Don't Overlook the Value of Twins' Surprising Savings on Arbitration-Eligible Players

After three years of service time (or when just shy of that threshold by a month or so), MLB players can automatically start making more than their standard minimum salary, until they reach free agency after six years of service time. If the team and player cannot come to an agreement on what their salary will be, they can appear before an arbitration panel. By and large, though, the team and arbitration-eligible player can come to some sort of agreement.

The Twins had 13 players eligible for arbitration this offseason. That’s half of their roster. Although these players tend to earn less than equally skilled players on guaranteed contracts, the team at least knows how much those guaranteed contracts will cost them. The Twins gladly pay Joe Ryan and Bailey Ober less than they’re paying Chris Paddack, but at least they’ve known for years what Paddack will cost in 2025. For Ryan and Ober, they just learned that last week.

Five of the 13 arbitration-eligible player cases were determined early in the offseason. Alex Kirilloff retired, so we don’t have to worry about that. Jorge Alcalá had a team option for 2025 that was exercised, skipping his arbitration eligibility. Justin Topa, Michael Tonkin, and Brock Stewart all agreed to deals on the deadline to tender contracts (i.e., anyone who wasn’t non-tendered by that day has to be paid), in a series of deals that reeked of “Take this offer or find somewhere else to play on your own.”

MLB Trade Rumors (MLBTR) provides salary estimates for arbitration-eligible players, and these estimates are generally held as the industry standard for those among us who don’t have access to teams’ internal projections. The deals for Alcalá, Topa, Tonkin, and Stewart combined to come in about $600,000 below the estimates, which is a good start but not abnormal for take-it-or-leave-it early final offers.

The other eight contracts were announced by a combination of Darren Wolfson and Dan Hayes on Twitter on Jan. 9, the deadline to agree to terms and avoid having to submit figures for an eventual arbitration hearing. MLBTR's estimates were largely accurate. The site’s biggest underestimation among Twins was Jhoan Durán’s, which was settled at $4.125 million, about $400,000 above their $3.7 million estimate.

Overall, though, the site trended toward overestimating Twins salaries, with Ryan, Ober, and Royce Lewis’s final numbers coming in between $600,000 and $800,000 below the projections. In total, the Twins’ arbitration-eligible players (excluding Alcalá, given the player option) earned approximately $2.4 million less than MLBTR foretold.

It’s totally possible that this number was right in line with what the Twins’ front office had projected internally, but let’s assume that their projections were close to the $33.3 million total that MLBTR had. In truth, there’s reason to believe that, at least from a spending perspective, the Twins took a more conservative approach and planned around more than that figure, so as not to bite off more than they could chew ahead of 2025’s payroll limitations.

Now that these salaries are set, the Twins benefit in two ways. First, there’s cost certainty. They no longer need to fumble around with rough estimates of their current payroll. Public estimates have ranged from $132 to $144 million this offseason as to where the payroll would stand without any talent being traded away. Now, though, they have a number. There is no sliding scale. There’s another easily imagined reality in which the arbitration-eligible players made a collective $5 million more than they did in this reality. They no longer have to guess.

No longer having to guess means that they can start making real plans for appropriate payroll. Honestly, there’s a chance that some of the team’s inactivity this offseason is because they were waiting to know how much nearly a third of their current roster, making up about a quarter of their committed salaries, will be paid. If they indeed plan on moving Paddack, for instance, they would be more likely to seek deals to move his entire salary if their projected Opening Day payroll clocked in at $142 million. If the projected Opening Day payroll was $132 million, they would probably be more open to retaining some of his contract, which means sending cash along in a deal but getting a better player back. But until the numbers were finalized, they couldn’t know that.

The second benefit is the obvious one: they have about $2.5 million available that they were not projected to. In a typical offseason, that’s a negligible amount. But for a team that still seems to be above the Opening Day payroll people have assumed they are aiming to get to, that goes a long way.

Although some may speculate that the Twins are not in a mad dash to reduce payroll, it’s been a safe assumption to expect Opening Day payroll to be around $130 million. After the Twins’ newly settled contracts, their projected Opening Day payroll is about $134 million, according to Cot’s Contracts. That number would have been about $136.5 million using MLTR’s projections. It could have been higher than that, had negotiation not gone the team’s way.

Let’s use Paddack yet again. He’s making $7.5 million this year, no matter who he’s playing for or who’s paying him. At this new figure, offloading his entire contract, or even part of it, can be enough to get the Twins under their necessary threshold. If the Twins retained, say, $2 million of his contract in a trade, they’re still in a better financial position than they would have been if they traded his whole contract but owed the MLBTR projections.

Suddenly, there’s more breathing room. Let’s say they can still move all of Paddack’s salary, as they always planned to. Well, now, they have $2.4 million more than they had planned. Again, that’s not world-changing money, but if they have one big fish they’re trying to reel in this offseason, an extra couple million dollars might make it possible. Furthermore, Randal Grichuk made $2 million last season. Donovan Solano made the same the year prior, and only signed for $3.5 million with the Mariners on Monday. That money under projections can be the difference between an MLB veteran sitting on the bench over Michael Helman right now (assuming the Twins sign the right two-million-dollar guy, of course).

It may not seem like big news, but these figures represent some of the most meaningful news the Twins have gotten or produced this offseason. It’s a low bar, sure, but it means a ton this offseason.