According to Cot’s Contracts, the Milwaukee Brewers currently have $40.5 million committed to their Major League roster, not including the three pending arbitration cases for Jean Segura, Wily Peralta, and Will Smith. Everyone else who dons a Brewers uniform in 2016, as of now, will make the league minimum. For perspective, the club’s Opening Day payroll in 2015 was $104.2 million.
Taking into consideration the arbitration cases and the league-minimum salaries, we can comfortably say that Milwaukee is slated to have a payroll that is at least $40 million under last year’s budget. What a difference a year makes.
Two important points: (1) I am fully aware that the organization must make a profit and should expect revenue to decrease, due to the club being non-competitive; and (2) I am not criticizing the front office for skimping on the free-agent market or avoiding new contract extensions for players under team control. This is a rebuilding club with many young players who are fighting for playing time at the league minimum. That’s fine. The team should absolutely avoid handcuffing itself financially through long-term contracts and/or extensions.
But it’s imperative to note that a low Major League payroll is not the only place to spend money. It also must be stressed that the Milwaukee Brewers will still benefit from revenue sharing, their own television contract, and all the normal revenue streams that have allowed them to spend $98-plus million in three of the past four years. Thus, if the club (understandably) fields a low-cost Major League roster and the differential is not spend elsewhere within the organization, ownership will simply pocket the extra excess money. And, it seems to me, there’s no reason why a non-competitive stretch should be frustrating for fans and line the ownership’s pockets a bit more than normal.
Fortunately, there are plenty of places for a Major League organization to spend money, namely on the farm system. And given the fact that Milwaukee is focusing on the future, that seems to be the perfect place to allocate more funds than normal. If the goal is really to shorten the rebuild and to construct a perennial contender, the club should welcome investing more in their minor-league system.
The Brewers can throw gobs of cash in both the international market and the 2016 MLB Draft. Granted, Major League Baseball has worked diligently to limit the amount of money given to amateur players by instituting a complicated set of “bonus pool” allotments that have strict penalties for exceeding them. But as we’ve seen teams like the Yankees, Dodgers, and Rays do on the international market, there’s nothing stopping organizations from spending more money — as long as they’re willing to pay the penalties.
Back in 2014, Craig Goldstein outlined the penalty structures for exceeding the signing-bonus pool limits. In short, overages are taxed at 100 percent — so a team effectively has to pay double when they’re spending over their limit — and teams are ineligible to sign players for more than $500K or $300K for a year or two, depending on how much a club blows past their limit. For example, from July 2, 2014, to July 1, 2015, the New York Yankees exceeded their limit by at least 610 percent! They signed 10 of the top-30 international players on the market and had to pay an estimated $13.4 million in overage taxes, but the club is hoping that the investment pays off handsomely in the coming decade.
Baseball America’s Ben Badler opines that 2016 is a perfect year to ignore the bonus-pool limits. With the Collective Bargaining Agreement ending soon and the specter of an international draft making some of the overage penalties questionably effective, the 2016 season represents a perfect storm, of sorts. Not to mention a wealth of young Cuban talent is poised to become available, too, and only teams willing to outspend their bonus pools will likely have an opportunity to sign those players.
The international market is one place where teams have already flirted with overspending and paying the overage penalties. No one has really done it in the MLB Draft. Teams once again are assigned bonus pools, depending on specific draft position and the number of draft selections, and have an aggressive penalty structure for exceeding those bonus pools. The strictest penalty is a 100 percent tax on the overages and the loss of first-round picks in the next two years’ drafts, and that’s for spending 15-plus percent over one’s bonus-pool allotment. That’s steep.
The 2016 draft class is not particularly strong at the top, but ESPN’s Keith Law and Eric Longenhagen suggest that it projects to be “teeming with prospects worthy of late-first or sandwich-round grades.” In other words, it has plenty of depth. And for a club looking to acquire extra amateur talent through the draft and is looking for high-priced youngsters to fall through the cracks due to bonus demands, depth is key. Depth is probably preferable to a draft that is top-heavy.
Since Ray Montgomery has become the Brewers’ amateur scouting director, the organization has been stellar at acquiring amateur talent. Their 2015 draft class was one of the best in all of baseball. Allowing Montgomery and his staff to be unburdened by money in the 2016 Draft, to simply identify and draft the best-available talent no matter the cost, seems to be a winning scenario for the Milwaukee Brewers. The only thing that is needed is extra money and a willingness to lose a first-round draft pick or two in the coming seasons.
Granted, it should be noted that the Brewers don’t project to be a quality Major League club for another couple seasons, which means any first-round pick they surrender would be a really good first-round pick. To make up for that, though, the club could focus on acquiring competitive balance picks via trade in 2016, as well as understanding that their second-round pick should be very high, too.
It’s a gamble for the Brewers to sacrifice future first-round picks. That’s undeniable. But, it’s also obvious that the Milwaukee Brewers have the means and the reason to ignore any monetary limitations on the amateur market and to spend big. Spend really big. Allocate that $40 million differential mentioned above on improving the future of the club, instead of simply becoming profit for ownership and the club. In my mind, if the real goal is to become competitive as quickly as possible and to sustain that competitiveness for as long as possible, the Milwaukee Brewers should put their money where their mouth is and blow the amateur market out of the water.