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Transactions Notes 10/13/11 - 10/19/11 Plus Payroll Breakdown

Another week without too many transactions to discuss. The Rockies made one move last week, signing their first MiLB Free Agent for the 2012 season, though the details at this point are a bit hazy. I'll get to that in a bit. First, I want to provide an update from last week's transactions. I edited last week's post to reflect this move, but I thought I'd add it in here just to be safe. Relief pitcher Jim Miller, who was outrighted from the roster along with several others two weeks ago, was granted MiLB Free Agency. Unlike Kevin Kouzmanoff, Miller was not allowed to declare free agency immediately. Miller's departure was likely petitioned in the same way Edgar Gonzalez' was, with he or his agent basically asking the team to start negotiating with them for next year or let them go so they can get started looking elsewhere. The long list of other MiLB Free Agents seem to be waiting for the proper declaration period, which will begin when the world series is completed.

With that out of the way, let's move on to this past week. The Rockies signed free agent outfielder Luis Terrero to a minor league contract, according to Matt Eddy of Baseball America. At one point a top prospect with the Diamondbacks, Terrero can play all three outfield positions, with the majority of his playing time having been in center.  He is a speedster type with good outfield range and supposedly a great arm. He's never been able to break out offensively, as strikeouts have been a problem. Terrero was claimed off waivers from Arizona by the Orioles after Spring Training in 2006. Despite being cut from the Orioles in July of that year, the White Sox signed him to a major league contract in 2007, only to outright him off the roster before the season began. With only one full season in 2005 and scattered active time in the rest, I have calculated that Terrero has 2 years and 105 days of service time, making him still in the pre-arbitration phase of his career. He is currently 31.

This signing is interesting, as almost all minor league signings for next year so far have been players re-signing with the teams they were with this year. Terrero has never been with the Rockies; after leaving Chicago after 2007, he returned to Baltimore where he played the entire season for AAA Norfolk. He spent 2009 and 2011 pitching for the Mexican League, which is AAA level baseball, with a stint in Cincinnati's system in 2010. WIth the world series not even complete yet, it is too early to tell if Terrero's signing is some sort of precursor to something else (though what that would be, I'm not certain) or if they actually intend to keep him through to Spring Training.

After the jump, I will be breaking down the current constraints of the 2012 payroll, and show where we have room to play with.

After declining Aaron Cook's 2012 option, the Rockies will have one significant salary coming off the books. The other salaries automatically leaving are the monetarily smaller midseason acquisitions of Kevin Millwood, J.C. Romero and Mark Ellis (whose salary we were only partially responsible for). Because none of the players were paid over the full season, the monetary value of these players' departures doesn't really add up to anything more than maybe about one total arbitration eligible player salary. The Rockies also have Todd Helton's $6M + $4.6M 2011 salary dropping to just under $5 million, another large weight off the team shoulders.

2012 Payroll (italics for undetermined salaries at estimated value)

$10M Jorge De La Rosa
$8.25M Troy Tulowitzki
$7.5M Huston Street
$5M Carlos Gonzalez
$4.9M Todd Helton
$4.75M Jason Hammel
$4M Rafael Betancourt
$4M Ty Wigginton
$3.775M Matt Belisle
$3.6M Matt Lindstrom
$3.55M Chris Iannetta
~$2.6M Seth Smith (via Arbitration)
~$2M Dexter Fowler (via Arbitration)
~$2M Ryan Spilborghs (via Arbitration)
~$2M Ian Stewart (via Arbitration)
$1M Jason Giambi (club plans to pick up option, no reason to assume Giambi will decline, $0.15M buyout if he does)
$0.5M Aaron Cook (option buyout)
~$0.41M times 11, pre-arbitration players, 9 roster spots, 1 De La Rosa replacement and Juan Nicasio on the 60 Day DL)

Total Estimated Payroll with Current Roster: $73.935M

This estimated payroll would be the team's lowest opening day payroll since 2008. It gives the team about $8 million to play with to return to 2011's payroll, or about $10 million to return to 2010's payroll, the largest in team history. I would assume the team is intending to spend closer to the $8M than the $10M in this situation. This range could cover two Mark Ellis type signings, or maybe one Michael Cuddyer type signing. But more flexibility would be nice. Each new salary would replace one pre-arbitration salary in that bottom figure, subtracting the approximate minimum salary from each one.

Now we get to the part I hate: speculating on how this estimated payroll will change by the time the season begins. First of all, we have the tender deadline, where we may see Ryan Spilborghs (and Ian Stewart, if the team changes its mind about using him in 2012) leave the payroll. The salaries for the arbitration eligible players are also always in flux. They could sign for lower in 2012 if they're signed for more in 2013 and beyond in a multiyear yeal, for example. Further, if they are unable to agree on a figure, a salary arbitration hearing could be forced to award the player a salary dramatically more or dramatically less than what is expected. Those figures are extremely uncertain.

Then we reach the trade market. Ty Wigginton is obviously going to be everybody's most desired trade, but other than opening a roster spot for a better player, I'm going to make the argument that a Wigginton trade is not going to produce a significant positive effect for the team inherently, particularly in regards to payroll. We're almost certainly going to have to eat some salary there. That's not to say I wouldn't support a trade of Wigginton, just that it shouldn't be the team's #1 trade priority.

Jason Hammel had his name thrown about late last year after losing his rotation spot, but with the uncertainty going into 2012's rotation which will likely contain two high-upside, low-experience rookies, I think keeping Hammel with the hope of a return to form is probably a smart idea.

Going into the offseason, my preferred trade priority for the team is Huston Street for three reasons:
1. Rafael Betancourt, Matt Lindstrom or Rex Brothers all have a chance to reach or surpass his production in the 2012 closer role.

2. His salary represents the largest potential impact on freeing space on our payroll via trade.

3. His down year hasn't ruined his trade value to the extent that it could have. There will be teams willing to pay him to close or set up for them. Even if we still have to eat some salary, I expect the potential freed payroll space to be at least 4-5M. Another player could bump that up.

I believe Street is both the most easily replaceable and the best trade chip in terms of potential payroll value going into the offseason. If we can shed 60% of his salary plus maybe even kill another bird with the stone and get a need in return, it could make a significant difference, moreso I believe than shedding several Wiggintons/Hammels/Smiths.

That about wraps that up. This upcoming week should be the last painfully slow transactions week, as once the World Series ends, free agency occurs and everything gets interesting. See you next week.