Gardner’s Extension: Planting a Seed of Stupidity in Spending

Yankees OF Brett Gardner
Yankees OF Brett Gardner

Brett Gardner is a good baseball player. He has been around since 2008, but he didn’t really get a full-time shot until 2010. He posted a 6.0 WAR in 2010 due to his 97 runs, 47 stolen bases, 79 walks, and solid defense while manning left field  (123 games) and center field (44 games) throughout that season. He followed that up with a good 2011, compiling a 4.9 WAR and leading the American League in stolen bases (49) while seeing his wRC+ fall below 100 (97). The 2012 season was lost due to right elbow surgery (he played in 16 games), and the 2013 season was solid (3.2 WAR), while Gardner become better than league average in creating runs (108 wRC+) while leading the AL in triples (10) and manning center full-time for an injury-crippled Yankee squad.

However, this winter, the Yankees have been very active, acquiring a new catcher in Brian McCann, a solid rotation addition in Japanese import Masahiro Tanaka, and adding one of the elite players on the open market – Jacoby Ellsbury – from their division rival, Boston. This clearly improved the roster and should allow the Yankees to be much more competitive in 2014 and beyond, but with these additions, especially the addition of Ellsbury, Gardner’s name was listed throughout many rumors, as his bat isn’t going to produce the numbers that many corner outfielders are capable of.

On Sunday, the Yankees signed Gardner to a four-year, $52 million extension. Yankees general manager Brian Cashman had this to say about the signing:

“He would be a leadoff hitter and playing center field for most organizations because most organizations don’t have multiple center-field options. There are certain places that need a center fielder and would love to have a leadoff hitter. He fit that criteria, and you have to pay him that way.”

Do you?

Gardner3Are there other teams out there that have two players locked into the same role, and, why, when the club was so cautious (prior to this offseason) of the payroll, was it necessary to give a decent player $13 million per season in average annual value for his age 31 to 34 seasons, when he will, likely, be less likely to run and maintain defensive value?

The Atlanta Braves just signed Andrelton Simmons to a seven-year, $58 million extension last week, so it wouldn’t be ideal for the Braves to try to sign Cuban shortstop Aledmys Diaz to a deal similar to what the Dodgers paid Erisbel Arruebarruena, as both are defensive-minded shortstops, though Simmons showed unexpected pop in 2013. Should the Yankees be excused from this type of investment because of their revenue streams?

Sure, there are other teams that have decided to employ solid defense in the outfield, potentially leaving some runs on the base paths to ensure that it is harder for the opposition to score. The Cleveland Indians, for example, went into the 2013 season with three capable center fielders in their outfield – Michael Brantley in left, Michael Bourn in center, and Drew Stubbs in right – and they became contenders, winning 92 games in 2013 after winning just 68 in 2012. Certainly, Nick Swisher‘s addition, improved production from Jason Kipnis, and surprising seasons from Yan Gomes and Ubaldo Jimenez helped, but…maybe it was the defense.

The Angels had Peter Bourjos penciled into center in 2013 until hamstring and wrist injuries kept him on the disabled list for 106 games in 2013. With Bourjos, Mike Trout, and Josh Hamilton, the Angels, on paper, had a group of three center fielders, as well; although, it would be a reach to consider Hamilton a center fielder at this point. There is also the dynamic offensive numbers that Trout can put up wherever he is playing that separates him from any of the Indians’ outfielders, as well as Gardner – so with Bourjos gone and J.B. Schuck and Kole Calhoun taking his spot, Trout manned center and, once again, posted MVP-caliber numbers while the Angels finished with a disappointing 78 wins.

There are certainly arguments for defensive value that make the Gardner extension reasonable, but $13 million per season seems like a lot of money for the 20th most valuable outfielder in baseball from 2013, tied with Rays’ outfielder Desmond Jennings and Braves’ outfielder Justin Upton with a 3.2 WAR. There are so many other options who could have been more affordable for New York as players like Coco Crisp, Marlon Byrd, and Shane Victorino could have been available to them, and they each posted more productive seasons while earning similar totals to what Gardner will earn from 2015 through 2018. 

Beyond Gardner’s peers, should the Yankees be concerned about his production when compared to his past production?

Season PA HR R RBI SB BB% K% BABIP AVG OBP SLG WAR
2008 141 0 18 16 13 5.7 21.3 0.296 0.228 0.283 0.299 1.1
2009 284 3 48 23 26 9.2 14.1 0.311 0.270 0.345 0.379 2.3
2010 569 5 97 47 47 13.9 17.8 0.340 0.277 0.383 0.379 6.0
2011 588 7 87 36 49 10.2 15.8 0.303 0.259 0.345 0.369 4.9
2012 37 0 7 3 2 13.5 18.9 0.417 0.323 0.417 0.387 0.3
2013 609 8 81 52 24 8.5 20.9 0.342 0.273 0.344 0.416 3.2

His best season will be three-plus years ago when the 2014 season starts and his production has been all over the place since then. You can see that Gardner’s walk rate has gone from 13.9 percent  in his breakout 2010 to 8.5 percent in 2013, while, at the same time, his strikeout rate jumped to a full-season worst 20.9 percent in 2013. Gardner may have been pressing due to a need to be productive with all of the injuries around him, but if he isn’t on base, he isn’t running, and if he isn’t running, where does his value lie? It lies in his defense and if he isn’t playing center field, does that decrease his overall value?

Gardner2Again, there is such a thing as an elite defense, but teams tend to want big offensive production from their corner spots. Brett Gardner is not as sexy in left as he is in center, and with Jacoby Ellsbury unlikely to ever reach the outlier power numbers that he showed in 2011 ever again, there isn’t room for error, regression, or depreciation in Gardner’s skill-set over the next four seasons for him to be worth this investment.

Whether a win is worth $5 million, $7 million, or it is immeasurable, this contract seems unlikely to contain any room for surplus value for the Yankees.

While the Yankees may be able to afford a failed investment that a team like the Reds, Rays, or Pirates can’t, but $52 million for a league-average player doesn’t seem like a wise investment – cost of a win be damned.

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Pretend GM: Signings and Trades That Should Be Made

With the big signing of Masahiro Tanaka by the New York Yankees on Wednesday, the market for free agency and trades could explode over the next several days. With that in mind, I was thinking about some deals that would make tremendous sense for several teams…although, they could just make sense to me. Regardless, here are some deals that I’d like to see made over the next few weeks before pitchers and catchers report.

Cincinnati Reds Trade Brandon Phillips to the New York Yankees for Brett Gardner

PhillipsWhy This Trade Makes Sense: The Yankees clearly want to get back to the top, as their $155 million investment in Tanaka showed. With Brian Roberts, Kelly Johnson, and Scott Sizemore as the current options at second base, New York could use a more reliable name to replace Robinson Cano. While the Reds don’t have an immediate replacement ready for Phillips (outside of Henry Rodriguez or another position change for Billy Hamilton), they need to clear some payroll in order to lock up Mat Latos, Johnny Cueto, and Mike Leake, all of whom are eligible for free agency after the 2015 season, as well as Homer Bailey, who will be a free agent after the 2014 season. Phillips, who is due $50 million over the next four years, could be a bargain based on the current market, while his ability to play defensively at an elite level will provide quite a bit of value, as well. Gardner is unlikely to provide the on-base skills that Shin-Soo Choo provided last season in Cincinnati, but he would provide elite-level defensive skills, speed, and solid on-base skills (career OBP of .352). Gardner, earning $5.6 million in 2014 prior to reaching free agency after the season, would be an upgrade over a 2014 version of Hamilton, while providing quite a bit of financial flexibility to shore up the rotation for the coming seasons in Cincinnati. Even if Cincinnati had to chip in $10 million in salary relief, it would be an interesting deal for both clubs.

Baltimore Orioles Sign A.J. Burnett to a one-year, $14 million deal

burnettWhy This Signing Makes Sense: In 2012, the Baltimore Orioles surprised the world by contending and finishing 2nd in the AL East with 93 wins. In 2013, there was a slight regression, as the team dipped to 85 wins after doing very little over the offseason. The Orioles have been very active in the minor league free agent market this winter, but they could use a splash, and Burnett would be a tremendous addition to the club’s rotation. Chris Tillman, Wei-Yin Chen, Miguel Gonzalez, Bud Norris, and Kevin Gausman make a good, young rotation, but Burnett would be the anchor for the staff, and his presence would allow the club to move Norris to a (more appropriate) bullpen role. Burnett is from Maryland and he has been rumored to be retiring if he doesn’t re-sign with Pittsburgh, but Baltimore is close to home and he can keep his wife happy, and the spare change for one year would be worth it for both sides. Burnett rebuilt his value with two tremendous seasons with the Pirates, and he is worth a one-year deal for Baltimore for another shot at the AL East for the tattooed right-hander. Sure, it seems like it is going to be Pittsburgh or bust, but the Orioles are contenders with a healthy Manny Machado and consistent production from Adam Jones, Chris Davis, and Matt Wieters – the O’s need to do their due diligence here.

Toronto Blue Jays Sign Matt Garza to a five-year, $60 million deal (I know he was rumored to have signed with Milwaukee for four-years, $52 million pending a physical, but it isn’t official…yet)

GarzaWhy This Signing Makes Sense: The Jays need another solid option in their rotation to compliment R.A. Dickey, Mark Buehrle, and Brandon Morrow, so that their offense isn’t wasted on sloppy rotation options like Esmil Rogers, Ramon Ortiz, Aaron Laffey, and Rickey Romero, who combined to make 27 starts last season. While Garza has some injury concerns, the Blue Jays have already given him a dynamic weapon – Dioner Navarro. With Navarro as his catcher, Garza has logged 338.1 innings and managed a 3.25 ERA and a 1.26 WHIP, while Garza has posted a 4.07 ERA and a 1.29 WHIP with anyone else behind the dish. While there is risk involved due to Garza spending 170 team games on the disabled list the last three seasons with right shoulder and elbow injuries, the Jays need a pitcher who is capable of pitching in the AL East (Garza has done it before), can toss 180 or more innings (Garza has done it four times), and would be a significant upgrade over Rogers, Todd Redmond, and J.A. Happ, while the club waits for Marcus Stroman, Aaron Sanchez, Alberto Tirado, Daniel Norris, and Sean Nolin to reach the majors. Garza may not be a number one starter, but he is a strong number two or three option on a club that should compete with an absolutely loaded offensive group.

Philadelphia Phillies Sign Ubaldo Jimenez to a five-year, $85 million deal

Why This Signing Makes Sense: The Phillies first round pick, seventh overall, is protected, so while Jimenez would require draft-pick compensation, it would only be a second round pick going to Cleveland for Jimenez. After a tremendous second half in 2013 (1.82 ERA, 1.14 WHIP over 84 innings), Jimenez rebuilt his value, and, at the age of 30, would be a solid right-handed option for the Phillies to place between Cole Hamels and Cliff Lee. Jimenez has had some success during his career in the NL East:

I Split W L ERA GS GF CG SHO IP H R ER HR BB SO WHIP SO/9 SO/BB
Atlanta Braves 3 5 3.79 9 0 1 1 54.2 47 25 23 6 28 66 1.372 10.9 2.36
Miami Marlins 1 2 4.07 5 0 0 0 24.1 23 19 11 1 16 31 1.603 11.5 1.94
New York Mets 2 3 3.40 6 0 0 0 39.2 27 15 15 4 21 29 1.210 6.6 1.38
Washington Nationals 5 1 2.61 7 0 0 0 48.1 39 14 14 1 16 36 1.138 6.7 2.25
Provided by Baseball-Reference.com: View Original Table
Generated 1/22/2014.

For those who don’t want to do the math, Jimenez is 11-11 with a 3.39 ERA, 1.30 WHIP, and a 162:81 K:BB over 167 innings and 27 starts, and while that isn’t perfect, especially in a ballpark that is more favorable to hitters, Jimenez should, at least, be worth the money as an innings eater if he isn’t elite like he was in the second half of 2013. The Phillies may not be contenders, but they’ll always be spenders. They don’t have any arms ready in their system and Jimenez would be a huge upgrade over Roberto Hernandez and Ethan Martin, who appear to be options for the rotation currently.

Oakland Athletics Sign Nelson Cruz to a three-year, $27 million deal

Why This Signing Makes Sense: The Cruz market appears nearly dead after there was draft-pick compensation added to a PED suspension, but Cruz is still just 33 and he is coming off of an All-Star season with solid production (27 home runs and 76 RBI in just 109 games). With very little interest and risk involved, it’s the perfect opportunity for Oakland to swoop in and make an interesting signing. While the club has some solid right-handed pop in Yoenis Cespedes and Josh Donaldson, the remainder of the lineup is filled with left-handed hitters, including Josh Reddick, Eric Sogard, Brandon Moss, as well as switch-hitters Coco Crisp and Jed Lowrie. Another right-handed, middle-of-the-order bat would be a tremendous addition, as Reddick or Moss could sandwich between Cruz and Cespedes, providing quite a bit of value and production for a team that struggles to find offense in a cavernous home ballpark. However, Cruz has struggled in Oakland, posting a .192/.248/.352 triple-slash in 202 career plate appearances there. The late first round pick and discounted contract, though, could be enough to overlook his struggles, while providing a little more punch to the Oakland lineup.

Texas Rangers Sign Bronson Arroyo to a two-year, $24 million deal

ArroyoWhy This Signing Makes Sense: Arroyo has been homer prone in the past and doesn’t have the stuff to avoid bats, but he has averaged 211 innings pitched over the last nine seasons and is someone whom the Rangers could count on with Colby Lewis and Matt Harrison coming back from injuries and Derek Holland on the shelf until mid-2014. Arroyo survived in a bandbox in Cincinnati over the last eight seasons, so he would be just as likely to post 200-plus innings and an ERA around 4.00 in Texas, especially with spacious ballparks like those in Seattle, Oakland, and Anaheim within the division. There isn’t draft-pick compensation tied to Arroyo, and with Masahiro Tanaka gone and no real hope of acquiring David Price in a trade, the Rangers just need five starting pitchers, and Arroyo is a nice, reliable addition for the middle or back-end of the Texas rotation.

Atlanta Braves Trade Alex Wood to the New York Yankees for Gary Sanchez

Why This Trade Makes Sense: C.C. Sabathia, Masahiro Tanaka, and Hiroki Kuroda make a great top three and Ivan Nova showed drastic improvements last season, but the Yankees are relying on David Phelps, Michael Pineda, Adam Warren, and Manny Banuelos at the back of the rotation in 2014. While Alex Wood has one of the more violent deliveries you’ll ever see, he has solid stuff and is ready to be productive immediately in a major league rotation. With Brandon Beachy healthy and David Hale and Gavin Floyd capable of filling the back of the Braves rotation, Wood could be expendable for Atlanta to seek a long-term option at catcher with the departure of Brian McCann to the Yankees via free agency. Evan Gattis has a lot of power and Christian Bethancourt has tremendous defensive skills, but neither seem like strong options as an everyday catcher for Atlanta. While Sanchez still needs some seasoning and he could use a change of scenery due to his makeup and maturity concerns, the Braves have several upcoming arms, as usual, and they have a long-term need at catcher. Sanchez could be the answer and the eventual elbow surgery that Wood will need is worth this type of deal for Atlanta, and the production that the Yankees get out of Wood could be useful, as well.

Should MLB Teams Refuse the Mega-Contract?

Another free agency period is ahead with another Major League Baseball offseason. With so many superstars being signed to lucrative contracts with their existing clubs, players who reach free agency can make exorbitant amounts of money due to fewer players being available and television contracts that teams are using as revenue generating machines. With that being said, is a big-time contract a smart investment for a needy team this winter?

The Yankees as a Model

With Robinson Cano heading towards free agency after the 2013 season, the New York Yankees will be faced with a decision that could alter their original plan of getting under Major League Baseball’s $189 million luxury tax threshold. With $92.4 million due to six players (Alex Rodriguez, C.C. Sabathia, Alfonso Soriano (the Cubs are covering $13 of the $18 million owed to him), Mark Teixiera, Vernon Wells (the Angels are covering $18.6 of the $21 million owed to him), Ichiro Suzuki, and Derek Jeter (who has an $8 million player option), the Yankees, on the surface, appear to have some wiggle room in an offer to their superstar second baseman; however, the players mentioned above are the only players with guaranteed contracts next season.

Yankees vs. MarinersAdam Warren, David Phelps, and Eduardo Nunez are all pre-arbitration, so they can have their contracts renewed at the league minimum, but the club will have to deal with David Huff, Chris Stewart, Francisco Cervelli, Michael Pineda, Ivan Nova, Jayson Nix, Shawn Kelley, Brett Gardner, and David Robertson within arbitration, and determine whether Cano, Hiroki Kuroda, Kevin Youkilis, Andy Pettitte, Phil Hughes, Mark Reynolds, Boone Logan, Travis Hafner, Joba Chamberlain, and/or Lyle Overbay are worthy of being tendered a qualifying offer prior to reaching free agency. With up to 19 spots available for next season, the remaining $96.6 million doesn’t appear to be going very far.

While relief could be on the way with a possible 2014 suspension for Alex Rodriguez, from which his $25 million contract would be forfeited, the long-term contracts that the Yankees have handed out like candy are now causing financial issues as the club’s attendance continues to decline (43,733 in 2012 vs. 40,002 in 2013) along with the talent of the aging players.

Consider this:

Alex Rodriguez is 37 years old and is owed $86 million over the next four years.

C.C. Sabathia is 32 years old and is owed $76 million over the next three seasons (including his 2017 buyout).

Mark Teixiera is 33 years old and is owed $67.5 million over the next three seasons.

The three have been worth a combined WAR (Fangraphs) of 2.6 in 2013 while costing the Yankees $73.5 million in salaries. For comparisons sake, San Diego third baseman Chase Headley, Atlanta third baseman Chris Johnson, San Diego outfielder Chris Denorfia, Baltimore outfielder Nate McLouth, and San Francisco shortstop Brandon Crawford have each posted a 2.6 WAR in 2013…individually. If the Yankees had all five players this season, they would have spent just under $16 million, about $6.5 million less than they spent on Teixiera alone in 2013!

Why These Contracts Don’t Make Sense

By investing large sums of money into veterans when they reach free agency in the post-steroid era, teams are taking immeasurable risks.

1) They are assuming that a high-performing player will be capable of producing into their mid-30’s, and…

2) They are assuming that the high-performing player will stay healthy enough to be worth the investment.

When a player reaches free agency, they have at least six years of major league experience. The player likely had three seasons of pre-arbitration followed by three years of arbitration prior to reaching free agency. Considering that most players make their debuts between the ages of 21 and 24, a free agent is typically between the ages of 27 and 30. The magic prime age in baseball is apparently going to happen in a player’s age-27 season, lasting roughly three to five seasons. A player has reached their physical peak at this point, which allows the player to utilize their various tools to take advantage of the opposition through the use of their experience and mental approaches gained through those experiences. When a multi-year contract is given to a player at the age of 30, say a five-year contract, and that player is then declining for nearly three-fifths of the contract, what is the value to the club? Without performance-enhancers, normal aging processes, such as shoulder fatigue for aging pitchers and chronic knee soreness for a veteran position player, become normal once again. Can teams count on a 39-year-old shortstop to play in 162 games? Ask Derek Jeter how his season went.

Unfortunate Recent Examples

Albert Pujols signed his ten-year, $240 million deal with the Angels following his age-31 season in St. Louis. To make the deal more affordable and to allow the Angels some financial flexibility, Pujols’ contract was heavily back-loaded, meaning he will be making the most money at the end of his contract when he is approaching or passing the age of 40. In fact, in Pujols’ tenth season with the Angels, he is scheduled to make $30 million, the highest annual salary within his contract. After making a combined $28 million in 2012 and 2013, Pujols’ contract will jump to $23 million in 2014 and climb $1 million each season before reaching $30 million in 2021.

VottoHowever, Pujols hasn’t really lived up to the contract based on his production over the first 11 seasons in the majors, as he has posted the lowest WAR of his career in consecutive seasons (3.7 in 2012 and 0.7 in 2013). He was shutdown on August 19 due to a partial tear of his left plantar fascia and he  should be ready to go next season; however, since he isn’t undergoing surgery, how well will this injury heal? Although the tear supposedly did what the surgery would have, one has to wonder if it can be aggravated, torn further (since it is still a partial tear), and debilitating enough to plague Pujols throughout the remainder of his massive contract.

And what about the contract that the “small-market” Cincinnati Reds gave to Joey Votto? The Reds handed Votto a ten-year, $225 million extension in April of 2012. The contract hasn’t even started yet, as the first year of the extension will be the 2014 season, Votto’s age-30 season. For ten years, the Reds will hope that Votto will produce numbers similar to his 2010 MVP season, something that he hasn’t seemed capable of reproducing over the last three seasons, despite leading the National League in on-base percentage the last three seasons, four including 2010. When you consider that the Reds are winning in 2013 and they still average just 31,479 in attendance (16th in MLB), how will the team be able to contend when Votto is making $25 million per season beginning in 2018, when he is 34 years old?

Even worse, the contract that the Philadelphia Phillies gave to first baseman Ryan Howard. Howard received his extension in April of 2010 and it didn’t go into effect until the 2012 season, a five-year, $125 million deal that would begin in Howard’s age-32 season. Since the start of the 2012 season, Howard has played in 151 games while posting a .244/.307/.445 line with 31 doubles, 25 home runs, 99 RBI, and a whopping 194 strikeouts in 609 plate appearances. The previous seven seasons, Howard had a .275/.368/.560 line with an average of 26 doubles, 41 home runs, and 123 RBI per season, and that was including his declining 2010 and 2011 seasons, in which Howard posted the lowest OPS of his career (.859 in 2010 and .835 in 2011)…that was, of course, until his dreadful 2012 season (.718 OPS).

The Problem With TV Deals

I was able to get a response from Baseball Prospectus’ Ben Lindbergh when I asked him via Twitter, “Do you think MLB teams are going to shy away from mega contract due to the Pujols/Howard/Hamilton deals in post steroid era?” His response:

The TV money, which was mentioned previously, is an interesting enhancement to the revenue stream for major league teams. With the Los Angeles Dodgers getting over $6 billion over 25 years from Time Warner in  their TV deal, which will give the club nearly $240 million per year in revenue, the already crazy expenditures of the boys in blue could become even more egregious this winter. The club seems capable of locking up left-hander Clayton Kershaw to a contract worth $30 million per season or more this winter, AND signing Robinson Cano to take over second base from Mark Ellis, who has a $5.75 million option for 2014 or a $1 million buyout. By taking on those types of contracts on top of the Carl Crawford ($20.25 million in 2014), Matt Kemp ($21 million in 2014), Adrian Gonzalez ($21 million in 2014), Zack Greinke ($26 million in 2014), and Andre Ethier ($15.5 million in 2014) deals, the Dodgers will be willingly entering the luxury tax threshold in an effort to win the World Series.

KempBut what happens when money can’t buy titles? The New York Yankees seemed to always have the highest payroll in baseball and they haven’t won the title every season. Spending doesn’t quantify wins, it is, as Lindbergh referenced, the winner’s curse. This concept is outlined in Colin Wyers 2009 Baseball Prospectus piece titled The Real Cursewhich Wyers states:

The market for baseball players seems to more closely resemble a sealed-bid auction than it does a market. Since the person who wins that sort of auction is typically the person with the largest bid, it stands to reason that the person who “wins” is in fact the person who overbids…

The curse is then being the winning bid on a contract that was probably more than what another team was willing to bid. By evaluating players and making smart investments, teams that break the curse are able to get production out of what they spend, while teams that suffer from the curse are those that fail to get production out of their investment, as in the suffering that the Cubs went through with Alfonso Soriano, the joint suffering of the Blue Jays and Angels over the Vernon Wells contract, and the Giants’ suffering through the Barry Zito contract.

When spending goes wrong, it can financially cripple a franchise, who is then responsible for allocating funds to an under-performing player while still trying to field a competitive team around that player. Teams seem more likely to take those types of risks, though. Due to the incoming revenue from the TV deals, teams like the Cleveland Indians, who celebrated the sale of the franchise owned SportsTime Ohio to Fox Sports this winter by signing Michael Bourn and Nick Swisher, are more capable of making these potentially fatal bids.

Will the money continue to be there for clubs to take on these large, risky contracts?

Pete Kotz had an amazing story about the leagues finances, and while discussing television deals, he says:

With no one saying no, the networks see sports as a no-lose racket, with ESPN as its piper. The sports channel charges cable companies $5 a month per customer, by far the highest monthly fee in national television. While that may seem a pittance, it’s big money when spread over the 100 million U.S. households with pay TV. And it’s made the other big boys envious.

NBC and CBS have launched their own sports channels. Another from Fox is on the way. Even regional sports channels are starting to broach that $5 mark. Their bet is that viewers will always be willing to pay more. And more. And more.

…Today, the average TV bill rests at $86 per month, about half of which pays for sports programming. That’s more than double a decade ago. So it’s no coincidence that the cable and satellite industries have been jettisoning customers for nine years straight.

 “I can’t tell you what will be the trigger,” says Matthew Polka, president of the American Cable Association. “But I am certain that at some point in the very near future, that balloon will burst.”

As cable and satellite customers are forced to pay more and they continue to leave those companies in an effort to save money, the money will eventually not be coming in. The cable and satellite companies will likely battle with the club’s networks to get lower rates, and there could be something drastic, like CBS being taken away from major markets. Eventually, the boom in finances and long-term contracts will go away and the inevitable crash will make it harder for clubs to make large financial commitments to star players. Imagine if the housing market was responsible for financing people’s salaries and when the market for home sales crashed how disastrous that could have been…but it did and it was miserable for the entire economy.

Major League Baseball is exempt from some things due to anti-trust laws, but nothing is too big to fail.

Who Is Worth a Mega-Contract?

harper troutIt may seem easy to say that locking up players within their pre-arbitration or arbitration years to lucrative, long-term contracts seems more intelligent than waiting until free agency, as the annual salaries can slowly increase rather than starting and sitting at $25 million per year for eight straight seasons. A few examples of players who could be worth a long-term investment in this scenario:

  • Angels’ outfielder Mike Trout is earning $510,000 in 2013 and he is pre-arbitration in 2014 before being eligible for arbitration in 2015, 2016, and 2017. If Trout continues his torrid pace for the next four seasons and reaches free agency in 2018 at the age of 26, what types of maniacal offers will he be receiving at that point?
  • Nationals’ outfielder Bryce Harper signed a major league contract and will be arbitration eligible in 2016, 2017, and 2018 before reaching free agency at the age of 25 in 2019. Like Trout, he has posted absurd numbers, given his age, and, with Scott Boras as his current agent, could own half of a franchise based on what he will be offered in free agency.
  • Orioles third baseman Manny Machado, Nationals’ right-hander Stephen Strasburg, Marlins’ right-hander Jose Fernandez, Marlins’ right-fielder Giancarlo Stanton, and Mets’ right-hander Matt Harvey (upon his return in 2015 from elbow surgery…if he is just as productive and dominant) are additional players who fit this mold.

Why are these types of players worth a long-term investment? Because they are young, producing prior to their prime years, and are more likely to continue producing towards the end of a 10 to 15 year extension than a player who turns 40 or 41 in year ten of their long-term contracts, like Joey Votto and Albert Pujols.

These are the types of mega-contracts that seem more reasonable and realistic for franchises, while being less likely to provide a curse on the investing bidder. Because the player is within the grasp of the franchise already, the team has all kinds of data available to analyze, they have coaches and front office personnel who have strong relationships with the player, and the fan-base, media, and community surrounding the player are already familiar, so it could be assumed that there are fewer outside influences that could impact player performance.

SeligRegardless of the potential that these younger players possess, any long-term contract remains a risk for the franchise. If the clubs suddenly refuse to offer these types of contracts, however, the league and its owners would likely be accused of collusion. The mega-contract isn’t going away anytime soon. Despite future reluctance to meet the demands of players and agents to attain these large salaries, there will likely be enough money, or a few teams with large enough revenue streams, for at least one of these deals to be made each offseason. As fewer and fewer star players seem to reach free agency due to long-term commitments with their existing franchise (like Votto, Troy Tulowitzki, and Carlos Gonzalez), the stars that do reach free agency will likely continue to get the lucrative deals.

How Can You Rebuild the Yankees?

Keith Olbermann reported on his MLBlog on October 17 that the New York Yankees and Miami Marlins are already discussing a deal involving Alex Rodriguez once the season is over. This is big news due to the struggles of Rodriguez during the postseason, 3-for-23 (.103) with 12 strikeouts, and that fact that the quickly aging veteran is due another $114 million over the next five seasons.

Alex Rodriguez is taking a lot of heat for his struggles, as if he is the only player currently struggling during the club’s rotten postseason. Mind you, Robinson Cano is 3-for-36 (.083) and Curtis Granderson is just 3-for-29 (.103) with 15 strikeouts, so what is the deal with the hatred for the game’s highest paid player? The Yankees have bigger issues, including, how are they going to rebuild the franchise if the potential trade of Alex Rodriguez actually does happen?

Courtesy: Wikipedia

Moving Alex Rodriguez would signify a possible change in philosophy. While the Yankees have spent many hundreds of millions in payroll over the last decade, could this be the end of “buying” the talent, all because of an apparent very quick regression in some of their talent?

The Yankees have some things to look at with their current roster:

After that, the Yankees have some payroll concerns:

  • Alex Rodriguez, as mentioned before, is owed $114 million over the next five years.
  • C.C. Sabathia is due $119 million (counting his $25 million 2017 option) over the next five years.
  • Mark Teixeria is going to make $90 million over the next four seasons.
  • Derek Jeter will make $17 million in 2013 and either $8 million in 2014 or a $3 million buyout.
  • Rafael Soriano is guaranteed $14 million in 2013.

The problem with trading Alex Rodriguez is that the Yankees would have to eat a huge portion of the $114 million that he is owed. Since 2007, A-Rod’s OPS has gone from 1.067 (his MVP season) to .965, .933, .847, .823, and finally .783 in 2012. At the age of 37 (turning 38 next July), why would anyone give anything of value for the declining future Hall of Famer?

Dealing Rodriguez to the Miami Marlins for Heath Bell and Logan Morrison would be a solid deal, even paying $50-70 million of his deal, so that the team gets more bullpen help and a potential replacement in an outfield corner with Swisher and Ichiro both headed to free agency. However, that deal probably would not sit well with fans.

Should the club let all of their free agents depart, will they go after Josh Hamilton in free agency? Could Hamilton’s previous off-the-field issues, which he still admits to battling, become a huge issue in the largest media market in the world?

Should the club trade Granderson and/or Cano on top of dealing Rodriguez, just to allow the franchise to make a fresh start, like the Boston Red Sox deal with the Los Angeles Dodgers, which included the contracts of Josh Beckett, Carl Crawford, and Adrian Gonzalez?

For what it is worth, dealing Alex Rodriguez would open up third base in one of the weakest years for free agent third base in recent memory, including: Miguel Cairo, Mark DeRosa, Alberto Gonzalez, Brandon Inge, Maicer Izturis, Jose Lopez, Scott Rolen, Drew Sutton, and, if their options aren’t picked up, Ty Wigginton and Kevin Youkilis.

Courtesy: NY Times

Would the club really go into the season with Eduardo Nunez at the hot corner? General Manager Brian Cashman would have to look in the mirror and commit to a potential rebuilding mode if that is the case.

While Alex Rodriguez has struggled and his value and stock has plummeted, the unfortunate facts are that the Yankees would be and will be better with him at third base in 2013 than they would be by making a trade. Unless the Bronx Bombers were able to trade Robinson Cano to Baltimore for Dylan Bundy and Manny Machado after trading Rodriguez, starting to make trades to change the structure of the team just does not make sense.

Cashman would have to make several trades involving star players and huge contracts, just to fill the several holes that would remain from the various deals. If you trade Rodriguez, he would need to trade for a third baseman. If he traded Cano, who would play second? If he traded Granderson, he could possibly get Hamilton, but what if the Red Sox or Rangers outbid him?

You can’t rebuild the New York Yankees. Brian Cashman is in a situation where he needs to win, in a market and a fan base that wants to win – see the attendance in the ALCS. The club will rebuild by reloading, like they have done, through free agency. They will acquire a top-tier or solid starting pitcher and a solid outfielder, and they will be right back where they were. They will probably have the veterans mentioned in potential deals, as well, because it is not worth the potential hassle of dealing the contracts and taking so much less in value, just to make a change.

GM for the Day: New York Yankees

What a difference a weekend makes, huh?  When the Yankees were showcasing a starting rotation that looked just a little better than the dung that the Red Sox call a rotation, with Ivan Nova, Phillip Hughes, A.J. Burnett and Freddy Garcia behind C.C. Sabathia, it looked like they were heading in the wrong direction, as well.  Suddenly, the Yankees traded super-prospect Jesus Montero to Seattle for Michael Pineda and they signed Free Agent Hiroki Kuroda, then you’re wondering what role two of Burnett, Hughes, and Garcia will have with the club in 2012.  The roster is still aging, and the contracts that were forced to Alex Rodriguez and Derek Jeter will probably come back to bite them in the buttocks, but they still have one thing going for them.  Money…and lots of it.  Here is a look at the current 25-man roster:

2 Catchers: Russell Martin and Francisco Cervelli

1B: Mark Teixeira

2B: Robinson Cano

3B: Alex Rodriguez

SS: Derek Jeter

LF: Brett Gardner

CF: Curtis Granderson

RF: Nick Swisher

DH: Andruw Jones

Bench: Eduardo Nunez (INF), Ramiro Pena (INF) and Chris Dickerson (OF)

Starting Pitchers: C.C. Sabathia, Ivan Nova, Hiroki Kuroda, Michael Pineda, and Freddy Garcia

Relief Pitchers: Mariano Rivera, David Robertson, Rafael Soriano, Boone Logan, Corey Wade, Phillip Hughes and A.J. Burnett

You have Garcia, who can’t be traded until June due to his contract, at the back of the rotation to build value.  He could be bumped for Burnett, who still has two-years and $33 million on his deal, to see if they can get something out of their investment.  He could be bumped for Hughes, who will need to show something to become a part of the Yankees future.  It’s a nice “problem” to have, especially after looking lot a hot mess just a week ago.

The offense is an interesting blend.  They have a young, speedy left fielder in Brett Gardner (28).  They have the future of the organization, their best and most valuable asset, Robinson Cano.  They have a slugger in his prime who has changed his swing and become a menace to pitchers around the league, Curtis Granderson.  Then, they have the declining stars: Jeter, Rodriguez, and Teixeira.  Why is Teixeira’s name there?  He’ll be 32 in 2012 and his OPS since joining the Yankees in 2009: .948, .846 and .835; however, people tend to focus on Jeter’s decline and A-Rod’s decline because it has been so obvious.  When Rodriguez opted out of his contract after the 2007 season, did they really think that a 10-year deal for a 32-year-old was a good idea?  Well, do the numbers 138, 124, 137, and 99 mean anything to you?  Those are the number of games Rodriguez has played since 2008.  Not to mention his OPS has dropped from  Good luck with Pujols, Angels.  Jeter will be 38 in 2012 and he has declined since 2009; however, not as drastic as some would think.  He did have a .297 AVG and .355 OBP in 2011, but it’s the .388 SLG that is killing his “value.”  His WAR was a career worst 0.7 in 2011.  He still has value…he just isn’t driving the ball and his range stinks.  Jeter certainly isn’t worth the 3-year, $51 million deal he got before 2011.  Public relations can be a bitch.

So, what can the Yankees do from here?  They could get a DH.  Rumors have Hideki Matsui, Johnny Damon, Jorge Posada and Lou Gehrig returning to the Yankees…Actually, add Carlos Pena, Raul Ibanez, and Vladimir Guerrero to the list of “legendary” Yankees.  All of these guys can get coffee for $1 at McDonald’s all day (old…), but they could be had for pennies on that dollar.  Due to the left-handed power alley, I’d take Carlos Pena.  Pena is also a solid defender at first, so he could spell Teixeira there on occasion.  The Yankees could then put Jones into a reserve outfielder or right-handed platoon at DH-role, utilizing his power and strengthening the bench.  Chris Dickerson is a decent 4th outfielder, and suddenly, the Yankees are just as poor as the Red Sox and can’t pay a luxury-tax.  Cry me a river big market.  Welcome to reality!  They’ll settle with Dickerson there.

The rotation is set, the bullpen is loaded, and you have depth with Hughes, Burnett, and/or Garcia in the pen.  I wonder when over-working kills Robertson the way that it killed Scott Proctor, but ride him while he’s there.  The Yankees are basically locked in at this point with the roster.  A DH is about all you’ll see them reach out for, and they should be able to get a veteran that wants to win a championship to sign on the cheap to fill that role.  So, this is the new roster based on my simple moves:

2 Catchers: Russell Martin and Francisco Cervelli

1B: Mark Teixeira

2B: Robinson Cano

3B: Alex Rodriguez

SS: Derek Jeter

LF: Brett Gardner

CF: Curtis Granderson

RF: Nick Swisher

DH: Carlos Pena

Bench: Andruw Jones (DH/OF), Eduardo Nunez (INF) and Chris Dickerson (OF)

Starting Pitchers: C.C. Sabathia, Ivan Nova, Hiroki Kuroda, Michael Pineda and A.J. Burnett

Relief Pitchers: Mariano Rivera, David Robertson, Rafael Soriano, Boone Logan, Corey Wade, Phillip Hughes and Freddy Garcia