How The Twins Could Lose Another 100 Games

That's my concern too.  If we pass on risky moves because of value, we're basically relying on internal improvements and draftees to save us.  It's hard to see a staff of this age (save May and Berrios) making sizable strides and draftees take time.

 

So that means we're burning through time we have this young offensive core together.  

 

I loved the Castro signing, but I really hope we see a plan forming soon.  This feels so much like Ryan's regime is still in charge that it's frustrating.

So how do you feel about extensions right now for Sano, Buxton, Kepler, Polanco, etc....? Assuming they would be amenable, of course. Yeah there is quite a bit of risk there it would extend the window of competitiveness while we wait for the young pitchers to develop.

Another bonus here is they might be able to front load some of those extensions since the Twins aren't using all their current payroll and then 4-5 years from now the Twins would have extra cash on hand to sign a big FA.

Based on just the value Buxton should provide on his defense alone, I woukd likely try to extend him this year. He is very likely a 3 WAR player right now. I would go out on a limb and say his offense will get a bit better.

I have concerns about Sano, so I would wait until he hits arbitration years.

3 WAR player, who plays elite defense, and could possibly hit and steal bases....who is 22 or so, what would that fetch on the open market? 5-7 years....150MM I'd guess. And, he'd want that shorter length so he could be a FA again.....

The problem is risk. Holding out exposes players to a lot of it. Arbitration isn't a great deal, either:

http://www.thepointofpittsburgh.com/calculating-mlb-arbitration-percentages/

For Buxton, just spitballing-

Salary by year (est.)

2017: 550k

2018: 575k

2019: 8m

2020: 10m

2021: 14m

Let's say he values his first two years of free agency at $50 million. Offering him $85 million would pretty much be fair market value, with the only downside being that as a 2022 free agent he would command a lot of additional years and guaranteed dollars. But this way, his risk level plummets and he still hits free agency in his prime.

Are they, though?

 

They had one legitimate shot to improve the rotation: Jose De Leon.

 

That didn't work out and we don't know who to blame for that non-move.

 

Given the complete lack of options in free agency, I can't blame this front office for preferring to run with the likes of Gibson, Berrios, May, Meija, Duffey, et al. In my opinion, those guys have the same chance of success as anyone on the free agent pitching market and they're all cheap and controlled (excluding Santiago).

 

I'm a bit disappointed in the complete lack of action in the bullpen, though. But I'll wait it out and see if they have a plan for Opening Day.

OK, so they might be the 14th worst staff in the AL instead of the 15th with the same staff if they all improve.

Even the rookie free agent market probably has a few guys on it who have a sub-5.00 ERA potential.

I'd bet those arb numbers are low, but maybe I overstated my position some......maybe you are all closer than I thought. From the Twins' side, if your numbers are close, why are they offering him close to market value? They are then, if your numbers are right, assuming all the risk, aren't they?

Keep in mind that arbitration calcs are not based on advanced metrics, so defense tends to be underrated. Buxton in particular is likely to be undervalued in arbitration, while Sano for instance might be overvalued.

The value concept for an early extension is complicated because there are so many variables. I'm not sure off the top of my head what I'd consider reasonable for any of the Twins young position players. A lot depends on the individual players' appetite for risk. 

Early extensions are the only real form of front-loading you see in MLB contracts - technically the player's salary rises over the years, but in reality the increase compared to automatic renewal/arbitration in early years is effectively being transferred from the later years. So from the Twins side, I like the idea of considering early deals, I just don't know how practical it is given the level of uncertainty.

Yeah $8 MM for the first year of arbitration is a bit aggressive. Hell, Machado and Harper were at $5 million for their first arbitration year before jumping up to $11 and $13 MM respectively this year. 

Yeah the distribution was off there, I didn't think about it too hard. But the total is probably ballpark in today's dollars if Buxton doesn't really turn into a great hitter.

Brock Beauchamp, on 27 Jan 2017 - 2:52 PM, said:
Oh, I realize that, but pro sports are something of an exception to pure business concerns, as they sometimes diminish the importance of profit or they view it differently.

Put in different terms, a front-loaded contract could be considered more along the lines of R&D than traditional operating expense.

 

Businesses have prepaid or advance salary expenses all the time, just not as far out. I don't see it as a different type of cost.

Every business of this size knows how to handle deferred revenue and deferred expenses as clients typically pay them on the yearly or monthly level (or whatever) and paying bills is usually at the yearly or monthly level (or whatever).  

The Pohlad accountants are probably high experts on deferred revenue tactics and heck maybe they even invented the ****.  

What can we do to get Hollywood Rockstar Pohlad brother Bill to run the team?  His film production resume is impressive and I bet he knows how to get stuff done.  

IIRC, the Twins were going to slightly reduce payroll in 2017. That would lower Falvine's flexibility for certain initiatives - especially while they were waiting for the Dozier trade resolution and then ending up with his salary.

But sports' labor expense isn't a typical labor expense. It's closer to a materials expense.

In no other industry does a person go from a $500k expense to a $35m expense in 6-7 years. And in few other industries is the labor the actual product.

Sports don't work in pure business terms. There's a lot of overlap but they're not the same.

The numbers are unusual at the individual player-employee level, but the overall labor expense is not that unusual because teams follow annual budgets . . . there is variation year over year, but that's true in other businesses as well.

The players are paid to provide services. The costs are not like a materials expense - that would be associated with a product-oriented business that deducts inputs as cost of goods sold. Nor is it true that labor is synonymous with product in sports; at least in MLB, guaranteed contracts mean that players are sometimes paid when they aren't even on the team anymore.

Compare a baseball team to a law firm (with multiple attorneys). In both cases, the biggest expense is compensation, whether in the form of salary or partnership distributions. The law firm provides legal services through the employment of some number of individuals, who each provide part of that overall service.

Baseball teams provide entertainment, and each of the employees provide some part of that entertainment, directly or indirectly. Dramatic variances in compensation, role, etc. exist in both circumstances.