Projected 2025 arbitration salaries would eat up one third of Blue Jays payroll savings

With over $60M dropping off of their $225M 2024 Opening Day payroll and team president Mark Shapiro saying, “I would not characterize there being any large-scale pullback on payroll”, the Toronto Blue Jays should be able to sign some top of the market free agents to be more competitive in 2025. A long term extension for homegrown superstar Vladimir Guerrero Jr. is also a possibility.

Matt Swartz of MLB Trade Rumors has a model to project salaries for arbitration eligible players, which MLBTR has been publishing for 14 years. Their projections are the industry standard, and are used by Spotrac and RosterResource in the offseason when they project payroll numbers for the upcoming season.

The Blue Jays had 10 potential arbitration eligible players on their season ending roster, plus Bo Bichette who signed a 3-year, $33.6M contract ahead of the 2023 season to take him though his final three years of arbitration eligibility through the end of next season.

According to RosterResource, the Blue Jays spent $45.8M on salaries for players eligible for arbitration in 2024, led by Guerrero Jr., who won his arbitration hearing in February and was awarded a $19.9M contract for this past season. His MVP-type numbers certainly justified the award. Bichette made $12.1M in the second year of his contract to buy out his remaining arbitration eligibility.

For 2025, MLBTR projects the following arbitration salaries for eligible Blue Jays (ranked by their unofficial service time figures in parentheses):

• Vladimir Guerrero Jr. (5.157): $29.6MM
•  Erik Swanson (5.059): $3.2MM
•  Jordan Romano (5.051): $7.75MM
•  Génesis Cabrera (5.011): $2.5MM
•  Dillon Tate (4.144): $1.9MM
• Daulton Varsho (4.128): $7.7MM
•  Alejandro Kirk (4.047): $4.1MM
•  Alek Manoah (3.063): $2.4MM
•  Zach Pop (2.171): $1MM
•  Ernie Clement (2.168): $1.7MM

Obviously the Blue Jays could non-tender, i.e. decline to offer contracts, to some of these players, which would immediately make them free agents. Jordan Romano, Zach Pop, Dillon Tate and even Erik Swanson could all be non-tendered as the front office looks to rebuild the dreadful bullpen.

But for the sake of argument, let’s assume all ten players are awarded numbers close to these projections. That implies $62M in salaries for players eligible for arbitration in 2025, a $16M increases compared to 2024, plus Bichette’s 2025 salary rises to $17.6M next year, a $5.5M increase over his 2024 salary.

That implies that $21.5M of the payroll savings from 2024 would be consumed by arbitration salary increases, plus the Bichette raise. Saying goodbye to Romano, Pop, Tate and Swanson as they rebuild their bullpen would free up almost $14M more room assuming no pullback on payroll.

Another positive is the $4M increase in the Competitive Balance Tax (CBT) threshold to trigger luxury taxes up to $241M for 2025, which becomes more relevant if the Blue Jays are a second time luxury tax payor in 2024.

Their final 2024 payroll looks like its right around the $237M luxury tax threshold this year; as a second-time payor, they would pay a 30% tax on any overages this year. But that tax would rise to 50% if their 2025 CBT falls between the $241M threshold and $261M, with a 12.5% surcharge should their CBT payroll exceed the base threshold by $20M or more.

So as we enter this crucial offseason for the Blue Jays front office, it appears as though they will have the payroll capacity to play in the deep end of the free agent pool (Juan Soto, Corbin Burnes, Anthony Santander, Alex Bregman, Pete Alonso, Willy Adames, Teoscar Hernández, Tanner Scott), as well as pursue a lucrative, 10+ year contract extension with Vlad to give the faithful a homegrown star to get invested in for the next decade, providing the stability and continuity that Shapiro sees as a “competitive advantage”.