Major League Ready

This is EXACTLY the question. Let's say we go out and get Ellsbury, Santana, and Jemenz. Ellsbury could be injury prone or simply play at a substandard level from day 1 (see Hamilton/Upton/Bourn) and have a negligible WAR the last couple years of their contracts. Jemenez could easily regress to the 5+ ERA pitcher he was in 2012 and Santana could do the same, especially as they age. Now you have over $80M/year in 2017-18 (including Mauer) tied up in guys who in all likelihood are no longer performing anywhere near an elite level. While I concede it is possible they could all still play at a high level at 35, the odds are much better that they regress, are injured or decline substantially as they age. I think this is what DieHard is suggesting. The FA signings and other transaction should reflect where the team is in the development/rebuild cycle.

There is a lot of presumtion here without even qualifying where it is that "we want to go. My presumption is that "where" means achieving several things. My guess is the first thing on the lists are things that provide sustainability. For example, improved process drafting, international signings, and development. It would be a safe bet the ultimate "where" is world series contention. That is not going to happen through free agency. That also does not mean they won't utilize free agency to put a better product on the field. So, I intepret his comment only so far as to conclude that he feels short cuts won't build a world series contender that is capable of sustaining a high level. Sustaining the orgaization also has several implications for management and organizational development. Nobody here is referencing these issues but I would bet TR is considering them when he makes these statements. We should not assume the very limited context of free agency as "short cuts". All anyone hears is that they won't spend. Bad contracts and/or players past their prime are a real detriment to any organization but they are absolutely killers when they are 5+ years for teams outside the very top revenue generators. The risk and impact often does not appear to be considered here. Looking back on top FA signings the past few years, there is at least as much failure as success. Fielder ranked 14th in WAR last year at 2.2. That salary would be an albatross for us and with that body type he could be really bad the last 2-3 years of his contract. Swisher ranked 13th in his first of a 4 year deal. Hamilton delivered a WAR of 1.9 for $25M in his first year. I don't like his odds of being better in the last couple years of that deal. BJ Upton's WAR was -.6. Michael Bourne had a WAR of 2.0. Edwin Jackson and Ryan Dempster were at very best mediocre. Pujlos could very well be back next season but he deliver a WAR of .7 last year and that contract could be a real clunker for 4-5 years. Reyes WAR ranked 15th at 2.2. Buehrle had an almost identical ERA to Correia. I am not a scout but Sanatana and Jemenez seem really risky to me. I hope they don't risk a future that appears to be very bright and sustainable by signing one of these guys to a 5 year deal and giving up a high draft pick. Feldman, Nolasco, Kazmir, Hughes all offer substantial upgrades without the risk. Burnett or Orroyo might even make sense on a 1 year deal with a 2nd year team option. Two of those 6 SPs + Morales or Loney and I will loook forward to 2014. Maybe Johnson as a 3rd high risk/reward add.

If they did sign Feldman and Kazmir they could afford to go after a high risk/return type, especially on an incentive based contract. There would still be money left over for help at 1B or OF. Which strike out pitchers do you think will be available on 1 or even 2 year deals beside Johnson that you would favor signing?

He would have taken a qualifying offer and they have better places to put $14M. Even the Yankees have spending limits and they need the salary room to retain Cano or go after Tanaka. This is going to be interesting to watch. The A-Rod deal is a shining example of how bad these monster deals can be in the final years. The Sabathia extension looks like it is going to be a big mistake too. So, I don't see them signing Cano unless other teams refuse to go 8 or more years or they are able to get out of A-Rod's contract. However, this is the Yankees we are talking about so they might sign him regardless and still go hard after Tanaka given the posting fee does not count against the Luxury tax.

I was thinking the exact same thing. It would we could deal Willingham and/or Doumitt by the deadline and get Rosario to the MLs. Start him in the outfield and see how his bat looks against ML pitching. We could also give him some games at 2B when Dozier needs a day off or even play Dozier at SS for a few games. Bottom line is that any decision on Florimon can wait until at least 2015 when it will be a more informed decision. How nice would it be if Florimon improves to league average offensively and Santana proves to be a top prospect. That would give us a viable trade scenario for more pitching.

I might be in left field in terms of Loney getting multiple years but I thought he has been solid enough that someone will give him 2-3 years. Hw was 11th in WAR. My guess would be something like 2/14. It's a nice low risk deal for the Twins and fills a gap if they decide Mauer will catch. Fielder was 18th.

Nice job looking at the steps necessary to build a contender. It is not going to happen through free agency. I think Loney is going to get at least two years and probably 3/22 but I agree he is a good bridge to Harrison/Vargas or anyone else that emerges as the 1B of the future. Of course, this assumes they decide to have Mauer catch. I like the idea of Kazmir and one of Hughes, Feldman or Nolasco. The Dodgers or the Yankees are going to make a nuts bid on Tanaka. Kuroda is going back to the Yankees. Santana and Jemenez have the potential to be epic busts. No way would I take on the required contract and give up a pick given the risk. I am sure many will disagree but it is highly unlikely we contend with Detroit even if we got both of them so it would be really dumb to take on the risk. I would much rather have the $18M/yr to spend in 2017 than to have a 34 year old Santana or Jemenez on the books.

So, did he get picked up by another team the second time around?

So, is it fair to say that you think every team should spend every dollar they have every year? In other words, Houston should go spend $70-80M this off season.

The general direction is great. Get rid of the guys who are not going to contribute in the next phase. Unfortunately, most of these guys value is very low right now. Willingham and Doumit are more likely to be moved at the deadline. Perkins ans a primary piece, potentially w/others is actually there best bet to yield a quality player or prospect IMO. I would prefer Kazmir on a 3 year deal. He might end up being just as good and I don't like the idea of a 34-35 y/o Santana at 18M/yr in 2017-18. Hopefully, by then, out propects will make us contenders again. I would rather Kazmir and the $18M to spend in 2017. I would spend the difference on a corner OFer or add a little and sign Morales or Loney if they decide to catch Mauer.

When the organizations you reference want an assessment or second opinion on their strategies and methodologies, they hire an outside consultant. Many times, the largest most successful companies are as likely as a struggling firm to engage an outside firm. In that capacity, I have interviewed and/or interacted with hundreds or even thousands of employees over the years. It is very common for them to make assumptions based on hear say and a myriad of other unreliable and/or incomplete information. Of course, they also don't know how the management team is fitting together all of the strategies. Based on the information available, my gut tells me some of the concerns voiced here might be legit. My experience tells me that we don't have nearly enough information to conclude anything with any certainty. What I really want to know is what has changed in the drafting and development process in the past few years. I think we can all agree that this is the most important component in putting a winning team on the field. They have completely turned around the minor leauge system. What did they change? Is it sustainable? We don't know and probably won't anytime soon. Should we be praising or condeming the direction. I am not sure. Those who are absolutely certain must have got their MBA at a much better school.

There is an argument to be made either way. I lean toward protecting Mauer but he is less valuable at 1B if for no other reason than 1B is the easiest position to fill. Morales or Loney would be nice additions. If you really believe in Pinto, put Mauer at 1B and go sign a corner outfielder this off-season.

So what does it count toward? It won't show up it whatever source might list "payroll" but it is part of cost associated with that player. The Twins are going to recognize it as payroll expense. You are confusing how MLB views this expense for luxury tax vs how it has to be accounted for as a business. The short version is that the Twins are not going to pretend a posting fee is not part of the cost of a given player. They are going to include any posting fees and/or bonus expenditures in their 52% budget for payroll expense.

This is the most compelling argument I have seen in this particular debate. That is a very large sample size. If he can put up a 4.10 era on the road, it would not be unreasonable to expect him to match or better that mark at Target field. The bad news is that a bunch of other teams are looking at that split and probably coming to a similar conclusion. He is going to get paid. There is no need for him to take a shorter term deal. He is the guy it makes the most sense to me to take a chance on because the term of this contract will during the players prime. This is the guy I expect them to go after the hardest.

The primary guidelines for how assets are treated is the matching principle I posted earlier. Clearly, the benefit of a posting fee is realized over the course of the contract. I doubt the fact that the posting fee goes to a 3rd party matters. If the Twins purchased a piece of equipment for maintaining target field from one company, and the attachments from another company, the expenditures would be treated the same. Of course, the posting fee is not going to show up as part of the salary and a team would not be obligated to pay it if they traded for the player. However, the organization would be required to amortize the cost over the course of the contract.

Some of the discussion got me thinking about how crazy this year could get with the availability of new TV money. Predict the years/salary for these FAs. [TABLE=width: 111] E. Santana U. Jimenez M. Garza H. Kuroda T. Lincecum S. Kazmir P. Hughes J. Johnson D. Harren R. Nolasco S. Feldman B. Arroyo A.J. Burnett M. Pelfrey [/TABLE]

Here is what I would like to see. It is low risk and would improve the team. If they decide to play Mauer at C - 1B/DH Kendry Morales or James Loney. Either guy could be had on a reasonable 3 year deal. (3/23-26) Hopefully, Harrison is ready to be our 1B by 2016. If they decide to play Mauer at 1st – OF Nate McLouth or David Murphy. McLouth probably gets a 3 year deal. I am not sure on Murphy. I would try to overpay a little on a 2 year deal given the depth of OFs in the minors. Either would be a good option to shore up our outfield until we figure out if Hicks can play at the ML level and also what we end up doing with Rosario. Any of these moves would still allow us plenty of budget to work on the rotation. 2B – Twins mgmt is not going to change the only thing that worked really last year. Get Rosario up here when he is ready and let him play a little 2nd and the rest of his time in the outfield and see what we have. 3B - It makes no sense to do anything with Sano close to the ML. And, I still hold on to the unrealistic hope Plouffe will put it together like Dozier did last year. 3B is a hard to fill position and Plouffe could bring a good SP prospect if he were to break out at least a little. SS – Florimon was very good defensively and he has not had enough big league ABs to write him off defensively. It is worth one more season to see if he can develop into a league average bat. We can’t keep complaining about the Twins selling low and then complain about them giving a guy a chance. CF – Presley holds the job until Hicks is ready. Buxton takes over for him whenever he is ready and Hicks takes a corner OF position if his bat plays. He could end up a 4th outfielder but I would bet he comes around. OF/DH – Willingham will be traded by the deadline unless he is so bad that nobody will take him regardless of the return. Rosario could fill that spot when he goes. I could see an outfield of Hicks / McLouth or Murphy / Arcia / Rosario. Arcia would be primarily a DH once Willingham departs.

I am not a tax specialist either. This type of thing comes up from time to time in the consulting I do and a tax specialist is consulted. However, I can tell you that generally accepted accounting princples (GAAP) require that expense recognition match the benefit period or revenue generation. In this case I think it is very clear that the benefit period is over the life of the contract. You can Google "GAAP matching principle" or "GAAP expense recognition". I copied the section below from an internet search on the subject. Matching Principle Special consideration must be given to how revenues and expenses are related. Recall that an expense is the using up of an economic resource to generate a product or service. Those products and services will later be sold and recognized as revenue. GAAP has established a special rule for this relationship known as the matching principle. The matching principle requires that expenses must be recognized in the same period as the related revenues.

Puck, The fact that MLB does not count posting fees against the luxury tax is an entirely separate matter. The expense does not go away. It is payroll expense. Fans might want to ignore it as if it does not count but the Twins and any other business is not going to pretend it did not happen. There could be a question as to when it is recognized but as I wrote earlier, there are IRS requirements where this is concerned. If it were allowed, and they wanted to recognize the expense this year, the total posting fee and salary would be attributed to 2013 expense. In other words, signing Tanaka and recognizing the posting fee this year would probably require the entire 2013 budget. That would not be the worst move long-term. Sign Tanaka and resign Pelfrey and look forward to having substantial budget in 2015 to continue building. It would give us an extra 8-10M/year over the rest of the Tanaka contract to build a team. I just don't think they can do it that way.

I am not sure how the IRS would interpret a posting fee but the Twins can't just recognize it in whatever manner they elect. My educated guess is that GAAP would dictate the expense be recognized over the life of the asset. In this case, the term of the contract.

You may very well be correct that 2/20-22M will not get it done. It's a real crap shoot. The splits you put are an attention grabber. Should we believe he will back to the form he was in his prime or is he an aging SP that will continue to decline? The latter is more likely. Let's say he matches his production for the total 2013 season and falls off in 2015 and then a little more in 2016 as you might expect from an aging SP. His war was 1.5 in 2013 and his ERA was 4.67. If he performs like he did the last 1/2 of the season it would be a great signing. If his production matches the year as a whole we will wishing we had the payroll space back in 2015 & 2016. If he slides at all, the same people calling for aggression just might be cursing Ryan up and down.

Very good point. The Ray's have done this with a few key players like Longoria. I hope the Twins FO follows this model in the future as you suggest.

42M (14M/yr) for a guy who posted a WAR of 1.3 is not what I would call a bargain. He would be 36 at the end of the proposed contract. Great pitcher in his prime but we have way too many question marks already fo this acqusition to make sense IMO. 2 years and 22M would be a different story.

There is is a lot of support here based on names. In other words, the guy used to be good. No way would I touch Lincecum if he cost a draft pick. However, I doubt SF makes a qualifying offer. Over th epast two years he is 20-29 with a 4.76 ERA. Yes, I know his FIP is lower but his FIP has always been signiifcantly lower than his ERA so his FIP does not predict he is unlucky unless he has always been unlucky. Johnson is an interesting high risk/reward but he should be plan-B. I am hoping for two of Tanaka, Kazmir, and Hughes. (in that order) Ervin Santana, Jimenez, Nolasco, and Harden are all decent options but they all make me nervous.

A couple million one way or the other probably won't have any impact in terms of spending this year but you might be right about the $12M being high. I would guess the ratio of cheap vs expensive seats that don't get sold is fairly equal but I base that on nothing but speculation. It would be interesting to see how much merchandise sales fall when they stink. You would think that would take a pretty good hit.