When the Baltimore Orioles signed Grant Balfour for two years and $15 million, it looked like a bargain. After all, Balfour had managed a 2.47 in 259 appearances the previous four seasons, emerging as a dominant closer for the Oakland Athletics in the previous two years. Joe Nathan, three years older than Balfour with less of a track record of success in recent years, received two years and $20 million from the Detroit Tigers. Then Balfour’s deal came apart because of an issue with his physical, and he subsequently signed with the Tampa Bay Rays for two years and $12 million. Everything fell right for the Rays to get him at even more of a bargain rate. But as it turns out, the best was yet to come.
Marc Topkin reports the exact details of Balfour’s contract, which includes a $1 million signing bonus, a $4 million contract from 2014, and a $7 million contract for 2015. The kicker, though, is that $2 million of his salaries for both years is going to be deferred for two years without interest. In one sense, you can call deferring money a form of procrastination. But for the Rays, right now is the time for them to make such a move. Deferring money without interest saves them money right off bat–salaries in baseball continue to increase, and $2 million simply will not be worth as much in 2016. More important for the Rays as this moment, however, is that $2 million will be much less important for them in two years. They are currently at a franchise-record payroll, and we have to presume that they will start cutting payroll following the year. They are pushing the limits of their funds as it is, and every dollar they can save now makes this situation a little more manageable. In two years, the Rays’ payroll will likely be closer to their normal levels, and especially now that we have seen that their payroll has the capacity to expand if they see the right opportunity, $2 million will be a cost they can more easily stomach. The other side of the coin, however, is that the deferred money may give the Rays just enough wiggle room to make one more low-cost signing.
One bizarre characteristic of the Rays’ offseason is that we did not see nearly as many low-risk, high-upside signings as the past. They signed Juan Carlos Oviedo for a $1.6 million guarantee and a few minor league signees, most notably Mark Lowe, but that is still a far cry from last season, when they signed James Loney, Kelly Johnson, Jamey Wright, and Luke Scott, all for $2.75 million or less. That is not necessarily a bad thing. The Rays did not have to go in a bargain bin as much because they made a pair of trades and had the core of the team signed for an additional year. But it is always nice to have a little more money to play with if one more interesting opportunity remains in play. Maybe the Rays spend the money now, or maybe the Rays use it to take on a salary at the trade deadline. Either way, having that additional flexibility gives the Rays more options both now and later in the season, and we will have to see how important it becomes.
Grant Balfour was kind enough to give the Rays a hometown discount to begin with, and the deferred money simply takes it over the top. Now the Rays have the opportunity to both get a little more comfortable financially and open up the possibility of one more move. We always hear that what other teams consider low-cost deals are much harder for the Rays to afford. The other side of that statement: the Rays may just have $1 to $2 million more to spend, and no one in baseball could possibly spend that money better than the Tampa Bay Rays.