The Default Option
What happens if nothing happens this off-season? No, really, let’s say the M’s make no moves at all. None. They wake up the day before spring training, slap themselves on the collective forehead, hand out NRIs to anyone walking by, and head into the season. How bad are things, really? Or, to put this another way, what’s the baseline?
C: Johjima/Burke
1B: Sexson! WOOHOO!
2B: Lopez
SS: Betancourt
3B: Beltre
LF: Ibanez
CF: Ichiro!
RF: Jones
DH: Vidro
Overall, that’s likely to be a bit of an offensive step back, though we can argue about the why (Sexson rebound versus Vidro regression, Ibanez slide against Lopez progression, Jones’ ability to replace Guillen…). Defensively, you’re going to do better with Jones over Guillen, but then Ibanez isn’t getting any faster. So small step forward.
Rotation:
Felix
Washburn
Batista
Scrub
Scrub
Hey, it’s just like last year! Wheeeee! There’s a chance Morrow’s ready for one of those slots, if a small slot, but really, the team would be picking from the Baek & Co. Assortment Pack of Back-Rotation, Low-Cost guys.
Amazingly, this would not be an appreciable step back from last year.
Bullpen
Putz & a ton of dudes
I have every confidence they can put together a quality bullpen without spending on some veterans with longer resumes than Sean Green.
Where do they finish? That’s a 75-80 win team, and just scanning it over, though, it doesn’t inspire a lot of hope.
However, you can see where if they want to make improvements, the places where they really need help are quite obvious. Here’s the question, then — will the M’s, spending a ton of money this off-season and likely making moves, manage to improve on the team they’d field if they did nothing? A Sexson move would go a long way to start things in the right direction.
Market Rates
As requested, here’s a pseudo update to the post I did three years ago on the concept of market value. The same basic concepts I wrote in that post are still true, but the numbers have changed a bit, and obviously, not all of you have been reading the blog for three years.
Free agency begins today, as teams can begin negotiating and signing players from other clubs. As always, most of the contracts signed by free agents this winter will be bad deals for the clubs, as they compete against each other for limited talent in a market that doesn’t correctly value actual on field contribution. Today’s big free agent signing is more likely to be tomorrow’s immovable albatross than franchise savior – this is just how the Winner’s Curse works.
So, how do you tell which free agent signings are better or worse than others? And what is market value now? Well, we won’t know for sure until the winter has played out, but based on previous signings, I think we can make some educated guesses.
According to the USA Today Salary Database, MLB teams spent just under $2.5 billion in player salaries last year. Obviously, some teams spent more than others, but that was the overall payout from teams to players for their performance last year. History has shown us that a team of league minimum players and Triple-A castoffs can win about 50 games a year, so what teams are actually paying for is every win above 50. We often call these marginal wins, and refer to those players as replacement level.
To be a true contender, a team needs to add about 45 marginal wins in any given season, and every dollar they spend above $12 million or so goes towards that effort. If a team that is trying to contend has a $100 million payroll, they are essentially trying to spend $88 million on about 45 marginal wins – that works out to just under $2 million per win.
So, pretty much any contract that is returning value at a cost of around $2 million per win is helping the team reach their goal of contending for a playoff spot. The further from $2 million per win you get, the more the contract is a bad deal for either the player or the team.
Now, because MLB has a non-free market setup for a huge population of the players, where their salaries are either determined by the team (if they have less than 3 years of service time) or by an arbitrator (if they have 3-5 years of service time), teams have a built in advantage with younger players where they can get strong returns for minimal costs. Thanks to research by Dave Studenmund on how teams spent last winter, we know that the average pre-arbitration player only makes about $500,000 per win, arbitration eligible players make about $2 million per win, and free agents make about $4 million per win. Obviously, having talented players under team control is a huge benefit, as their cost per win is eight times lower than comparable free agents.
This is why the smart teams mostly eschew free agency in roster construction, instead building through player development and trades. Unless you can turn a proftit with a payroll north of $150 million, you’re just not going to be able to build a competitive team using free agents as a core building block. The cost is just too prohibitive. With inflation, we should expect the cost per win this winter to be more in the $4.5 to $5 million range, driving salaries even further away from the ideal $2 to $2.5 million per win that teams should be aiming to spend.
Now, that’s not to say that every contract needs to be valued at $2 million per win or less. If a team has a significant amount of cost controlled talent on the roster, to the point where they’re getting 30 to 35 marginal wins for $50 million in payroll and they have a $100 million budget, that gives them somewhere in the $50 million range to buy another 10-15 wins. At that point, they could justify spending $3-5 million per win on a couple of free agents to round out their roster and make a real run at a championship.
Free agency is best served to find role players to fill a short term hole or to get the final piece to the puzzle. It is, without a doubt, the least efficient way to add talent to an organization, and in many cases the cost more than offsets the value the player adds. We’ve certainly seen the Mariners run into this problem – their spending on mediocrities such as Richie Sexson, Jose Vidro, and Jarrod Washburn are eating up enough payroll space to keep them from being players for true all-star talents while not returning enough performance to make this team a legitimate contender.
This is why we advocate a roster building philosophy that focuses on paying premium dollars to premium players (Ichiro’s extension is a perfect example of this), ignoring the overpaid middle class, and surrounding your stars with young players who haven’t had their salaries determined by free agency. It simply doesn’t work to try to fill out a roster with good-but-not-great players in free agency.
So, when someone argues that if you want to improve the team this winter, you have to pay what the market will bear, just ignore them – the free agent market is just one (not very good) way of adding talent, and the smart teams will usually ignore it entirely. Let other people throw big money at mediocre players hoping for a quick fix – market value isn’t actual value, and competing with other GMs who are spending money like fools is a great way to end up with a high payroll and a .500 team.
Winter Moves Begin
Now that we’re starting to get to the end of the 15 day exclusive negotiating period and teams had the chance to talk at the GM meetings last week, the offseason is slowly kicking into gear with a few minor moves. Here’s a quick recap of what’s happened so far.
Boston re-signed Curt Schilling to a one year deal.
Schilling takes far less money to stay in Boston than he could have gotten on the free market. On top of all the other built in advantages the Red Sox have, they’ve also now established an environment that encourages quality players to take below market deals to play in the city. They’re going to be contenders for a long, long time.
Philadelphia acquires Brad Lidge for three replaceable parts.
Pat Gillick makes a pretty terrific move here, picking up a valuable bullpen arm for a trio of role players. As long as Lidge doesn’t tank in 2008, the Phillies are going to be in a position to get a quality relief season, then cash in with compensatory draft picks for letting him walk as a free agent next winter, and those draft picks will likely be more valuable than the middling prospects they gave up to get Lidge in the first place. New Astros GM Ed Wade gets off to a bad start – not that I had much hope for that franchise after they hired him to begin with.
Detroit acquires Jacque Jones for Omar Infante.
Remember when Jon Paul Morosi was speculating that the Tigers would give up some real talent for Raul Ibanez? Nope – they’re smarter than that. Instead, they bought low on the always underrated Jacque Jones. He’s not the same caliber of hitter that Ibanez is, but his defense makes up for 90% of the difference. When all you’re giving up is Omar Infante for a quality left-fielder, the price is definitely right. The Cubs didn’t necessarily need Jones, but they don’t need Infante either, so this was basically a money dump for Chicago.
2007 Free Agent Landmines
Every year, teams wander into free agency with money to spend and a desire to improve a specific area of their teams. Every year, a few teams end up giving huge amounts of money to the best guy available that winter because, well, he was available, and their goal for the winter was to get the best player they could for that position. It’s short-sighted thinking and almost always ends in disaster, but this kind of roster building will exist until the end of time.
This crop of players are the group I would consider Free Agent Landmines – players with enough value to appear to be an asset, but who are extremely unlikely to live up to the contracts they’re going to get this winter. Previous landmines include Carlos Lee, Barry Zito, Richie Sexson, Mike Hampton, Jarrod Washburn, Carlos Delgado, Pedro Martinez, and Jason Varitek. All good players in their primes, but not good enough to justify the salaries they demand on the open market.
Here are the guys that fit into the mold this winter. Teams who sign one of these players will be quite likely to experience significant buyers remorse a year from now.
1. Torii Hunter, Center Field
Torii Hunter just had a terrific year at the right time, and he’s going to be paid for what he was in 2007, not for what he’s likely to be in 2008 and beyond. From 2004 to 2006, Hunter’s offense was worth about 15 runs above an average hitter – combined. He had settled in as a pretty consistent +5 offensive player, which as a center fielder with some defensive value, made him a borderline star, but not anything like a franchise player.
In 2007 alone, he was worth about 17 runs more than an average hitter, his best offensive season since 2002, and only the second time in his career that he’s been better than +10 runs with the bat. There’s no change in skillset to indicate that he actually improved as a hitter – he’s still the same aggressive free-swinger that he’s always been.
However, there’s this belief that Torii Hunter is a perennial all-star type of player, and he’s going to get paid like a premium talent. Part of that belief is predicated on his defensive reputation, which hasn’t matched his actual abilities in the field for several years, and will only continue to decline as he ages. Whoever spends $100 million on Torii Hunter is going to get themselves a solid player for the next 2-3 years, but certainly nothing like the value they’re going to pay for.
2. Carlos Silva, Right-Handed Starter
Despite the fact that he’s posted seasonal ERAs the last three seasons of 3.44, 5.91, and 4.19, I’d call Carlos Silva one of the most consistent pitchers in baseball. He does the exact same thing every single start – throw 90 MPH sinkers down the middle of the plate and let hitters put the ball in play. He has terrific command and refuses to walk anyone, so his results are almost entirely dependant upon the defenders he has behind him and the abilities of the hitters he’s facing. And, as you can see, those results can change wildly, even if Silva himself stays the same.
However, because Silva’s healthy, has a track record of throwing 180+ innings every year, and has gotten outs with his strikes, strikes, and more strikes approach, he’s going to get a multiyear deal for $10 million + per season. In reality, he’s basically just this year’s Jeff Suppan – a back-end starter with one skill that isn’t even really that hard to find. For all the whining about the scarcity of pitching in major league baseball, the minor leagues are littered with guys who have a very similar skillset to Carlos Silva. Ever heard of Nick Blackburn? I’m guessing not. He’s one of the candidates to replace Silva in Minnesota next year, because he’s basically the exact same pitcher. Blackburn’s just been putting his strikes and groundballs skillset to use in the minors the last few years.
There is almost no difference between Nick Blackburn and Carlos Silva, however. Silva has the name recognition and the track record, so he’ll get the big payday, but from this point forward, it’s a coin-flip to who has a better major league career. And it’s not like Nick Blackburn is a highly valued commodity throughout the game.
The strike throwing, no outpitch hurler is just a very easy skillset to find in a pitcher. Throwing a huge amount of money at Carlos Silva simply because he’s proven is a gigantic waste of resources.
3. Kyle Lohse, Right-Handed Starter
Completing the trifecta of former Twins, we have the most inexplicable somewhat coveted free agent in recent history. It’s essentially assumed that Lohse is going to get a contract in the $25 million range over 3 years. Why? I have absolutely no idea.
Lohse is what you would have if you took Carlos Silva, gave him mediocre command, and took away his sinker. He has below average stuff, average control, no outpitch, and was drummed out of the American League 18 months ago after posting a 7.07 ERA in 2006 before the Twins dumped him on the Reds. The move to the National League helped, as it would any pitcher, and made him appear simply not good instead of terrible.
The Reds sent him to the Phillies in a meaningless deadline deal this summer, and after pitching like the mediocre #5 starter he is in Philadelphia, even Pat Gillick doesn’t particularly want him back (quick sidenote – Gillick stole Brad Lidge from Ed Wade yesterday, and since I never say anything nice about him, here you go Pat – way to rip off one of the few GMs worse at trading than yourself). Lohse doesn’t have a strong track record of success. He doesn’t have good stuff. He doesn’t pound the strike zone. But, because he currently has a pulse, he’s a valued asset?
Every single 2008 Triple-A rotation will have at least one guy who could give you 95% of Kyle Lohse’s production for 3% of the cost. In an efficient market where major league teams understood how to evalute pitchers, Lohse would be lucky to get more than a few million dollars on a one year deal. However, he’ll stand as the new example of how badly teams misread pitchers, and he’s going to steal money from some unlucky franchise for the next few years.
Gold Gloves
Since I write about defense a lot here, I figured I’d throw up a quick post on the Gold Glove Awards that were just announced. Hopefully, you guys know by now to not take these things seriously, as they’re by far the biggest farce of any major award in sports. The managers just don’t take these things that seriously, nor do they generally understand how to properly value defensive players.
By and large, they just pencil in the same names over and over every year, leading to things like Greg Maddux winning his 17th gold glove today. Now, I’m not here to argue that Maddux isn’t a great defender for a pitcher – he is – but there’s no way he’s been the best defender in baseball at his position in 17 of the last 18 years. That’s just laziness from the voters and a reflection of how reputation, and not any kind of performance, is the main evaluative tool for managers when it comes to defense.
But, regardless of our misgivings about how these awards are given out, they still receive notoriety, so congratulations to Ichiro and Adrian Beltre on being recognized for their defensive contributions. I’m not sure I’d have voted for Beltre, honestly, and I say this as a card carrying member of the Adrian Beltre Fanboy Club, but it’s nice to see him being recognized as a superb defender.
And, just for fun, if I was voting, these would have been my selections:
Catcher: Gerald Laird, Yadier Molina
1st Base: Kevin Youkilis, Albert Pujols
2nd Base: Mark Ellis, Chase Utley
Shortstop: John McDonald, Troy Tulowitzki
3rd Base: Brandon Inge, Pedro Feliz
Outfield: Curtis Granderson, David DeJesus, CoCo Crisp, Andruw Jones, Carlos Beltran, Juan Pierre
Tuesday Notes
A few interesting stories popped up this morning.
Jose Guillen purchased $19,000 worth of steroids from 2002 to 2005. Honestly, I’m not really surprised. Hopefully, this doesn’t discourage the M’s from offering Guillen arbitration to receive the compensation pick when he signs elsewhere, but it could.
The Marlins officially confirmed that they’re shopping Dontrelle Willis and Miguel Cabrera. Unfortunately, the Mariners are going to be interested in the wrong one of those two.
And finally, Larry Stone checks in and tells us that the Mariners are expected to bid on Japanese right-hander Hideki Kuroda.
Random Notes During The Downtime
As I’m sure you’ve noticed by the lack of posts recently, Derek and I are both pretty busy, and with very little going on in the baseball world, it’s given us both a chance to do non-blogging things. Don’t worry – this isn’t the pace we’ll hold the whole offseason. Expect more posts as the winter heats up.
From scanning the papers around the web today, however, I did notice one trend – the annual hot stove rumor mongering is kicking into high gear. In separate articles today, we were told that Miguel Cabrera will be shopped by the Marlins, the Orioles will listen to offers for Erik Bedard, and that the Devil Rays might market Scott Kazmir as a Johan Santana alternative if the bidding gets ridiculous.
This is what happens when there is no news, but there’s still a significant demand for insider ideas into what might happen. The Orioles might listen if… The D’Rays might consider doing this if… I might move to Darfur if…
If Bob Finnigan was still around, he’d be writing his annual “Mariners might bring Griffey back” column right about now, so remember, just take these rumors with truckloads of salt.