Neal: Twins in on Ervin Santana

[nicksaviking]

I'd rather do 2/40 than 4/60.  

 

Any chance the Twins would be creative and front load the hell out of a multi-year deal?  The free agent market is awful this year, there's next to nothing to buy, blow your cash now and if you can't resist the urge to give Santana multiple years, can those last years be at a significantly reduced salary; ie a salary this team wouldn't be afraid to eat?  

[jay]

Yes...bench them. Or release them and pay them not to pitch.

 

If you sign nobody, you have the minor leaguers, and the money. The minor leaguers might win baseball games, the money won't. You have no choice as to who is in the rotation.

 

If you sign someone, you have him, and the minor leaguers, and don't have the money. You have the choice of who's in the rotation. Two choices to win games.

 

If the goal is to earn a large profit, option one seems like the better choice.

 

If the goal is to win baseball games, now and in the future, the second option seems wiser.

I can appreciate the simplistic logic, but I think it ignores too much to be applicable.

 

The loss illustrated in "Sign nobody" doesn't happen. By signing nobody, the Twins get to keep someone. The opportunity to have someone pitch doesn't change. It's not an either-or situation.

 

In "Sign someone", the Twins face opportunity costs around roster spots and salary commitments. That opportunity can be applied to any number of options -- a higher dollar FA like Santana, an upside guy like Anderson, an innings eater, a minor league free agent, etc. -- but each has their own appeal of positives and negatives.

 

All of that said, I do agree with the idea of signing a pitcher like Santana this offseason if possible. In my assessment of the next few seasons, I see the Twins having the realistic financial capacity to take on a contract like the one being discussed here for Santana.

 

However, it's not realistic to say or think that capacity is limitless. If the front office thinks this is the right guy and the right time to do it, then let's get him.

[USAFChief]

I can appreciate the simplistic logic, but I think it ignores too much to be applicable.

The loss illustrated in "Sign nobody" doesn't happen. By signing nobody, the Twins get to keep someone. The opportunity to have someone pitch doesn't change. It's not an either-or situation.

.

The opportunity to have someone pitch--and I'd call it an obligation, not an opportunity...pretty sure you can't have a baseball game without a pitcher--doesn't change, but the opportunity to have more choice in who that someone is does change. That's the point.

 

As for opportunity costs, you seem to be arguing signing someone costs you the opportunity to sign someone else. Wouldn't that then result in the same opportunity costs? What's the point of saving opportunity if you can never use it, because doing so results in the loss of opportunity?

[USAFChief]

Simple. One vote for Chief as GM

.

Much appreciated.

 

But my guess is you'll pull your support once I'm forced to go on record with my positions on pitch framing and defensive metrics. ;-)

[jorgenswest]

Much appreciated.

But my guess is you'll pull your support once I'm forced to go on record with my positions on pitch framing and defensive metrics. ;-)

How much different can it be than what we have now? You have my vote.

 

Your first order if business is get Santana.

[howeda7]

I'd rather do 2/40 than 4/60.  

 

Any chance the Twins would be creative and front load the hell out of a multi-year deal?  The free agent market is awful this year, there's next to nothing to buy, blow your cash now and if you can't resist the urge to give Santana multiple years, can those last years be at a significantly reduced salary; ie a salary this team wouldn't be afraid to eat?  

What's the benefit of front-loading it? There's no salary cap and Jim and Billy are out the same $$ either way. Doing that to enable your own arbitrary salary cap is the height of stupidity. There's still time value of money at work. If I was Pohlad and Ryan told me that I'd fire him.

[jorgenswest]

I see some value in front loading. If the Twins have the payroll space now, use it. If it isn't used, it won't be used later. The contracts need to be the same value, but not the same dollars. The sum of the annual salaries in a front loaded contract would be less.

 

The Twins are going to need to do something to top the Giants offer. Offering the same dollars and front loading the money would top the Giants offer.

[SwainZag]

I see some value in front loading. If the Twins have the payroll space now, use it. If it isn't used, it won't be used later. The contracts need to be the same value, but not the same dollars. The sum of the annual salaries in a front loaded contract would be less.

 

The Twins are going to need to do something to top the Giants offer. Offering the same dollars and front loading the money would top the Giants offer.

 

 

How often does front loading actually happen?  I know it's brought up a lot, but realistically does it happen very much?

[howeda7]

How often does front loading actually happen?  I know it's brought up a lot, but realistically does it happen very much?

Not often. Most owners don't get to be billionaires by being morons.

[nicksaviking]

Much appreciated.

 

But my guess is you'll pull your support once I'm forced to go on record with my positions on pitch framing and defensive metrics. ;-)

 

Well you have my vote for sure now.

[nicksaviking]

How often does front loading actually happen?  I know it's brought up a lot, but realistically does it happen very much?

 

The Cardinals are going to be enjoying Jon Lackey's $1 million dollar salary this year.

 

Not often. Most owners don't get to be billionaires by being morons.

 

You do it now because the Twins will not carry over payroll, so if 2017 comes around with a bumper crop of free agents but the Twins still have Santana on the books for $17M we're SOL.  Pay him $7M in 2017 and pay that extra $10M this year when they're is no chance of payroll problems.  

 

There's nothing moronic about it, unless one is concerned with not being able to collect the extra interest those last couple of years.  That would seem to be an odd concern considering the sum of the interest is nothing compared to the extra few millions of dollars the player and club try to wrangle out of each other during negotiations.

[SwainZag]

The Cardinals are going to be enjoying Jon Lackey's $1 million dollar salary this year.

 

 

You do it now because the Twins will not carry over payroll, so if 2017 comes around with a bumper crop of free agents but the Twins still have Santana on the books for $17M we're SOL.  Pay him $7M in 2017 and pay that extra $10M this year when they're is no chance of payroll problems.  

 

There's nothing moronic about it, unless one is concerned with not being able to collect the extra interest those last couple of years.  That would seem to be an odd concern considering the sum of the interest is nothing compared to the extra few millions of dollars the player and club try to wrangle out of each other during negotiations.

 

That was a clause put in his contract as insurance.  If he missed a year due to an elbow injury, the team got an option of an  extra year tacked on at a minimum year, it wasn't  because of a front loaded contract.

[Reider]

I am indifferent on signing Ervin Santana. I really couldn't care less whether the Twins sign him or not. However, I can't get my head around the sentiment of one being worried about a pitcher "blocking" another pitcher. In the entire history of the Minnesota Twins, when have we ever thought to ourselves, oh no, we have too many good pitchers, what are we going to do now? Never. If the Twins truly had too many good pitchers, there would be no shortage of trading partners.

 

The Twins need to improve their pitching. If Terry Ryan feels he can improve the pitching staff, he should consider all of his options in order to do so. Money is not an issue, contracts expire, players get injured, players under-perform, players get traded, players get demoted, and there's lots of room in the bullpen.

 

At the end of the day, I believe that if Terry Ryan can improve the pitching staff, the last thing he should be worried about is a pitcher with a good track record "blocking" unproven minor league pitchers. There's plenty of options and plenty of room for good pitchers on the Minnesota Twins.

[jay]

What's the point of saving opportunity if you can never use it, because doing so results in the loss of opportunity?

I certainly didn't say they should never use it and actually said I'm in favor of making this move, so I'm not sure how to answer that.

 

To clarify, the point I was trying to make is that the Twins realistically only have so many opportunities to sign contracts like these. Free agency, contracts and money are essentially limitless in the theory of your illustration while that is far from true in the application of reality.

 

If this is their guy, then let's do it. I do believe they have the roster and financial flexibility to add a quality starting pitcher. If it's not their guy or it doesn't work out, I'm fine with that too.

[TheLeviathan]

How often does front loading actually happen?  I know it's brought up a lot, but realistically does it happen very much?

 

Frontloading is heavily frowned upon by the union as well.  So basically neither side is really interested in doing it for various reasons.  Hence why it almost never happens.

[USAFChief]

I certainly didn't say they should never use it and actually said I'm in favor of making this move, so I'm not sure how to answer that.

To clarify, the point I was trying to make is that the Twins realistically only have so many opportunities to sign contracts like these. Free agency, contracts and money are essentially limitless in the theory of your illustration while that is far from true in the application of reality.

If this is their guy, then let's do it. I do believe they have the roster and financial flexibility to add a quality starting pitcher. If it's not their guy or it doesn't work out, I'm fine with that too.

I misunderstood you earlier, my bad.

 

And I agree resources are not unlimited.

[Brock Beauchamp]

It's really easy to say "release the guy". In practice, it's a far more difficult decision.

 

Is it easy to release a guy like Pelfrey or Blackburn? Yeah, I think so. They're owed ~$5m, which isn't much money in today's game.

 

But releasing a guy like Nolasco? A guy owed almost $40m over the next three years? No, that's not something one just does on a whim. Ricky Nolasco is going to get every opportunity to succeed in the rotation. Then he'll be moved to the bullpen. Then he'll go on rehab. Then he'll get another shot on the MLB team.

 

Teams don't just throw away $40m unless they have so much money that it simply doesn't matter and even then it's a hard decision. There's a reason why we don't see teams completely give up on struggling veterans who are owed tens of millions of dollars. This "problem" is not unique to the Twins, which limits the amount of criticism they should receive for holding on to expensive players who aren't producing.

 

I find it mildly humorous that people will criticize things like WAR for being an out-of-touch stat that doesn't apply to what's happening on the field but will turn around and ignore the realities of throwing away $40m and just how hard that is to do for a myriad of reasons. The player might rebound because he performed in the somewhat recent past. It's a lot of money. It reduces future payroll flexibility (have to add another player while paying someone to not play). It's admitting a colossal mistake on the front office's part. There are no "take-backs" on a player release.

 

There are reasons why so few teams employ this type of move and why it's so rare.

[tobi0040]

Frontloading is heavily frowned upon by the union as well.  So basically neither side is really interested in doing it for various reasons.  Hence why it almost never happens.

 

As a finance guy, I think it is odd that anyone is against being paid more now.

[Brock Beauchamp]

As a finance guy, I think it is odd that anyone is against being paid more now.

It is a question I have long asked and never received a logical answer. You'd think athletes would love front-loaded contracts because:

 

1. A dollar today is worth more than a dollar tomorrow

2. An invested dollar today is worth a lot more than a dollar tomorrow

 

I'm not countering Levi's point because the reality is that everyone appears to frown on front-loaded contracts... But that doesn't mean it's smart.

[nicksaviking]

It is a question I have long asked and never received a logical answer. You'd think athletes would love front-loaded contracts because:

 

1. A dollar today is worth more than a dollar tomorrow

2. An invested dollar today is worth a lot more than a dollar tomorrow

 

I'm not countering Levi's point because the reality is that everyone appears to frown on front-loaded contracts... But that doesn't mean it's smart.

 

Not to mention that by lowering the comitment to the player in the future, the team's free agent budget should be larger the following years.  Seems like something the union would really embrace.

[tobi0040]

Not to mention that by lowering the comitment to the player in the future, the team's free agent budget should be larger the following years.  Seems like something the union would really embrace.

 

Yeah, two $100M contracts structured differently would have a different NPV.  But I suppose what is driving the NPV is the assumption the money received earlier will be invested and grown at a good rate, versus blown on cars, jewelry, and strip clubs.

 

Maybe that is why the union frowns upon them.

[Steve Lein]

I think they frown on front-loading contracts because it would set a form of precedent for giving lower salaries as players age.

 

They don't want contracts like A-Rod's and Pujols's to disappear (e.g.: still making a ton of money as they are past their prime), and that would be a step in that direction.

[Mike Sixel]

I want Meyer and May in the rotation day 1. IF they Twins still refuse to do that, I hope they sign a good pitcher. I still don't understand the Meyer thing.......

[Willihammer]

Salaries are already inflating at a ~12% rate. Frontloading would just compound that. Frontloading might benefit owners who are in a financial window but over the long term it is shooting themselves in the foot. Especially if you're talking about players paid in the top 125 and therefore factor into the QO price.

[Brock Beauchamp]

Salaries are already inflating at a ~12% rate. Frontloading would just compound that.

Frontloading would do the opposite of compounding salary inflation.

 

For example, you offer two contracts.

 

1. 4 years, $60m. $15m per year.

2. 4 years, $60m. $20m, $20m, $10m, $10m.

 

In years three and four, the front-loaded contract would free up more money to spend on new players as salaries inflate.

 

Or maybe you're arguing that front-loading would lead to higher overall dollar contracts... I can't agree with that, as I see no reason it would play out that way.

[tobi0040]

Salaries are already inflating at a ~12% rate. Frontloading would just compound that. Frontloading might benefit owners who are in a financial window but over the long term it is shooting themselves in the foot. Especially if you're talking about players paid in the top 125 and therefore factor into the QO price.

 

I would thnk owners would like it the way it is. If you owned a baseball team, you likely had a slew of other business interests as well, with productive investment opportunities.  Delaying a payment to a player a year or two would mean higher total profits as those funds could be invested elsewhere. 

[big dog]

My recollection of the union's stance the last time this was brought up was concern that future free agents would be measured against the back end of other players' deals, so that the diminished future salaries would have some chance of influencing prices for new contracts for other players.  I'm not saying that's a great point, but I am pretty sure it was mentioned as a concern.

[Willihammer]

Frontloading would do the opposite of compounding salary inflation.

 

For example, you offer two contracts.

 

1. 4 years, $60m. $15m per year.

2. 4 years, $60m. $20m, $20m, $10m, $10m.

 

In years three and four, the front-loaded contract would free up more money to spend on new players as salaries inflate.

 

Or maybe you're arguing that front-loading would lead to higher overall dollar contracts... I can't agree with that, as I see no reason it would play out that way.

That's exactly what would happen. Frontloading accelerates inflation, backloading keeps prices down.

 

One contract on one team wouldn't make much difference but if frontloading were to become standard practice, than any dollar saved for a later window would buy a fraction of what it could otherwise. That's why it doesn't happen much. It might benefit one team in one year but its not in ownership's collective long term interest.

[nicksaviking]

My recollection of the union's stance the last time this was brought up was concern that future free agents would be measured against the back end of other players' deals, so that the diminished future salaries would have some chance of influencing prices for new contracts for other players.  I'm not saying that's a great point, but I am pretty sure it was mentioned as a concern.

 

 

This makes some sense, but using a players current salary as the barometer of his worth is about as outdated as measuring his performance based on RBIs.  Every salary discussion these days revolves around AAV, which obviuosly wouldn't be affected by backloaded contracts, and there isn't a GM in the league who thinks he's going to get a pass from Scott Boras by using current salary instead of AAV. 

[jay]

^^ Agree.  Seems like a pretty dated approach to valuation.