Where the SF Giants payroll stands following reported signing of Jorge Soler

The SF Giants reportedly agreed to a three-year deal with power-hitting DH Jorge Soler late on Monday night, per Susan Slusser of the San Francisco Chronicle. Once that signing is made official, where does the Giants' payroll stand?

Where the SF Giants payroll stands following reported signing of Jorge Soler

I usually give an update on payroll a few times each offseason because it is a fluid area of roster building. Teams have the option to shed payroll such as when the Giants shipped veteran pitcher Ross Stripling to the Oakland A's in exchange for a minor league prospect. The Giants sent $3.25 million to Oakland as part of the deal. The A's are assuming the rest of the $9.25 million owed to Stripling, so the Giants did save some money in the deal.

The other alternative is to add payroll through trades or free agency. The Giants have done some of that as well. They added Jung Hoo Lee on a six-year, $113 million deal and reallocated some payroll by acquiring Robbie Ray from the Seattle Mariners in exchange for Mitch Haniger and Anthony DeSclafani.

In some sense, the Ray trade felt like a bit of a salary dump on both sides. The Mariners were motivated to get the remainder of Ray's five-year, $115 million deal off of the books, whereas the Giants wanted to shed the contracts for a pair of players who arguably did not have much of a role on the 2024 team.

So, payroll is a fluid number and it can change with the next move. I should reiterate that there are two sets of books in baseball. The first set is based on actual payroll, which is indicated in a player's contract. They can agree to frontload or backload the deal based on preference or pay it out evenly over the course of the deal. The player can even decide to defer money.

The actual payroll is usually influenced by ownership. It is usually based on projected revenue for the upcoming year.

On the other hand, Competitive Tax Balance (CBT) payroll spreads a player's contract out evenly throughout the duration of the contract. This is for luxury tax purposes. Baseball does not have a hard salary cap, but the luxury tax acts as a soft salary cap. Teams can exceed the CBT threshold if they choose and the penalty is a tax on the overage. The penalties become more stringent depending on how far beyond the CBT threshold a team goes or if a tax-paying team signs a player who rejected the qualifying offer.

To me, the CBT is the true bottleneck. It is imposed by the league, so we will stick with that for the analysis. Jon Heyman of the New York Post reports that Soler's three-year deal is for $42 million. There could be an option at play, but until more information becomes public, Soler's CBT cap hit will be $14 million per season.

According to Cot's, this brings the Giants' CBT payroll to $210.5 million. This figure not only includes contracts on the books but is factors in estimates such as player benefits. This is to say that the overall number adds up quickly!

The CBT threshold for 2024 is set at $237 million. This means that the Giants have about $26.5 million below the CBT threshold. They finished the year at $218 million in 2023, so they are closing in on the number.

Do the Giants still have another move or two to make? It certainly feels like it when you consider that the rotation needs more veteran experience and infield defense could be improved as well. $26.5 million sounds like a lot of money, but that amount disappears quickly if they sign a high-profile name such as a Matt Chapman.

Unless they find a way to shed more salary, it feels like it will be tough for them to upgrade the roster in a meaningful way given the constraint. They could do it, especially if they decide to cross the CBT threshold but Giants ownership has not necessarily shown the willingness to do so over the past few years.