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Cardinals payroll in 2018 and beyond

A look at how much the Cardinals have committed, and how much room they have to grow.

Craig Edwards

At this point, everyone should be aware the Cardinals can afford Giancarlo Stanton. The Cardinals have three and a half million paying fans every year, more money is being shoved their way from national broadcast rights, and their new television contract that gives them an ownership stake begins next year.

There are rumors about bullpen upgrades or maybe a big move on the rotation front. They can probably afford that, too. The last time we took a look at future Cardinals payroll, Mike Leake had just been traded. Not much has changed since then. We have better arbitration estimates thanks to MLB Trade Rumors. Over at Cots, they have tweaked some of the future payments for Mike Leake and Jedd Gyorko, so we have updated those as well.

In all, not much has changed since September, but with the Cardinals about to make some significant changes to the franchise and its payroll, we are about due for a refresher. The chart below shows Cardinals current commitments as well as some very rough estimates on future arbitration salaries that should serve as a bit of a guide. The figure with the arbitration and minimum salaries assumes all options will be picked up to retain the players.

Craig Edwards

So right now, the Cardinals have around $123 million committed to next season. How much can they spend? Derrick Goold’s chat yesterday shed a little bit of light on that subject.

Here was the question:

What would be the largest overall payroll that the Cards would feel comfortable having this year in your opinion?

by Ken 2:11 PM

Here was the answer:

One dollar below the luxury tax. I get the sense they want to avoid that tax and the penalties that are going to start with that.

by Derrick Goold 2:11 PM

For 2018, the tax amount is $197 million. The non-taxed limit increases to $206 million in 2019, $208 million in 2020 and $210 million in 2021. Here is the convoluted penalty structure from the latest CBA:

A club exceeding the Competitive Balance Tax threshold for the first time must pay a 20 percent tax on all overages. A club exceeding the threshold for a second consecutive season will see that figure rise to 30 percent, and three or more straight seasons of exceeding the threshold comes with a 50 percent luxury tax. If a club dips below the luxury tax threshold for a season, the penalty level is reset. So, a club that exceeds the threshold for two straight seasons but then drops below that level would be back at 20 percent the next time it exceeds the threshold.

Clubs that exceed the threshold by $20 million to $40 million are also subject to a 12 percent surtax. Meanwhile, those who exceed it by more than $40 million are taxed at a 42.5 percent rate the first time and a 45 percent rate if they exceed it by more than $40 million again the following year(s).

Beginning in 2018, clubs that are $40 million or more above the threshold shall have their highest selection in the next Rule 4 Draft moved back 10 places unless the pick falls in the top six. In that case, the team will have its second-highest selection moved back 10 places instead.

Whether the Cardinals need to strive to stay under the cap is debatable, but knowing that they likely will stay under the cap, most of the penalties above would seem irrelevant in trying to determine how much more the Cardinals plan to spend.

We see above, that the Cardinals have somewhere around $125 million in commitments, which means that in theory, they have around $70 million to spend. That isn’t really the case. Around $13 million is going to go to player benefits that gets added in at the end of the season. A few million dollars extra for minimum salaried players throughout the season is probably in order. The Cardinals wouldn’t want to get hamstrung in the middle of the season, unable to acquire players with big salaries who could help in a playoff run. Let’s add in another $10 million cushion there.

In addition to those amounts, we also need to consider that the amount the Cardinals are actually paying isn’t the way the tax payroll is configured as long term deals and bonuses are generally just averaged annually so as to eliminate any funny business from front- or back-loading contracts. Doing this lowers the contracts of Carlos Martinez and Jedd Gyorko while raising the payroll on Stephen Piscotty and Kolten Wong.

All told, Cot’s estimates the payroll for tax purposes at around $137 million. Add in the $10 million cushion, and that means the Cardinals can probably afford to add around $50 million in salaries. If, for example, the Cardinals traded for Giancarlo Stanton, that would leave the team with another $25 million to make more moves. If those moves involved clearing Stephen Piscotty and Randal Grichuk due to their loss of a starting role, that’s going to allow for another $9 million in spending.

The Cardinals can afford Giancarlo Stanton. The Cardinals can afford a lot more than Giancarlo Stanton. Moves are coming, and they are going to be big.