New York Mets have more money available to spend than they let on

New York Mets fans have heard that the team has luxury tax issues which may hurt their ability to add payroll for 2020. It’s a myth. In reality, they have more money available than we are led to believe.

It’s hot stove season for Major League baseball. A time of speculation and most of all hope for fans. Last year, New York Mets General Manager Brodie Van Wagenen added a significant amount of salary to the team’s bottom line. Newcomers Robinson Cano, $20.25M average annual value (AAV), Jed Lowrie,$11.5M, Jeurys Familia, $10.67M, and Wilson Ramos $10.25M were responsible for over a quarter of the total payroll. Results aside, it’s still a big chunk of change.

MLB teams have to work within the confines of the Competitive Balance Tax, meaning they can’t spend above a certain amount without being subject to a progressive monetary “fine.” For 2020, that amount is $208M. The New York Mets have only surpassed the threshold once. It was 1999, a year before they went to the World Series. Mets ownership operates like a small market team, so spending over their alotment is a big “no-no.”

According to Sportrac.com, the Amazins should come in around $196.5M AAV for the 2020 season. That total includes arbitration estimates, deferred salaries (hello Bobby Bonilla), and retained salaries (New York is covering $2M of Jason Vargas‘ contract this season). I think that number will be a bit higher. The New York Mets are going to try and sign both Noah Syndergaard, Michael Conforto, and possibly Marcus Stroman to longer term contracts this winter before arbitration hearings begin.

As of now, the Amazins are left with roughly $11.5M, give or take a million (because the arbitration amounts are estimates), if the team doesn’t get the contract extensions done. Should they add some years and money to the above mentioned players, the available amount will be far less. It doesn’t leave a much money to add a much needed bat or two to the lineup, some quality relievers and possibly a fifth starter.

Not so fast.

The New York Mets assessed payroll and how much money they actually pay out against that amount are two different things. Both David Wright and Yoenis Cespedes are on the books. They count $12M, and $27.5M respectively against the tax threshold. Wright’s playing career is over due to injuries. It’s unlikely Cespedes can play this year due to foot and ankle injuries. Besides, the odds of him ever donning a Mets uniform again are slim to none. Additionally, no team is going to trade for him at this point. “La Potencia” is going to sit out this year.

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Due to Wright and Cespedes’ injuries, the Mets should recoup around $31M from the insurance policies they have on player contracts. Additionally, Jacob deGrom counts $27.5M, but will get paid $13M next season.

That changes the cash flow significantly. Van Wagenen can also go over the threshold because teams are taxed on the overage amount. So if the Mets come in at an assessed $230M AAV next season, they would pay a $1.5M tax. In terms of player salary, it’s very little and is offset by the insurance money recouped.

An overage won’t be a carry over to 2021, which would increase their tax burden, because Familia, Wright, and Cespedes contract’s expire at the end of 2020 resulting in reduction of over $50M AAV. NYM can be competitive and remain far below the $210M threshold in 20221.

Van Wagen has real money to spend this offseason. Per Danny Abriano of SNY, BVW has not been told by ownership that he is confined to the $208M threshold amount.

"“Our goal is to identify what the acquisition costs are of players and then make recommendations to the ownership group that we think are going to put the team in the best situation to succeed,” Van Wagenen explained. “So we will do that. And if the luxury tax threshold becomes something we have to consider, then we will talk about it at that time.”"

In other words, a spending increase could likely happen, because the New York Mets have the financial means to do so and any tax incurred would be nominal. Van Waganen is free to wheel and deal. There is hope.

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Mets have more money available to spend than they let us believe

By Ed Stein | Nov 15, 2019

New York Mets fans have heard that the team has luxury tax issues which may hurt their ability to add payroll for 2020. It’s a myth. In reality, they have more money available than we are led to believe.

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