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AmarilloRed
11-10-2007, 09:21 PM
On the payroll

The Reds don't tell you what their player payroll will be. At least, they haven't since the year they moved into Great American Ball Park. They upped it from $45 million to about $60 million that year.

I've stopped asking. But I keep guessing. My guess is they'll be around $75 million for 2008. When you take Eric Milton's $8.5 million off the books, they would seem to have a lot of money to play with going into the free agency season. Not so.

Consider: The club owes its 13 players under contract for next year $59.72 million – Adam Dunn ($13 million), Ken Griffey Jr. ($12.5 million), Aaron Harang ($6.75 million), Bronson Arroyo ($6.5 million), Alex Gonzalez ($4.62 million), Ryan Freel ($3 million), Mike Stanton ($3 million), David Weathers ($2.75 million), David Ross ($2.5 million), Scott Hatteberg ($1.85 million), Javier Valentin ($1.53 million) Juan Castro ($975,000) and Todd Coffey $925,000).

Three players – Brandon Phillips, Matt Belisle and Jorge Cantu – are eligible for arbitration. They’re going to push the payroll to $65 million or more.

The rest of the roster will be made up of guys making around the big league minimum of $380,000. But that will push the payroll to close to last year’s level of $68.9 million.

So I wouldn't expect the Reds to be able to bid for any top-tier free agents -- unless my guess is wrong and the payroll going to be considerably more than $75 million.

posted by John Fay at 6:41 PM

I suspect that Fay is wrong and that the limit is probably about 8o million. Still, his point is well taken and it would seem it might be difficult for the Reds to afford a top-tier free agent this year. I hope some trades can be made and this salary level can be lowered, but as things stand now Wayne will be hard-pressed to pay for the very best free agents. This is what giving those lucrative contracts to Freel, Stanton, and Ross has done for this team's payroll. I realize that we will not see the very best that free agency has to offer this year, but it will have an effect on our payroll.

GoReds33
11-10-2007, 09:35 PM
I hope they can find some money to bid on players like Gagne and any other pitchers out on the market. This team needs pitching, and they won't be getting enough of it from within.

mlbfan30
11-10-2007, 09:57 PM
The Reds probably just 1 good pitching signing, which means a great pitcher even if its overpaying (Gagne, Cordero, Mo). Getting any SP on the market is a horrible move when a guy like Moloney, or at least Cueto and Bailey would probably be just as effective for league minimum and no commitment if they fail. Also Belisle is a real #5 starter, and at the very least a solid long relief man so he could be insurance if 1 of Maloney/Cueto/Bailey fail.

hippie07
11-10-2007, 10:39 PM
Okay, so the Red's current payroll w/ no changes will be around $69 mil. The Reds COULD operate on a much higher payroll, but the question is not can ... it's will.

I broke out my calculator and did some math today. The Reds actually paid $69 mil for their players and staff last year according to http://mlbcontracts.blogspot.com/2005/01/cincinnati-reds_24.html
The Reds total revenue was $146 mil according to Forbes (revenue data is 2006, latest availabe- but I think the analogy still works). Does that surprise you? Even if you tack on another 15 mil in administrative costs, the Reds still pocketed about $60 mil last year... I mean I'm sure there are other elements to this that I'm not aware of, but, still... Baseball's a good business.

In other words, if the Reds ownership wanted to raise the player payroll - it's not like they'd have to take a loan, or even tap into their personal bank accounts, they would just have to concede to make less of a profits.

Anyway, the Reds aren't particularly greedy in comparison to the rest of baseball. They spent 47% of their revenue on player payroll. Oakaland had the exact same revenue as us $146mil, but they spent 54% of revenue on player payroll. The NL Central shakes out like this:

Cubs: 51%
St. Louis: 49%
Pirates: 28%
Astros: 48%
Brewers: 49%

So, 4 out of 5 teams in our division spent a higher % on player payroll than we did (though not by much).
What's interesting is that the "large market" teams actually spends quite a bit more of their revenue on players' pay roll: Yankees spent 63% and Red Sox spent 61%.

In other words, I don't think we need to worry about what the Reds CAN do, it's more of a question of what they're willing to do.

I know my methodology is not perfect - if you have ideas on how to make it better - let me know, because I'd love to determine what the Reds profits look like.

Bip Roberts
11-11-2007, 09:00 AM
heres to hoping Burton stays amazing and Stanton loses 120 pounds

ChatterRed
11-11-2007, 03:03 PM
The Reds probably just 1 good pitching signing, which means a great pitcher even if its overpaying (Gagne, Cordero, Mo). Getting any SP on the market is a horrible move when a guy like Moloney, or at least Cueto and Bailey would probably be just as effective for league minimum and no commitment if they fail. Also Belisle is a real #5 starter, and at the very least a solid long relief man so he could be insurance if 1 of Maloney/Cueto/Bailey fail.

I'm not saying it will solve all the problems, but adding one quality starter pitcher and one quality reliever/closer type pitcher, factoring in the natural progression of young players improving, could put this team in contention for a division title in a weak division.

AmarilloRed
11-11-2007, 05:50 PM
One caveat here: I think CEO Bob Castellini might be willing to bump the payroll if it means getting someone who really can help in 2008. The problem is the list of free-agent starting pitchers - the Reds' top need - is overwhelmingly underwhelming.

General manager Wayne Krivsky was at the GM meetings last week. He is typically vague on the club's plans, but he did say the Reds have contacted some free agents. They can't talk money until Tuesday.

"It's like any other year," Krivsky said. "We're looking to upgrade - whether it be by trade, free agent, or minor-league free agent. We've got people scouting the Winter Leagues."

The GM meetings are often where trade talk begins. The Winter Meetings (Dec. 3-6) are typically where the trades get done.

The Reds' biggest splash last year at the Winter Meetings came when they took Josh Hamilton in the Rule 5 Draft.

Hamilton and the club's other Rule 5 pick, Jared Burton, had a huge impact on the team.

"It's unusual for an organization to have two picks that turn out that well," Krivsky said.

redsfanmia
11-11-2007, 05:59 PM
If Castelinni raises payroll significantly I would be shocked, pleasently surprised but mostly shocked.

ChatterRed
11-11-2007, 07:35 PM
http://www.mlbtraderumors.com/2007/11/reds-have-rough.html

John Fay says the payroll will be around $75 million next year and that Reds have approximately $6 million to spend on Free Agents. Woo-hoo!

Unless someone is traded to free up money.

*BaseClogger*
11-11-2007, 08:01 PM
...This is what giving those lucrative contracts to Freel, Stanton, and Ross has done for this team's payroll...

Is Mike Stanton really going to get $3 million!? I thought that was the total for the two years... However, I have to respectfully disagree that David Ross's contract is killing our payroll...

redsfanmia
11-11-2007, 10:04 PM
As a fanbase we need to come to the realization that Castellini is not going to raise payroll. It is what it is and lets face it the Reds are not I repeat not going to be major players in free agency ever. The payroll is probably maxed out now thats why resigning Dunn is a mistake, it leaves no flexibility.

AmarilloRed
11-11-2007, 10:16 PM
I wonder if any savings would be realized by buying out Griffey's option year for 4 million in 2009? Aren't Harang and Arroyo due for very big pay increases that year? This thread makes a very good point on why we should have Votto, Hamilton , Bailey, Cueto, Bruce and Maloney on the Reds in a couple of years. They will all be very cheap for some time to come, and keeping them might be preferable to trading them.

Screwball
11-11-2007, 10:20 PM
As a fanbase we need to come to the realization that Castellini is not going to raise payroll.


In Castellini's tenure he's given the OK on all of Krivsky's attempts to fix the bullpen in '06. He OKed a 15% payroll increase from 2006 to 2007. He's allowed Krivsky to sign Arroyo and Harang to their lucrative contract extensions. Where you're getting this penny-pinching assessment of B-Cast is beyond me.

As for your take on free agency, well I hope that's the case this year. I wouldn't mind seeing a gamble on Gagne, but other than that this year's FA looks to be chock full of Milton scenarios.

terminator
11-11-2007, 10:27 PM
The Reds total revenue was $146 mil according to Forbes (revenue data is 2006, latest availabe- but I think the analogy still works). Does that surprise you? Even if you tack on another 15 mil in administrative costs, the Reds still pocketed about $60 mil last year... I mean I'm sure there are other elements to this that I'm not aware of, but, still... Baseball's a good business.

Forbes also shows their operating profit as $20MM -- which is before taxes, interest and depreciation. And most teams argue the Forbes' estimates are too high. Regardless, I don't think they are making anything close to $60MM. Remember, something like $100MM of Castellini's purchase price was debt -- i.e. more interest. After interest and taxes I wouldn't be surprised if they were close to breaking even.

*BaseClogger*
11-12-2007, 07:32 AM
Forbes also shows their operating profit as $20MM -- which is before taxes, interest and depreciation. And most teams argue the Forbes' estimates are too high. Regardless, I don't think they are making anything close to $60MM. Remember, something like $100MM of Castellini's purchase price was debt -- i.e. more interest. After interest and taxes I wouldn't be surprised if they were close to breaking even.

This sounds more accurate... I don't think professional sports teams are as profitable as a lot of people think... Otherwise, you would see all of the best businessman in the country buying up teams... However, most owners are smart men who are making their money elsewhere and just have a love for sports...

UK Reds Fan
11-12-2007, 08:41 AM
In Castellini's tenure he's given the OK on all of Krivsky's attempts to fix the bullpen in '06. He OKed a 15% payroll increase from 2006 to 2007. He's allowed Krivsky to sign Arroyo and Harang to their lucrative contract extensions. Where you're getting this penny-pinching assessment of B-Cast is beyond me.

As for your take on free agency, well I hope that's the case this year. I wouldn't mind seeing a gamble on Gagne, but other than that this year's FA looks to be chock full of Milton scenarios.

Completely agree...if you think BCast is a penny pincher, what did you think of Banana-Man?

Also, we have drafted and signed our top picks instead of punting them due to money concerns. I'd like for the Reds to be able to spend more, but in today's baseball...it is what it is for small to mid market teams.

as_v_1
11-12-2007, 09:43 AM
If only there was a salary cap to even the playing field.

redsfanmia
11-12-2007, 02:28 PM
In Castellini's tenure he's given the OK on all of Krivsky's attempts to fix the bullpen in '06. He OKed a 15% payroll increase from 2006 to 2007. He's allowed Krivsky to sign Arroyo and Harang to their lucrative contract extensions. Where you're getting this penny-pinching assessment of B-Cast is beyond me.

As for your take on free agency, well I hope that's the case this year. I wouldn't mind seeing a gamble on Gagne, but other than that this year's FA looks to be chock full of Milton scenarios.

Didnt really call the man a penny pincher I just said that Payroll is not going to raise significantly and we should just accept that since payroll wont raise we wont dip into free agency.

AmarilloRed
11-13-2007, 06:39 PM
My guess that the payroll would be in the $75 million range may have been low. The club is going get to more in revenue-sharing and luxury tax, so maybe they can shop with the big boys.

posted by John Fay at 5:57 PM


Fay himself now concedes that the payroll more than likely will be more than $75 million.

757690
11-13-2007, 06:52 PM
Freel will not be on the team when the season starts, which will subtract $3M to the total. Others could be traded too, which would free up some money.

Probably looking at $65M of tied up money and a payroll of $80M which leaves around $15M to work with. That could buy one or two decent relievers and a #4 or 5 starter.

Still I would rather add salary through the trade route, since it has a better talent pool this year.

bounty37h
11-14-2007, 11:19 AM
Okay, so the Red's current payroll w/ no changes will be around $69 mil. The Reds COULD operate on a much higher payroll, but the question is not can ... it's will.

I broke out my calculator and did some math today. The Reds actually paid $69 mil for their players and staff last year according to http://mlbcontracts.blogspot.com/2005/01/cincinnati-reds_24.html
The Reds total revenue was $146 mil according to Forbes (revenue data is 2006, latest availabe- but I think the analogy still works). Does that surprise you? Even if you tack on another 15 mil in administrative costs, the Reds still pocketed about $60 mil last year... I mean I'm sure there are other elements to this that I'm not aware of, but, still... Baseball's a good business.

In other words, if the Reds ownership wanted to raise the player payroll - it's not like they'd have to take a loan, or even tap into their personal bank accounts, they would just have to concede to make less of a profits.

Anyway, the Reds aren't particularly greedy in comparison to the rest of baseball. They spent 47% of their revenue on player payroll. Oakaland had the exact same revenue as us $146mil, but they spent 54% of revenue on player payroll. The NL Central shakes out like this:

Cubs: 51%
St. Louis: 49%
Pirates: 28%
Astros: 48%
Brewers: 49%

So, 4 out of 5 teams in our division spent a higher % on player payroll than we did (though not by much).
What's interesting is that the "large market" teams actually spends quite a bit more of their revenue on players' pay roll: Yankees spent 63% and Red Sox spent 61%.

In other words, I don't think we need to worry about what the Reds CAN do, it's more of a question of what they're willing to do.

I know my methodology is not perfect - if you have ideas on how to make it better - let me know, because I'd love to determine what the Reds profits look like.

Hippie-you hit it on the head!!!!! I complain/whine to my Yanks friends regarding their ridiculous payroll, and its effect on other teams, and they come back at me with "spend more, and you will get more", its all about the owners not being so greedy and cheap, and spending more money on thier product, which should also bring in more people, success, which returns in cash in the long run.

hippie07
11-14-2007, 12:26 PM
My guess is at least 85mil.... who's got the over/under? ;) I wouldn't mind if Kriv spent most of that on Cordero & pulled off some shrewd starting pitching trades to fill out the rest.

redsfanmia
11-14-2007, 01:35 PM
My guess is at least 85mil.... who's got the over/under? ;) I wouldn't mind if Kriv spent most of that on Cordero & pulled off some shrewd starting pitching trades to fill out the rest.

Way under and I can see why your name is hippie.

Moosie52
11-14-2007, 01:55 PM
How are the Pirates spending the other 20% everyone else is spending on players?

hippie07
11-14-2007, 01:58 PM
As far as the payroll, we shall see.. I feel like 85 is really likely - BCast wants to win, and you're telling me that if WK comes to him and says "I think Cordero will put us over the top, can we pay him $13/yr." ... BCast would say no.. I haven't heard of him saying no yet..

As far as hippie, I have no idea what you're implying - If you'd like to PM me, I'd love to discuss it further w/ you.

I(heart)Freel
11-14-2007, 05:19 PM
I think 75-80 is a closer bet, with less emphasis on the final number and more emphasis on addressing through free agency what we don't think we can get in trades.

The other point - and one for which I'll post a new thread - is that the Reds can slightly overspend their usual budget for 2008 knowing that the payroll for 2009 will be way down, with league minimum players all over the starting 8 and possibly 3/5s of the rotation.

I'm cooking up the four-year plan. It's interesting to study. But it all leads to using this off season to get a closer for 2-3 years and a third starter for 1-2 years. That and the maturity of the youth movement have the Reds contenders from 2008-2011.

BLEEDS
11-15-2007, 04:47 PM
Consider: The club owes its 13 players under contract for next year $59.72 million – Ken Griffey Jr. ($12.5 million),

Bronson Arroyo ($6.5 million), David Weathers ($2.75 million), Scott Hatteberg ($1.85 million), Javier Valentin ($1.53 million) Juan Castro ($975,000) and Todd Coffey $925,000).

I suspect that Fay is wrong and that the limit is probably about 8o million.

KGJ's salary does not count for the full $12.5M. They're only paying $6M out every year, and deferring $6.5M. There's a lot of guesstimates out there about what they've "estimated" for "cap purposes" - most are around $3M or so. So, that's off by $3M or so.

I haven't seen anything showing me that Arroyo's salary is $6.5M, I've seen it as $3.95 - from his 3 year (06-08) deal with the BoSox. The Reds extension kicks in in 2009. He does get a $2.5M SIGNING Bonus, so maybe that's where it's coming from.

Weathers is due a performance bonus, max 800K, for GF's. I'd put his salary at $3.5M

Javy's salary is $1.35M not $1.53 - probably a dyslexic issue.

I'd say we're probably closer to $60M - before the arbitration kicks in.
((Some of you have seen my breakdown for 2008/2009 payrolls:
http://www.redszone.com/forums/showthread.php?t=60925&highlight=payroll Look at it if you want REAL numbers. Might have had a guy or two (Santos comes to mind) that are no longer with the club, and I didn't forecast Hatte on our roster.))

Then you have the "candidates" to reduce lower:

Hatteberg - was an oddity to me, since I don't see us keeping him on the bench at $1.85M when we got Votto here. I doubt he's on the payroll.

Castro I expect to get an injury settlement. He won't be on payroll.

Coffey should start the year in the minors, and maybe not make the team if he can't get his head right. Could be replaced by min salary guy.

The WORST offenders are Freel and Stanton.
Freel - can't imagine why people are interested in him but Texas never has been accused of being smart. He saves us $3M.
Stanton - We can only hope Stanton retires, because we trotted him out there 69 times. If he trots out there 71 times in 2008, then his 2009 Option - at $2.75M - VESTS! (meaning, we OWE it to him).


I think we could get it to $60M - $65 tops - for a 24 Man Roster of the following:

Votto 0.45
BP 4
Gonzo 4.625
EE 0.45
Dunn 13
Hamilton 0.45
Griff 10
Ross 2.525

Valentin 1.3
Cantu 1
Keppinger0.45
Hopper 0.45
Freel 3

Harang 6.5
Arroyo 3.95
Bailey 0.45
Belisle 1
TBD

Weathers 3.5
Stanton 3
Coffey 0.925
Burton 0.45
Bray 0.45
Gosling 0.45
Majewski 0.45

TOTAL 62.825


That includes estimates of $4M for BP, $1M for Cantu and Belisle. Does NOT include Hatteberg or Castor, but DOES include Stanton and Freel. Estimates Griffey at $10M value. Puts all "near min" salaries at 450K.

It's also short a SP.

IFF you get rid of Stanton and Freel - that's $6M right there - and you got $57M payroll with 3 spots to fill - RP, SP, and OF/IF bench spot (call that guy $1M max)

I'm also in the $80M max crowd, so you've got up to $22M to spend on a SP and RP if you really wanted to take on that Payroll. Surely you can get a top notch closer in the $10M+ per range if you wanted. AND, you could trade one of your young OF/IF prospects for a SP in the $10M range.

IMO there is NO reason in the world to trade Dunn or any other offense for pitching. We COULD take on the payroll as is and be okay. IMO we have too much young talent to trade it for pitching. We should pick up a Closer this year, and then get a SP in 2009 - if Cueto and Bailey are up to speed, we can UPGRADE from a Belisle (or move him back to the pen) and we are instant contenders.

ALso, 2009 is a wash because the raises due Harang and Arroyo get offset by replacing Griffey's salary with Jay Bruce. Then you just have to consider the Arbitration figures for BP, EE, etc...

PEACE

-BLEEDS

AmarilloRed
11-15-2007, 11:42 PM
Reds.com does say his salary is 12.5 million. The option the Reds picked up for Dunn passed
Griffey in salary. I am not sure how they came up with the number, though. You did create a good thread earlier, BLEEDS. You might consider updating that thread on a semi-regular basis.

DannyB
11-19-2007, 05:42 PM
I am very sure the Reds count JRs full salary in the payroll.

redsfanmia
11-19-2007, 05:57 PM
I am very sure the Reds count JRs full salary in the payroll.

Of course they do.

hippie07
11-23-2007, 07:18 PM
As far as the payroll, we shall see.. I feel like 85 is really likely - BCast wants to win, and you're telling me that if WK comes to him and says "I think Cordero will put us over the top, can we pay him $13/yr." ... BCast would say no.. I haven't heard of him saying no yet..

As far as hippie, I have no idea what you're implying - If you'd like to PM me, I'd love to discuss it further w/ you.

Closing in on 85mil.... go Reds !!

Bip Roberts
11-23-2007, 07:19 PM
I dont think we have any idea on what its going to be after this signing. Ownership is wanting ticket sales and if they show the willingness to add players then the Fans will come.

roby
11-23-2007, 08:01 PM
I dont think we have any idea on what its going to be after this signing. Ownership is wanting ticket sales and if they show the willingness to add players then the Fans will come.

I know I will! :thumbup:

redsfanmia
11-23-2007, 09:03 PM
I dont think we have any idea on what its going to be after this signing. Ownership is wanting ticket sales and if they show the willingness to add players then the Fans will come.

After raising ticket prices significantly accross the board ownership had to show a willingness to add players or GABP would have been a ghost town next year.

*BaseClogger*
11-23-2007, 09:11 PM
After raising ticket prices significantly accross the board ownership had to show a willingness to add players or GABP would have been a ghost town next year.

very true

EDIT: just noticed what I typed, and apparently what you said was not just regular truth, but of the very truthiness variety :laugh: