TEMPE, Ariz. - The Angels' decision to not chase one of the premier free-agent bats they desperately needed did not stem from a refusal to exceed the $189 million luxury-tax threshold, owner Arte Moreno reiterated on Friday. "It has never been about that," Moreno said in an exclusive interview with MLB.com,
TEMPE, Ariz. - The Angels' decision to not chase one of the premier free-agent bats they desperately needed did not stem from a refusal to exceed the $189 million luxury-tax threshold, owner Arte Moreno reiterated on Friday.
"It has never been about that," Moreno said in an exclusive interview with MLB.com, refuting multiple reports and a widespread belief that he is categorically against exceeding that mark. "It has never been with the threshold."
The Angels enter the season with a projected Opening Day payroll of about $165 million, a club record that is roughly $20 million ahead of where they began last season. Moreno said his operating budget is supposed to sit somewhere in the $140 million to $150 million range.
"We have a budget," Moreno said. "And every year, I've overspent our budget."
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From 2004-15, the Angels -- never considered big spenders in their first four-plus decades of existence -- ranked no lower than eighth in the Majors in Opening Day payroll. Their current Competitive Balance Tax payroll -- one that uses the average annual value of all 40-man-roster contracts to determine where teams sit relative to the tax threshold -- is currently about $187 million, putting them dangerously close to that 17.5 percent overage tax.
The biggest issue with the threshold is the escalating penalty, at 30 percent for second-time offenders, 40 percent for third-time offenders and 50 percent for those who exceeded the mark at least four consecutive years.
Plenty of room will open up next offseason when Jered Weaver and C.J. Wilson, making a combined $40 million in 2016, presumably become free agents. But Moreno wasn't confident that the Angels would be able to comfortably get back under the threshold given their potential holes, prompting him to pass on the big free agents.
The biggest factor, of course, is that the Angels owe the Rangers $22 million each of the next two years for Josh Hamilton.
"The reality is it's a business," Moreno said. "And right now the economics don't add up for us to go invest that kind of money."
Moreno didn't go into specifics on the Angels' revenue streams, simply suggesting that the team is barely avoiding debt -- despite drawing more than 3 million fans for 13 straight years and signing a reported 20-year, $3 billion deal with FOX in 2011.
Chris Davis, Alex Gordon, Yoenis Cespedes, Jason Heyward and Justin Upton would've all been major upgrades in left field, a position where the Angels received a Major League-worst .592 OPS last season. But the Angels didn't aggressively pursue any of them and hardly addressed the position. Now, barring a late move, they look poised to field a platoon of Daniel Nava and Craig Gentry.
"Does one of these guys give us a better chance to win? Sure they do," Moreno said of the big free agents. "But the reality is, are they a guarantee? And what we end up with is we end up with debt, we end up paying tax, and then it restricts what our flexibility is going forward."
The Angels enter the 2016 season with a suspect lineup, a top-heavy payroll and a depleted farm system, a reality that has prompted many to wonder if Moreno would be better served going into rebuild mode.
"I don't want to rebuild," Moreno said -- though it would nonetheless be almost impossible to do so with Albert Pujols under contract for six more years.
"This team is good enough to win," Moreno added. "And we want to make sure that economically we're in a position to have some flexibility."
FanGraphs and Baseball Prospectus project the Angels to miss out on the playoffs in 2016, despite leading the Majors in wins in 2014 and avoiding elimination until the final day in 2015. Baseball America and ESPN.com have ranked their farm system last in the industry. And while recently listing their collection of prospects 30th, Keith Law of ESPN.com wrote: "They need a big draft this year to restock the system or we're going to start talking about whether it's time to trade Mike Trout."
"One hundred percent we are not trading Mike Trout," Moreno said. "We're not trading Mike Trout. It's not even in the thought process. Yes, we want to win. But we're not going to give up any part of what we're going to do in the future by making economic mistakes right now."
Moreno took his usual stroll through the Angels' Spring Training complex on Friday morning, as he's prone to do this time of year. He sat in on the organizational meetings that take place right before camp, spoke to the pitchers and catchers before Friday's first workout and stood on the back fields watching them all practice.
He thinks they can win.
"You know, I like the team," Moreno said. "We always come to camp optimistic. I like our depth in pitching. It gives us some flexibility. Most teams are using 10, 12 starting pitchers. … We have a lot of young arms here. You've got to have pitching. We can't just look at just '16, we have to look at '17 and '18, because the cost of starting pitching has really gone off the charts."
Alden Gonzalez is a reporter for MLB.com. Follow him on Twitter @Alden_Gonzalez and Facebook , and listen to his podcast.