It is no secret. When the lockout ended on March 10th, the firesale began in Cincinnati. This was somewhat surprising to many fans, as just two years ago, before the 2020 season, the Reds appeared to be willing to contend. In that offseason, they acquired notable names, such as Nicholas Castellanos ($64M over 4 Years with Opt-Outs), Wade Miley ($15M over 2 Years), Mike Moustakas ($64M over 4 Years), and hot international prospect Shogo Akiyama ($21M over 3 Years). In total, they committed to spending roughly $165.83M and had a projected 2020 payroll of $149.05 million. While that payroll was not met due to the shortened COVID-19 season, this was still a big jolt for a financially conservative small-market team.
As the 2022 season is set to begin, two of those signings are no longer with the team - Miley was claimed off waivers by the Cubs, and Castellanos signed a five-year deal worth $100 million with the Phillies. The latter two have also not panned out so well, with Moustakas earning 0.2 fWAR and Shogo producing -0.1 fWAR during the life of their contracts with Cincinnati. On top of that, they have lost key names like OF Jesse Winker, SS Eugenio Suarez, RP Amir Garrett, and SP Sonny Gray. Cincinnati’s front office faced the fact that the team assembled was not capable of a championship and acted accordingly. Sporting a $99.6M payroll for 2022 ($49.5M less than projected 2020), the Reds are going into rebuilding mode, a plan that I believe to be a great course of action. Through this piece, I will attempt to provide an objective path that could lead Cincinnati to the playoff appearances and eventual Championship that they desire.
To provide a well-thought-out plan for this challenging problem, I first want to establish the current state of the team. Shown below is the main list of the contractual obligations that the Reds currently have. Notable names such as Johnathan India, Vladimir Gutierrez, Artisides Aquino, and Tyler Stephenson are not pictured due to the nature of their cheap rookie contracts that take up an astronomically small percentage of the payroll.
The main additions to the Reds roster this offseason were Mike Minor, Tommy Pham, and Donavan Solano. Together, their adjusted salaries account for 20.6% of the Reds Payroll - a bit more than one would expect for a downsizing team. However, if the team’s goal was to build a better structure for future rebuilding, these moves seem curious. The ZiPS DC projected fWAR is much less now for the team than it was before, even after committing a sizable portion of salary to those veterans. The other factor that sticks out is the anchoring contracts of Joey Votto and Mike Moustakas, who together account for 41.18% of the Reds contracts. Worth $41M together, Votto was the only one of the two who produced value - being worth 29.8M dollars to the Reds in 2021 while Moustakas was worth -$3.4M, according to Fangraphs value statistic. With inefficient run producers taking up most of the space, the roster remains to be optimized.
The rest of the players (as can be seen) take up relatively little space, with most of the roster producing at a higher-than-expected rate. In 2021, the Reds managed to produce $180.3M worth of excess value (ranking 9th), with Miley and Winker being among the leaders of the team in that measure. Both players will not be suiting up for Cincinnati this season. Fortunately, despite those losses, they are still projected to produce $159.6M in excess value for 2022 according to Dan Szymborski, which would’ve ranked around the 12th spot in 2021. The Reds have consistently shown the ability to produce value without spending much, meaning that fielding a cheap roster with high upside is feasible and could be beneficial to the team.
It is worth noting that while producing excess value is important, it is not the end-all-be-all. The ability to produce potency within a roster also needs to be considered, as more production in less roster space is very valuable. For example, if Player A produced 4 fWAR while Player B and C produced a combined 4 fWAR, Player A produced a better form of value, as he did it in fewer roster spots. That freed space allows the team an extra place to add production. And while star-studded teams such as the Dodgers and the Astros were successful at this, the Reds arguably failed - their highest producer (Castellanos) had only 4.2 Wins. Walker Buehler of the Dodgers had 5.5, and Carlos Correa of the Astros had 5.8. To equal that production, the Reds had to utilize an extra roster spot, automatically putting them at a disadvantage. And while I am by no means saying that having a high-impact (over 5 fWAR) player is necessary to be successful (as evident in the Rays), most successful teams tend to have at least one. The Reds currently do not, meaning the path toward success is hindered. With the current state now clear, let’s examine the path to recovery.
This plan is divided into three phases, with each part being interconnected through farm system development, major league trades, and payroll adjustment, the main functions through which teams advance. If utilized properly, they can bring much-desired prosperity. The Reds have shown their ability to use these tools to their advantage, as evident in their streak of success in the early 2010s. The question now becomes whether they can do it again, and how fast if so.
Phase 1: Cleaning House
Although the $50 Million decrease in payroll over the last few weeks seems dramatic (it is 33% after all), I truly believe that is not enough. $99.6 Million is still a relatively large payroll, especially in comparison to the bottom three teams that average under the $40 Million mark. While I can acknowledge that players bring in value through the business side as well, I am looking at the sole want of building a championship team when I suggest payroll should be gutted. Votto, Moustakas, Minor, Akiyama, Castillo, and Mahle all need to be dealt. The remaining life on all of their contracts is three years or under, meaning that they will expire before the team should attempt to be competitive again. Shedding these contracts would clear $71.6 Million off the current payroll for 2022, as well future monetary obligations. That would give the Redlegs a $28 million payroll, the lowest in baseball. Of course, the challenge begins with actually moving these contracts.
Including this year, Votto is owed $50 million over two years (with a $7 million buyout in 2024). His production has gone up since 2019, and there is a contending team with a glaring hole at First Base - the Boston Red Sox. The Sox could utilize an aging veteran to lead a young and inexperienced Dalbec. If Boston is willing to take most of his contract on, I suggest they send to Cincinnati LHP Chris Murphy (No. 11), a 23-year-old in Double-A who has a hard fastball teamed with a difficult changeup.
Akiyama, Castillo, Mahle, and their $20.6 million obligations in 2022 could also be moved in a single trade. This deal would require a recent trade partner to reenter the ring - the Seatle Mariners. Dedicated to competing, the Mariners have shown their willingness to take on dollars now in exchange for selling their future. Equipped with a Top 5 Farm system, they appear to be a great match. For this batch of relatively cheap talent, Seattle would move SS Noelvi Marte (No. 2), LHP Adam Macko (No. 11), and Reliever Justus Sheffield. Despite being a large chunk of their talented farm system, the players they are receiving allow them to have one of the better rotations in baseball (which is a current weakness). On top of that, the acquisition of Akiyama and the $8 Million owed to him over the next year can add a level of depth to a very young outfield in Seattle.
Moustakas and Minor also need to be moved, which will be much more difficult. Given their current evaluations and age, these two will serve as mid-season selloffs to competing teams. If Moustakas returns to a shade of his former self, he could go to a number of these types of teams for a single prospect and partial responsibility for his contract. If this is not possible and he continues to produce at such a low level, waivers should be utilized and then release as last resort (which I don’t find likely). Minor should return a single prospect, more than likely being treated as a premium asset to the teams that are in desperate need of pitching. With the majority of their obligations now gone, the Reds now maintain one of the better farm systems and an incredibly small payroll.
Phase 2: Molding the Current Roster
Although inexact, I will assume that the team was able to shed $65 million of their obligation pertaining only to 2022. While, in theory, they could’ve shed $71.6 Million, it is unlikely that they were able to completely get rid of all of those aforementioned contracts. They will likely end up with partial responsibility for some deals, bringing their actual payroll to $35 million. With major holes to fill, the Reds should aim to do this as cheaply as possible. To replace two of the three starters, Hunter Greene will now be in the rotation, and Nick Lodolo will be called up. The other could be supplied through a prospect that was acquired in the previous deals. That leaves 1B and SS open, as well as a backup outfield spot. TJ Friedl should finally have his time to shine as OF No. 4 - he is big-league ready and even spent some time with the club last season. First Base goes to Kyle Farmer, who will now assume a full obligation for the position. Shortstop can be divided between Solano and the recent call-up José Barrero, providing much-needed depth. In this state, the current lineup looks as follows:
Having most of the replacements on rookie contracts, the payroll would increase to roughly $38 million. And, while unknown, I will assume that the median salary the Reds are capable of maintaining is around $100 million. Hence, they should be carrying around $62 million in salary per season during the rebuild. In the process, their record will noticeably suffer. After all, they did lose a projected 13 fWAR. While this would be painful, more players will have Major League opportunities, allowing the club to let their young players adjust to the biggest stage. Plus, they potentially could gain a spectacular player that they previously would have never given a shot.
The team would start in the 60-65 win range but grow from that point consistently. After a few years, when the Reds prospects have developed, an abundance of players would join the Major League squad. I believe that they could become a 70-75 win team within three years through this type of pure development. When within the latter range, the Reds need to pounce. Having both a strong foundation and plenty of cash to work with, the tools for success are now in their hands.
Phase 3: Making a Champion
The Reds are now consuming cash at a below-average rate and producing more wins than expected. Phase 3 begins in the offseason of 2024, three years after the initial clearance sale. Assuming $186 million saved over the rebuild, they could safely maintain a team for about $147 million for four years, barring any additional contributions from the owner’s regular allowance. Now, they have an additional $105 Million to play with compared to their most recent payroll.
According to Fangraphs most recent calculations, the value of one win (1.0 fWAR) is currently $8 Million. If we assume fWAR’s value increased to $8.5 Million / win due to inflation, then the Reds recent spending spree will add twelve extra wins to their mid-70 win record. Unfortunately, that is not a championship team. To truly succeed, they need to be able to stretch the dollars they have recently spent as much as possible. In 2021, they exceeded their payroll in value produced by 144% ($304.7m Value Produced, $124.8M Spent). If they did it once under regular circumstances, they can do it again. Even with a decrease in efficiency to 140%, they still would produce $352 million of value, adding 5 more wins. Their win total now would stand between 87-92, enough to guarantee a Wild Card Spot and possibly a clinch.
With a clinch now being feasible, I will again assume that the team will continue to develop and improve throughout the given time of their four-year extended payroll. Utilizing free agency and waivers over blockbuster trades, the Reds should avoid selling off any of their top 20 prospects. These prospects are a necessity in ensuring the integrity of the farm system, which will be increasingly important as the four power years (the increased payroll years) expire. If done correctly, the development and bringing-up of these players will ensure that a year outside of the power years consisting of limited spending will still yield 70-75 wins. This raised floor allows for a much bigger ceiling when the cycle repeats in the next four power years, possibly taking the team to an upper-90s win season. As this cycle continues to repeat, both the floor and the ceiling of the team will rise, bringing the floor to around 81 wins. A floor of 81 wins will more than likely be the maximum of a sustainable average, as the nature of competitive balance would not have a non-contending team beat this mark. Nevertheless, the Cincinnati Reds will have established a culture of winning, and the ceiling is now a championship.
The city of Cincinnati has struggled with the Reds - since 2010, the team is 889-953 (.482). They have managed to make the playoffs only four times (winning the division twice) and have never managed to defeat their first-round opponent. Their last World Series title was in 1990 - thirty-two years ago. In this proposal, I outline a fix to those struggles. For Phase 1: Cleaning House, I suggest a total strip-down of all major salaries on the club, acquiring highly-touted prospects in the process. In Phase 2: Molding the Current Roster, I recommend exposing the current farm system to more Major League opportunities, allowing the Reds to adjust and grow to a slightly-below average team while spending an incredibly low amount. And for the last of them all, Phase 3: Making a Champion, I propose the club goes all out on spending, still maximizing value produced per payroll dollar while hanging onto prospects to ensure the continuance of the cycle. In matching success with sustainability, the attitude regarding the team will have hopefully shifted. They are now competitive winners - no longer hiding behind the division rivals. And, in a matter of time, they will win a World Series title.
In my inability to predict the changing variables of the future of the MLB, I have to adjust my estimates based on estimated guesses. If anyone claims to provide a precise understanding of the future variables, they are more than likely not telling the truth. With that in mind, this should be looked at as more of a general blueprint or theory rather than a step-by-step guide to fixing the Cincinnati Reds. While the 2022 numbers can more easily be projected, anything beyond this year regarding future talent and evaluation is an assumption based on the patterns of the market.
As I mentioned in the article but want to surely clarify, this proposed plan of action is focused solely on the true outcomes of winning and losing a baseball game, with no consideration towards possible revenue contractions or expansions. With the vast majority of clubs, including the Reds, being privately held, evidence of their financial standing is not attainable to the public. I could not account for the possible revenue results of a losing or winning team - only their baseball standings and accolades. Hence, I am going to assume that building a competitive team is of the utmost importance to the owner, with revenue being a non-factor in the process of trying to contend.
I can acknowledge that the statement “Utilizing free agency and waivers over blockbuster trades, the Reds should avoid selling off any of their top 20 prospects,” is easier said than done. Many teams are more than willing to part with their top talent, but I believe that holding onto these prospects is the key to sustainability for a club. To that degree, a limit of trading one or two of the top 20 prospects with an avoidance of the top 5 would be recommended if necessary. Otherwise, tactful maneuvering around the extremely sophisticated baseball market must be used. Even with sophistication, the market is not completely efficient - more and more exploitations are waiting to be discovered every day.
The financial calculations in regards to the proposed cut payroll should not be regarded as exact. The later numbers are rounded to the nearest whole. For the sake of simplicity, these figures are rather intended to give rough estimates and do not account for some other baseball expenses.