After years of flirting with the Competitive Balance Tax (CBT), the San Francisco Giants now find themselves in much better shape as they begin to develop their offseason strategy.
When the San Francisco Giants saw Andrew McCutchen and Hunter Pence‘s contracts come off of their books last offseason, Farhan Zaidi made an unpopular decision at the time to not reallocate those resources to other free agents.
In fact, the team’s signing of left-handed pitcher Derek Holland for $7 million represented their biggest free-agent expenditure. The rest of the offseason additions were brought in on cheap major league contracts, minor league deals, and under-the-radar trades.
That decision has given the San Francisco Giants some much-needed flexibility heading into the 2019-20 offseason, and the recent trades of Mark Melancon, Drew Pomeranz, and Sam Dyson created even more financial freedom.
The Melancon turned out to be one of the biggest surprises of the trade deadline for one big reason:
The Braves did get a reliever with solid bottom-line results—including a 3.50 ERA and a 3.32 FIP—and plenty of late-inning experience. Is he worth that much money? Probably not, but that’s Atlanta’s problem now.
That traded removed $15.5 million in terms of average annual value (AAV) from the San Francisco Giants books for 2020. In addition, the Dyson trade saved the Giants at least $6 million. He’s making $5 million this season and is due for a decent raise in his final year of arbitration.
Lastly, the Giants designated Joe Panik for assignment earlier this week after he struggled to the tune of a .235 average and .627 OPS in 388 plate appearances. That move saves the team about $4 million in AAV for next season if they were to tender him a contract.
The takeaway here is that the San Francisco Giants have some money to spend.
According to Spotrac, they will have somewhere in the neighborhood of $90 million in payroll space, relative to the CBT threshold.
Assuming the Giants tender Kevin Pillar a contract, he would stand to receive a modest raise from his $5.8 million he’s earning in 2019. Additionally, Tony Watson will likely earn more in 2020 due to escalators in his contract.
So conservatively speaking, the Giants should have roughly $75 million in available payroll before crossing the CBT.
Just because they will have that amount available does not mean they will or should spend all of it. The 2020 free-agent class is a bit thin after several top-tier potential free agents signed extensions with their current team before ever testing the waters.
A reunion with both players makes sense for a number of reasons. Ultimately, a lack of money should not be a factor in deciding whether to retain the left-handed pitchers. The question will be how many years Zaidi will be willing to go to lock up either player.
In addition to the two incumbents, Puig and Ozuna would give the Giants a much-needed right-handed power bat at a corner outfield position. Puig might be a difficult signing for the fan base to accept, but he would improve the roster.
Zaidi does not have a track record of spending big on free-agent relievers, so expect another offseason of minor league deals and minor trades to supplement the bullpen.
They could also look to bolster their position-player depth with a versatile veteran like Howie Kendrick, Brad Miller, or Brock Holt. Those are not the most exciting names, but this free-agent class is thin on star talent and they could help.
Since taking charge of the front office, Farhan Zaidi has done well to improve the San Francisco Giants financial flexibility. He’ll have a chance to wield that freedom offseason as he tries to improve the roster and gradually bring the team back into the competitive cycle.