Nationals Arm Race

"… the reason you win or lose is darn near always the same – pitching.” — Earl Weaver

Take a guess how much salary the Nats have Deferred at this point?

37 comments

Even Murphy deferred some salary.. (AP Photo/John Raoux)

Even Murphy deferred some salary.. (AP Photo/John Raoux)

So, I was kind of wondering the other day, “how much salary has this team deferred at this point?”  And, from the comments on the last article, others are wondering the same.  So lets play a little game; take a quick guess as to the aggregate amount of salary the Nats have kicked down the road to this point before reading on.

Digging through Cots’ website looking for details, here’s what I discovered in terms of Nats players currently under contract and their deferral terms:

PlayerMain Contract DetailsDeferred Pmt Details
Werth, Jayson7 yr/$126M (11-17)Deferred $10M to 2018 w/ 5% interest
Scherzer, Max7yr/$210M (15-21)2019-21 salaries ($105M) deferred without interest, to be paid in seven $15M installments each July 1 from 2022 to 2028
Strasburg, Stephen7yr/$175M (17-23)$70M deferred without interest ($30M in 2019, $10M in 2020, $30M in 2023), paid in seven $10M installments each July 1, 2024-30
Murphy, Daniel3yr/$37.5M (16-18)$5.5M of 2018 salary is deferred without interest, to be paid in installments of $2.5M on 1/15/19 and $3M on 1/15/20
Wieters, Matt1yr/$5.5M (17)$5M in salary is deferred, to be paid in 2021
Lind, Adam1 year/$1.5M (2017)$500k buyout of mutual 2018 option

I’m not sure I was even aware that the team deferred Daniel Murphy‘s salary until I saw it in print.  I also included FWIW the nominal $500k buyout of Adam Lind‘s mutual option as a “future” payment just for completion.

So, how do these payments look going forward?  here’s a quick look at the next 14 years or so of deferred payments:

Player2017201820192020202120222023        
Werth, Jayson01000000000000
Scherzer, Max000001500000015000000
Strasburg, Stephen0000000
Murphy, Daniel0025000003000000000
Wieters, Matt0000500000000
Lind, Adam050000000000
0105000002500000300000050000001500000015000000
Player2024202520262027202820282028Total
Werth, Jayson00000000
Scherzer, Max15000000150000001500000015000000150000000075000000
Strasburg, Stephen1000000010000000100000001000000010000000100000001000000070000000
Murphy, Daniel00000000
Wieters, Matt00000000
Lind, Adam00000000
25000000250000002500000025000000250000001000000010000000145000000

Since those two tables may not be easy to follow, here’s the answer: $196,000,000 in total deferred salary over the next 14 years.

Here’s how it breaks down year over year:

  • 2017: nothing or this year; all our roughly $152M in payroll for this year (current dollars) is for players, this year.
  • 2018: Jayson Werth‘s $10M from last year plus Lind’s $500k buyout.
  • 2019 and 2020: Murphy’s $5.5M total deferred salary, split between the two years.
  • 2021: Matt Wieters’ $5M of 2017 salary deferral comes due.

That’s all chump change compared to what’s coming up after that:

  • 2022, 2023: $15M each year for the beginning of Max Scherzer‘s deferred payments.
  • 2024-2028: $25M each year for both Scherzer’s and Stephen Strasburg‘s deferred payments.
  • 2029, 2030: Scherzer’s payments drop off, leaving just Strasburg’s $10M/year.

$196M total, and five straight years of $25M right off the top going to deferred payments.  Now, there is a silver lining in that Scherzer’s *entire* 2019, 2020 and 2021 salaries are deferred, leaving roughly $30M each year unspent and thus allowing the team to (in theory) use those dollars in those years to augment the roster.  And the same happens for Strasburg’s deferred salary; his entire 2019 salary of $30M is deferred in 2019 and again in 2019, meaning that the team should have use of those dollars in their budget for those years.  So there’s that.

But man, 2024-2028 better see a significant change in the financial landscape of the league, else $25M off the top of dead money could be crippling.  That’d be 1/6th of their general payrolls that they’ve been running lately.  To put that into perspective, there’s a recurring theme about the Nats behavior this off season that seems to imply that the team isn’t willing to fork over the dollars required to buy the upgrades it needs, especially at closer.  Well, if the team is payroll strapped at $150M … what happens when $25M of that is dead money?  Is $125M going to be the new norm in those  years?  Are we assuming that the MASN RSN mess is magically going to be solved by then?

Food for thought.  Not an issue for now … but potentially a big issue later.

 

 

Written by Todd Boss

February 27th, 2017 at 8:54 pm

37 Responses to 'Take a guess how much salary the Nats have Deferred at this point?'

Subscribe to comments with RSS or TrackBack to 'Take a guess how much salary the Nats have Deferred at this point?'.

  1. Those 14 years will come and go and the Mets will STILL be paying Bobby Bonilla!

    And Ted will no longer be with us. Neither will Angelos. Maybe their heirs will finally get the MASN morass settled, which is part of the reason the Nats have deferred so much money in the first place.

    Incidentally, they’ll be deferring a whole lot more in the Harper extension . . .

    KW

    28 Feb 17 at 5:17 am

  2. Thanks for doing this, Todd. I had the $25m for Max and Stras in my head, but not the others, and not the complete deferrals in 2019 and beyond. It really makes you scratch your head and wonder why? Their actual payroll in 2019-2022 could be super low. Are they creating room for a mega Bryce deal, or one of the other superstars coming available?

    And do you know the terms of the MASN mess? Are the Nats getting paid the O’s offer now, and litigating the surplus, or are they getting $0 u till it’s resolved. And didn’t they supposedly flip into the third reset period last year, and what is that nominally?

    Yikes, these deferrals are almost unprecedented. I remember AZ had large ones for Schilling and Randy Johnson, but not this large or long. I’m surprised.

    Btw, that Werth deferral looks like a pretty good deal for Werth. 5% for a two year loan in today’s rate environment? Sign me up.

    Wally

    28 Feb 17 at 6:46 am

  3. Agree; the payroll will be very low 2019-22; it could very well may be to give Harper a monster present-day dollar deal in the 35-40M/year range with an opt-out that’s timed perfectly with these periods. That kinda makes sense right? Give him something like a 4yr/$150M deal or so to take him from 2019-22, then part ways with him. Harper’s born in Oct 1992 so a 4yr deal from 2019-2022 covers his age 26-29 seasons. He’d have another FA pay day right at age 30. I’d seriously consider doing that if i was him, though he may very well get 10 year $35M AAV deal offered to him at the same time. Its not hte most illogical concept out there, but it basically puts the Nats in a pickle in 2022 :-) Worry about it then.

    MASN particulars; i do not know them as well as others. I believe that the Nats are getting paid on original terms for now, litigating the delta and MLB is making up the difference in the mean time. If/when they finally win and arrive at a number i’m assuming that MASN will have to pay the back log at that point, paying back MLB. Or (in a more dark scenario) MASN declares bankrupcy at that point since htey may very well owe 9 figures of back wages … at which point maybe the nats are free of the deal to begin with? More likely is a scenario where Angelos dies and MLB makes it a contingency of the xfer to his family that htey divest the monopoly RSN deal. that’s a theory I heard elsewhere and was heartened by but i’m not sure if it is realistic; when Ilich died last week the team apparently just went right to his son.

    The Bonilla deal still makes me laugh :-)

    Todd Boss

    28 Feb 17 at 7:59 am

  4. The deferred money might be a bigger deal if the ownership group was marginally funded, if they had a bad stadium deal, or if there was some transition issue when the patriarch dies (as there was with Abe Pollin and Jack Kent Cooke). None of these is the case with the Nats. The Lerners are among the richest owners in baseball, and the next generation is already heavily involved in the baseball operation, particularly Mark, so the transition should be seamless. (Who knows, Mark, who seems very enthusiastic about the team, may even be willing to spend more.)

    The only place where the Nats aren’t in the upper echelon in MLB finances is the TV deal. It’s a very messy Selig legacy (one of many), and I’ve always thought Angelos will go to his grave fighting it, as long as he has any avenues of appeal. Sooner or later that will pass, though. One would hope that the MASN connection dies completely and that the Nats can negotiate their own TV deal. CSN would seem to be the logical landing spot, but you never know. Most Nat fans would appreciate anything that isn’t MASN.

    KW

    28 Feb 17 at 9:14 am

  5. Of course, if current fiscal policy creates an inflationary cycle then the Lerners would make out like bandits (we won’t even talk about the risk of fiscal collapse and hyperinflation – if that happens the Lerners would be paying pennies on the dollar, but suffice it to say there would be other problems).

    The Bonilla deal is a standing joke/go-to punch line when talking about baseball contracts, but I’ve seen an article in a financial magazine (I think it was Forbes, but I’m not certain) that took the position that because of the present value of money (etc) the contract was actually a decent value for the Mets. The article did note that most don’t get that, with the unspoken subtext that as a nation we’re not very smart about how money works.

    John C.

    28 Feb 17 at 9:57 am

  6. In one of Doug Glanville’s early columns for the NY Times a decade or so ago, he wrote about the difficulty that even the smartest and best-advised athletes have in properly and successfully investing such large sums of money. Many well-known athletes, who could afford the very best representation, have ended up in big financial messes. Yes, there are plenty of corporate types who make, build, and keep their fortunes, but not all do.

    Anyway, the point I’m getting to is that while straight financial terms argue that athletes lose money in deferred salary, there is also considerable reassurance that this money will still be there, will still be paid, and won’t have to be managed until it is paid. Ol’ Max will just have to scrape by on $15M per year instead of having to worry about investing $30M at a time. Now, this can be taken to a ridiculous (Bonilla) extreme, but at a certain level, such contracts do help the player, while also giving the team flexibility to be able to afford to put better players around him.

    In the Nats’ case, it seems likely that they wouldn’t have gone so deeply to the deferred-payment well without the MASN mess, but it has been a good deal for them financially overall, and it has certainly allowed them budget flexibility to keep a contending team together . . . at least so far.

    KW

    28 Feb 17 at 11:40 am

  7. I would argue that Bonilla signed the smartest contract of any player in MLB history. When you think about how many pro athletes stupidly blow all their dough and end up penniless by the time they are 40, he was astute enough to insist on what essentially amounts to a long term pension. Good on him–I’m surprised more players don’t ask for something similar.

    As for the Nats, Uncle Teddy’s is just hanging on, hoping to live long enough to see a WS title. He probably figures that his chance of being around to see 2024 are pretty slim. :)

    Karl Kolchak

    28 Feb 17 at 11:54 am

  8. Score! Nats sign Blanton! Most of salary deferred!

    KW

    28 Feb 17 at 12:36 pm

  9. Whew! Blanton represents desperately needed bullpen depth. My new guess on the opening day seven:

    Kelly (closer)
    Treinen (setup)
    Blanton (setup)
    Solis (L)
    Perez (loogy)
    Romero (L)
    Worley (long relief)

    Romero will then be on a very short leash, with Glover and Gott waiting in the wings at AAA if he continues to do his best Henry Rodriguez impersonation. Both could use some fine tuning anyway, so this is the best possible scenario.

    Karl Kolchak

    28 Feb 17 at 3:30 pm

  10. An update, based on the Blanton signing:

    – $1M deferred in 2018
    – $2M deferred in 2019

    Natsochist

    28 Feb 17 at 4:35 pm

  11. It seems that Lind, Wieters and now Blanton were exactly the players the Nats had their eyes on all along to make the upgrades they needed, and they merely waited it out until each player was willing to defer salary. They apparently had a very good sense of who would still be available at the end of the free agent process and weren’t worried that they’d end up losing out on what they needed. I guess you’d call that smart management.

    Karl Kolchak

    28 Feb 17 at 5:23 pm

  12. It should also be noted that the Nats picked up Wieters and Blanton for a rather staggering total of $28 million less in guaranteed money than MLB Trade Rumors estimated they would get (the site did not have an estimate for Lind). That’s less than half of what they were estimated to be worth, which really shows the value of being patient throughout the process.

    Karl Kolchak

    28 Feb 17 at 5:50 pm

  13. Good stuff Todd – thanks for posting this. It’s been bothering me how much the Lerners are deferring, considering how Old Man Lerner is getting up in age and is leaving these bills to his kids (who may or may not be as aggressive in spending).

    The other thing is while the MASN deal is not completely controllable, the Stadium Naming Rights are and the Lerners have lost a lot of money waiting for the “perfect deal.”

    Andrew R

    28 Feb 17 at 7:27 pm

  14. Andrew — with the naming rights, the flip side of that argument would be that the Nats aren’t really that desperate for the cash or would have made the deal long, long ago. It’s all part of the Lerner poverty dance that’s so nutty sometimes, the same one that includes signing guys like Scherzer and the Stras extension but then being unwilling to take on a couple of months of salary at the trade deadline. It all has to make Rizzo pull his hair out. Oh, wait . . .

    KW

    28 Feb 17 at 8:47 pm

  15. I was on the Blanton bandwagon last offseason, and he was even better in 2016: 2.48 ERA, 1.013 WHIP, 9.0 K/9, 75 appearances and 80 innings. That’s a solid workhorse any way you slice it. He was one of the guys I wanted all of this offseason, but I thought his price would be too high for a setup guy.

    Yeah, the bullpen battle just got even tighter. Kelley, Treinen, Solis, Perez, and Blanton figure to be locks. That leaves two spots. One will go to a “long man,” presumably Worley/Cole/Guthrie/whoever. That leaves only one spot for Nathan, Glover, Gott, Romero, Cordero, . . . or the mystery closer behind Door #3. I’d love to see Glover name it and claim it, but there’s no rush if he isn’t ready yet. They’ve already been giving him and Gott some early looks in games, meaning they’re facing more regulars in the lineups.

    KW

    28 Feb 17 at 9:02 pm

  16. Blanton was the A’s second pick in the first round in the 2002 draft chronicled in Moneyball. He was taken two picks after Jeremy Guthrie, four after Denard Span, and one ahead of Matt Cain. Blanton was the comp pick for the Yankees signing Jason Giambi.

    KW

    28 Feb 17 at 9:14 pm

  17. Oh, and 40-man roulette starts again when Blanton shows up. Hard to see Martin sticking around with so many other RH arms in camp, but I’ve been wrong on such things before, and often.

    KW

    28 Feb 17 at 9:17 pm

  18. Yeah, the Nats played this very well to make some low cost signings that really improve depth and bullpen. I don’t know if they planned it this way or just capitalized on opportunities. But it doesn’t matter to me. I am also really intrigued with Romero and would like to see him in the pen. I figure Worley is probably hurt the most by the Blanton signing.

    With Lind, Weiters and now Blanton on board, I can probably even live with the bane of KW’s existence as the 5th OF.

    Wally

    28 Feb 17 at 10:19 pm

  19. Excellent point KW. If they really needed the money that badly, they would have pushed the stadium rights issue. I actually know a guy who has been involved in the Nats’ stadium rights sales process and he says that Mark Lerner has been in control of the process and has seemed indecisive. That there were deals that probably could have gotten done, but Lerner was always looking for better ones. Now this stadium isn’t new anymore and still no naming rights…

    Andrew R

    28 Feb 17 at 10:36 pm

  20. I’m glad that haven’t sold the naming rights as I hate the corporatized names, which are often companies like Verizon that suck (sorry, I was on the phone with their idiotic customer service reps for a total of about four hours yesterday trying to correct a problem that should have taken about 15 minutes).

    And anyway, shouldn’t the actual owners of the stadium (DC taxpayers) get that revenue? Seems only fair, but I know fair has little to do with pro sports when it comes to money. As for Mark Lerner, sounds like he’s a typical “boss’s kid” to me. That’s not a good sign for the future.

    Karl Kolchak

    1 Mar 17 at 12:01 am

  21. HOF Max Schrock is hitting .500 in MLB Spring Training so far… what?… I thought he was a lowly midget A ball ceiling player?

    What was that pitchers name we traded for who tossed a few average meaningless innings for us again?

    Seriously though… Stevenson probably should be on a fast track to MLB for us, power or no.

    Marty C

    1 Mar 17 at 12:13 am

  22. Wally, thanks for the encouragement, but I don’t think you meant to indicate me as the 5th OF! Alas, I would strike out even more than MAT . . . but I do have a good arm . . .

    I still hope they’re trying do a deep-discount deal with Pagan. He would complete a significant upgrade all across the bench.

    Yeah, the scoop on Mark Lerner doesn’t sound encouraging, does it? Of course a lot with the team management in the future will depend on how much latitude Mark and siblings give Rizzo to do his job.

    Naming rights: beyond a certain time frame, it’s hard for the fan base to warm up to a new name. It’s always going to be Nats Park to most of us, no matter what they call it. If you say Eagle Bank Arena, no one knows what that is (the artist formerly known as the Patriot Center).

    KW

    1 Mar 17 at 7:51 am

  23. KW – not you. I went with a bad joke : the ‘bane of your existence’ = MAT.

    Wally

    1 Mar 17 at 8:51 am

  24. Maybe I should give up ragging on Taylor for Lent . . . I’ve said many times that I think he has skills. But when you strike out a higher percentage of the time than you get on base, that isn’t going to average out well, matter how many 450-foot spring training bombs you hit.

    Not a good day for ex-Nats in the Chisox-Reds encounter yesterday. Rey Lopez started and gave up five ER in only 1.1 IP, including a homer and a double. For the Reds, Storen gave up three runs in 0.2, including a triple and a double. In one positive note, Renda (playing LF?) had a double and an RBI. He was Max Schrock before there was Max Schrock. Put one on the other’s shoulders and Werth is probably still taller.

    KW

    1 Mar 17 at 1:11 pm

  25. Elsewhere, we used to think of the A’s as “Nats West,” but now it’s got to be the Angels: Espinosa, Escobar, Revere, Petit, Alex Meyer, de los Santos. The A’s only have Schrock and Det.

    KW

    1 Mar 17 at 1:18 pm

  26. MAT, King of Spring.

    KW

    1 Mar 17 at 2:27 pm

  27. Dave Cameron was asked, during his chat, about all of this deferred money the Nats sign up for, and he responded that there is a very good chance that the Lerners don’t intend to own the team when the Scherzer money comes due. Didn’t seem like he had a source or anything, just speculation.

    Wally

    1 Mar 17 at 3:49 pm

  28. I did a similar chart back in July 2008, the $16 million Guzman extension had taken the Nats from $23.5 in future salary commitments to $39.5, from last in the league to third to last. This was during the period when the Nats were tanking for draft picks. When Rizzo is praised for his turning the Nats around it is good to remember just how much money he was given to throw at the problem. (Here’s a link to my spreadsheet: http://www.wnff.net/index.php?topic=20772.2675;msg=886820)

    The MASN deal does hurt the Nats, however the deal was factored into the price the Lerners paid for the team. With broadcast rights included the sale price would have been a lot higher than $450 million. Ten years later Forbes estimated the team worth at $1.3 billion and the Marlins might be sold for $1.6 billion, so I’d say that ownership is doing just fine.

    PowerBoater69

    1 Mar 17 at 8:26 pm

  29. PowerBoater–That’s a great point, and if what Wally says is true it makes decisions like the one not to expand payroll to upgrade the offense in the summer of 2014 or get a decent closer in the summer of 2015 even more of a head scratcher. Uncle Teddy is about 110 years old, you’d think he want to do like the Cubs have done and buy a World Series before he croaks. I would understand the reluctance if the Nats were a mediocre team, but each year the past five years it seems like they’ve been about one player short, except maybe for 2013.

    Thank goodness Boras hypnotizes Uncle Teddy so he can lift his wallet from time to time or the Nats would never get any worthwhile players.

    Karl Kolchak

    1 Mar 17 at 9:10 pm

  30. As strange as we may sometimes think the Nats’ spending situation is, the overall operation is millions of times saner than the perpetual dysfunction in Ashburn. I don’t think we’ll ever have wall-to-wall talk radio about whether Rizzo has been on a bender . . . thank goodness!

    KW

    2 Mar 17 at 8:44 am

  31. Kieboom DFA’d to add Blanton to the 40-man.

    KW

    2 Mar 17 at 10:03 am

  32. Was about to post asking whether anybody else is worried that Strasburg hasn’t started since last Thursday but Zuckerman posted a few hours ago that he’s starting tomorrow.

    Love the Blanton signing…

    Derek

    2 Mar 17 at 10:44 am

  33. I’m sorry i’ve been out of pocket; new onsite engagement with lock down on outside resources. … i’ve missed a couple of things this week i woul dhave normally commented on.

    Todd Boss

    2 Mar 17 at 11:13 am

  34. Thanks Todd.

    While this is interesting, the Lerners are billionaires and better businessment than us. The Washington Compost presents this as if they are writing about people like Loria, who will happily dump the Stanton contract in someone else’s lap as we knew he would, while the Marlins have just screwed their fan base.

    The Lerners and Rizzo have been a great combination. The Lerners have made incredibly deep investments and have shown the willingness to push hard for big free agents. We’re not for want. The team has contended every year and will continue to do so, with or without Harper in ’19. We are sitting on a windfall of lower minor league talent that will cash in at the upper levels by 2018-2019. These are great times.

    And kudos to Rizzo for how he played Wieters and Blanton.

    forensicane

    6 Mar 17 at 12:29 pm

  35. The focus of this article makes the following article worth noting:

    http://www.fangraphs.com/blogs/mlb-teams-with-the-most-dead-money/

    The Dodgers paying 47.4 million dollars to people not even on their roster this year! And the padres, with a far smaller payroll, on the hook for 35 mil.

    The Nats are on none of these lists that reflect upon waste.

    I know Strasburg makes for some anxiety, but could you imagine if the Nats were on the hook for Greinke? Heyward?

    There are many forms of albatross.

    forensicane

    13 Mar 17 at 10:10 am

  36. Hey there Doc. I saw this too and it seems to me that the Dodgers’ Andrew Friedman, after years of forced poverty in Tampa, ahd long thought of how to “use” extra money to his benefit. So he purposely wasted 10s of millions of dollars while also acquiring other assets knowing he had more than enough money coming in from his RSN. $50M is nothing to the Dodgers; they don’t bat an eye at that thnaks to their ridiculous RSN.

    But the Nats aren’t in that position; in a few year’s time when we’re paying that $25M/year in dead money we’re going to be hurting.

    Todd Boss

    13 Mar 17 at 2:56 pm

  37. Hi Todd :)

    We’re rolling the dice with Strasburg and Scherzer, but both are looking in far better form than David Price.

    In a few years’ time the contract thing will be resolved. Angelos is an attorney, but the Nats have attorneys too, and a legacy that they can point to of competitive impact because of this impasse. I’m hopeful.

    forensicane

    14 Mar 17 at 11:21 am

Leave a Reply