The SF Giants will head into the offseason after a disappointing 79-win campaign. They have a lot of needs to address but how much payroll flexibility will they have to do so?
Where the SF Giants payroll stands as they prepare for the offseason
For better or worse, the Giants have maintained flexibility with the contracts they have signed. Pretty much every offseason, about one-third of the payroll comes off of the books with very little in the way of guaranteed contracts a season or two down the road.
This offseason is no different as they will have a handful of contracts coming off of the books, including Brandon Crawford, Joc Pederson, and Alex Wood. There are others, but that is the bulk of the money.
They also have a trio of players with opt-out clauses like Michael Conforto, Sean Manaea, and Ross Stripling. Stripling has indicated that he will opt in after a rough 2023 campaign. The other two have been mum on their next move.
The Giants also have a $10 million team option on Alex Cobb, which they plan to exercise. That decision is hardly a surprise after the veteran pitcher was an All-Star for the first time in 2023.
MLB Trade Rumors recently published its projected arbitration salaries for 2024. The Giants have six arbitration-eligible players under team control. It is likely that they tender all six a contract for next season. This is usually the last step in trying to determine where their payroll is at as they head into the winter.
For the purposes of this exercise, I am using the Competitive Balance Tax (CBT) payroll. This number is based off of a player's average annual value (AAV). This is different than the actual payroll because actual payroll is exactly how it sounds.
For example, when the Giants signed Tommy La Stella to a three-year, $18.75 contract, his AAV was $6.25 million for the duration of his contract. That is his CBT or cap hit. However, his contract was back-loaded, so that he received $11.5 million from the Giants in 2023. This number is slightly lower because the Seattle Mariners signed him to a guaranteed deal after he was released, but that is a topic for a different day.
I prefer CBT payroll because there is a true bottleneck. For 2024, the CBT threshold is $237 million. The Giants can choose to exceed that amount as it is a soft salary cap. They would be taxed on the overage and there are potential consequences if they signed a player who rejected a qualifying offer in the following offseason.
Actual payroll is established by the front office and ownership. Ticket revenue and concession sales influence that number as well, but the actual payroll is self-imposed. CBT payroll is determined in advance by the Collective Bargaining Agreement (CBA). Without further adieu, here is where the Giants stand as they head into the winter:
I don't like using my own posts in these articles, but there is no reason to reinvent the wheel this time around. The guaranteed contracts are those who are already under contract. For example, Logan Webb's AAV for 2024 is $18 million. That number is set in stone regardless of the site you use, but I am using Cot's for these amounts.
I backed out Sean Manaea's contract because I am assuming that he does opt out. I added Alex Cobb's amount to the mix. I should note that Cobb's $10 million team option carried a $2 million buyout, which gets spread over the guaranteed years because that amount is guaranteed money. If the Giants pick it up, he would have a CBT hit of $8 million.
The arbitration salaries are still projections, but the total amount should not deviate too much from that $29 million pot if the Giants tender all six a contract. The pre-arbitration salaries and player benefits are estimates with the latter being a relatively fixed amount that all teams cover.
If you put this all together, the Giants will begin the offseason with an estimated CBT payroll of around $150 million. Or, about $87 million below the CBT threshold of $237 million. Similar to last offseason, the Giants will have the money to spend, it is up to the front office and ownership group to determine how they plan to allocate that payroll flexibility.
No one asked me, but if the Giants signed Shohei Ohtani to a contract with a $75 million AAV, they would still fall well below the CBT threshold. Just saying...