When the Braves left Atlanta and moved 15 miles to the north in Cobb County, on the other side of the disposable income dividing line, they did so for one reason — money. It wasn’t to get closer to their fans, as they so often spun publicly. It was because county administrators quietly cut them the public-funding deal of a lifetime and gave ownership the opportunity to be commercial real estate landlords. It was Scrooge McDuck nirvana.
The Braves’ public talking points focused on the potential positive ripple effect of the deal: A development called The Battery would be built adjacent to SunTrust Park. The revenue generated by both would flow into the organization. Payroll would skyrocket. A river of free agents would potentially follow.
You can wake up now.
The Braves had a bottom-10 payroll for their first two seasons at SunTrust Park. Included in the estimated $120 million payroll for the 40-man roster in 2018 was $33 million in “dead money” — salary that general manager Alex Anthopoulos took on in the Matt Kemp trade for the specific reason to clear the books for 2019. Despite all this, the young Braves stunned the baseball world by winning the National League East, averaging 31,500 fans per game, selling a bazillion Ronald Acuña Jr. jerseys and the team showing $200 million in revenue for the third quarter alone in 2018, a $15 million leap from the third quarter the year before.
But that hasn’t flowed into the payroll. It mostly has gone to pay down debt and service construction loans.
Even with the signing of Josh Donaldson to a one-year, $23 million deal, the overall payroll hasn’t risen (although it might).
It was a year ago when chairman Terence McGuirk said: “There will be very few teams that have as much to spend in the marketplace next winter as the Atlanta Braves.” Anthopoulos frequently has spoken about payroll flexibility and the chance to “shop in every aisle.”
The Braves have flexibility. But they haven’t flexed. They have remained prone. Some fans are burning down villages on social media. No surprise. There have been no major trades or a free-agent signing to help the starting rotation. Pitcher Dallas Keuchel, superstar outfielder Bryce Harper and several other players remain on the market as spring training opens this week.
The Athletic sought answers. David O’Brien and I quizzed McGuirk and Anthopoulos for an hour in the team’s executive offices Wednesday about the roster, budget, ownership and the future.
Anthopoulos said publicly for the first time that the Braves’ 2018 payroll was budgeted at $120 million but actually rose to $126 million after in-season trades. He wouldn’t disclose this year’s budget but maintained: “We have room to go north of that — well north of that.” McGuirk and Anthopoulos expect the Braves’ payroll to rise to the middle of the pack of 30 teams. Last year, that would put it at $145 million. As for not doing much yet, Anthopoulos said, “You can easily get caught up in, ‘I have money burning a hole in my pocket.’ ” But he’s not.
Maybe it works out. Anthopoulos has earned the benefit of the doubt to this point. Maybe it backfires. Liberty Media lost the benefit of the doubt long ago. It’s perceived as a bottom-line-driven company focused more on real estate ventures than victories. Until the Braves spend money, the assumption will be that they won’t. That’s it from me for now. Here’s an edited-down version of our conversation. I believe David and I asked all of the questions you would want asked.
All we heard about the Braves’ move to SunTrust was that it would drive a higher team payroll. Terry, you said the team would have money to spend. But it has been a relatively quiet winter. Please explain.
Anthopoulos: Did we promise we were going to spend more money, or did we promise we were going to have more flexibility? Nobody is ever going to say, “We have to spend ‘X’ amount.”
No, but it’s fair to say that comments by both of you set up certain expectations about what was going to happen this winter. Matt Kemp is off the books, as is about $33 million in “dead” money, and still you haven’t added that major acquisition to potentially take you to the next level.
Anthopoulos: The thought was we had all this money and all of these free agents coming off the books — (Tyler) Flowers, (Kurt) Suzuki, (Nick) Markakis, (Brandon) McCarthy, (Scott) Kazmir, Adrián González. So we would have a ton of financial flexibility moving forward, with payroll climbing. We never announced it, but our budgeted payroll last year was $120 million (for 40-man roster and including players on the DL and “dead” money). We ended up north of that — around $126 million after we added (Kevin) Gausman and (Darren) O’Day. In August, it was well-documented that Donaldson was going to get traded, and he had about $3 to $4 million left in salary. We were in on him (in trade talks). So we were at $126 million, and we could’ve ended up at $130 million. That was part of the financial flexibility. We added Gausman and O’Day in July, and just those two alone is over $9 million apiece. Donaldson, we added $23 million. Just in terms of guaranteed commitments, we’ve added close to $56 million for 2019 that were not on the books (to open 2018).
What’s your budgeted payroll for 2019?
Anthopoulos: We’re not going to say it for obvious reasons what our budgeted payroll is, but we still have a lot of room. We have room to go north of that — well north of that. But that doesn’t mean we’re going to do this just for the sake of doing it. There were players last offseason people thought we should’ve signed, but from a baseball standpoint it just didn’t make sense. AAV-wise (average annual salary), we can shop anywhere. The issue becomes the totality of the deal — how many years, what’s the total guaranteed dollars, ages, do we believe in them, are there other bells and whistles in the deal. That’s ultimately what the hangup ends up being. We’ll sign someone or trade for someone if we believe in the deal. I know that might be tough for some people to hear. But we have not had any restrictions. We just don’t believe in some of the deals right now.
Where are you at now budget-wise for the 40-man roster and other things you factor in?
Anthopoulos: It just doesn’t help my negotiating position right now to say. As much as people want to make moves now, and we do, too, we have to make sure we believe in them. There’s always windows to spend, whether it’s now or July or August.
Can you at least say whether your 40-man payroll is above or below where you were a year ago at this time?
Anthopoulos: I don’t remember exactly where we were to start last season.
McGuirk: We’re above that.
Anthopoulos: I can tell you this: We were in the bottom 10 last year by the end of the year. Our budgeted number absolutely is trending toward the middle. I know we have the ability to do whatever we want to do.
McGuirk: Those are really all the headlines. Knowing the amount of dead money we had on the books, if we were at $126 million in total, the real money on the field was $85 to $90 million. We still have an appreciable amount of dry powder ready to go. The winter to us is certainly relevant. But the psychological value when you add to your team at the trade deadline is appreciable. We build that into the budget now. I’ve been here a long time. I can never remember us not having dead — a lot of dead money. We’re being very careful, just to make sure we don’t make that mistake. I saw on social media the last few days, somebody listed the number of deals done between $120 million and $240 million since 2007, and almost all of them have a disaster part in the end. Our goal is not to just be good; it’s to be good a long time.
Where do you see your payroll going in the future?
McGuirk: Spending now is about winning. It’s not about building as much. Alex’s mandate is to advance the ball from where we were last year in the playoffs. I read where all of the prognosticators have us winning 82 or 84 games. I love being the underdog. The fact that we can take that $126 million and put it on the field, plus an appreciable move beyond that, is unprecedented for us. We’ve been a bottom-10 payroll team for a couple of years. We’ve messaged that we want to get to the middle, and I think this year begins to get us to that neighborhood. I expect that we push beyond that in the coming five years.
If the 2018 season moved up your time frame of being a World Series contender, isn’t this the time to make a major move to get you to that next level?
Anthopoulos: The landscape’s constantly changing. You’re not going to force a deal. Now, short-term, sure. But some of these players are requiring long-term commitments, and you’re not really bullish on what the performance will be long-term. He might fit the 2019 club — great. But what if you’re signing the guy to a long-term deal? Take the rotation. We really believed there was upside last year with (Mike) Foltynewicz and (Sean) Newcomb. We’d like to see (Mike) Soroka or (Max) Fried or (Touki) Toussaint get some starts. We think they have a chance to emerge. It doesn’t mean we’re out of the trade or free-agent market. But if we weren’t as optimistic about those kids, it would be totally different. Every contending team, for the most part, you’re still going to have to make some pretty impactful moves come July. The Red Sox won the World Series; Steve Pearce was the MVP, and they added him around the trade deadline. Same with Nathan Eovaldi. In L.A., we added Yu Darvish. You’re likely going to need to do more again come July. You can easily get caught up in: “I have money burning a hole in my pocket. It’s the winter. Guys are still out there.”
So to be clear, you don’t care if you have to wait until July to make a move?
Anthopoulos: The market is the market. And even with trades, unfortunately, I can’t get into why we may like or not like a player. Whatever internal information we have, whether it’s performance-wise, whether it’s a clubhouse fit, whether there’s a health concern. All clubs have access to more information than fans. We’ll have our reasons for doing things. Now, at the end of the year, we may look back and say, “We should’ve signed this guy.” There’s a multitude of reasons we make the decisions that we make. We’re not always going to be right.
Are you running a risk by not filling a potential need like starter now?
You’re always weighing against your internal options. Last year, third base was a big topic of conversation. So, if you look at the roster, we really like the depth of the rotation. I know Soroka hasn’t emerged yet, Fried hasn’t, Toussaint hasn’t. Mike Foltynewicz, after the lumps that he went through, got to this point. Sean Newcomb, 2017 made him better for 2018. We explored Charlie Morton. We explored (Sonny) Gray. We explored Aníbal (Sánchez). We explored (Edwin) Díaz. But ultimately, we elected (to pass).
Do you agree acquiring a No. 1 or 2 starter would elevate you to that next level?
Anthopoulos: No doubt. But what I’d say is we were (fourth) in starters’ ERA (3.50) last year; we are really bullish on some of these young kids. Going into last season, we thought Luiz Gohara was the best starter on the team. Freddie Freeman told me in spring training he was going to make the All-Star team. Then, he rolled his ankle, had a disjointed offseason with what happened with family, and he just never got going. I don’t know if that (potential top starter) has been traded for or signed this offseason yet. If we had that confidence, we’d be right there trying to make that deal now.
Was not trading for catcher J.T. Realmuto tough because, while you know how good he is, you only get him for two years and Miami may ask for Cristian Pache or Austin Riley, where you have six years of control?
Anthopoulos: Or more. With young players, you can extend. If you’re trading for a 30-year-old player, how long are you going to extend him. If you’re trading for a 22-year-old, you have seven years of control and can extend longer. Freddie Freeman’s a good example. And we’ve never come out and said (what we offered). But you’re also weighing, “We have McCann, Flowers, guys in the minors.” You have to start giving up certain assets. You start doing the math, and in the aggregate, it doesn’t make sense. And we didn’t view catcher as an area we had to address.
With the free agents still out there, you know you can silence the criticism now by just signing a $15-to-$20 million player.
Anthopoulos: Yeah. I respect it. You want a passionate fan base that’s engaged. But our job at the end of the day is to put a winning product on the field. It’s not winning the offseason. It’s not making a big splash. We don’t know who’s going to have a good year or who’s going to be healthy, who’s going to surprise. But on the whole, our talent level is very good.
So you’re walking into a sportsbook: What are the odds that you sign or trade for a significant player between now and Opening Day? I define significant as top-two starter, every-day player or top reliever.
Anthopoulos: It’s a coin flip. We’re still engaged. As we sit here today, we’re not close to a deal. But there’s still free agents out there, so things can change. I think we’re a desirable place for certain players. Ultimately, the contract generally carries the day. Will we be the high bid for some guys? I don’t know. We’re just not going to force it.
Is Liberty Media behind whatever you do budget-wise?
McGuirk: I’m the control person of the team. I’m luckily entrusted to make all of these decisions. We’ve never ever checked with Liberty on a salary decision, a free-agent signing, nothing.
Liberty reported significant revenue increases for 2018. Fans see that and expectedly want you to invest in players.
McGuirk: The last thing you can do is follow our bouncing ball of economics, with debt. It costs a lot to build this edifice.
I totally get that this is a business. But when you have a team, stadium and commercial real estate ventures so intertwined, isn’t there a danger of the baseball product being tied to loans and a development’s bottom line?
McGuirk: It’s all designed to produce profitability that will go into our team, over and above, as we pay off the debt and pay off the principal. I wouldn’t be doing it unless I thought it was going to jettison us from that small middle-market team to high middle-market team to even potentially something bigger. I think it’s terrific for the Atlanta Braves. I couldn’t be more optimistic.