Entering a pivotal offseason, one with newfound stability now that both Farhan Zaidi and manager Bob Melvin are signed through 2026, the biggest question the Giants face will be how active they’ll be in the free agency market.
Under Zaidi, the Giants haven’t been able to sign any superstars to long-term deals. Their sweepstakes losing streak includes Giancarlo Stanton, Shohei Ohtani, Bryce Harper, Aaron Judge, and (ostensibly) Carlos Correa.
While Zaidi is the one calling the shots, he needs ownership’s support to make the signature deals happen. On Wednesday, chairman Greg Johnson hinted at how tenuous that commitment may be.
Asked if the competitive balance tax serves as an artificial limit on team spending, Johnson said “it depends a lot on who we target.”
“When you look at the luxury tax, one year you can go past that if you have to,” Johnson said. “I don’t think it’s something we want to do for a long period. I think if you look at the teams that have jumped up in free agency, they didn’t really have great years this year, with spending. So I’m not sure there’s a direct correlation there. But we plan on being active, and if we have to go through that, we will go through that. But we also represent a group that hopefully our goal is to somewhat break even, which is somewhat a challenge in this business. But everybody, I can tell you, from the ownership side: the goal is to win. And we’re doing everything we can.”
Johnson’s father, Charles B. Johnson, has a reported net worth of $4.8 billion. While attendance has flatlined in recent years, the Giants’ involvement in the Mission Rock development project is expected to generate substantial revenue in the future.
The Giants, per Forbes, are the fifth most valuable franchise in Major League Baseball at $3.7 billion. The same source — one ownership-level officials have disagreed with — listed the club’s 2022 operating income at $75 million.
The Forbes figures suggest the Giants haven’t had serious issues with breaking even. The historic trend of team valuations consistently rising suggest annual profits shouldn’t be the most relevant factor, anyway.
Johnson’s perspective that teams who spend don’t always — or, in this particular season — have success has truth to it. The three teams with MLB’s most expensive payrolls each missed the playoffs. But the Rangers (fourth on the list) committed significant capital to their roster and are headed to the World Series. The Phillies (fifth) lost in Game 7 of the NLCS.
Spending doesn’t guarantee success. But opting not to spend with the other big markets will generally put the Giants at a disadvantage.
The Giants finished 2023 with a $187 million payroll — 12th in MLB. The Giants haven’t dipped into the luxury tax since 2017.
Johnson’s Wednesday comments are consistent with his prior acknowledgments. In August, he told The San Francisco Chronicle that “I don’t think we’d ever see ourselves massively exceeding (the CBT) level in the luxury tax.”
Zaidi’s direction upon joining the Giants was to rebuild the farm system while cleaning out ugly payroll figures while remaining competitive. With Logan Webb being the only player signed long-term, the Giants have true financial flexibility to spend.
The flashiest free agents available this winter include Shohei Ohtani, Yoshinobu Yamamoto, Blake Snell, Cody Bellinger and Jung Hoo Lee. San Francisco hired Melvin in part because they could use his reputation to bring in players who may want to play for him.
“Those are all pretty good players, we’d like to have every one of them,” Melvin said. “But financially, that’s a stretch. But I think all those guys will be talked about, and hopefully I do have an impact on that.”
Yet if ownership doesn’t let the club pass the competitive balance tax threshold for more than a year, signing superstars to massive deals will remain difficult. In a division with the Dodgers, Padres and NL pennant winner Diamondbacks, a commitment to consistent spending will be required to compete.
In Johnson’s words, the ownership group will need to actually do everything it can.