Glaus to Arizona
Dave · December 9, 2004 at 7:34 am · Filed Under Mariners
This should get things moving along on the offensive side of things.
The Diamondbacks effectively ended their contract stalemate with slugger Richie Sexson by convincing free-agent third baseman Troy Glaus to sign a four-year, $45 million contract with the club, The Arizona Republic has learned…
The 6-foot-5, 245-pound Glaus, 28, will be given a $4 million signing bonus and a salary of $8.25 million this season. He’ll make $9.25 million in 2006, $10.75 million in 2007 and $12.75 million in 2008.
This knocks Arizona out of the running for Richie Sexson. Now that Glaus is off the board, I expect Sexson and Delgado won’t be too terribly far behind. Should be a fun week.
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44 Responses to “Glaus to Arizona”
It will also up the ante for Beltre.
I’ve always wondered this and figured if anybody could answer it for me, it would be somebody here on USSM. Why do teams backload contracts like that? What is the benefit of paying a guy 8 million this year and raising it until it is 12 million the last year. I understand that if you can pay a guy less money one year than the next, then technically you might have more money to spend in the earlier year. But does this benefit outweigh the fact that three years later, the same guy is going to be costing you an extra 3 million a year?
Or is there just something I’m not seeing here?
I think the assumption that started this was that team income and players salaries would rise every year. $20 million in 2005 might not buy the same player as $20 million in 2009. That’s been strained some with the recent correction, but that made sense to me.
Of course, if the player retires or you trade him or he gets injured or something (back in the days of insured contracts), you’d also would get more money back. If I have to pay $50 m to get a player, I’d rather backload it because who knows what the future might bring.
So now the question is, do we get Koskie or Beltre???
This deal is a killer for the M’s. Its now no wonder to me how the Diamondbacks ended up bankrupt and with a criminal as their managerial choice. Can anyone make an argument that Delgado shouldn’t demand at least this big of a contract? If the M’s pay it, its probably a mistake.
I really don’t think this changes anything for Delgado. There’s no way he was gonna sign for less than $12 million a year with his track record, regardless of how much another team was going to pay Glaus. He’ll get that $12million, too. There’s really been little question (with the exception of people in the comments section at USSM suggesting we sign him for 3 years at $8 million per) all offseason about how much Delgado will get paid. The only question is who pays him.
Yeah, I think that market value for Carlos will be 3/30 or even 3/35. I mean, I guess he is playing at a position that has, in general, better offensive numbers than 3B and he is older, but Glaus has missed more than half of the games in the last 2 years.
I read a report that the M’s offer Beltre 7 years and if the Dodgers or Anehiem wouldn’t go for that long then he would sign here! I would be fine with signing Beltre, and Burnitz to a small contract for 2 years. Trade Winn and Franklin for a #2 starter. Unfortuneately, the Phillies, who needed a CF, have already traded for Lofton.
#2, one reason may be that money loses value over time due to appreciation. Backloading a contract means you’re paying less value for a player than front-loading it.
The other reason I believe is mentioned, your revenue and salary limit will likely rise also due to appreciation.
$12M per for Delgado over 4 years?! Forget it. I’ll pass. You wanna be paying him $12M when he’s 36? Heaven help us if the deal is backloaded and its ends up being more like $15M in the last year.
Another reason would be financial analysis. Using simple NPV and a discount rate of just 5%, we see that the contract (note, not including the signing bonus) is worth $36m today rather than $41m. The more backloaded the contract is, the better it looks in a financial analysis.
Dave, other insiders, anything to say about Larry Stone’s rumblings of a deal for burroughs / klesko ? given the friendly history of the M’s and Padres, it doesn’t strike me as out of the question. Pretty much any deal that gets rid of winn and spezio in one fell swoop would be OK with me. Plus, I’ve liked Klesko since his days in atlanta with the mean sideburns.
Another reason for backloading is existing other contracts dropping off the books in future years. Take the Mariners, who have large contracts with Moyer and Boone dropping off the books after 2005. With annual payroll limits you can’t afford them in 2005, but you can in 2006 and beyond.
In the process adding other, larger contracts into those hazy future years. Hee hee.
On Burroughs — Burroughs gives me the willies, though the “why” of that would to involve a long, long post. The M’s should stay away. Unless he’s, say, free.
There’s nothing really to the SD rumors. Bavasi and Towers talked about that deal around a month ago, but Klesko doesn’t want to come to Seattle (no trade clause insures that he gets what he wants) and the M’s don’t see it as a deal that really helps them that much.
It could be an extreme fall back plan if everything else goes poorly and they have nowhere else to turn, but even then, I don’t think Klesko is coming here.
Ghah. This does not look promising for the Ms. I have no confidence that they have the nerve to sign a front line player or will “gamble” on a long contract for a Beltre.
I see a Sexson and Koskie signing by January.
Might it actually be adventageous for GM’s to front-load a contract? By doing so, in most cases (Beltre might be an exception here due to age) you’d be making a better match for the player’s anticipated actual worth, which would thereby increase his trade-a-bility. Imagine a team having desirable and productive vetrans, earning a resonable salary for a last-place team at the trading deadline. The GM who has that player is in an excellent win-win situation: either trade the player for promising prospects that might not otherwise be available, and get yourself out of the player’s decline years, or hang onto a productive player for a fair market value. So many of today’s deadline deals are more about unloading horrendous financial obligations than they are about swapping talent. Perhaps a front-loaded contract would address that.
I wonder if the player’s union might have something to do with this as a popular structure for contracts. If the player is coming into free-agency, he’s in a much more adventageous position for the upcoming negotiations if he can point to his inflated salary the previous year as a starting-point for discussions. I think this would be especially true for aging players who are popular with their team but who’s productivity has declined since the contract was originally signed.
I guest the most optimistic situation we can expect would be a Delgado/Beltre signing, with a trade made for a mid-level starter.
I have a nagging feeling we can expect something more along the lines of a Burnitz/Koskie/Lowe signing or something simular.
*shudder*
The thing that concerns me the most (in reading various articles) is the fact that it sounds like the M’s plan of attack for signing free agents is “helter-skelter” at best. I can understand the concept of keeping one’s options open, but it sounds like they’re spreading themselves too thin. Instead of targeting 2-3 key FA’s and focusing on them, it’s as if they’re trying to have a hand in almost every FA out there. You would think that they made a list of free agents that they were interested in and then prioritized that list. With a prioritized list in hand, they could then spend the appropriate amount of time courting the right free agents instead of doing things so haphazardly.
I say of all this with the disclaimer that my opinion is based off of what I have read online and in the news. Is someone else has a better take on how things are going (preferrably a more re-assuring take), I’m all ears…
Teeeechnically, it’s never advantageous if the player wants the same total amount of money, because the future money is cheaper.
Consider this — I somehow get a 10y, $100m deal to write this site (and a pony) from you. You’re on the hook for that money no matter what happens. If you pay it all in year one, that’s $100m out of your pocket. If you can somehow pay it all in year 10, then you can take that $100m and put it into… CDs, short term bills, something that bears even a modest interest rate, say 1% a year. When the time comes to pay me, you’ll have $110m in the bank. Backloading makes you 10m in that case.
I was actually hoping that the M’s would make a run at Glaus — I figured his asking price must have decreased due to his recent injuries. I guess I was wrong — 4 years at $11M per doesn’t sound like an injury discount to me.
My concern is that this kind of deal will drive up the asking price of other, better players even more. Does someone have a sense whether the FA market is really impacted THAT much by what “comparables” are getting in the market? In other words, do players quickly change their negotiating position based on, “Player X got $Y/year, I am better than player X, so my asking price just went up $Z/year”?
If you focus all your efforts on 2-3 players, you’d better be damn sure you’re going to get them, or be ready for the fallout if you get none. In the current climate, I think that would be a very risky strategy. The 2-3 players you target almost certainly will be in demand among other teams — especially if two of those names begin with the letter B — and you could easily find yourself with an unsavory choice: either paying much, much more than you wanted to in order to get them, or explaining to the fans (and prospective season ticket holders) why you cam home empty-handed. Basically Bavasi seems to be hedging his bets; by keeping in contact with everyone, he hopes he’ll have the flexibility to shift to alternate plans if his wish-list turns out to be unrealistic.
In general I think we oversimplify things in this discussion. It’s too easy for us to say, “Just give Beltre what he wants.” It’s easy to sign 2-3 favorite players if you can jsut hand them a blank check. We’re not the ones in charge of managing a budget and hitting a target figure set by higher-ups. Bavasi has to deal with the real world, a zero-sum game in which other GMs are actively trying to thwart him, “fair market value” sometimes turns out to be grossly overinflated, and fan expectations are sometimes indistinguishable from pie in the sky.
Actually, you have $10,462,213 (if it’s compounded annually) — but I think we get the point.
Makes me more and more OK to take that 100 million and give it to Beltre. I’m probably with Howard, though, and a little gun shy on such a move. In my court, the jury’s still out on Beltre.
But another thing to keep in mind with spreading out your negotiating — the lion’s share of the big free agents (several of which the M’s SHOULD be targeting) are under the auspices of ONE agent — $cott Bora$. That’s certainly a factor in spreading out your options…
Back to random speculation: I’ve been wondering about how the Yankees situation with respect to Gimabi affects Seattle’s attempt to woo Delgado. Specifically, if I were Delgado’s agent, there’s no way I’d have him sign on the dotted line until I knew if the Yankees were going to make an offer. Even if they can’t void Giambi’s contract, I’d still be wondering if Steinbrenner would be willing to make a good offer (particularly since there’s a good chance we’ll never see Giambi in pinstripes again–one way or another they need a new first baseman). As Delgado’s agent, you could convince me otherwise, but only by adding a lot of money, or another guaranteed year or two.
So what do you think: have the Delgado negotiations gone on hold, or is this just one more paranoid fantasy that takes shape in the context of too little solid information?
#21 – I agree with the majority of your sentiment. I think that there are certain players that are worth being the highest bidder on and overpaying, however. Last year, I felt that Vlad was one of those guys. I think everyone got spooked by the potential money that he could command and he actually ended up signing for a relatively reasonable deal (5 yrs, $70 million if I am not mistaken). I just don’t want to see the M’s paying so much attention to the “Plan B” or “Plan C” guys that they miss out a similar situation with a “Plan A” free agent…
#19 – to your point, this is apparently what an agent told Olney this week (yes it’s Olney so take it for what it’s worth):
“Buster Olney: Mercer Island: The Mariners will be stuck with a lot of left overs. Talked to an agent yesterday who says the Seattle execs seem to be all over the map with what they want to do, with no solid plan; the agent is shying away from that place, thinking that it doesn’t seem right.”
With targets like Glaus and Wright going off the board so quickly – and strong competition for Delgado, Sexson and even Koskie, my sense is they may eventually panic and overpay for one “name” player like Russ Ortiz just to say they bagged a recognizable player. And I don’t have confidence that Bavasi can engineer a creative trade and pull a great player out of his hat like Beane or Theo might. The M’s think too linearly to adjust to this crazy market – We have Plan A, if that fails, then Plan B, then Plan C…never thinking to adjust their strategy or think outside the box given the real-time market conditions. Of course I hope they prove me wrong and blow us away with a great signing and/or trade.
#23: DMZ, that theory is correct if you have the $100MM to invest today and are able to benefit from the return on that investment…..if in fact, like most teams your ability to pay the future salary is dependent upon your franchise earning revenue and you don’t have $100MM in cash sitting round that you can invest, then the only benefit you really get by backloading contracts is the discounted future value of money…..ie: a dollar today is worth more than a dollar five years from now.
With targets like Glaus and Wright going off the board so quickly – and strong competition for Delgado, Sexson and even Koskie, my sense is they may eventually panic and overpay for one “name†player like Russ Ortiz just to say they bagged a recognizable player.
Helllloooooo, Jeromy “.773 OPS at sea level” Burnitz!
Great, just what we need, another Raul Ibanez, except older.
Yes, Burnitz would be an appalling mistake. Anyone bagged Hidalgo yet?
Dave, the Diamondbacks might be off the board for signing Sexton to a long term deal, but they did offer him arbitration…. It would serve them right for the idiotic contract they gave Glaus for them to end up having to pay big bucks to Richie in arbitration….
I think everyone’s on track here regarding why most contracts are backloaded, but there is another factor noone seems to be mentioning: Player incentive.
While it may be likely that Free Agent A is more productive in the early years of his contract than the later ones, there are no guarantees. If you pay him say $12 million in years one and two, but $10 million in years three and four, you are asking for trouble.
Assume he averages a very nice .290/.380/.540 in those first two seasons. Now you’re halfway into the third season and he’s hitting at a .330/.420/.600 clip. Most players may be professional and mature enough to handle it, but its not to difficult to imagine someone who would get a little upset that they’re making less even though they’re playing better. If they keep those numbers up all year long, they could holdout before season four, seeking money more in line with what they feel they deserve.
I’m not sure how relevent this concept really is, but it seems like backloading keeps this scenario from ever playing out, which in my opinion is advantageous for everyone involved.
One interesting idea I’ve heard about front-loading versus back-loading, is the ability to preserve market value.
Say you’re going to pay Slugger 5/$50, the average is $10M per year. As Derek and others suggest, paying more later means a lower cost in 2004 dollars. Plus, by back-loading, you can afford more player now. So, you go for the 6-8-10-12-14 salary.
From a pure dollars/accounting standpoint, you’ve maximized your investment. You can invest $44M today, earn some interest, etc.
BUT, turns out Slugger here is 32 years old. Do we really want to pay him $14M for his age-36 season?
Also, consider a case like the Mariners, where we have (according to everyone not named Lincoln or Finnegan) lots of money this year. Who knows what the future holds? Slugger is a stud now, but he’s gonna get older, so we propose a 14-12-10-8-6 salary scale. Same $50M.
Now, why would Slugger take this? Well, from that same “today’s dollars” standpoint, $14M now is worth more than $14M in 5 years. But, there’s the ego involved – if I’m worth $14M this year, why should I take a planned pay cut each of the next 4 years?
A great suggestion I’ve heard, is to make the later years mutual options. Or even just player options. Ie, guarantee the 14-12-10, or even 12-12-12, but make the 8 and 6 be player options.
The player benefits, because, if he’s still at the top of his game, he can go test the market to see if he gets more. The team benefits because, if he ages poorly, they’re not paying $14M for Jeff Cirillo (circa 2003). Also, even though you’re paying $36 for three years, which is way above the $10M/year “average”, you are saving yourself from $14M of disaster money if Slugger goes soft.
Thoughts?
#8 – You need to read your reports more carefully. Beltre said absolutely nothing about coming here, he simply said that he would stay in LA for a lot of years at a discounted rate, but if not there another preference is Anaheim. No mention of the Mariners from his mouth whatsoever
if you are the D’backs, *why* are you paying Troy Glaus all that money?
#35
Because the D’Backs don’t know how to do accounts properly and need to appease Randy Johnson enough so he’ll at least be partially happy while playing for Melvin until the trade deadline.
as for #33,
It seems like a logical approach to take with someone like Delgado but it rarely happens (the Guardado thing is a rare case). I could only see that situation happening if it were like Guardado’s “mutual” options so that if the team chooses to, they can keep him w/o losing him.
Yes, a mutual option makes front-loading work.
Imagine if we’d had a mutual option on Boone this year – team @ $9M and Player @ $5M. Would the M’s decline, like with Eddie? I would hope so. Then, it’s up to Boone to decide if he can get more than $5M on the market… Saves at least $4m. On the other hand, if Boone hadn’t regressed, then the M’s would still have their $9M 2B.
I think it’d be a neat idea. Now, try getting it to work in reality…
Looks like Kent is signing with the Dodgers. Doesn’t that eat into the money they could use for Beltre?
Well, this deal drives in the spike, as it were: We are offically into 2000 Too, where the owners are going to fall all over each other paying luxury class premiums for available players in all but the bargain brackets. The early read that the high-money signs of Vizquel and the like were simply fool’s-money aren’t holding up; dollars are going through the roof, and even years offered are dangerously high, and I think both conditions will hold in all brackets after this. It is very hard to imagine Beltre signing for less than and average of $15M per after Glaus gets this deal.
I hope this works out for Glaus and the D’backs, as I’ve like Troy and I’m sorry he won’t be coming here. Four years seems like a wild bet given Glaus’s recent injury history. Oh well. This deal does break the logjam, yes. Like a barge full of AMNO going *Ching-a-ling*.
BTW, Derek, I’m totally with you on Sean Burroughs, which I’ve said before on this blog. I can’t believe anyone takes him seriously as a prospect at all anymore given his major league numbers. I also have a very clear memory that no deal the Ms have ever swung with Towers in San Diego has come out in the Mariners favor in terms of producing a genuinely productive player. From the time Towers shipped Al Martin up here, he’s had a sucker light in his phone display next to the Mariners’ number.
On the subject of back-end loading deals: a) future money is cheaper, as Derek says; b) you might deal the guy and not have to pay, c) the guy might get injured and insurance pays the whopper year, so again you don’t have to pay, or not the whole lump sum, and d) I suspect that there are amortization games one can set up with the numbers skewed in this way although I don’t have the background in accounting to see my way into this one. In essence, b) and c) allow you to hedge the contract a little bit, while a) and d) if it exists allow you to make outlays at a discount to stated totals.
Bela, not all the deals with San Diego have been one sided…. We did send them Cirillo and Aurilia…. True Seattle did not get anything in return, but Tacoma got one half a good year out of Wiki Gonzalez that I was able to watch so all was not lost…. The only player sent to San Diego that I wish we had back is Ramon Vazquez, solely because there is no one in Tacoma or Seattle that I have seen who looks like they have any chance to be even a marginal shortstop….
Say there, stan
I’m glad you have something positive to say on Wiki; maybe there’ll be some value in him yet. And I haven’t forgoten Dave Hansen in that deal, who had a little bit of value. But seriously, what did Jarvis, Hansen, and Gonzalez _combined_ really ADD to the Ms? Nothing. Nada. And the money was a wash, the Mariners saved nothing financially. It would have been better simply to CUT Cirillo, made a statement regarding the value of failure thereby, and to have used the three 40-man spots clogged up by knick(ed)-knacks from SD on real replacement level players who actually had some value to offe. Like Hiram Bocacchia; not a great guy, but he could actually _do_ something. Towers got his problems down from three guys to one for the same price: he came out ahead in this deal. To me. And you’re right—this was the _best_ deal that the Mariners pulled off with Towers. And Burroughs, a real bust, is now being dangled in front of the Ms to get them to swallow Klesko, another guy Towers is just dying to dump; another sucker deal, except Klesko won’t play his part, thank goodness.
. . . If Kevin’s on the phone, be out to lunch or you ARE out to lunch.
Bela (#41), you also have to remember that the M’s did get something out of the Cirillo trade: The lack of Cirillo. Thought it wasn’t reflected in the team’s record, I’d be willing to wager that there were at least some folks in the clubhouse that weren’t sad to see him go. And, most importantly, the casual fan saw it as “progress” that Cirillo was gone. To the casual fan, it did not matter what was obtained in returned. If we had traded Cirillo for a pair of used gym socks, fans still would have elated…
Wonder if Arizona will part with Chad Tracy? He would be an upgrade over what we have now unless we get Beltre.
Bela, hold off on the call blocking from San Diego… The EPA has a bunch of silly little rules that prevent us from sending guys like Cirillo and Aurilia to Hanford but for some reason that don’t raise a squalk when we ship them over state lines to California… Bavasi would in my mind be the greatest GM of all time if he would send Randy Winn, Scott Spezio and all the people who have moved from California to Washington in the last thirty years to San Diego for Klesko and JJ Furmaniak…. If you are one of those who has migrated here from California too bad; better pack your bags… I agree though probably for different reasons that Burroughs is not a guy I would be interested in acquiring… Furmaniak is a guy I saw last year in Tacoma who really impressed me not only by his play but how he carried himself….
Though it is not fashionable in these parts I agree with you about Bocca… Had I been running the Mariners and found myself 30 games under 500, I would have tried Bocca in a super utility role the way the club used Cabrera and Bloomquist…. Obviously you don’t need three of those guys on a roster, but I would have liked to see what Bocca could do in that role… He came up as a shortstop in Montreal and it looked to me he had the arm strength and the athleticism to play in the middle infield… Maybe Oakland will find out in 05 if Bocca can be a McLemore type with a bit more power…. I for one wish Seattle had answered that question in a wasted year… It seemed to me that after Bocca made his base running blunder to end a game by being picked off third, he landed in BoMel’s doghouse…. Unless my memory is playing tricks on me, I seem to remember Brett Boone making a couple of rockhead plays last year with nary a murmur out of the manager… I am really glad that Melvin is gone; he seemed to me to be the kind of guy to confront guys like Bocca and Ben Davis and say not a word to an established player…