Giants Have $45M to spend

According to article in SJ Merc yesterday (read soon as Merc only allows 7 days to read for free)by Andy Baggarly (whom I enjoy reading, BTW), the Giants have $45M to spend since their budget is $85M and they have $40.3M in contracts committed currently. This is about $10-15M more than most discussions I have read about how much the Giants had to spend, so it opens the possibility of getting more high powered free agents than we could have speculated before, though spread over, say, 6 starting positions, that only adds $2M per position, not much of an upgrade on any one position, but a big upgrade if they lump it all under one position.

The interesting note was that while the $40.3M in committed payroll includes deferred signing bonuses due in 2007, including $1.28M to Kirk Rueter (which I don't think most people accounted for), it does not include deferred salary payments to Bonds which begin next year because, "according to the club, deferred salary comes out of a different budget." Most people have been subtracting this $5M in their calculations.

Why the Different Budget Exists

What most people did not account for, and that I forgot until now, was that the big issue from the last CBA (Collective Bargaining Agreement) was the cutting off of the loophole teams were using with deferred salaries to move up spending from future period into present period. Previously, they could just defer it and wait until it was due to actually account and pay for it.

With the new CBA, teams were only allowed a $2M in total deferment, like a deductible, but otherwise must fund the total deferment in a separate account with an amount equal to the present value of the defered amount by the third January 1st (so basically 2 years) after the season the defered income was earned. In other words, in times of low interest rates, essentially the full amount had to be funded in another account minus interest that will be earned in the years between this funding and the actual payment, after about two years. So you could defer it 5 years like the Giants did for Bonds, but they had to fund around $4M of the $5M owed Bonds, after two years and add a little each year.

This loophole actually allowed teams to basically borrow money from players without it showing up as debt on their balance sheets (at least the way they do their accounting, which apparently is from a Bizarro world). The fear on the part of the players union was that a team that used that loophole extensively, like the D-backs, could buy a championship but then go bankrupt in future years by doing that and the players would end up with nothing. So the last CBA shut that down, except for $2M per year. Bud Selig didn't like it because teams were circumventing his rules on the ratio of debt to team value that he wanted teams to stick to or get punished in some way.

Replacing Ned Colletti

There are other interesting factoids about Sabean's management in there, including functions done by certain execs under him, that are in the article. It gives a partial view to the functions of some of the Giants key executives under Sabean. One has an interesting implication/interpretation to me.

In addition to Colletti negotiating most contracts, he also made most exploratory phone calls with other executives in baseball (which I'm interpreting to mean that he was the one who initiated and closed the A.J. Pierzynski trade without running it by Magowan - as Magowan alleged in a statement he made a year or so back that he would have vetoed the trade had it gone through him as it usually did - because Sabean was experienced enough to know that he would need to do that, I would think). Thus Sabean was left without this conduit to all the other teams, which could have inhibited his trade actions this season.

When Colletti left, there was talk about spreading the duties among the other execs. Pat Dobson was one and apparently he cut back on his advance scouting to allow for more brainstorming sessions with Sabean. Bobby Evans was another. He had handled negotiations for minor league contracts previously and was promoted to director of player personnel after Colletti left (whatever that title means exactly).

Loud by his name being absent from the article, is right hand man Dick Tidrow, who was, hmm, Director of Player Personnel, according to the 2006 Giants Media Guide (I've bought one each year for nearly 20 years now). Oddly enough, that's Evans' new title, I wonder what happened to Tidrow. I would have thought he would be the one to have brainstorming sessions with Sabean (and perhaps he did but it wasn't mentioned in the article and he wasn't mentioned at all, period).

The article noted that, as last commented on, in July, Sabean said that he planned to reorganize the front office this winter. Part of the plan is to perhaps bring in someone whose skills are a closer match for what Colletti brought to the group. If I recall right, there was someone working for the Washington Nationals who worked with Sabean before and who has Ned's skills, but I haven't seen his name since then.

It was noted that Colletti was the man most closely connected to the other GMs, many of whom were young, wore neckties, and did not come from the scouting department. However, it was noted, with the workload this offseason, an assistant would probably be down the list of priorities and he probably won't have time to hire one.

Who Might the Giants Get

The article noted some possibilities of what the Giants will do. The Giants are expected to make a run at re-signing 2B Ray Durham, who is looking for a 2-year contract with an option, which, coincidentally, most Giants fans have been saying that's what they would offer him. Both Feliz and Hillenbrand hope to return but the Giants will probably only keep one because of their low OBP. It will probably come down to who signs first and Feliz might be motivated to stay because his children attend school in the Bay Area.

Even if Bonds is signed, the Giants need another OF to replace Moises Alou - I guess the Linden era will have to wait another season. The author notes - indicating that he got this from Giants sources - that they prefer a CF/leadoff hitter so that Randy Winn can shift to a corner OF spot. He also speculated that Carl Crawford might be available but prohibitively priced, as it might take both Lowry and Sanchez to get him.

He also noted that among the challenges Sabean faces, he must determine how to replace Jason Schmidt atop the rotation, he must prepare for contingencies in case Benitez and/or Matheny are not available next season.