Analysis: How Braves’ revenue surge could affect payroll, Freddie Freeman

Freddie Freeman hoists the 2021 World Series trophy for fans on Nov. 5. (Daniel Varnado/ For The Atlanta Journal-Constitution)

Credit: Daniel Varnado

Credit: Daniel Varnado

Freddie Freeman hoists the 2021 World Series trophy for fans on Nov. 5. (Daniel Varnado/ For The Atlanta Journal-Constitution)

The disclosure last week of the Braves’ record-setting financial results left many fans asking: What does it all mean for the team’s player payroll and for a potential Freddie Freeman contract?

Let’s dive into that while waiting for MLB to decide whether to play ball.

Although the Braves said pre-lockout that they plan to have a larger payroll than last year, they haven’t said how much larger. But the franchise’s 2021 financial performance – $568 million in revenue and $111 million in operating profit before depreciation and amortization – and World Series championship argue for a substantial increase.

The Braves’ revenue last year topped their previous high of $476 million in 2019. Coming off that 2019 season, the Braves were set to have a team-record payroll of about $151 million in 2020 before the COVID-19 pandemic shortened the season and prorated salaries. If the Braves’ 2022 major-league player payroll is the same percentage of 2021 revenue as the original 2020 payroll would have been of 2019 revenue, that would equal a full-season payroll of about $180 million, well above last year’s $148 million.

Such an increase could accommodate a new Freeman contract, the raises due returning players through arbitration or existing contracts and other transactions needed before or during the season.

Would the Braves spend as high as $180 million on players this year? Only time will tell, and it may be a long time, depending on the length of the lockout.

(How much of a full-season payroll actually will be paid out this year is up in the air. MLB already has canceled each team’s first two series of the season and contends players won’t be paid for those games and any others lost to the lockout. The Players Association intends to fight for full pay as part of an eventual deal. But in any case, for purposes of this analysis, let’s work with a full-season payroll.)

Back to that hypothetical $180 million: It would be below the luxury-tax threshold and would have ranked eighth among the 30 MLB teams’ payrolls last year, when the Braves actually ranked 13th.

The Braves generally don’t disclose their payroll budgets in advance because it’s not information they want agents or competitors to have. And during the lockout, teams are forbidden by MLB from commenting publicly about current major-league players.

But we’re under no such restrictions, so let’s do some payroll math.

The Braves have 10 players whose 2022 salaries have been set: pitchers Charlie Morton ($20 million, up from $15 million last year), Will Smith ($13 million) and Kirby Yates ($1 million); catchers Travis d’Arnaud ($8 million) and Manny Pina ($3.5 million); infielders Ozzie Albies ($5 million) and Orlando Arcia ($1.6 million); and outfielders Marcell Ozuna ($16 million), Ronald Acuna ($15 million, up from $5 million last year) and Guillermo Heredia ($1 million). Combined, those players have 2022 salaries totaling $84.1 million.

Nine Braves players are eligible for arbitration, which has been delayed by the lockout: infielders Dansby Swanson and Austin Riley; outfielder Adam Duvall; and pitchers Max Fried, Mike Soroka, Tyler Matzek, A.J. Minter, Luke Jackson and Sean Newcomb. Those players are projected to receive salaries totaling close to $42 million, which would bring the payroll to about $126 million for 19 players (the 10 already signed and the nine bound for arbitration).

Some spots on the opening-day roster will be filled by young players not eligible for arbitration. Those players, including starting pitcher Ian Anderson, will make around the MLB’s minimum salary, which likely will be close to $700,000. Let’s say this group, added to the aforementioned, brings the payroll close to $130 million.

Next, let’s factor in the biggest variable: free agent Freeman.

His contract likely will be for somewhere in the range of $30 million per year, depending on the length of the deal and the post-lockout market. (A tougher call for the Braves than what to pay Freeman in 2022 may be whether to guarantee a sixth year in a contract with a 32-year-old first baseman.) If the Braves sign Freeman to a $30-million-a-year deal, that would put their 2022 payroll in the vicinity of $160 million when added to all of the aforementioned.

But that wouldn’t be enough because there still would be other needs to address. Another $20 million would come in handy.

It certainly would be helpful for the Braves to re-sign at least one of the outfielders who became free agents after starring in the postseason: World Series MVP Jorge Soler, National League Championship Series MVP Eddie Rosario and NL Division Series standout Joc Pederson. The NL’s adoption of the designated hitter will increase the need to keep at least one of those players or to acquire someone similar. Soler and Rosario made $8 million each last year and enhanced their market value in the postseason. Pederson made $7 million.

The Braves also may want to add a veteran pitcher to bolster the starting rotation, especially with Morton’s early-season status uncertain as he returns from the broken leg suffered in Game 1 of the World Series.

Additionally, the payroll needs to be set high enough to allow for in-season trades to address needs that inevitably develop because of injuries or underperformance. Without spending more than $10 million in prorated salaries to add Duvall, Pederson, Rosario and Soler in July, the team wouldn’t have won the World Series.

In setting the 2022 payroll, the Braves may weigh their chances post-lockout of matching their 2021 revenue.

Of the team’s $568 million in revenue last year, $102 million was generated during the fourth quarter (October through December) – triple the $34 million generated in the same quarter of 2019. There’s obviously no assurance of duplicating a quarter as special as Q4 of 2021, financially or otherwise.

On the other hand, the Braves say they’ve already sold more season tickets than in any of the past 22 years, including all premium seats at Truist Park. All they have to do to bank that money is play the games.

The business of baseball will happen fast once the lockout ends, whenever that is. Several months’ worth of free-agent deals and trades will have to be compressed into a few weeks. The Freeman bidding will play out. The Braves’ spending plan will become clear.

As Pederson tweeted this week: “When this (labor) deal is done … it’s gunna be the craziest free agent frenzy we’ve witnessed.”