Breaking Down the SF Giants' Financial Situation for This Offseason
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The Giants are committed to bringing a championship-caliber team back to San Francisco. This will be an exciting and eventful winter for GM Brian Sabean and the Giants.
Sabean and team president Larry Baer acted quickly to lock up Hunter Pence, one of their impending free agents. Pence signed a five-year, $90 million contract, thus avoiding the free-agent frenzy. Pence will be on the books at $16 million for the upcoming season.
Sabean has indicated that he would also like to retain Tim Lincecum and Javier Lopez, the Giants' other top free agents.
The key to the Giants' moves over the next few months is going to revolve around money. The Giants ended the 2013 season with a payroll just north of $140 million.
There are some notable departures, which will give the Giants some financial flexibility. The Giants will save $13 million on Barry Zito, after paying his $7 million buyout.
Tim Lincecum's 2013 contract of $22.25 million is now gone.
Several other players will also come off the books. These include Javier Lopez at $4.25 million, Andres Torres at $2 million, Jose Mijares at $1.8 million, Gregor Blanco at $1.35 million and Chad Gaudin at $750K.
The Giants also must decide the fate of Ryan Vogelsong, who made $5 million in 2013. They could opt to exercise their option on him, which will give him $6.5 million for 2014. If the Giants decline the option, they would owe Vogelsong a buyout of $300K.
At one time, it was almost assured that the Giants would exercise the option to keep Vogelsong, but it is appearing that they may opt to release him and try to sign him at a lower price. Declining the option would result in an additional savings of $4.7 million.
The Giants have roughly $50 million coming off the books, which is offset by $19.25 million in increases due to existing players.
The bottom line is that the Giants have ten players under contract for 2014 at a sunk cost of slightly greater than $100 million. There are several arbitration and pre-arbitration eligible players that will be signed at a relatively low cost.
These players include Brandon Belt, Brandon Crawford, Hector Sanchez, Joaquin Arias, Tony Abreu and Yusmeiro Petit. If we do some rough math and add roughly $10 million to the payroll for these players, plus another couple of relievers and bench players, the Giants will be at $110 million.
The Giants have only two starting pitchers locked up, if you do not include Petit or Vogelsong in that mix. Petit would come cheap, if the Giants keep him as their fifth starter. In addition, Sabean will be looking for a left fielder and some additional relief pitching.
In the recent press conference on CSNBayArea.com, Sabean indicated that he would like to acquire a solid no. 3 starter for the rotation. If the Giants are able to re-sign Lincecum, he ideally would slot into the fourth-starter role.
If the Giants' ownership group keeps the 2014 salary level at roughly $140 million, that leaves Sabean only $30 million to fill the third and fourth starting rotation jobs, plus one good outfielder and Javier Lopez.
Lopez would likely get around $6 million, which now leaves $24 million to sign two quality starters, plus a solid left fielder. These three remaining spots are difference makers and $24 million will not bring in the talent necessary for the Giants to compete with the Dodgers in the NL West.
Top young talent that comes up through your system is the most economical way to build your roster. At this stage, the Giants don't have any young prospects ready to step into an everyday role.
In addition, the Giants' top young starting pitchers, such as Kyle Crick, Clayton Blackburn and Chris Stratton, are all at least a couple years away.
Since there isn't any real help coming soon, Sabean must look to the more expensive free-agent market and international market to bolster the Giants' roster. The only other option is via trade, which would involve giving up some top young prospects.
If the Giants hope to contend in 2014, the ownership group must increase the payroll some $15 million, up to $155 million. This would give Sabean roughly $39 million to work with.
That available money can be broken down as $27 million for the two starters, plus another $12 million for a quality outfielder.
This is the ideal scenario. However, another possible scenario is a minor increase in payroll, perhaps to the $145 million range. This would require Sabean to again cut corners and leave the Giants vulnerable.
Injuries and below average performances derailed the team in 2013 and the Giants did not have the depth to overcome it. This is a matter of scrimping on the bench and the bullpen.
We saw how that came up to bite the Giants this year and unless the salary level is increased to $150-155 million, the Giants will be treading on very thin ice again.
All existing contract data is courtesy of baseballprospectus.com.
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