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The Orioles’ young core will help payroll ‘increase steadily.’ It won’t justify a meager mark in 2023. | ANALYSIS

Orioles catcher Adley Rutschman’s 2022 salary will triple by the end of the year, at effectively no extra cost to the team. The same will not apply to most other raises coming in Rutschman’s future.

After finishing as runner-up for American League Rookie of the Year, Rutschman will receive a bonus of about $1.18 million from the pre-arbitration bonus pool that came out of the league’s new collective bargaining agreement. The ninth-largest bonus of the 100 given out to players yet to reach arbitration, it’s more than double Rutschman’s actual salary for his time spent in the majors. The Orioles will pay that bonus and any others for their players and then be reimbursed by the league, responsible for only their portion of the $50 million pool.

That $1.67 million payment is not included in projections for their opening day payroll, which, a week removed from the winter meetings, stands at $53.5 million, according to Cot’s Baseball Contracts. That’s the second lowest of the 30 major league teams, and while it represents an increase of more than 20% on last year’s season-opening figure, it’s also about $20 million less than the overage penalty the free-spending New York Mets are projected to pay for exceeding the thresholds of the competitive balance tax. Put another way, the Mets are being taxed more for their players than the Orioles are paying directly to theirs.

Although Baltimore’s young core led by Rutschman figures to grow expensive in the near future, it doesn’t justify the organization’s current meager payroll as it pursues a playoff berth in 2023. Last season, the Cleveland Guardians were the only one of the 12 playoff teams with a payroll below $98 million, according to Spotrac, with Seattle and Tampa Bay the only other postseason clubs below the league average of $150.6 million. The Orioles could have added $100 million to their 2022 payroll and still not reached that mark.

It seems there will not be an effort to get to that level this offseason, either. There are still two months until the start of spring training, but the Orioles are the only team in the American League East yet to reach an agreement on a multi-year contract with a free agent, with its only guaranteed deal being a one-year pact for $10 million with veteran right-hander Kyle Gibson. Baltimore’s payroll figures to climb, with the Orioles looking for another starting pitcher, a left-handed bat and a catcher to serve as Rutschman’s backup. But whether that increase reaches the level of “significant,” as executive vice president and general manager Mike Elias suggested it would at the end of the regular season, is another matter.

During the winter meetings in San Diego, Elias softened his outlook for the team’s financial plans, saying major league payroll would “increase steadily” over the coming years as the organization also tries to maintain its improvements in infrastructure.

“We have a plan to keep the underpinnings of the organization healthy going forward, which is something that the Orioles haven’t done historically while also funding a competitive team in the American League East, and it’s not something that we’re just going to force and do our wants and have it encumber our roster because we went out and made some deals that don’t make sense for the next window,” Elias said last week. “But I do expect our payroll is going to increase steadily from this point forward now that we feel like we have a competitive team and we feel like the internal talent’s there to fuel a competitive team.”

He added the team’s payroll would increase as revenues and attendance do, expecting those numbers to rise with the club’s improvement. The Orioles have had one of the eight lowest average home attendance figures every season since their most recent playoff berth in 2016. The club’s lease at Camden Yards is up after this season, though the team can exercise an option for a five-year extension before February, while Elias has repeatedly referenced future renovations the team has planned for the ballpark.

Hovering over any conversation of payroll are the Orioles’ ongoing legal situations, with the team still in a dispute with the Washington Nationals over the Mid-Atlantic Sports Network, while the sons and wife of Orioles principal owner Peter Angelos have exchanged lawsuits over the past several months. Any questions about payroll are likely better steered toward ownership than Elias; in an interview last month with 105.7 The Fan, Orioles CEO and chairman John Angelos was asked about Elias’ comments that “it’s liftoff from here” for the organization and that this would be “an offseason where we’re going to have the flexibility to invest in the major league payroll in a different way than I have done since I’ve been here.”

“I think what Mike said is right on,” Angelos said. “We have always felt that a rebuild requires you to take it down, and you have a long view, that you’re going to reinvest early and middle and often, and that’s going to give you fewer valleys and a whole lot more peaks. We were very successful for five years [from 2012 to 2016], but we had a drop-off. This is designed to take us out five, seven, 10 [years], more like a Tampa Bay kind of an approach, except with bigger payrolls.”

Faced with payroll questions at the winter meetings, Elias repeatedly pointed to Baltimore’s young core as a reason for pause, saying the Orioles “want to be really careful and strategic about building on this group that we have.” Baltimore has baseball’s top minor league system, and that’s after graduating the sport’s No. 1 overall prospect in Rutschman. Gunnar Henderson, Grayson Rodriguez, DL Hall and possibly others figure to come off prospect lists in 2023, but Baltimore will still have a group of top prospects including Jackson Holliday, Colton Cowser and Coby Mayo coming up behind them.

That prospect nucleus, plus major leaguers who have already established themselves such as outfielders Cedric Mullins, Anthony Santander and Austin Hays; first baseman Ryan Mountcastle; and pitchers Kyle Bradish, Dean Kremer, Tyler Wells and Félix Bautista, offers a partial explanation for why the Orioles might be hesitant to spike payroll in 2023. Led largely by that group, Baltimore finished 83-79 in 2022, the best team in the American League not to make the playoffs despite spending the final two months of the season with only two players making more than $1 million.

Mullins, Santander and Hays are projected to receive at least $15 million collectively through the arbitration process, accounting for more than a quarter of the Orioles’ current payroll. But Baltimore will pay only the $700,000 league minimum or thereabout for the other players listed. In time, though, Rutschman and those other young players will have growing salaries that, unlike any pre-arbitration bonuses, the Orioles will be on the hook for.

Theoretically, in the 2025-26 offseason, the Orioles could have Mullins and Hays entering free agency with Mountcastle, Rutschman, Henderson, Rodriguez, Hall, Bradish, Kremer, Wells, Bautista and others eligible for arbitration. Even if Mullins and Hays were to leave, the Orioles tendering all of their arbitration-eligible players, a group accounting for at least a third of their roster, would amount to a significant expenditure, especially if the top prospects pan out as hoped and prove worthy of steep raises.

But the potential for high costs in the future shouldn’t prevent short contracts. The reported deals for outfielder Cody Bellinger (one year, $17.5 million with the Chicago Cubs), left-hander Sean Manaea and right-hander Ross Stripling (both two years, $25 million with the San Francisco Giants), and even right-hander Justin Verlander (two years, $86.7 million with the Mets, who it’s admittedly hard to see anyone outbidding) could have improved Baltimore in the near term without Elias needing to worry about them detracting from a future window.

In each of the eight seasons before the Angeloses hired Elias to lead baseball operations in November 2018, the Orioles ranked in the top 16 of teams in opening day payroll, with a top payroll of $164.3 million in 2017, according to Cot’s Baseball Contracts. But Elias said it’s doubtful the organization returns to that high mark, at least in the immediate future and certainly not by the end of this offseason.

“This isn’t something where we’re going to flip a light switch and get to our max capacity again,” Elias said. “I think there were years here recently where the team was over its means, and when I came in, we were kind of still feeling that from years prior. But that’s in the past now. We’re in a good spot, much better spot, and I’m extremely confident that we’re going to take the plan to its logical end course, which involves continually increasing the payroll, and it’s gonna start this year.

“I think we’re going to get into a mode where we find a very solid water level for what the Orioles payroll is going to be.”

But for now, Baltimore’s figure is drowning under most other teams’.

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Source: Berkshire mont

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