The hot stove is cooking and Rick Hahn hasn’t even poured his morning coffee in Carlsbad, California yet at the General Managers’ Meetings. News of the White Sox motivation to sign one or both of Manny Machado and Bryce Harper hit a frenzy yesterday and today The Athletic‘s Ken Rosenthal speculates that the “planets [are] aligning” for the White Sox this offseason.
It’s well known that penurious Sox owner Jerry Reinsdorf struggles to reach his pockets when it comes to signing large contracts, but this season could be different.
“For one thing,” Rosenthal writes, “the White Sox are coming off their sixth straight losing season, and second straight with 95 or more defeats. They have minimal contractual commitments in 2019 and beyond. And they are due to sign a new local TV contract, the kind that often prompts clubs to spend more freely.”
It’s well known that Reinsdorf hates losing and according to several accounts he stridently questioned Hahn’s direction in rebuilding the franchise from the ground up. He may disguise his passion in a defense of the fanbase, but the weathered veterans of 35th and Shields always take a jaundiced eye when Reinsdorf has to open his checkbook. But this year could be the year that Reinsdorf makes a splash as lucrative media deals may be on the horizon.
“The partnership between the White Sox, Cubs, Chicago Bulls and Chicago Blackhawks with NBC Sports Chicago,” Rosenthal continues, “includes only one more guaranteed year, sources tell The Athletic. The White Sox then expect to enter into a joint venture with the Bulls and Blackhawks, be it with NBC Sports Chicago, a different media distribution partner or perhaps even a private equity firm.”
The variables in securing a media deal can be read two ways: As drying well of funds or as an opportunity to drill deeper into the earth’s crust and hit a wellspring of cash. And in fact, recent media deals with other teams such as the Phillies, have been lucrative cash-cows in major media markets. Chicago is indeed such a market and by bundling the Bulls and Blackhawks along with the White Sox, Sox fans may witness a historic moment in sports.
If you need a ballpark figure to work from, the Phillies signed a 25-year, $2.5-billion deal with Comcast in 2014. With their 25 percent stake in Comcast and $100 million in average annual cash, the deal jumps closer to $5 billion. And if you need more cause for optimism, Chicago is the second largest media market behind New York; Philadelphia is fourth.
Even as I make the argument that the White Sox have unlimited financial flexibility, history smacks me in the face. The largest contract the White Sox have ever agreed to is Jose Abreu at $68 million, a contract he opted out of in 2016 to test arbitration. The Sox avoided arbitration with Abreu the past two seasons, but other players were forced to the arbitration table after the team and players couldn’t come to a settlement. Avisail Garcia and Yolmer Sanchez won their arbitration cases in 2018 despite the organization’s history of settling contracts.
The other half of my skepticism comes from the White Sox history of never even sniffing a competitive balance tax penalty. The highest payroll the Sox have had since 2000 was $127 million in 2011. This season could see a record low for payroll considering they jettisoned James Shields‘ albatross salary and only have approximately $11 million in guaranteed salary on the books. This figure excludes arbitration salaries that MLB Traderumors estimates could total nearly $37 million for six players including Abreu. The payroll inches higher when you start rounding out the roster with bullpen pieces and minor free agent acquisitions. Conservatively estimating that the Sox could round out the roster with another $15-$20 million the 2018 payroll could be a touch under $70 million.
With the CBT threshold set at $206 million the White Sox could almost triple their payroll without suffering a penalty. The only question is whether Reinsdorf will approve a payroll north of $150 million?
Bryce Harper ($21.725 million salary in 2018) and Manny Machado ($16 million salary last season) will demand a balance of years and money in free agency. With Mike Trout earning $34 million over the next two seasons and Harper and Machado’s stature as among the best players in the game they will earn salaries in Trout’s orbit. They may not earn $30-plus million in the first or second year, but the average annual salary for both players will be at Trout-levels and higher as the years move on.
My estimation is a baseline of $25 million in salary for next season and into the mid-30s by 2021. How teams decide to engineer these contracts with guaranteed money and signing bonuses balanced against years and options is anyone’s guess. This is a historic free-agent class and no one is ready for what’s ahead of us. But if the White Sox want to land both Machado and Harper they will have to pony up at least $50-$75 million in average annual salary for the next two seasons to have a shot at snagging these two players.
If Reinsdorf decides to go all-in and try something new — after all, rebuilding is a new idea to him — we could see historic numbers and years tossed around ($700 – $800 million in salary commitments with no-trade clauses and team options over eight to 10 years). But if the White Sox can snag a media deal of the ilk the Phillies did, money isn’t really a concern, is it?