Here is where the Orioles' payroll stands after surprise Shane Baz extension

In baseball, some teams sign players to multi-year contracts every single offseason, and some teams have impressive streaks of doing no such thing. Over the last decade, the Baltimore Orioles had become a team that was not in the business of signing anyone to long-term deals. During much of Mike Elias' tenure, it seemed as though the organization's primary goal was to ensure they never entered an offseason with any guaranteed contracts beyond what they owed Chris Davis.

That seems to be changing. Last year, the Orioles broke their spending dry spell by signing Samuel Basallo to a nine-year extension, and now the floodgates opened. Pete Alonso got the largest contract in Orioles history a few months later, and yesterday, Shane Baz got the largest contract the Orioles have ever given a pitcher.

For the first time since the Orioles' 2018 fire sale, there is real long-term money on the books. Here's how it stacks up.

Even with the addition of the Shane Baz extension, the Orioles have room to continue adding more talent

For 2026, the Baz contract adds very little to the budget. He was set to make $3.5 million, but with the extension, he is now getting a $4 million signing bonus, and his salary for the season is set at $1.8 million. So from a cash perspective this extension doesn't have a major impact in 2026.

The biggest difference is regarding the Orioles' luxury tax payroll. Salaries are factored into this payroll based on their present annual value. For Baz, this number is now $13.6 million, bringing the Orioles' total luxury-tax payroll to $214 million.

This is the highest the Orioles' payroll has been in the Mike Elias era, and therefore the closest the Orioles have ever been to the Competitive Balance Tax threshold of $244 million. There is still a $29 million buffer between the Orioles and the tax, so, hypothetically, they could afford to hand out two more Baz extensions and still be safe from the 20% tax levied against first-time offenders of the CBT.

Getting a pitcher as talented as Baz under contract for his age 26-31 seasons at an average annual value of $13.6 million should be good value as long as he can stay healthy. Even the salary's peak figure of $25.8 million is not much to pay for a quality starting pitcher. Five years from now, that might be about the value of the qualifying offer, which gets you pitchers like Nick Martinez and Shota Imanaga. If Baz stays healthy AND pitches to his full potential, then this contract will save the Orioles a lot of money because they'll have their top of the rotation starter under contract and won't have to pay $30+ million annually on the free agent market.

As far as the longer-term ramifications of this contract, Baz joins Basallo and Alonso as the only players on the Orioles with contracts guaranteed for 2028 and beyond. That's still not a lot of guaranteed contracts, and compared to most contending teams, the Orioles still have a lot of payroll flexibility to continue building their roster year after year.

This is the exact kind of deal the Orioles should be looking to sign with all their young players coming up through arbitration. Give them a pay raise up front to get them under team control for longer, achieving cost certainty at a manageable price point.