Texas has taken advantage of a historic spending opportunity

Late in the 2021 season, and then in the aftermath of a 102 loss disaster of a year, the Texas Rangers’ front office indicated that the team would be aggressive in free agency this offseason. Jon Daniels, Chris Young, Chris Woodward...all indicated that the organization was prepared to add salary in a way that they have not done the previous few years, to ratchet the payroll back up towards where it was when the team was in its competitive window.

Those declarations were met with a healthy dose of skepticism. One of the most common responses was that we would hear a lot of “well, we made a competitive offer” excuses while the team ended up bottom feeding for additions. Others thought we’d see more of the Lance Lynn/Kyle Gibson variety of signings, but wouldn’t land any big fish. Even those of us who thought that the Rangers would be aggressive and would spend thought that a best case scenario was likely one of the top free agents, along with a second tier guy or two, in terms of substantial deals — and even that was shooting high, given the lack of success the team has had recently, and especially in 2021.

As it has turned out, even the most optimistic among us were wrong. Kole Calhoun — signed to a one year, $5.2 million deal with a $5.5 million team option — was announced as having signed yesterday. Later today, it is expected that the signings of Corey Seager, Marcus Semien and Jon Gray will be officially announced. Seager is getting $325 million over 10 years. Marcus Semien is getting $175 million over 7 years. Jon Gray is getting $56 million over 4 years.

That is half a billion dollars committed to two players, $561.2 million committed in all. With Seager’s contract reportedly paying him $35 million per year in the first several years of the deal, and including a $5 million signing bonus, that’s $84 million in addition salary paid between now and the end of the 2022 season. And indications are that the Rangers still have irons in the fire, although those are going to be on hold until the lockout (expected to begin at midnight tonight) is resolved.

Jon Daniels said back in July that there would be no more half measures. He wasn’t bullshitting.

The thing is, though, that the Rangers were uniquely well set up to take these steps this offseason. After avoiding long-term deals the past few seasons, Texas entered 2022 with two players under contract — Jose Leclerc at $5.25 million and Kohei Arihara at $2.6 million — and approximately $20 million in obligations still due to Elvis Andrus and Rougned Odor in conjunction with those trades. There were no contractual obligations beyond 2022 other than whatever the team opts to do with Leclerc’s club options in 2023 and 2024.

There were also no particularly expensive arbitration cases on the horizon. Isiah Kiner-Falefa is expecting to make $4.5-5 million in arbitration this year, will presumably make more in 2023 if he’s still here, and then would be a free agent. Willie Calhoun, Brett Martin and Taylor Hearn aren’t going to be breaking the bank in arbitration this year or going forward. The most notable 2023 first year arbitration cases are Nathaniel Lowe, Jonathan Hernandez and Nick Solak.

The term “financial flexibility” has become a joke nowadays, a term used to mock teams for not spending on free agents or for trading away expensive players. But financial flexibility is a real advantage, and the moves of the last few years put the Rangers in a situation where they had the financial flexibility to make just about any move they wanted — if they wanted to use it.

That was a big “if,” of course. But you also have to take into account that the Rangers have a new ballpark, and history has indicated that new ballparks usually see increased spending on payroll. The ballpark itself is expected to generate a tremendous amount of revenue, assuming fans have a reason to come to games. And the Rangers had the fourth highest attendance in MLB in 2021. Yes, that was due to the decision to open to full capacity beginning at Opening Day, while other teams had more restrictive attendance policies due to the pandemic, but it meant that the Rangers generated more in gate receipts than most teams in 2021, better positioning the team to spend going forward.

I don’t know that there is another team, other than possibly the Los Angeles Dodgers after Frank McCourt sold, that had the ability to spend so much money so quickly within the parameters of how MLB teams generally operate in terms of revenue and expenses.*

* Yes, I know, MLB owners are billionaires, they could have a $300 million payroll if they wanted. I’m talking about expenditures within the normal operating margins that MLB teams work with, the budgets that would be normal for an MLB team relative to their revenue. This is descriptive, not prescriptive.

And finally, ownership has historically spent when it made sense to spend. The Rangers were in the top 10 in payroll throughout the winning years under Bob and Ray, and never really had a particularly low payroll until 2021, when there was a full commitment to a rebuild. The Rangers consistently acquired extra international pool money to spend on J-2 players. They took on salary in trades in recent years, when they weren’t spending big on payroll, to get prospects or pool money.

So there was reason to think that the Rangers would spend when the time was right. And reason to believe that, having cleared salary and vastly improved the farm system, the team was serious when they said they would spend this offseason, when a strong group of free agents were available.

I did not expect them to spend to this extent. I honestly doubt that Jon Daniels, Chris Young and company expected to spend to this extent. I have no doubt they were prepared to do so, that what we have seen go down so far was part of their Plan A (with bringing Clayton Kershaw home probably being the final major part of that plan). But the legendary Helmuth von Moltke famously noted no plan of operations extends with any certainty beyond the first contact with the main hostile force, and Rangers fans (and this front office) knows that offseason and transactional plans almost never play out the way you hope they will. The Rangers were prepared to spend to get their primary targets, they had contingency plans in place, but I suspect they thought they’d land one or two of them, make some smaller moves, and then use more of their financial flexibility next offseason.

Instead, Corey Seager, who had been on the Rangers’ radar for a while, who is tight with manager Chris Woodward (and I now find myself wondering if that was a factor in the hiring of Woodward after 2018 — surely it wasn’t, right?), who seemed to be the guy they wanted as a tentpole player for the team going forward, was locked up. Marcus Semien, who was older than the other top free agents, but who earns raves for his leadership and presence and makeup, things that we know the Rangers prize, was locked up. Jon Gray, a pitcher the Rangers have been rumored to have interest in in the past, a high floor, reliable starter who is seen as having the potential to take another step or two forward away from Coors Field, was locked up.

Cot’s Contracts now has the 2022 Rangers payroll commitments (including arbitration estimates, minimum salary guys, and the Odor and Elvis money) at $124 million, although that currently uses the AAV of the Seager, Semien and Gray deals, so that number will likely change as we get a more exact breakdown. In any case, I suspect the Rangers are prepared to go to $150-160 million for 2022, depending on who is available.

Now, even with these moves, this is probably a team that projects, if you are optimistic, to be a .500 team. There are arguments to be made that the Rangers are spending too early, that they should have waited until next offseason and the offseason after that so that more of the young talent is ready at the start of those deals.

And I get that argument. But, as we discussed above, Plan A rarely works out — remember the 2012-13 offseason, when we thought we were getting Justin Upton and Zack Greinke? The Rangers could wait to spend...and find themselves missing out on their top targets, pursuing players they don’t value as highly as Seager and Semien, and having to fall back to the contingency plan, and the contingency to the contingency plan, and the contingency to the contingency to the contingency plan.

I also think that the organization wants Josh Jung and Cole Winn and Jack Leiter to step into a clubhouse that has Corey Seager and Marcus Semien and other impact players already there. They want the guys coming up from the farm to supplement solid veterans and stars already in place. And given that the Rangers have, in the past decade, cranked out a lot of role players but only one star, I can’t say that’s an unreasonable position to take.