Just as an exercise.
Good morning! We don’t know what the San Francisco Giants will do this offseason as Buster Posey settles in as the new President of Baseball Operations but if we’re going to speculate (Juan Soto? Corbin Burnes? Willy Adames?), we might as well try to give ourselves as much information as possible. Let’s start with how much money the team might be willing to spend on player acquisitions this winter.
First, it’s important to note that there are two payroll tabs to keep track of:
- The Competitive Balance Tax (CBT) payroll
- The “real money” payroll
The CBT payroll is the one that encompasses the average annual values of all player contracts year to year and sets the tone for the types of penalties or rewards teams will receive by signing or losing players in free agency. Plus, it folds in the following mandatory costs: the team’s contribution to the league’s pre-arbitration bonus pool ($1.667 million) and the “estimated player benefits” (literally, the employer-funded health care programs like a lot of us get through our jobs) which in 2024 Cot’s projected to be $17 million. There are three tiers of penalties. Last year, if a team exceeded $237 million, they were taxed 20% of the amount that was over. The Giants did so and were assessed a tax in the amount of $2,967,156 (this is according to Cot’s MLB Contracts due to their CBT payroll of $251,835,780.
This year, the first tier of tax has gone up from $237 million to $241 million. However, because the Giants went over in 2024, if they were to exceed $241 million in 2025, their penalty would jump from 20% to 30%. The percentages also go up if the team goes over $241 million by $20 million, $40 million, and $60 million, but we won’t get into any of that because I don’t think that’s a situation that’s in the cards for the Giants.
What is plausible is that if the Giants sign a player who has rejected a qualifying offer, they will be subjected to even harsher penalties than the ones they received for signing Matt Chapman and Blake Snell last offseason. In that case, they lost $500,000 (not $250,000 times 2, just $500,000 for the first signing) in international bonus pool money and their 2nd and 3rd round draft picks. Because they paid the tax in 2024, if they were to sign a qualifying offer player this offseason, the penalty for 1 player would be the loss of $1 million in international bonus pool money plus **two** draft picks (their 2nd and 5th-highest selections. If they were to sign a second qualifying offer player, they wouldn’t lose an additional million in bonus pool money, but they would lose **two more** draft picks (their 3rd and 6th-highest selections).
Now, in terms of overall payroll, we have to consider that all of these numbers are on a budget spreadsheet: the amount they’d spend on the amateur draft, the international bonus pool money, etc. and as Farhan Zaidi mentioned last offseason, losing these dollars for signing Chapman & Snell actually helped the budget. We don’t know the team’s actual baseball ops budget, but we can assume it’s probably not more than $250 million. That’s for literally anything you can think of that’s related to operating the team: coaches, staff, front office personnel, player payroll, travel, draft expenses, whatever. And that’s where the “real money” payroll comes in:
Last year, the Giants (again, per Cots) spent about $216,675,067 on their 40-man roster. But if you factor in the two mandatory costs (player benefits and the pre-arb pool), that rises to $235,341,734. But Cots doesn’t have it totally right because we know that $17 million of Blake Snell’s deal was deferred to 2025, so, the “real” payroll, based on publicly available information was actually more like $218,341,734. Add in the team’s draft bonus pool ($7,566,200), their international bonus pool ($5,284,000), and the actual tax they had to pay for exceeding $237 million ($2,967,156) and you get $234,159,090 spent on players. That’s without knowing how much they spend on their minor league operations, the coaches, staff, etc., — but $250,000,000 as the whole Baseball Operations budget suddenly feels about right, doesn’t it?
So, absent some creative accounting or a decision to raise the baseball ops budget, the Giants probably won’t spend as much as they need to improve their odds a whole lot in the NL playoff race — this isn’t a Steve Cohen-led team. They might add a guy and hope a lot of breaks go their way, and that’s okay. But before you let my words limit your imagination, let’s look at some possible numbers Buster Posey & Zack Minasian might be playing with.
Cots presently puts their “real money” payroll at $148,180,667, and that includes MLB Trade Rumors’ arbitration projections for their four eligible players (LaMonte Wade Jr., Mike Yastrzemski, Tyler Rogers, and trade candidate Camilo Doval). It does not factor in the $17 million owed to Blake Snell on January 1st or the estimated player benefits (up to $17.5 million this season), the pre-arbitration bonus pool contribution ($1.667 million), or the international bonus pool ($5,146,200) or the amateur draft pool (TBD). Add those in and that’s $189,493,534. That’s ~$44.7 million away from last year’s spend; and, you have to figure that the team wants to avoid the tax and so they’ll want to stay away from spending that much.
If the ops budget is the same, then moving Doval and, say, non-tendering Yaz (a combined $13.25 million in savings) might be necessary moves. The current CBT payroll, per Cots, is $174,431,151, or $66.57 million below the first tax threshold; so, you know, a creative structuring of a deal, at least in year 1, is totally possible.
Given all this… commence rosterbation!