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Try to compete again or rebuild? Orioles have tough decisions ahead

Baltimore's Chris Davis (left) and Wei-Yin Chen are headed for free agency in a few weeks, while Manny Machado is in need of an extension. Getty Images

While a .500 season is hardly a disaster, the Baltimore Orioles are one of those teams watching the playoffs at home right now that have some big decisions to ponder this winter. After a disappointing season -- both in the majors and the minors -- the Orioles have reached a crossroad, that perilous place in baseball when your team is awkwardly stuck between competing and rebuilding. They have contracts expiring, legit production to either re-sign or replace, and with another year in the books, franchise player Manny Machado is that much closer to free agency.

This team has some big decisions to make in the next 2-3 months, and the root question is this: Do they compete or rebuild?

Look back 20 years and the Orioles used to be one of those high-payroll American League East teams. The 1995 Orioles had a $49 million payroll, second in baseball to -- you guessed it -- the New York Yankees. The O's payroll was second in 1996 and 1997 as well, and in 1998 they even passed the Bronx Bombers with a $74 million payroll, the largest in baseball. Fast-forward to Opening Day 2015 and the O's ranked only 17th in baseball in total payroll, despite coming off a 96-win season.

To win 93, 85 and 96 games, respectively, over the past three seasons, Baltimore needed some pretty big bargains. For instance, the Orioles took a chance on an inconsistent, high-K slugger struggling to stick in the majors named Chris Davis. That worked out nicely, as Davis led the AL in homers in 2013 and 2015, and the player that led the league in 2014 was Nelson Cruz, another O's bargain pickup who left for Seattle last offseason. Davis hits free agency in a few weeks, and he'll likely sign for a lot more money than the $12 million he earned this season. Another O's bargain, Wei-Yin Chen -- originally signed to a modest three-year, $11.3 million contract with a 2015 option -- also hits free agency, and should get a tidy salary boost of his own.

In all, Baltimore is losing six players to free agency that were paid $35.1 million by the team in 2015. While some argue this frees up $35 million to spend on the free-agent market, that would be the wrong way to look at it. We're not talking dead money here like Ryan Howard's contract. By Baseball-Reference's reckoning, those six free agents to-be were worth 11 wins to the Orioles in 2015 (and that includes Gerardo Parra and his -1.1 WAR). With a win on average costing more than $6 million a year in the free-agent market these days, losing 11 wins to gain $35 million is not a good tradeoff.

Running some (very) preliminary ZiPS projections for the Orioles in 2016, based on all the players they have under contract or are eligible for arbitration, the O's have a mean projection of 72 wins in 2016. Just based on the guaranteed contracts they have and their arbitration-eligible estimates, Baseball-Reference already puts the team at $86 million for 2016. Even if the team bumps their $110 million Opening Day 2015 payroll to $125 million, that means the O's, to have an 88-win average outlook next season, need to add 16 wins for $39 million this winter. That's unlikely to come from the minors either, as these projections already take into account any 2016 contribution from their current minor leaguers.