The Astros Have Payroll Concerns...But It's For Next Year's Payroll
The Astros Are Making Moves for 2022 with an Eye on 2023
The Astros have already made what is likely to be their biggest move of the off-season, signing Justin Verlander to a 2 year, $50 million free agent contract. They seem likely to add another free agent arm (or two) to the bullpen. They will need to figure out a solution at shortstop, which may involve signing a player to a short-term contract to cover the gap from today until when Jeremy Pena is ready for an everyday job. And there has been reporting linking the Astros to outfielder Starling Marte (though I’m personally very skeptical that the Astros will sign him).
But there is an issue that hangs over the Front Office’s thinking about what moves to make for the rest of this off-season. It’s the payroll.
But it’s not the payroll for the upcoming 2022 season. After the Verlander signing, Roster Resource lists the Astros as being $26 million under the “current” luxury tax threshold of a $210 million payroll. That’s more than enough to fit in the Astros targets in the bullpen and at shortstop.
No, the issue is the payroll for the 2023 season. The Astros will see a number of important players—Kyle Tucker, Yordan Alvarez, Jose Urquidy, and Cristian Javier— begin their first year of salary arbitration. Rotation mainstay Framber Valdez will likely receive a significant raise in his second year of arbitration. And Alex Bregman’s salary will increase by $17.5 million.
At the same time, the Astros will need to replace or re-sign three starting players whose contracts expire after the 2022 season—Michael Brantley, Yuli Gurriel, and Ryan Pressly.
So while the Astros payroll will likely go down from 2021 to 2022, if but slightly, it will increase again in 2023, and will bump up against the current luxury tax threshold.
The 2023 payroll seems to be a factor in why the Astros were not willing to match the White Sox 3-year offer to Kendall Graveman, and may push them to a 1-year offer to a bullpen arm.
I’ll explore the Astros 2023 payroll. I focus on their veteran contracts and the players they will have to replace or re-sign. Then I’ll look at what might happen in arbitration, before turning to four possible solutions to the 2023 roster and payroll situation.
Veteran Players
Guaranteed Contracts—Alex Bregman ($30.5M), Jose Altuve ($29.5M), Lance McCullers ($16.0M).
Contracts with Options—Justin Verlander ($25M player option), Jake Odorizzi ($8.5M player option), Pedro Baez ($7.5M club option, with $2M buyout)
Free Agents—Michael Brantley, Ryan Pressly, Yuli Gurriel, Jason Castro, Aledmys Diaz, Rafael Montero
The biggest change in the Astros payroll in 2023 will be the big bump in salary for Alex Bregman. He’ll make $13M this season, but his contract goes up next year in what would be his first year of free agency. The increase is $17.5M.
The Astros do have a number of contracts coming off of the books. The biggest ones are for Michael Brantley ($16M) and Ryan Pressly ($10M) . Approximately $18.6 million will come off the payroll with the end of the Gurriel, Castro, Diaz, and Montero contract.1
Verlander can opt-out of his contract, but the most likely scenario is that he will opt-in, so that’s salary we should assume is taken for 2023.
The Astros will need to replace or re-sign their left fielder, first baseman, and closer in the 2023 off-season, either from internal replacements or from free agency or trades.
Arbitration Eligible Players
3rd year of Arbitration—Ryne Stanek, Phil Maton
2nd year of Arbitration—Framber Valdez, Josh James
1st year of Arbitration—Kyle Tucker, Yordan Alvarez, Jose Urquidy, Cristian Javier, Blake Taylor
The biggest change in the Astros payroll between 2022 and the 2023 season is the move of several of their young starts—Tucker, Alvarez, Urquidy, and Javier—into for arbitration. Tucker and Alvarez are young stars, and while their salaries in 2023 will depend on their play in 2022, we can expect both of them to make greater than $5 million at a minimum. Urquidy is in line for something like $3 to $4 million and Javier’s 2023 salary will greatly depend on how he performs in 2022, with potential ranges from $2 million to $5 million. Framber Valdez is projected by MLB Trade Rumors to make $3.2M in arbitration this year, and his salary will likely go up another $3-4 million in 2023.
In short, the Astros are looking at spending something like $20 million for a set of players that will cost them something like $5 million in 2022. So that eats up the savings from the end of the Gurriel, Castro, Diaz, and Montero free agency.
If you put all of this together, the Astros are about at the same place they are in payroll right now, with commitments of around $180 million for the players under contract. But that $180 million is spread around to 22 players in 2022. In 2023, it is distributed to 15 players—7 less than in 2022.
Those 15 do not include the current starting left fielder or first baseman, or their closer. In 2022, those players have a combined salary of $34 million.
Solutions for the Astros
There are a couple of ways for the Astros to deal with the payroll increase in 2023. The most obvious is for Jim Crane to spend his money. The penalties for going over the luxury tax threshold are a modest amount of money and would not cut much into Crane’s profits or the inheritance of his great-grandchildren.
But like most billionaires, Jim Crane prefers not to give money to others when he could just give it to himself. In addition, the penalties for the luxury tax would take more of Crane’s money if the Astros went over the threshold multiple years in a row.
The good news for Crane’s heirs is that the front office made a number of moves to stay just under threshold in 2021. And they should be able to avoid going over again in 2022 with less effort.
But if they go over in 2023 they could well go over again in 2024 and 205. Tucker, Alvarez, Urquidy, and Javie will keep receiving raises as they go through the arbitration process.
Another solution is to assume that the luxury tax threshold will rise when the players and owners agree to a new collective bargaining agreement. As fans of baseball, we should want this because the luxury tax acts to increase the profits of the owners while reducing the money received the people who actually entertain us—the players.
As Astros fans, we should especially want the luxury tax threshold to increase, as our ownership usually wants to spend up to, but not over the threshold. A higher threshold means the potential for better players to fill up these holes on our roster.
Of course, owners and their head negotiator—Rob Manfred—prefer to keep money for themselves rather than give it to players. And their initial proposal to the players called for lowering the luxury tax threshold. The players will have to find leverage points to raise the threshold.
A third possibility for filling in the holes in the 2023 roster without spending a lot of Jim Crane’s money is for prospects to develop into everyday players. For example, the Astros current best prospect is Korey Lee, and there is every reason to think that he will be able to take a big share of the catching PAs by 2023. Which means instead of paying $3.5 million to a backup catcher that season, the Astros can pay the major league minimum.
The Astros have a useful set of young outfielders in Chas McCormick, Jake Meyers, and Jose Siri. One of them could take over in left field for Brantley next year. Or a prospect like Pedro Leon could take the job. Young pitchers—such as Shawn Dubin or Enoli Parades—could develop into reliable bullpen options. And Phil Maton could blossom into a dominant reliever ready to take over for Pressly after this season.
Some of this may read as hope is not a plan. Let’s hope these young players develop. But it is essential that some of them do. The Astros have maintained their hold on the AL West over the past 5 years because young players like Tucker, Alvarez, Valdez, and Urquidy have developed into everyday players, ameliorating the free agent losses of players like Charlie Morton, Gerrit Cole, and George Springer.
There is a fourth option, which is to identify small contract players to fill in these roles. For obvious reasons, this is the least desirable option. The Astros could make it work; for example, the could trade a starting pitcher for a first baseman to replace Gurriel, dealing from a strength. Though this has an element of the third option too. It would require a current minor leaguer—say Hunter Brown or Forrest Whitely—to develop into a rotation option.
Regardless of which of these solutions the front office adopts for the 2023 season, the payroll for that season seems to have an effect on the choices they are making for the 2022 season. As noted, I think an unwillingness to add an $8 million budget line in 2023 and 2024 reduced the Astros willingness to match or beat the White Sox offer.
Some of this may be based on uncertainty. The front office does not currently know what the luxury tax threshold will be in 2023 or what other adjustments the new collective bargaining agreement will hold for the game. They may be holding off on some decisions waiting for more clarity.
But whatever the outcome of the collective bargaining negotiations, the Astros will make decisions for 2022 with eye toward the payroll in 2023.
Rafael Montero is in the arbitration process for 2022; his exact salary is yet to be determined, but MLB Trade Rumors estimates his contract at $4 million.