Trade Deadline Impact on Pirates’ Payroll

Chris Archer faces a lot of pressure from his new fanbase as the big deadline acquisition for the Pirates. Photo by Gene J. Puskar/AP

Well, the deadline has come and gone, and despite the persisting narrative—not actual fact—Neal Huntington made two big moves to help fortify a team that is in contention.

Late Monday night/early Tuesday morning, the Pirates swung a trade for reliever Keone Kela from the Rangers for left-handed pitching prospect Taylor Hearn and a player to be named later—the trade was originally announced as two PTBNL, but it just turns out that Hearn was still asleep, so he had to be informed before anything was actually reported. Then, after escalating, rampant speculation leading up to the 4 p.m. deadline, the Pirates swung a deal for Chris Archer, the biggest get on the market as far as starting pitchers go; however, it cost them two once-top prospects in Austin Meadows and Tyler Glasnow, along with another player to be named later.

As I wrote last Friday, I had no idea what to expect come the deadline, and these outcomes certainly didn’t disappoint in that regard. I spent most of the day resisting the Twitter call like everyone else, and it was a palpable excitement not felt for several seasons by Pirates’ fans.

Will these deals work out? Were they good deals? Did the Pirates give up too much? Did the organization fold under pressure from a frustrated fan base? While I’ll insert my feelings on these subjects a little, I’m going to try and focus on how these moves affect the Pirates’ payroll this season and moving forward, as this subject is always one at the front of fans’ minds.

Current Payroll

Coming in to the season, the Pirates sat at $84,604,323. Before Tuesday’s deadline, the projected club payroll for 2018 sat at $87,889,979. Small roster moves such as promoting players and waiver claims make the final total fluctuate almost daily, but the large difference in these two amounts is the unanticipated inclusion of a salary for Jung Ho Kang after his reinstatement from the Restricted List. After the trades, the payroll sits at a projected $90,774,361 for the season.

Keone Kela Trade

This deal is fairly straight forward, at least for now. Kela is currently in his first year of arbitration making $1,200,000 on the season. Prorating his salary from 8/1 to the end of the season, this pickup increases the Pirates’ payroll by $393,548, and it currently isn’t being offset by any outgoing salary, as Hearn was not on the 40-man roster. The possibility still stands that the player to be named is drawing a 40-man salary, but for now, the amount stays as is.

I know this has been touched on already, but I want to make Kela’s contract status clear one final time. I can’t count the number of times I’ve read from different stories that Kela is controllable through different seasons, either 2020 or 2021; no one seems to agree. The issue is with a discrepancy in his days of service as of the beginning of the season. Kela was on the Rangers’ 40-man roster since the start of the 2015 season and spent a single trip to the minors in both 2015 and 2017. The confusion arises from how many days he spent in the minors. According to Article XXI (B) of the CBA, “[i]f a Player is optionally assigned for a total of less than 20 days in one championship season, the Player shall be credited with Major League service during the period of such optional assignment(s).” Since neither of Kela’s stints in the minors were greater than 20 days, he has only accrued major league service time since 2015, giving him an even 3.000 days of service before 2018. If he never goes back down—for more than 20 days at least—he will see two more years of arbitration in 2019 and 2020 before becoming a free agent before the 2021 season.

Larger names and bigger outlets finally got all this right—even though some still haven’t—but I was reporting it Friday in my original column. Am I tooting my own horn a bit? Sure, but I’m proud I was the first to pick up on it—from what I saw—and was able to interpret it correctly. Moving on…

Finally, it’s not that I love Taylor Hearn, but I don’t like seeing valuable assets given up for relievers. Sure, Hearn’s upside is possibly what Kela’s currently is—a big, late inning arm out of the bullpen. Many will argue that is Hearn’s destiny due to control issues, which certainly lowers his stock a bit, but if he still has this kind of value, why not trade him for a piece other than a reliever? Relievers can be found almost anywhere, for basically any price. This is how Huntington has built his bullpen for years—look at Richard Rodriguez for example. Smart teams fleece the stupid ones for big returns on relievers, and it’s with that in mind that I’m not crazy about this trade. There is one possible upside however, and it’s the possible bullpen construction moving forward.

I’ve never been a big fan of how Clint Hurdle utilizes his bullpen arms, sticking to strict roles for everyone at all times. When looking at more favorable situations, many pundits will say that Terry Francona isn’t afraid to use Andrew Miller as he has because he has Cody Allen to actually close, leaving Miller available for other high-leverage situations (not because closers are stupid and not actually a position). If this somehow convinces Hurdle to do the same, I like this deal more (but I’m not holding my breath).

Chris Archer Trade

While the Kela deal got many fans deadline day off to a great start, it was this trade that really sealed the deal for the majority of the fanbase. Let’s look at the more complicated payroll ramifications of the trade first.

Way back at the start of the 2014 season, with only parts of two seasons under his belt, Archer signed a 6-year deal for $25,500,000 in guarantees, plus two option years at the end. This extremely cheap, cost controlled deal is part of what has made him such a valuable pitcher and one of the reasons he was a target for the Pirates.

For 2018, Archer’s base salary is $6,250,000. This goes along with prorated portions of his $1,000,000 signing bonus and $1,750,000 buyout of his 2019 option. While I’ve touched on this before, the inclusion of the buyout isn’t very well known, so I’ll mention it again. According to Addendum A of the CBA:

The buyout associated with the first Club or Mutual Option Year shall be attributed, pro rata, over the guaranteed years of the Contract. If a Contract contains no guaranteed years, the buyout shall be attributed in full to the first year of the Contract. No portion of the buyout shall be attributed to any option year. If the Player’s Contract is assigned to another Club, the pro-rated portion of the buyout will continue to be included in the Player’s Salary.

So, if come 2020, the Pirates are no longer happy with Archer’s services and they decide to buy him out, I’d assume the cash outflow of $1,750,000 hits the ledgers in full; however, for payroll purposes, that has already been spread prorated amongst the Rays and Pirates for six years, and nothing hits the payroll for 2020. In this way, it’s treated exactly as a signing bonus, just as the CBA says it should be.

There’s another interesting payroll machination that I didn’t account for before regarding Archer—an assignment bonus. It appears that a $500,000 bonus was included in Archer’s deal if he was traded; however, it doesn’t seem to specify who owes him that bonus. When I looked to the CBA for help, I didn’t get much. Article XXIII (C)(2)(b)(iv) states the following:

Any such increase in Salary attributable to the Contract Year during which the assignment occurred shall be treated as an assignment bonus and allocated to the Actual Club Payrolls of the assignor and assignee Clubs pursuant to Section C(2)(b)(ii) above

So, what does Section C(2)(b)(ii) say?

Salary arising from assignment bonuses earned upon or after the assignment and within the Contract Year of the assignment shall be included in the Actual Club Payroll of the Club(s) responsible for paying it in the Contract Year in which the bonus is earned

At first blush, it seemed that the Rays and Pirates would have to split the charge; however, the section that directive points to basically says the charge falls to the club that is responsible for paying it. Well, it’s being reported that the Pirates are on the hook for this bonus, so that’s what I’m going to go with in this exercise.

Adding all of Archer’s charges up for 2018 that the Pirates must include in their payroll for Luxury Tax purposes looks like this:

Base Salary: $2,049,731

Prorated Signing Bonus: $54,660

Prorated Buyout: $95,654

Assignment Bonus: $500,000

Total: $2,700,045

However, the outgoing salary of Meadows and Glasnow must also be included in the equation. Both were in the majors at the time of the trade, with Meadows making the prorated minimum of $545,000 and Glasnow slightly higher at $556,500. If you cut off both payments through 7/31, the Pirates save a mere $361,245 in 2018. Therefore, in total, the trade for Chris Archer raised the payroll for the Pirates by $2,338,800. Including the Kela trade, payroll increased by $2,732,348.

In 2019, Archer would account for $7,958,333 in a total payroll hit, which is roughly 16% of the $50,741,667 that the Pirates have among six players in guaranteed payroll for 2019, not counting options and arbitration figures. Add the prerequisite minimum salaries to the total, and the Pirates obviously have room to play with going in to free agency in the winter. Does this mean they’ll spend it? That remains to be seen, but they obviously felt strongly about the group of players they had and stepped out of their comfort zone at the deadline, so it’s hard to predict where they’ll go from here. The core is certainly there, and the right moves could supplement them moving forward, but that’s for another day

Analysis

I spent way too long breaking down the dollars and cents, so I’ll try and keep this short and sweet.*

I don’t love instant analysis on deals; we have no idea how players will acclimate to their new homes, how the outgoing players will perform, whether the deal could have been had for a better package, or any multitude of factors that are too hard to pinpoint and are thus foolhardy to discuss.

I’ve read plenty on the trade, and I’ll leave others to the actual statistical analysis, but I’ve seen pros and cons that make sense on both sides. I’ve always said that I’d be okay with prospect trades, as long as they were for the right player, and after Tuesday, I finally had to reconcile with that philosophy. This was new, and now I could actually see how I felt when the situation presented itself; so how do I feel? Honestly, I’m not sure.

I believe there is a valid level of skepticism at this point regarding the ceiling of Tyler Glasnow, along with substantial injury risk—as well as lagging performance—for Austin Meadows that depressed their values enough to the point where they’d be available now. There is a ton of depth in the system at both positions, so that’s a plus. The third piece will be important to the grade, as it’s being reported that it will be a name that fans will know. Ultimately, I think it comes down to how you feel about Archer, and I’m just not sure the Pirates are getting the Chris Archer that everyone knows and loves.

Sure, his stats in and out of the AL East show a stark difference, but he’s approaching 30 and his numbers are trending down. The Pirates are also a fastball focused team, and that’s the pitch in Archer’s arsenal that is hit the hardest. Of course, he could turn it all around and be the team’s savior, but as we’ve seen with Jose Quintana and David Price—among others—the sure thing isn’t actually always so sure.

My bigger issue is with the team’s place in the standings. Sure, they are playing great, but they are still a few games out of the second wildcard with several teams to catch, and what happens when they eventually come down to Earth? You don’t want to have to rely on such streaks just to get the chance at a one game playoff on the road. Basically, was all this worth it? The extended control on both players makes that factor more palatable, but it obviously remains to be seen.

Really, I think I want to try and approach it with an open mind. I’ve always been on the side of keeping prospects, especially in a small market. This provides the opportunity to see if I’ve been wrong, and if a large portion of the fanbase has been right all along. With that being said, those same fans need to realize something—this is what you’ve wanted, so go out and support the team, cheer them on, but don’t be upset if this doesn’t work. If Archer doesn’t get the team over the hump. If Glasnow turns it all around and Meadows becomes a star. You’ve said that doesn’t matter, so we’ll see if you were telling the truth.

Will this all be remembered differently simply because of the names involved? Fans always complain about how much money the Pirates don’t spend, but they spent far more at the deadline in 2015—about four times as much—and it’s remembered with disdain because no top prospects were traded, no big names were acquired, and the team ultimately failed.

The same fate is obviously on the table now, but my feeling is it’s all about perception. The Pirates “went for it.” Nothing else matters. Now it’s time to enjoy the ride.

*It didn’t work