make sense.
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Even if payroll were to remain flat at $131 million, which seems unlikely, given that AT&T Park continues to sell out every night and the team is back in the postseason, the Giants would still have enough money to attempt to retain Scutaro and Pagan.
Payroll will have to increase if the Giants want to make a big splurge for a free agent like Josh Hamilton, however. The Giants could also back-load a new free agent contract because Zito and Lincecum can become free agents after 2013, freeing up another $35 million in payroll space for 2014.
In the end, the Giants are in good shape both on the field and financially. A long-term contract extension for Posey is overdue, and with Lincecum rounding back into form during the second half, a contract extension to buy out some of his free agent years could make sense as well.
The Giants will attempt to win it all again this October, but come November, the busy work of remaining competitive will begin anew.
Given general manager Brian Sabean's recent track record, which includes shrewd deals for Pagan, Cabrera, Pence and Scutaro, the franchise remains in good hands.