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The Angels’ payroll picture heading into 2020

With a lot of holes to fill this offseason, you’re probably asking yourself: how much do the Angels have to spend in free agency? This post is to figure out just that.

Los Angeles Angels Introduce Joe Maddon - News Conference Photo by Jayne Kamin-Oncea/Getty Images

Projecting payroll and average annual value (AAV) is important as the two are both functions of population size and density, team quality, team enthusiasm, unemployment, consumer wages, and consumer confidence, among other factors.

While the AAV is used for luxury tax calculations, and teams receive fines and penalties for exceeding the luxury tax threshold (which is $208 million this year), the actual figure is incredibly important as it represents how much money is spent on the roster each year.

As for this year’s data, Jeff Fletcher, a team beat writer with the Orange County Register, maintains an updated spreadsheet which has the team’s AAV for luxury tax purposes at $118,945,000 before considering an MLBTR-estimated $21.7 million outlay in arbitration-eligible players.

By adjusting that figure for how much players will actually make (recall that AAV is simply the average amount per year that a player makes, and frontloading or backloading the contract makes the actual amount vary from the AAV) by adding in players on the 40-man roster ($2.25M) and estimated player benefits ($14.5M), we arrive at an actual payroll that would clock in at $157,395,000 if no changes are made to the roster.

While accurately predicting the exact year-end payroll of a given year is a crapshoot, the best we can do is evaluate past year-end payrolls and revise payroll accordingly based on the changes that have occurred.

Cot’s Contracts is a tremendous help here, as they have the past five years of the team’s actual baseball payroll data; they have luxury tax calculations on their site, too.

Angels owner Arte Moreno has alluded to a payroll increase for the team this season. While a rather vague and noncommittal response, the statement—and a perhaps predictable managerial change—is acknowledgment that Moreno would like the team to be better than it was last year.

To be conservative in each of the staff’s general manager scenarios over the next several weeks, we will be using +10% in payroll from the prior season, which brings us to an approximate total payroll of $191.5 million, and MLB player salaries of $175 million. This means the organization would have $34.35 million to spend this winter.

[Note: I am aware that the hiring of Maddon may indicate drastically increased spending, a deviation from the Angels’ norms. However, it does not make sense to explicitly forecast such an increase when management has a history of misleading their own fan base in recent years with their competitive intentions.]

Welcome to winter!