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Article: Minnesota Twins 2019 MLB Draft Signing Tracker

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Now that the 2019 MLB Draft is behind us, it is time to sit back and wait for news on when each of the 41 picks will either sign or decid...
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Article: Zack Littell Changes Role, Changes Mindset

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For the first time this season the Twins win on a walk-off hit from (who else?) Max Kepler. It was the longest game of the season for bot...
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Kepler's Unusual Contract

The Twins announced long-term deals with Max Kepler and Jorge Polanco yesterday. Both are somewhat unusual players with whom to sign to a long-term deal, and thus required an unusual deal, which is fantastic, because truth is often found at the edges. Let’s look at how these contracts usually are structured, how Kepler’s is different, and what it says about the Twins and Kepler.
MLB Salaries 101
Long-term contracts usually follow the same structure as a player’s natural earning power. For the first three years of a players service time, a player makes whatever the team wants, so long as it’s above the major league minumum. In years four through six, the player gets substantial raises, provided the club opts to retain him. The purpose of these raises is to get him close to what he would expect to make in free agency, which happens when he has six full years of service. An established young player could expect salaries that look something like this:
Attached Image: Screenshot 2019-02-15 at 10.36.01 PM.png

The long-term contract for an established young player usually mimics this, taking a little less in each year along with an option year on free agency. He does this because the money is guaranteed. Otherwise, if the player is hurt or never develops, the team can decide not to retain the player in those lucrative arbitration years. The team might also give a small signing bonus up front. So it might look like this:
Attached Image: Screenshot 2019-02-15 at 10.36.01 PM (1).png

An Unusual Challenge
Kepler provides some unusual challenges to this structure. The first is procedural: Kepler is a Super-2 player, which means he got arbitration to start a year early. So even though he’s only in his third year, he was going to make $3.125M this year.

The bigger issue is that Kepler is not an established young player. He’s made peripheral improvements in his nearly three years in MLB, but his numbers have essentially stayed steady and underwhelming. There’s a lot to like in his profile, and he just turned 26 years old this week, plus he’s relatively new to this baseball thing being from Germany. But the later years of a typical contract provide a significant challenge to the Twins.

This year and next year were easy to work out. Even if Kepler doesn’t develop further this year, the Twins would almost surely offer him arbitration for next year, meaning he would get about $6M. His numbers are worth that, and he would be entering his 27-year-old season, which is still on the upswing of a baseball player’s career.

But if he didn’t break through, there is a decent chance the Twins would not offer arbitration for the 2021 season. If they did, Kepler’s salary would be raised to $8-9M, he would be turning 28, and he would be a middling hitting corner outfielder, albeit with good defense. He might improve and be worth that money, but maybe not. And if he stays the course again, there is no way they offer him arbitration in his sixth year.

That pessimistic career arc shows the challenge the Twins faced in working out a long-term deal. If Kepler doesn't develop, a typical long-term deal would really hurt them in the later years. A fiscally conservative (or if you prefer, “cheap”) team can’t guarantee $10M and $12M paydays to someone who might be a below average outfielder. The available spend every offseason is usually $20M - $60M for a team. Losing $10-12M of that hurts.

On the other hand, losing $6M is probably acceptable, especially for a guy who at worst is a solid strong-side-of-the-platoon hitter with good defense. Which is why it’s now time add Kepler’s contract to the chart:
Attached Image: Screenshot 2019-02-15 at 10.36.01 PM (2).png

A Balanced Deal
The Twins lock in a player that is arguably already worth $6-7M to a slew of $6-7M/year contracts. To do so, they pay him an extra $3M this year (remember, he was already going to make $3.25M), guarantee next year (which they almost surely would have done anyway), and then get two years of similar pay without having to worry if he takes a big leap forward. The only really risky year is Kepler’s 7th year, when they pay him $8.5M, so they’re betting on minor breakthrough sometime before he turns 30 years old.

The Twins reward? If Kepler does take that giant leap, he’s a bargain, not just for this year and next (which he already was) but for FOUR more years. I’m a Max fan, admittedly, but even objectively that’s a good risk on a 26-year-old with really good plate discipline and power who has a career .730 OPS, even if he’s a career .233 hitter.

And for Kepler? He’s guaranteed $35M, even if he never takes the next big step. That's nice. Plus, there’s some upside for him too, if he can look out that far ahead. He’ll be able to hit free agency as a 31-year-old, which is a plenty marketable age. If he’s hitting and if salaries bump up a bit, he could be in line for a deal worth twice as much.

The Twins and Kepler have found a middle ground that balances the risk and reward each needed, despite Kepler not being the prototypical extension candidate. What’s more, it appears the Twins were able to do the same with Jorge Polanco, and tomorrow we’ll examine his contract a little more closely, to see what it tells us about the Twins tendencies.

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66 Comments

And it is still the average salary. If you want to subtract out all players that are pre-free agent eligible you actually further my case


Subtracting pre-FA players, especially the pre-arb ones, would significantly raise the average. Probably to the point where $20 mil for a 1 year deal of 2.6 WAR isn't an unreasonable starting point (see Michael Brantley). How does that further your case that the Fangraphs estimate is unreasonable?

 

Then you understand your comparison was apples and oranges?

 

You are isolating a detail of little consequence and ignoring the fact that I already acknowledged 20 million was Max's alleged value in the market.Why keep pursuing this?

 

How does that further your case that the Fangraphs estimate is unreasonable?

As great as Mookie Betts was last year are we going so insane as to believe he is worth $83 million for a 1 year deal in the open market?

 

 

 

I could care less about the methodology used to arrive at this absurdity.When they are telling me that Dozier "could be worth" 46,000,000 dollars in the open market for a one year deal I stop listening.It has nothing to do with reality no matter how clever and detailed it might be.


If you looked closer at methodology, you would see that Fangraphs isn't saying what you think they are saying. They are saying that 6.2 WAR could be estimated to be worth that much on the open market. Now, that itself is of limited utility on the actual market, because projected 6.2 WAR players are extremely rare (Dozier was never one, despite his one 6.2 WAR performance), and they rarely hit the open market, and if they do, they generally don't settle for one year deals.

It's really just another way to illustrate value, for those who are unfamiliar with WAR or the WAR scale. It's not meant to applied in the manner you are suggesting, and indeed Fangraphs has never advocated Dozier to receive anything approaching $46 mil for a single year of his services (even in the hypothetical alternate universe where he was declared a free agent after 2016 because TR originally tendered him a contract after midnight, or Falvey fed him after midnight, or whatever).

In general, dollars per projected WAR can be one data point to start analyzing or predicting deals. And it's not too unreasonable in that context (i.e. Brantley).

You are isolating a detail of little consequence and ignoring the fact that I already acknowledged 20 million was Max's alleged value in the market. Why keep pursuing this?


You used (and are still using?) that little incorrect detail in an attempt to ridicule Fangraphs. I am not pursuing anything other than noting the correction for others.

 

If you looked closer at methodology, 

 

No thank you.Why look bother analyzing.

 

And when you say things like this:

Fangraphs has never advocated Dozier to receive anything approaching $46 mil for a single year of his services

What are you really saying about this methodology I need to look at more closely?To what end?

If it doesn't serve too deal terms applicable to reality I cannot bother with it.

Moreover, how can you use the Michael Brantley example over and over again to give it validity when you say what is in bold above?

 

I will try to answer all your questions but you have ignored all of mine thus far

 

Have a good day.Maybe we can pick this up next week.I have things do as I have an extended weekend and places to go

 

 

As great as Mookie Betts was last year are we going so insane as to believe he is worth $83 million for a 1 year deal in the open market?


No. But 10.6 WAR from a single player could absolutely be worth a ton to a team. Maybe not precisely $83 mil, but it would likely blow our minds compared to the current MLB salary scale.

But, Betts isn't projected to produce 10.6 WAR (no one ever is), and nobody ever that good would settle for a one year deal on the open market either -- they would leverage it over many years and more money.

 

This begs the question.....

How much longer did player salaries need to increase at ridiculous rates?Average player salariesincreased by over 100% from 2001 to 2015.Was this supposed to continue until the end of time?

 

Some rational economic reasoning here. Extrapolation is very risky. I recall a wonderfully humorous article on this subject in the Economist's holiday issue a decade or so ago. One of their examples was that, if one extrapolated the trend at that time, by 2100 everyone in Chicago would be murdered every year! :)

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Carole Keller
Feb 16 2019 10:16 AM

Some rational economic reasoning here. Extrapolation is very risky. I recall a wonderfully humorous article on this subject in the Economist's holiday issue a decade or so ago. One of their examples was that, if one extrapolated the trend at that time, by 2100 everyone in Chicago would be murdered every year! :)


Good thing I won’t be living here by then!
    • PDX Twin likes this
Remember when this was a thread about Kepler? Me neither.
    • Carole Keller, Jerr, Twins33 and 5 others like this
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terrydactyls1947
Feb 16 2019 10:18 AM
Would it be appropriate to ask all the Fangraph debaters to start a new thread and return this thread to the topic of Kepler and his new contract? My opinion (no absolutes, no adement declarations, just the opinion of an old fart) is that it's a good deal for both sides. Securing $35M at age 26 is a damn nice deal for Kepler. With his intellect, he is now financially secure for the rest of his life and can concentrate of becoming the best player he can. The Twins have locked up a player they obviously believe in for seven years for a reasonable amount of money. In a couple years, if he performs well, Kepler will be significantly underpaid. If not, he can become trade material. I like the deal.
    • Carole Keller, Jerr, Mike Sixel and 4 others like this

There’s a lot to like in his profile, and he just turned 26 years old this week, plus he’s relatively new to this baseball thing being from Germany.

 

...and he would be entering his 27-year-old season, which is still on the upswing of a baseball player’s career.

He’ll be able to hit free agency as a 31-year-old, which is a plenty marketable age. If he’s hitting and if salaries bump up a bit, he could be in line for a deal worth twice as much.

Great article, and in return I offer mere quibbles:

 

- Max's baseball experience in Germany is often mischaracterized like that. There is a small but strong American influence there, and he played as a young child, and attended the best baseball academy in that country. Maybe the instruction wasn't quite as good as he'd have gotten at the best places here. But it's far from him having been discovered on a Pacific atoll throwing coconuts into the ocean to conk distant dolphins, and having a tourist show him a baseball and ask, "y'ever seen one a these?"

 

- Age 27 is about when a player had better already have established what he's going to establish, and not hope for further upswing. That's about the point where further learning and experience starts to collide with Father Time eroding the physical gifts.

 

- This off-season free agent market has been a wakeup call for players in their thirties, and additionally with the CBA coming up for renegotiation it's really unclear what the market for Max will be when the time comes. Yes, he'll find employment if he's still capable, but it may turn out in retrospect that players in his age cohort had better have made the vast majority of their lifetime earnings during the period this new contract covers. The times, they are a-changing.

    • USAFChief, caninatl04 and Original Whizzinator like this

FWIW, he would likely be on the sideline with Manny and Bryce waiting to get his money. Seven years for Max Kepler after last year? The Twins clearly like him and trust him. I can't see him getting that kind of security from an organization that didn't raise him.

This contract is unique. We could benefit enormously from it, but I cannot agree with anyone who says he'd get 7 years in the open market. Not until these kinds of contracts for 25 year old guys who hit .224 the season prior become the norm.


I mean, you guys are both right. There's a different scale for Free Agents than extensions. There are opposite pressures. Bidding in the FA market and team control on the extension side. One pulls up, the other drags down.

The cost per WAR on the FA market is skewed because less valuable players drop out the bottom. The guys with positive WAR who aren't signed don't get count as zeros. Players of Kepler's production level are virtually worthless at a certain age because almost every organization has guys with upside who can do what he has done for league min. Or you can sign a retread to a minor league deal or even an ML deal which boosts the number since they're counting the guys who sign and not the ones who don't. Kepler got his money because he's youngish with upside. If his same production were available but he was 31 when most players hit FA the market for him along with the perception of him would probably be platoon or 4th outfielder. League is changing. Skewing toward super stars and rookie deals.
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LA VIkes Fan
Feb 16 2019 10:38 AM

 

The reality is, you can't assess player value as a dollar figure on a static line like that, because the true value of a player by bWAR or fWAR increases the more WAR they contribute. A 6 WAR player (no matter which formulation you like) is worth more than three time aWAR player, because of the scarcity of a 6 WAR player. It's a real guesstimate to assess dollar value on a linear progression like that and mostly applicable to lower WAR players.

 

Back to Kepler: it's a really interesting contract, and probably a fair one for both sides at this point in time. There's risk going both ways as John notes: if Kepler breaks out as a hitter, this is a terrific deal for the Twins. If he doesn't, there's a good chance he'll be overpaid unless he moves to CF full time and can stay a good defender in that role. The front-loading of some of the money is beneficial to both the Twins and Kepler; it's almost always better to get your money sooner if you can for a player, assuming they can manage their money reasonably and not blow through it all and start reaping investment returns sooner. For the Twins, they have payroll flexibility now, this helps them maintain it in the future. (If this were the NFL, this is where a team pays the big bonus in year 1...)

 

I'm a fan of Max, and I hope he has the hitting breakout. There's some data that suggests a change in approach last year that's likely to pay out in future years if he sticks with it. There's also data that suggests he may be who he is as a hitter. We'll see which way it goes.

Very well said. Great job of encapsulating the Kepler conundrum. Peripheral statistics suggest he either broke out last year or is on the verge of breaking out at the plate yet his actual performance was substandard - .224/.319/,408 (.727) with a 96OPS+ last and about the same in the last 3 years. What do you call a corner OF with that bat, strong defense in the corner OF and average or slightly below average CF skills on a good team? The 4th OF. We all think Kepler can or should be more than that but let's not kid ourselves - that's what he is today. Him improving of being replaced by someone better is critical to this team's longer term success. It will be very hard to succeed with a guy hitting like that in RF. 

 

In that context, this deal makes great sense for both sides and accurately allocates risk. Same for Polanco. His lack of Super 2 status and the steriod suspension give him higher risk than most even though he has performed better than Kepler. Both deals are smart for both sides. 

 

I think this also explains why we haven't heard much about deals for Berrios and Rosario. They have performed significantly better than Kepler or Polanco and thus come with a higher upside and less risk. Consequently, they would need numbers 25-40% higher to make a long term deal make sense for them. Ironically, that raises the team's risk profile in the sense that the downside risk is less likely but its bigger because we may be paying one of them 10-15m just as he flames out, not 6 or 7m.I would still do it for both and give a 2-3 year extension to Gibson but that's a harder swallow for the team.  

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puckstopper1
Feb 16 2019 10:58 AM

My initial reaction was that the cost was a bit high and the years a bit long.But after looking at the charts it seems like a fair deal.It is a great contract for the Twins if Max's bat improves, and good stability for Max if he continues to meander offensively. 

 

On its own this contract should not prevent the Twins from spending more to upgrade their team in the future, but when you start adding in others (Polanco, Rosario, Buxton, etc.) that is where the length and amount become a concern.

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TheLeviathan
Feb 16 2019 11:00 AM

 

I think 2018 Kepler in 4 years, on a reasonable 1 year contract with two reasonable team option years, could absolutely still be an asset. Nothing elite, of course, but valuable enough to trade for something useful.

 

In four years Kepler will be 30 and he might not be the same defensive player he is now.At some point during htis contract he's going to have to have enough offense to offset the fact he is getting older.

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Carole Keller
Feb 16 2019 11:03 AM
Does anyone know of any other contracts being structured this way for players at this stage in their careers? I wonder if this could be a trend. I could see this structure potentially being better from a budgetary planning standpoint.
    • Jerr and Original Whizzinator like this
I can't believe people think this price is any kind of barrier to future spending.
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Carole Keller
Feb 16 2019 11:08 AM

I can't believe people think this price is any kind of barrier to future spending.

Uh, who said that exactly?

I think the structure of this would allow for more flexibility, actually.
    • TheLeviathan, gagu and ewen21 like this

 

I can't believe people think this price is any kind of barrier to future spending.

Especially, when the deal won't be any kind of barrier for future trading. Toward the middle/end of the contract, Kepler will be, at a minimum, a solid strong-side platoon option at a corner or 1B. He would be dumpable in a heartbeat at a trade deadline with this contract....if it came to that.

 

Smart deal by Twins...slightly surprised, but not shocked, that Kepler's camp pulled the trigger on this type of deal at this point in time.

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I don't know that I would give someone who profiles so closely to Dan Gladden a contract like this. I would pay him his due share through arbitration and let him go in free agency -- or sooner if an internal option looks more interesting.

 

20 dingers a year just isn't as valuable as it used to be.

FWIW, in the story, I don't mention FanGraphs calculation. I haven't really studied it.

...

Would he have gotten that contract from any other team if he was on the free agent market? Undoubtedly. Would he have agreed to it? I bet not.

It was of course Seth who brought up FG, in the first reply. While well-intentioned, and casts the new contract in a favorable light, I think it is a serious misuse of the notion of dollars-per-WAR. And not for the reasons already brought up.

 

I wouldn't quibble about the exact value per win - you'll find differing values depending on which FG article you look at and which years were looked at, and whether the methodology was forward-looking or backward-looking, among other things.

 

The bigger problem is that the number pertains to free agents. The Collective Bargaining Agreement is structured a certain way. As it has evolved, the premium paid to free agents amounts to the Stupidity Tax you pay for not having developed your own, young, cheap talent, for whatever spot on the roster you have decided is below par. Every team has to pay this Stupidity Tax now and then (so I use the word Stupidity as mildly humorous); on the other hand, no team is now willing to pay also the Luxury Tax that comes on top of paying the Stupidity Tax for every player on the roster. All teams are somewhere between the extremes.

 

Max Kepler was not a free agent. Full stop. Using the free agent Stupidity Tax, as a benchmark, is what one boss of mine used to call "interesting, but not relevant."

 

The CBA makes it so that good players are vastly underpaid their first several years, and maybe marginally underpaid for the next several as well. Your (John's) charts demonstrate this quite well.

 

Any contract extension that is reached during these years of a player's career is going to be shaped partly by the years remaining under team control, partly by the years of free agency being bought out, and partly by the security it gives both player and team.

 

EVERY such contract is going to look good, compared to paying the Stupidity Tax. That doesn't mean an individual contract is good, by itself. Free agency is the wrong benchmark to use. Max Kepler wasn't a free agent. (Yes, that bears repeating.)

 

What difference does it make? None, really, to us fans.

 

But if our front office is congratulating themselves to the degree that Seth suggested, saying that the contract is a steal? Then it's a problem. If I were in Dave St Peter's or Jim Pohlad's position, I'd be very concerned about their acumen and would walk into their champagne party to tell them so. Anyone could load up on players with contract extensions like this, and still not have a very good, or particularly cost-effective, team for competing to make the post-season.

 

I'm sure FalVine are not actually breaking open a bottle of the bubbly this week. :) Max is entitled to - he's now set for life, as he deserves to be in this economy.

 

Like any long-term contract, Kepler's has enough uncertainty that it could turn out to be a steal for the team, or could turn out to be a bust - either outcome won't in retrospect make this any other than what it seems to be, a contract that's about market-correct. If someone with a sharper business eye than mine, or has better forecasting tools, thinks it's team-friendly, it's got to be only by a smidgen.

 

Sprinkle IMO everywhere in the above, to taste.

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But if our front office is congratulating themselves to the degree that Seth suggested, saying that the contract is a steal? Then it's a problem. If I were in Dave St Peter or Jim Pohlad positions, I'd be very concerned about their acumen. Anyone could load up on players with contract extensions like this, and still not have a very good, or particularly cost-effective, team for competing to make the post-season.

 

Precisely.

    • Don Walcott and Original Whizzinator like this

IMHO, Kepler seemed to do better before he started being concerned about launch angle this past year. To me, the drawback when trying to achieve launch angle is that it provides fielders more time to get under the ball for an out. 

 

Remembering the swing of Rod Carew, all he was trying to accomplish was to meet the ball with the bat. Seems like that ended up being a fairly successful approach over time. Also Tony Oliva's saying of see ball - hit ball.

 

Granted, a home run is good every once in a while, but you cant expect to hit the ball out every at bat. Crooked numbers mostly come from having runners on base.

 

Hope Max can get back to the swing and approach that used to work for him.

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TheLeviathan
Feb 16 2019 01:05 PM

 

Uh, who said that exactly?

I think the structure of this would allow for more flexibility, actually.

 

Yeah, my skepticism only kicks in when people try to make the contract too valuable right now and going forward.I think it can be a great value if Kepler starts to hit, but the current Kepler isn't particularly valuable at this price going forward.

 

But a handful of million should absolutely do nothing to impede spending.That impediment starts with a P and ends with Ohlads.

    • Don Walcott likes this

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