The Market
Well, I don’t think anyone predicted this. 5 days into free agency, and we’ve had five rather, uhh, strange signings. We’re getting a sixth tomorrow when Arizona gives Royce Clayton a two year contract. A brief rundown:
1. Omar Vizquel: 3 years, $12 million
2. Cory Lidle: 2 years, $6 million
3. Cristian Guzman: 4 years, $17 million
4. Vinny Castilla: 2 years, $6 million
5. Troy Percival: 2 years, $12 million
Keep in mind, it was just five months ago that Carlos Guillen signed a three year, $15 million extension, passing up his first shot at free agency, to remain a Detroit Tiger. Carlos Guillen was worth about seven wins above replacement this year; Cristian Guzman one. Somehow, Guzman parlays that into a longer contract at just a bit less in annual value. And the Guzman signing is probably the most defensible of the bunch, honestly.
So, a few hours ago, I’m talking with a friend who works in a non-Mariners front office about this rash of deals. I express a bit of worry that these low-to-mid-tier players are setting a market value that will raise the rates the upper echelon players will expect to receive. His response, which I think is important (not word for word quote, since we were just talking):
“I disagree. I think this helps us sign (Player X) for less, actually. These guys aren’t setting the market; they’re simply allocating resources to players we weren’t going to pursue anyways. The supply of attractive free agents for us hasn’t changed one bit, but the amount of teams that will be pursuing them has probably dropped by two. Less demand, less leverage. Don’t worry about these signings; we’re still sticking to what we believe is an intelligent offer, and we’re glad that those who feel like overspending are doing so on guys we didn’t want anyways. (My GM) isn’t bound to match contracts given out by (Bowden, Dombrowski, Minaya, and Sabean). If (the agent) says that Omar is worth $4 million a year so (Player X) is now worth $15 million, I’ll gladly tell them to go ask Sabean for $15 million. He knows that he can’t, and so do we. This is good news, not bad news.”
He knows the baseball market, and how team’s operate, a lot better than I do, and what he says makes sense. So, his advice to me is my advice to you; don’t worry, be happy.
Comments
38 Responses to “The Market”
What if it doesn’t end?
Filed under: Mariners — DMZ @ 2:09 pm.
Dave’s post raises an interesting possibility, that early bad signings will later depress the market […]
YAY!
This is good to hear. I was losing sleep.
Interesting point of view. Thanks for reminding me why I read your site regularly.
And, of course, you’ve explained all of this to Hicks and Moreno? How about Bavasi? Anyone clue him in, yet?
Dave – I was running through some of those same thoughts. But, as usual, you expressed it better than I could have.
Good post Dave.
This doesn’t answer the question – why? Why are there all these really dumb signings?
I’ve been thinking similarly as these signings have gone down: They more the Mariners competition spends on middle tier players, the better. They’ll have less resources to offer the guys we want.
If the M’s can just hold off on similar signings and save their money for the big boys, they’ll be in good shape.
I agree. No reason to worry. Let everyone else play the idiot role this year.
gee, the blatantly pessimistic side of me voices itself easier every offseason as I watch headscratching moves year after year. here goes…
“of course, if you’re and M’s fan this is bad news because the M’s brass will panic as they see the mid-tier players go for so much. they were never really going after any top-level FA’s anyway, oh they’ll make an offer feint at Beltre, like they made an offer at Tejada, say 4 years, $32Million. then before it’s too late, they’ll lock up Jeff Conine 1B for 3Years, $12.2Million, Kenny Rodgers 2years $14Mil. and some RH hitter with warning track power in his mid 30’s because he’s such a good clubhouse presence. (I dunno, Delino Deshileds?)” etc. etc.
{/rant}
alright, I don’t even know if those guys are FA’s or not, but I’ve seen it too many years in a row now to even think about the M’s in the same sentence as moreno.
I still hope though…sigh.
I can’t believe we missed out on the Cory Lidle sweepstakes! So much for competing in ’05!
I have to agree with the gist of what stiletto wrote. The Mariners have yet to show they are willing to make a big free agent signing over the last few seasons. Does anyone honestly believe we will sign Beltre or anyone else near his caliber?
This is sort of on topic because it is about free agent contracts, though it is not about these idiotic “mulligan” contracts given out so far in this off season: Baseball Primer has posted Dave’s post with our reader comments about long term contracts. As I type this there are 27 comments so far. It is interesting to read comments from a national perspective about the postings made by the readers of this site about the topic of long term contracts. The poor Mariners may be a sinking ship but the USSM is very much afloat among the tall ships on the baseball internet.
Hey…Cocktail.
Is that a rhetorical question?
I want to believe.
Why are there all these really dumb signings?
Why did Gillvasi sign Ibañez for 3 years, $13.5 million last year very early on? Same reason. Some GM’s haven’t quite had it sink in yet that it’s to their advantage to wait on signings- for one thing, a bunch of talent will hit the market when arbitration candidates are non-tendered in December. Some GM’s want to shoot their wad early and lock in players they have targeted? Great- less competition for the rest of them.
I find the signings cited for this thread really quite appalling. In principal, I’m willing to take the observation by your FO contact, Dave, at face-value until and unless the market proves the guy wrong; the real issue, then, is can FOs maintain budget discipline on the major signs?
For reasons of long-term historical modeling (part of what I -really_ do) which I can’t and won’t take anyone’s time trying to explain here, this baseball offseason modeled as likely to generate some truely bad contracts and Oh-my-God-they-did-WHAT!!!? decisions; the most comparable year was 2000 when A-Rod led a spate of egregiously awful signings. Judging by these opening shots, this offseason may well shape up as a drunken roll in the poison oak by baseball’s collective executives. If ‘my team’ bucks that trend, that’s the best I can hope for—except that the Ms are under major pressure to produce some above-the-title signs, so there is reason to be afraid, be very afraid at the moment, sez I.
Specifically, Guzman’s signing isn’t even a joke; it’s like hearing that some dumbass electrecuted himself putting up Christmas lights in the rain. Guzman is one of the worst offensive players in the majors; he’s actually WORSE than his miserable numbers, if you follow any comments out of Minnesota about his complete lack of discipline and sense at the plate, and the multiple times he’s been benched for lack of effort on the field and all the rest. I was wondering which fool would take the guy, but a 4-year for him is sooooo . . . weak. Guzman only figured to stay in the bigs as a defensive back-up in my book. Castilla simply can’t hit for beans away from Coors, which is simply another way of saying that he can’t hit. Plus as Dave says, he’s 37. It would have been better to have re-signed Batista for less money, and it’s farcical that I have the opportunity to write the first clauses of this sentence. I’ve never had any respect for Bowden as a human being or a GM, but it would appear that not only has he learned nothing by being fired, he’s more than happy to throw away someone else’s money now that Selig & Co. have authorized him to do so. Whoever buys this team should negotiate that MLB has to cover _any_ contract signed in this offseason if a guy’s cut—and then dump all the losers.
Cory Lidle . . . why is this man in the major leagues? Because he eats innings, maybe?? Ryan Franklin is a better pitcher, and has always been a better pitcher. Lidle will pitch well for a couple of months here or there, but the rest of the time he gets lit up like he’s soaked in gasoline. If he was on my team, he would be in my top five priorities as someone to _replace immediately_, that’s where I see him. And where Billy Beane saw him. And where Riccardi saw him. But that’s not where Wade sees, him, evidently *snicker*. But then I’ve never thought that Ed Wade had Clue 1 regarding what he is about in Philly, either. There’s a reason that that team has: a) bad chemistry, b) poorly matched skillsets on the 25-man, c) a pitching staff with big question marks for yet another season, d) had repeated underperformances by _physically_ skilled rookies both pitchers and positions guys, and e) had a terrible choice for manager on performance for far to long only to f) replace that guy with an ineffective ‘proven’ retread who made the White Sox look very much like, well, the ’04 Phillies. If the ownership in Cream Cheese City had a lick of hotdiggity, Wade—Grade: F—would have been dropkicked into another career, but there it is. I’m betting Eddie “Inside Straight” Wade has another big contract sign in him this offseason, and here’s the first word that it will be Smile Gas laugh-a-thon when it comes down.
I agree with Dave’s friend as quoted above, at least as far as the overall market is concerned. When most of the teams have filled their needs, there will still be guys available at Lidle’s and Guzman’s performance level, and they won’t be costing nearly as much in January as they are now.
That’s not to say the M’s front office is out of the woods, of course; the key will be whether they can refrain from panic, and from setting their hearts on any one particular guy (unless that guy’s last name starts with “Belt…”). (Well, all right, Drew might be okay too, but no lower than that. Nobody else is irreplaceable within the market.)
As this is the Bavasi administration’s first full offseason in Seattle, I’m refraining from committing myself either to optimism or to pessimism at this point. I’m pleased that they haven’t been one of the first to jump in with an overpriced deal for a replaceable talent; but if they change that trend tomorrow, I may be disappointed but I won’t be shocked.
Also, FWIW: Borders signs with Milwaukee (the usual NRI deal).
http://cbs.sportsline.com/mlb/story/7898815
Darn. Now I need to find a copy of Bobby McFerrin’s song, just to get it out of my head.
I swear revenge.
One note to Bela: I think you’re confusing your Manuels. Philly didn’t hire ex-CWS manager Jerry, they hired ex-Cleveland manager (and hitting coach) Charlie.
And look around for Terry Riley and Ron Gardenhire’s comments on Guzman leaving Minnesota. Purest crocodile tears in my view, and to keep the Twin Cities faithful from any brief, muzzy tizzy at the Twins ‘letting good-fielding Guzman go’ while ‘having no replacement’ (with [fill in the blank] being an improvement in reality]). What a hoot, I’m sure they couldn’t wait to see the last of Christian’s corpus.
Dave,
I agree with “Mr. X” and your views on these signings not impacting the top end of the market. It could though impact which players are offered arbitration at the middle end of the market for players considered too green or too old.
That would be strictly true only if there were a handful of teams in the league. But in fact, it only takes three or four teams for there to be a bidding war, and I don’t see the major players — Yanks, Red Sox, Cubs, Angels, maybe the Dodgers — taking themselves out of the running with weak yet expensive early signings. All Boras has to do is convince two or three owners that early signings do set the market, and he’ll get everything he wants.
Moral of the story: it’s still too early to call. We’ll just have to wait and see.
It often takes only one gullible owner or GM to have a bidding war.
A-Rod’s contract wasn’t bad so much for its’ size or length as for the fact that there was no competition even close to what the Rangers ended up paying. They simply way overshot the market. Ditto most any other bad contract you can think of.
I can’t blame the Expos err Senators or whatever they are called for getting grabby early. Vinny had his RBI machine going last year. They may not be done either.
What did PT Barnum say — “There’s a sucker born every minute”
I think for almost any given player, there’s a GM (or three) who want to see only the player’s upside and pay him based on that. For example, if you look at what Christian Guzman did in 2001 as a 23-year old and think about how good he might be at 27-30, $4M would be a bargain. I remember thinking at the time that he would soon be better than Jeter. Unfortunately, there are three full seasons of data to prove that 2001 was a fluke. Likewise if you look at 2001, 2002, and 2004 post trade, Lidle is a pitcher with an ERA below 4. (Also, I think people are a bit harsh on Lidle; even with an ERA of 5 he seems better than Moyer or any fifth starter the Mariners ran out there last season.)
I also think many front offices still aren’t very savvy with statistical analysis. For example, my impression of Guzman, from watching him and SportsCenter is that he’s a good shortstop — not an all-star but at the top of the next tier. When I look at the statistics, especially when I compare him to other SS, it’s clear I’m wrong. But even then it took some drilldown to see that offensively he might be the worst SS in baseball. Admittedly this was 5-10 minutes of work any GM could have done.
Trent at Leone for Third did a great piece on this. And he also gave Dave a huge plug in italics for the lead story here. I can’t add anything to either story except my pessimism and one totally subjective opinion: Bavasi appears to be less and less stupid the farther away Gillick gets.
Read both and decide for yourselves.
I know this comment is a bit out of place, but I had followed stan’s comment over to baseball primer and wanted to post. Not sure what everyone’s background is or whether you’ll have access to these articles, but I have found a couple of more detailed studies relating to topics that have come up over the last few weeks. These are all studies done by economists and are academic articles. I haven’t read every page of every article so I’m not sure exactly how technical they are.
Long-Term Contracts: “Long-Term Employment Contracts: Risk Management in MLB” in Managerial and Decision Economics. It’s a paper explaining why certain players are more likely to get LT contracts and what teams’ motivations are.
Overpaying players on the decline: “Thanks for the Memories: Baseball Veterans’ End-of-Career Salaries” in Managerial and Decision Economics.
Effect of manager quality on team success: “Managerial Quality, Team Success and Individual Player Performance in MLB” in Industrial and Labor Relations Review.
The next topic hasn’t come up recently, but is of prime importance in relation to the M’s recent strategy of staying away from star players.
“Pay and Performance: The Impact of Salary Distribution on Firm-Level Outcomes in Baseball” in the Journal of Sports Economics. Their finding is that the greater the inequality within a team’s salary structure, the lower the performance of the team, all else equal.
Just thought these were interesting topics and economists are usually pretty careful in their analysis. The downside is that they are likely less knowledgable about baseball than the baseball experts.
Re: #27
Some economists are very knowledgeable baseball experts.
Agreed.
This echoes the much bantered-about stats that teams with more than x% of their payroll devoted to y players don’t perform up to z standard.
It’s a flawed argument because payroll distribution does not have anything to do with quality of payroll, or level of payroll. If I take the Devil Rays and spend $20m/year on a scrub, that doesn’t help. Whereas brining in Barry Bonds does (see: the Giants). Similarly, if I have the Yankees, with 10 guys who make $20m/year, that payroll distribution’s going to look pretty even, and perform well, but any of those guys would be 1/4th of the Expos payroll if they were over th ere.
Economic (and other) studies of sports issues often focus so specifically on the application of some tool or theory that they entirely miss the question of the worth of applying that same tool or theory to the problem, and what exactly the end result measures.
DMZ – The idea is to try and control for everything other than payroll distribution (i.e. payroll level, surrounding talent etc.). That is, I interpret the results as trying to answer “Should the D-Rays bring in Bonds @ $20M and three replacement level scrubs or should they spread the $20M around more evenly among the four players, holding the rest of the team constant?”
Bringing in a $20M scrub isn’t going to help anyone. The idea is that contracts are correlated with the level of talent of the player involved and are, in this sense, a measure (albeit a noisy one) of player quality. So, if I control for the overall talent level of a team, would a particular team be better off spending their money on two players that are OK, or one player that is great and one that is replacement level, WITH EVERYTHING ELSE BEING THE SAME. I guess I don’t see the flaw in the argument.
“EVERYTHING ELSE BEING THE SAME”? Everything else cannot be the same. You can’t study it, or correct for that assumption.
The problem is that the question as framed entirely ignores the factor that determines its success or failure. It’s like saying “Is it better to buy a new or used car?” and coming up with an answer like “used”. It entirely ignores that every cost/benefit discussion is different depending on the individual and the decision made on a generalization like that may have a slight advantage in being correct in more situations while still entirely wrong in many others.
Take the stars/scrubs thing. If you spend $20m on Bonds and $1m on three other players, and you spend the minimum on draft picks Hudson, Zito, Mulder, that’s a huge difference in results against spending $20m on Chan Ho Park and $1m on three washed-up veterans.
No study on payroll distributions or similar problems can avoid the problem that payrolls are once-removed from the ability that most separates good from bad teams: the ability to assess and acquire talent.
I see what you mean now. I would still believe that the analysis is correct in general. As in, it’s more often optimal to buy a used car than it is a new one. This does not mean that there aren’t good deals on new cars and people trying to give you the shaft on used cars. It just says that you’re more likely to find a good deal on a used car. I don’t want to oversell my belief in the results of one paper. It’s just one piece of evidence and can’t be used to make blanket statements about every possible scenario. However, I do think it is a valid piece of evidence.
mfan and dmz, i hope you don’t mind me adding my 2cents into your disccussion…it seems to me the right strategy for spending money on ballplayers can never be known…quite frankly if it could be known that would take all the enjoyment out of the game… that being said, i do think that a front office should have a strategy in building a ballclub that is dependent on at least a rational assessment of the parts of the puzzle that have already been assembled… for example, i have been against bring adrian beltre to the mariners, not because i think he is a bad player; quite the contrary, i think beltre has obvious talent…. however, if i was the gm of the giants i would be doing everything i could including bouncing checks to sign beltre… if i was a giant fan i would be against signing vizquel and the interest they supposedly have in finley because i think the giants should spend their money on a premium player to compliment bonds…
i think i could give a half dozen reasons why the giants should sign beltre and a half dozen reasons why the mariners should avoid him… bottom line in my opinion the starting point for a gm in building a team is a realistic appraisal of what he already has on hand…
Note to the ancient one,
You are right regarding my juggling Manuels, I realized this as well later after I’d posted, too. I’m not much more impressed with Bro’ Charlie than with Jerry, but it would be churlish of me at the least to blame the one for the other’s mistakes.
Stan,
I don’t understand your point. How does the fact that the Giants have a contract with Barry Bonds make Beltre a better acquisition for them than it does for us? Using these two teams, I would argue the contrary. Beltre is a better acquisition for the Mariners, because he would improve the Mariners more than he would improve the Giants. The Mariners currently have a hole at 3rd base with only a slight to moderate chance of filling it to satisfaction from within the system. The Giants, on the other hand, have one pretty good player locked up at third base for a while (Edgardo Alfonso) and have another young third baseman that shows potential in Pedro Feliz.
I’m not saying that the Giants 3B situation is an ideal one… but if the Giants really want to improve their team, acqisitions in other positions have the potential to provide greater improvement for less cost (such as SS, CF, RF, 1B, Starting pitchers 2-5, relief pitcher).
Aw heck… what am I saying? The Giants could stand an improvement at just about every position except left field.
hans, in my opinion the giants need an rbi/power guy to hit behind bonds… barry will still get walked unless he shows that his bat has slowed, but the pitchers in the national league will know they will pay a higher price than in 04 because beltre has shown he can hit them…. i would imagine barry would get more pitches to hit with beltre behind him…. barry hitting 3rd, beltre 4th and jt snow 5th should be a productive group unless age catches up to barry and jt… if so, beltre is not going to carry the giants on his back… beltre in seattle in my mind is a completely different story… adrian will have to learn a whole new group of pitchers and he will be hitting in ballparks he does not know and in a home park that is tough on right handed hitters unless they drive the ball the opposite way…… he would not be the first to struggle making the adjustment of switching leagues…. if he does swing the bat well i don’t think he will get much help from the players hitting behind him… ibanez is ok but he is not a big power threat…. maybe boone will have a power surge in 05 but i dont think you can count on it… bucky is an interesting power guy but let’s face it he does not have a track record… with beltre in the lineup the power the mariners would have would all be from the right side in a park that favors lefty power…i just don’t foresee adrian doing well in that scenario and i for one would not want to pay a 100 mil for a contract that might not produce and would probably be impossible to trade… lastly, i am impressed with the potential of jose lopez, but only as a third baseman… for me he does not have enough range to be a middle infielder… if you sign beltre in my opinion you may as well trade young jose…. it may well be that lopez will never make it; lots of guys with potential never produce… what i would like to see the mariners do is plug jose in at third and see if he can turn into a guy who can have a season like beltre just had… if lopez dooesn’t turn into that type of player the mariners can look to other options… if beltre comes here on a high dollar, long term deal and struggles the options are not so pretty… i don’t know if that is actually a half dozen reasons why the giants should sign beltre and the mariners should not, but anyway that is my thinking… i have been wrong about players and teams before and i am sure i will be wrong again…. if the mariners are itching to spend a 100 mil on a player i would prefer them to spend it on beltran, though i am not calling on them to do that either….