Giants anticipate a payroll reduction in 2025: Source

SAN ANTONIO — Buster Posey almost never took batting practice on the field in the waning years of his career. As a starting catcher whose bat was too important to afford many days off, he learned the benefits of conserving his resources.

Now that he is the Giants' president of baseball operations, Posey will be required to exercise those same skills.

The Giants' first offseason under Posey is expected to be marked by austerity measures, according to a league source familiar with the team's plans. The Giants' adjusted payroll, which accounts for salary that is earned in a given year but not necessarily paid out, is expected to step back from the $206 million they spent last season, when they finished 80-82 while exceeding the luxury tax threshold for the first time since 2018.

Even a modest amount of belt-tightening would leave the Giants with limited resources to spend this offseason — perhaps $30-40 million — beyond their eight players under contract plus the forecasted salaries of four arbitration-eligible players plus pre-arbitration player salaries. Although the Giants are not resolved at present to trade off their major-league roster to create more financial flexibility, they plan to explore it, with arbitration-eligible players like LaMonte Wade Jr. ($4-5 million), Camilo Doval ($3 million) and Mike Yastrzemski ($9-10 million) among the names in play to be moved.

The Giants still anticipate making significant roster improvements through free agency and potential trades that involve taking on salary. They just won't have ample wherewithal to do it, and budget cuts, if enacted, would make it practically impossible to pursue free-agent outfielder Juan Soto, the one megastar up for bidding.

Posey declined comment on any potential payroll reductions when reached by text, saying he would not discuss payroll matters. Giants chairman Greg Johnson, when asked about player payroll at Posey's introductory press conference on Oct. 1, said the organization approaches each offseason with an opportunistic mindset and "will spend what we need to put a winning team on the field."

Johnson echoed that message while responding to The Athletic's request for comment on Thursday, saying via text that the Giants "never have a set budget, just a fairly wide range. The end number depends on plenty of movement between trades and free agents. Our goal is to try to field the most competitive team. It's way too early in the process to set a number. We want to make smart baseball decisions that balance the short term and long term."

Even if the Giants were to reduce cash-basis payroll to the range of $180 million, it would represent a significant but not necessarily drastic step back from recent seasons; the Giants' adjusted expenditures in 2023 were roughly $187 million. Some pullback was expected after this past season in which the Giants failed to post a winning record despite venturing beyond the luxury tax threshold.

But if an assumption existed within the fan base that the Giants would continue to ramp up spending each year as they got further removed from the financial impacts of the COVID-19 pandemic, effects that lingered amid the Bay Area's slower economic recovery, then those fans are likely to be disappointed.

The Giants are still feeling the after-effects from the shots in free agency they took last March while signing Jorge Soler , Matt Chapman and Blake Snell. And their revenue streams were not able to offset the player payroll overruns, which one team source pegged at more than $30 million.

Although the Giants achieved a year-over-year increase of 2,231 fans per game this past season and their overall attendance of 2.65 million was their highest since the pre-pandemic 2019 season, a higher percentage of their tickets were heavily discounted or sold as part of value bundles that limited overall revenue growth. The Giants are in a fortunate position compared to their major-league counterparts that face uncertainty with regional television revenues; the club signed a 25-year contract with NBC Sports Bay Area (then Fox Sports Net Bay Area) in 2007 and receives part of its rightsholder fee as an ownership stake in the channel.

But the Giants' overall operating losses last season were believed to be significant enough to cause discomfort among members of the ownership group. The Giants have also enacted belt-tightening measures elsewhere in the organization, eliminating some positions in the scouting and other departments.

In the near term, at least, the Giants almost certainly will not return to the spending heights, relative to the rest of the industry, that followed their coffer-filling run to World Series championships in 2010, '12 and '14. On a cash basis, the Giants' payroll ranked from second to fifth highest from 2015-18 under GM Bobby Evans, who was fired in favor of Farhan Zaidi prior to the 2019 season. The Giants have not returned to that top-five level since then.

The Giants ranked eighth in cash-basis payroll last season following their opportunistic spring training investments in Soler, Chapman and Snell, the latter of whom recently opted out of the remainder of his two-year, $62 million contract. But they effectively shot for the moon with those signings. That's because Snell's contract pushed the Giants over the tax threshold and because the deals in March were structured in such a way that left no escape hatch to dip under the tax line in case the season went sideways. For example, even when the Giants offloaded the remainder of Jorge Soler's three-year, $42 million contract onto the Atlanta Braves at the July 30 trade deadline, the trade trimmed just $2.3 million off the Giants' luxury tax payroll calculation because $9 million of Soler's guaranteed money had been negotiated as a non-transferable signing bonus. It would've made a similarly small dent if the Giants had traded Snell, who will receive a $17 million chunk of his 2024 earnings as a signing bonus that is payable in January 2026.

(In retrospect, pushing so much of Snell's money into 2026 should've been the first sign that the Giants were operating well beyond their projected revenues.)

-for-broke season's luxury tax implications are inescapable

The amount of tax the Giants actually paid was a relative paucity — just $2.25 million — but being designated a tax payor has left them in a detrimental position when it comes to signing free agents with qualifying offers this winter, and might entirely take them out of the running for those 13 free agents who received one.

Last March, the Giants sacrificed their second draft selection and $500,000 from their international bonus pool when they signed Chapman. They sacrificed their third selection and another $500,000 in international money when they signed Snell. This offseason, because they are a luxury tax payor, signing a qualified free agent would cost them their second pick plus their fifth pick plus $1 million from their international pool. Signing a second free agent with a QO would cost them their third and sixth picks.

Fans might ask: Should the potential loss of a couple draft picks limit the aggressiveness of one of the game's most historic franchises, especially at a time when they have so much work to do to achieve relevance with their National League West rivals? Maybe not. But highly compromised amateur drafts in back-to-back years is hardly the way a new president of baseball operations wants to begin his tenure — especially a development-minded executive like Posey who has stated that the path to sustained winning is through the farm system.

In addition to Soto, the free agents who received a qualifying offer are: shortstop Willy Adames, first baseman Pete Alonso, third baseman Alex Bregman, right-hander Corbin Burnes, left-hander Max Fried, outfielder Teoscar Hernández, left-hander Sean Manaea , right-hander Nick Martinez, right-hander Nick Pivetta, outfielder Anthony Santander, right-hander Luis Severino and first baseman Christian Walker.

Notable free agents who were not offered QOs by their former teams include shortstop Ha-Seong Kim, right-hander Shane Bieber, right-hander Walker Buehler, outfielder Tyler O'Neill, first baseman Paul Goldschmidt, and outfielder Jurickson Profar.

Adames might represent the best combination of offensive production at a position the Giants consider a priority to address, but Kim's lack of draft compensation will make him a more attractive target. The 29-year-old infielder, who was a favorite when he played for current Giants manager Bob Melvin in San Diego, is coming off surgery to repair a labrum tear in his right shoulder and is uncertain to be ready to begin the season. Kim is expected to be in demand, though, with agent Scott Boras noting in Wednesday's session with reporters at the GM meetings that there is a shortage of middle infielders on the market.

"His medical is established," Boras said. "He knows all the teams are aware of his return-to-play dates, which is going to be if not the start, very early in the season. They're all aware. They've seen the reports and are very comfortable with his medical."

Between Tyler Fitzgerald and Casey Schmitt , the Giants might feel comfortable ham-and-egging it at shortstop for a few weeks if they were to sign Kim and need to give him more time to ramp up the end stages of his recovery.

The Giants also will have second-tier choices in the starting pitching market. If it's star power and name-brand entertainment value that they seek, they could go the Randy Johnson-circa-2009 route and try to squeeze a season out of future Hall of Famer Justin Verlander, who will be 42 on Opening Day. Bieber, who made one start last season for Cleveland before undergoing Tommy John surgery, might offer the most upside at the most approachable price point.

Nathan Eovaldi, who declined a $20 million option to return to the Texas Rangers , would be more expensive but is not tied to draft pick compensation.

Notably, neither is Snell, although the Giants are not expected to seek a swift reunion nor be competitive if his market goes where Boras expects it to go. Ownership also does not appear to have the same appetite, for Snell or anyone else, to wait out the market and potentially sign players in spring training or the weeks leading up to it.

If the Giants manage to return to the playoffs in 2025, some measure of credit should go to Zaidi. The Giants' outgoing president of baseball operations made too many mistakes to retain his position, but he also left a wellspring of young pitching that is well regarded within the industry. And he was a considerate camper when it came to the 40-man roster. He left it in better shape than he found it.

Then again, if the Giants find their way into the postseason next October, some of that will be in spite of Zaidi, too. When Giants ownership stood ready to support last spring's spending spree, there was no reason for Zaidi to pump the brakes. He likely understood it at the time: if the season didn't pan out, somebody else would be cleaning up the financial mess.

(Top photo: Eakin Howard / )