How much can the Blue Jays spend this offseason?

Incoming president and CEO of the Toronto Blue Jays Mark Shapiro and his new general manager will have a few big tasks this offseason, needing to fill the roles of three starting pitchers, make a few additions to the bullpen, and finding a backup catcher.

Although the Blue Jays' 2015 revenue received a big boost due to the club's post-trade deadline run, it appears that the total payroll budget for the 2016 will remain about the same as what the departed Alex Anthopoulos spent this season. According to TSN's Rick Westhead, Shapiro will have $140 million to field the 2016 Blue Jays. Factoring in existing payroll commitments, contract options and buyouts, and arbitration awards, the Blue Jays will have approximately $32 million to spend this offseason (detailed calculations below).

#bluejays expected to tell new prez Mark Shapiro next week his team will have payroll budget of $140M in '16: source. Roughly same as 2015

— Rick Westhead (@rwesthead) October 30, 2015

Westhead—at least before his Thursday tweet referring to Shapiro "scolding" Alex Anthopoulos—is likely unfamiliar to many Blue Jays fans, but although he hasn't been considered to be a baseball "insider", he is a seasoned sports reporter so his tweets should not be easily dismissed. After being called out on his apparent hyperbolic use of the word "scolding", Westhead later defended his word choice by hinting that it was a direct quote from  his source, who was in attendance in the Shapiro-Anthopoulos summit that was confirmed by the Star's Bruce Arthur. One can therefore surmise that Westhead indeed has been in contact with a high-level member of the Blue Jays' (edit: or Rogers') front office, a disgruntled one at that, giving some credence to the reported payroll figure of $140 million, which is definitely within the range one could reasonable expect looking back at the previous few years.

As an aside, Rogers Communications, who owns the Blue Jays, will have to think of a way to explain to fans why they are maintaining the payroll at $140 million despite the postseason run and expected increase in ticket prices for 2016. Westhead suggested that one way to spin it is that the payroll has actually increased because the Canadian dollar was worth 88.7 American cents on October 31, 2014 but is now worth just 76.5 American cents. However, Rogers hedges the currency exchange risks by entering in long-term forex contracts that lock in rates so they likely didn't feel the full 12-cent plunge. The people managing PR for Rogers and the Jays better have a better excuse for not increasing payroll or #CheapRogers will be trending once again on Twitter. It's not like $140 million is a bad payroll, but fans came out to the ballpark so they expect more.

Update: David George-Cosh of the Wall Street Journal informs me that his sources have told him that the Blue Jays (the baseball club) do not have foreign exchange hedges for 2016 but they did hedge for 2015 at about 92.5 American cents to the Canadian dollar. However, they may be able to tap into Rogers' corporate hedging, which will be at the same 92.5-cent rate according to figures from Rogers' 2014 Annual Report.

If we assume that $140 million is truly the maximum payroll for 2016, we can determine how much money can the Blue Jays spend this offseason by looking at what they will have to pay the players they already have, using the numbers conveniently found at Cot's Contracts and arbitration projections from MLB Trade Rumors.

Here, I am assuming that the contracts of Ben Revere (at $6.7 million) and Justin Smoak (at $2 million) will not be tendered, and that the Blue Jays will buy out Maicer Izturis's club option. (MjwW already took a great look at roster projections for 2016, so I won't go into too much depth here.) The salaries of the 13 pre-arbitration players to round out the 25-man Opening Day roster will be around $510,000 each (the exact figures are going to be insignificant in the calculations). I also assume that Ricky Romero's $600,000 buyout for 2016 was paid at the time of his release in 2015.

Right now the Blue Jays are projected to have an Opening Day salary of $101.9 million, which means the club can spend an additional $44.7 million for 2016. (Since every new acquisition replaces a pre-arbitration player, the $6.6 million can be included in the amount they can spend.)

However, they cannot spend the full $44.7 million in the offseason, as funds must be reserved for things like replacements for injured or ineffective players and trade deadline deals. The final payroll for 2015 is $138.3 million (according to Spotrac's calculations) while their Opening Day payroll (which includes three disabled players) was $125.9 million (according to Cot's Contracts' calculations), which meant Anthopoulos left about $12 million for in-season spending. (With the Cleveland Indians, Shapiro and Chris Antonetti spent about $10.6 million during the 2015 season.) Assuming Shapiro and his general manager in Toronto leaves the same amount in their back pocket, they could spend around $31.6 million this offseason.

While that is not a small amount, it would be difficult to see how Toronto can sign a top free agent pitcher like David Price or Zack Greinke, both of whom would command a huge chunk of that figure, without backloading a big portion of the salary to later years. If they plan on adding starting pitching through free agency, someone like Jordan Zimmermann, who could probably get a contract with an average annual value (AAV) of around $22 million, might be more of a fit in the Blue Jays' payroll.

Marco Estrada, if he is offered and accepts a $15.8 million qualifying offer, will take exactly half of what the Jays can spend. However, the club can likely offer a lower AAV if they sign Estrada for a three- or four-year term. If Shapiro believes in Estrada's ability to put up similar numbers next season, signing the 32-year-old right hander should be his first priority.