Thursday, November 16, 2006

I'd rather roll the Dais than sign Kris Benson

Edited 10:50 AM

My dearest Steady B,
While I do agree that the Red Sox are spending a whole buttload of dollars for an unknown and unproven quantity, I must disagree with your sentiment that 1) The Sox are going to get hosed on the price by Boras and 2) They are setting the bar for pitching much higher than otherwise expected as egregiously (or more so) than the Mets did with Benson. Bear with me for the following arguments:

1) While Boras is a great negotiator and has sucked more nickels out of his target than an Atlantic City hooker, this is a different case than a free agent. For starters, the Sox will not face him saying "Yeah, well, I just got off the phone with another team that is offering double what you are for twice the years and a 10% stake of ownership with the ball club." Basically, Dice is facing two prospects right now: the Sox at $9-$14mm per year, or Siebu at $3.5. Plus, the guy has been so excited to play in the majors since he was in high school that he has been begging to be posted for 2 or 3 years. The main worry I have about the negotiations is that Boras may go short on years (rumor is he wants a 3 year deal so that Dice hits the Market at age 29, though he probably will sign for 4). Granted, a shorter deal kicks up his average annual cost, but it also gives the Sox 2 distinct advantages: they can turn this around on Boras and lower his average annual salary by accepting a shorter deal, and they will have 2-3 years to see if he actually reaches his potential (early growing pains aside) and still have a year to hammer out another long-term deal. If the deal is short, it doesn't mean he will be a free agent, just that the Sox will have to extend him a bit earlier (and having invested $51mm just to talk to him is a great incentive to extend him unless he is a total bust). My predictions is he either goes 3 years $32mm or 4 years at $44mm.

2) The money is not as critical moving forward due to luxury tax and past moves, though it is not a sunk cost, and it will come back in it's own right. The Sox, having failed in negotiations with Clemens, Damon, and Pedro, have a lot more money sitting around than they expected. Over the last 3 years, they have been much more profitable than at any time in their history, and they haven't made the huge outlays in cash that they were expecting too because they haven't really signed anyone to a big money deal. Words is they probably have most of the money sitting around. Additionally, since this is a one-time fee that doesn't affect the luxury tax, this will not hurt them moving forward the way a bad contract could (note: this is a different concept than 'Sunk Cost'). With a bad contract, unless it is front-loaded, you have to incorporate it into your budget going forward, and it affects you both in that a) future revenue is earmarked to pay for a player who is either underperforming and hurting the team or worse is not even playing so you are paying twice for the position and b) if you are close to the luxury tax, makes other signings and contracts more expensive (i.e. making a $10mm/year FA signing actually a $14mm/year player from a budget standpoint). The post fee does niether, as it doesn't count towards the luxury tax (so it doesn't hinder contracts in other areas others by increasing their cost) and the money doesn't have to come from future revenue. Assuming the Sox have the money in their coffers, there is no problem. If they eat into a little future revenue, the cost gets mitigated going forward. So they are not really paying A-Rod or Manny money every year, just emptying their piggyback now and refilling it going forward.

3) Also, as I mentioned before, some of the posting fee can be viewed as an investment in building a fandom in Japan rather than as an investment in the player. The Sox have little or no revenue from Japan at the moment, but that is about to change. I'll ask A. Sean Feddish (who is currently in Japan) to start looking out for this, but I bet you dollars to doughnuts that there are going to be a whole crap load of Matsuzaka Red Sox t-shirts sitting in drawers next to their "Hello Kitty" counterparts. And that is before Lucky Larry gets his wheels in motion and has every teenager from Sendai to Hokkaido getting Wally the Green Monster dolls for Christmas. Granted, I don't think the Japanese market is going to provide $51mm in the near future, but the returns will mitigate the outlays in the coming months, moreso than a traditional FA signing does with new merchandizing sales of an American or Dominican.

4) Matsuzaka is quite possibly the best pitcher on the market, and young. There aren't many aces on the free-agent horizon, especially at age 26. With all respect due to Kris Benson, or Gil Meche, or whomever, Matsuzaka has the potential to be the Sox ace for the next decade. The way baseball is currently set up, 26 year olds who even have the potential to be an ace in the leagues do not hit the free agent market. Johan Santana, Roy Halladay, Ben Sheets, Brandon Webb, Scott Kazmir, et al will never see the light of Free Agency in their twenties because the market for good pitching is so damn important and even low-revenue teams get $20mm a year from revenue sharing that they lock those guys up until they are 30. For a potential ace to hit free agency at age 26, he would have to come into the league as a rookie when he was 19 or 20, prove that he can stay healthy throughout that whole time, and turn down all the long-terms deal that the team probably has been offering him since arbitration years started. The only other option to get a 26-year old stud pitcher is to trade half your farm system for the guy.

5) The market this year and next is crap. Schmidt is an NL refugee who is aged 34 today, and likely will get 5 years thrown his way. Zito has pitched his entire career in a pitchers park and gets lit up like a joint at a Phish concert every time he gets near an AL East lineup (something like a 6+ ERA against the Sox and Yanks). And both those guys are going for a lot of years at a lot of money. After that, you are just plugging holes with question marks. And nobody else worthwhile and young is on the market next year, either.

6) All apologies, but the wacky Kris Benson contract trend continued through last year and was going to do so this year, anyhow. Before the posting numbers were out, there was already talk that Justin Speier (Just Freaking Speier!) was going to probably get $10-$12mm per year. Just from last year, Kevin Millwood is averaging $12mm per year. Matt Morris and Paul Byrd are making $9 and $7mm, respectively, to put up their near 5 ERAs (note: please no Beckett jokes here). Hell, the Sox have to pay $8.5mm to Clement, who is probably note even going to make the team. I mean, the Orioles just willingly took Jaret Wright in exchange for a young reliever when he would have become a FA in 20 minutes. Maybe the Kris Benson signing is not so bad in retrospect, but we are in a market where there are no good pitchers available for anything less than 3 or 4 excellent prospects and crappy starters are going to get three years at $9mm per just for showing up. I mean, teams are actually going to be apologizing to their fans for not signing Jeff Freaking Suppan to bolster their rotation. Pitching is never dependable in the FA market, but at this point Dice is the guy with the best upside, including the potential to be an ace for more than 2 or 3 years. To get that from anywhere else in the market, you are giving up $17mm per year for 5 or 6 years, plus every good prospect you have above AA.

7) All that said, if he gets hurt out of the gate or sucks massive ass, this could be a really bad deal for the Sox.

Edited 10:50 AM

Just thought I would throw up an excerpt from this article, as well:

I leave you with the simplest interview ever conducted, yet I find it absolutely hilarious.
Q. What do you know about the Red Sox?A. It is a team with history, with the oldest stadium. Babe Ruth, Cy Young, and Ted Williams played there, to name a few.
Q. How would you react to Red Sox fans “booing”? A. If you can’t perform, you deserve it. I want to get good numbers and hope to get booed at away games.
Q. What is your impression of Boston? A. Never been there, but it has famous universities, museums and hospitals. I’ll like it.
Welcome to Boston, Daisuke.

Also pointed out in the article that, in 2009 the Sox could have a rotation with 5 of the following 7 guys: Beckett, Papelbon, Matsuzaka, Lester, Micheal Bowden, Clay Bucholz, and Daniel Bard. All under 30, only Beckett and Matsuzaka on a large money contract, and only Papelbon in his first year of Arbitration. Tee Hee.


At 11:30 AM, November 16, 2006, Anonymous Steady B said...

Initial thoughts
1. All team merchandise not sold at Stadiums or team stores goes to MLB and gets distributed evenly amongst all of the franchises. So, revenue generated by any D-Mat Redsox jerseys sold in Japan goes to all of the MLB teams.

2. Scott Kazmir is dead to me

3. Next year's free agents pitchers will be led by non other than Carlos Zambrano (so much power it makes me crapp my pants)age 25. and Yes you do give him $16M- $17M.

4. I need to shower and change my pants.

5. Who is this Scott Kazmir guy?

At 12:33 PM, November 16, 2006, Blogger Fletcher Austin McGuffin said...

Color me skeptical that the Cubs are going to let Zambrano go to free agency. He'll have a deal in hand before the All Star Break, if not the season.

I did not know that about the merchandise, but I do know that the Sox are already hammering out broadcast rights with the Japanese to telivise his all of starts, or at least the ones against the Yanks and Mariners. According to Peter Gammons


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