Monday, March 15, 2010

TwinsCentric Blog: Puzzling Contract

This is also published on the TwinsCentric Blog at

It’s getting to the point where it is becoming a crusade. I should probably do something about that.

We’ve seen the same scenario play out the past two weeks. The Twins offer a long-term contract to a popular player and are lauded by media and fans. The latest example, a five-year deal to Denard Span, was again roundly praised, despite it seemingly being a goofy contract for the team.

Is “goofy” too strong of a word? Let’s find out by playing out a scenario: what happens if the Twins DON’T offer this deal to Span? If they don’t do the deal, they can pay him almost whatever they want for the next two years. And for the three years after that, they can unilaterally renew his contract at the price an arbitrator sets.

I say "almost whatever they want" because there is a minimum and some precedent. This year and next year, Span would likely make about $1 million combined. Truth be told, he would probably make closer to $900,000 combined, but we’ll round up for the sake of argument.

In 2012, he would be up for arbitration for his first year. In arbitration, the player is paid a salary commensurate with his tenure in the big leagues and his performance. So let’s list the centerfielders who have tenure within a few years of Span and rank them by their OPS last year.

(OPS is On-base Plus Slugging percentage. It’s a REALLY good measure of a team’s ability to score runs. Since players also have those stats, it’s assumed it works well for them too. It also does a decent job of crediting (and comparing) both players who get on-base and players who hit for power.)

So here are the centerfielders, their tenure (expressed in "years.days"), their OPS, and how much they are making or have made in their first year of arbitration:

Matt KempLAD0.842 3.0494
Denard SpanMIN 0.8071.111
Shane Victorino PHI 0.803 4.092 3.125
Adam Jones BAL 0.792 2.139 TBD
Cody Ross FLA 0.79 4.058 2.22
Grady Sizemore CLE 0.788 5.056 3
Nate McLouth ATL/PIT 0.788 4.056 2
Curtis Granderson DET 0.78 4.077 3.5
Jacoby Ellsbury BOS 0.77 2.037 TBD
Dexter Fowler COL 0.77 1.027 TBD
Franklin Gutierrez SEA 0.764 3.08 2
Nyjer Morgan WAS/PIT 0.757 1.12 TBD
Michael Bourn HOU 0.738 3.028 2.4

First, you’ll notice that Span had a GREAT year last year as far as centerfielders go. He’s nearly at the top of the list, though he’s much closer to that bunch of guys behind him than the guy on top. You might also notice that very few guys with less than three years of service time currently have contracts that cover their arbitration years.

Based on this, how much would an arbitrator say you need to pay him? It looks to be around $3 million, maybe as much as $3.25M, right? Ok, let’s do the same thing for the second year of arbitration. This time I’ll leave off the guys who don’t have contracts yet:

Matt Kemp LAD 0.842 3.049 6.95
Denard Span MIN 0.807 1.111
Shane Victorino PHI 0.803 4.092 5
Cody Ross FLA 0.79 4.058 4.45
Grady Sizemore CLE 0.788 5.056 4.6
Nate McLouth ATL/PIT 0.788 4.056 4.5
Curtis Granderson DET 0.78 4.077 5.5
Franklin Gutierrez SEA 0.764 3.08 4
Again, the answer seems pretty clear: somewhere around $5 million. Let’s be generous and say $5.25 million

And for year three, here’s how things look:

Denard Span MIN 0.807 1.111
Shane Victorino PHI 0.803 4.092 7.5
Grady Sizemore CLE 0.788 5.056 5.6
Nate McLouth ATL/PIT 0.788 4.056 6.5
Curtis Granderson DET 0.78 4.077 8.25
Franklin Gutierrez SEA 0.764 3.08 5.5
This one is a little harder, but the $7.5 million that Victorino is making is a pretty good benchmark. We’ll run with that.

So if you add up those salaries, we can reasonably expect him to be paid $17 million over the next five years. That’s what happens if the Twins pay him on a year-by-year basis, making sure he continues to perform and stay healthy. Instead they handed him five years of guaranteed money for $16.5 million?

It’s like a bad informercial. Buy now and you can save $500,000? Really? Are operators standing by, too?

For some reason, long-term contracts equal success in everyone’s heads. It’s praised when it’s done for players like Span or for Joe Mays. More stunningly, it’s praised even after disasters like Joe Mays. But even for sure bets like Span, it doesn’t make sense unless there are some big savings involved.

And Span is a quality player. There has not been a more consistent supporter of Denard Span for the past 2+ years, than me. (Don’t believe me? Check this out. I was a voice in the wilderness, gently mocked for suggesting that Span had turned a corner two years ago.)

I believe Denard Span has been an absolute force. I expect him to continue to be a force. His skill set (with the possible exception of his speed) should hold up reasonably well over the next five years. I believe he’ll be able to handle the temptations that come along with long-term security. And by all accounts, including my personal experience, he’s a legitimately good guy who deserves every good thing that comes his way.

But it’s still goofy to give a player a five-year deal when you have the option of instead giving him five one-year deals. And that’s exactly what the Twins just did. The only reason you do that is if you get significant discounts back in return, and the Twins didn’t.

So what’s going on? I asked several people this weekend, and here are the theories I heard:

1. The Twins got an option year to buy out Span’s first year of free agency as part of the deal. It should be pointed out that it isn’t a cheap option ($9M) and so it’s not a slam dunk they’ll exercise it. But it is a benefit.

2. Mr. Rihanna (Matt Kemp) scares the heck out of them. He may try to force the market much higher though arbitration. There is a benefit in having some cost certainty, in protecting the team from a skyrocketing market.

3. Similar to #2, only ALL teams are worried. MLB teams are worried in general about players driving up salaries through the arbitration process and so there is some pressure to sign deals like this even if there isn’t much cost savings.

4. The Pohlads are positioning the team for a sale in a few years, and these kind of deals make a sale more possible.

They’re all nice theories, and none of them mean a thing because I didn’t ask the people I should have asked – the Twins. I’ll see what I can do in that regard later this week, before this becomes any more of a crusade.

I had a fantastic time at the TwinsCentric Twins Viewing Party on Saturday, with one exception.

  • We had a very good crowd. Fifty-five people entered the raffle, and we had at least another 10-15 who were there but didn’t want to be in the raffle. That makes 65-70 people, some who came up from Iowa and even from Chicago.

  • It started at 11 AM and there were still people there when I left at 6:00, so I'm pretty sure others had a good time too.

  • I got to meet a ton of people, some old friends and some new. I’m hesitant to try and list all the writers there because I really don’t want to leave anyone out, but I’ll take a shot: Seth, Nick, Parker, Doogie, Phil MIller, Karlee, Babs, Josh, Andrew, Eric, Scott, k-bro, Roger, Emily and Betsy. And PMac was there in spirit, or rather spirits; he called and bought us a round of shots. Again, if I'm forgetting to mention someone, I apologize, especially becaue I made everyone wear nametags.

  • The only bummer was a Twins loss. To the Phillies. My wife's favorite team. I only have one bet on any spring training game and this was it. Now she can make me watch (500) Days of Summer. I'm blaming you, Matt Tolbert.

  • Thanks to everyone for showing up and thanks to Major's in Apple Valley for the cheap beer and eats. They were very kind and accomodating. The consensus opinion was that we should do this several times per year, and I agree. Of course, that's the consensus opinion every spring, but I'm hopeful that more places like Major's will step up to sponsor us, and we'll do as many as one per month.


Bryz said...

I first read this from David at Twins Fix and he told me later that Craig Calcaterra and Jesse from Twinkie Town mentioned this as well. It's possible that all of these long-term contracts for arbitration-eligible players are just to help the team have some cost certainty in the future. Mauer's contract is likely going to take up $20 million per year, so it sounds like the Twins would like to know how much money they are guaranteed to spend before making any free agent signings or trades.

TT said...

Just to point out the obvious. I doubt OPS is going to carry much weight in arbitration, if it is ever mentioned.

OPS - "It’s a REALLY good measure of a team’s ability to score runs."

It actually doesn't measure a team's ability to score runs at all. Runs scored measure that ability and OPS doesn't really correlate with how many runs a team scores.

" Since players also have those stats, it’s assumed it works well for them too."

Which is goofy. Since Span is leading off and batting in front of Mauer and Morneau, his on base percentage is far more important to the Twins ability to score runs than his ability to drive in the guys at the bottom of the order.

thrylos98 said...

I am with you on this. Horrible decision (same as with the Blackburn contract, btw) and add a couple of reasons called Hicks and Revere to the equation...

TT said...

Are you comparing the most he might make or what you THINK he will make. If the later, then saving $500 thousand with an option is not a bad deal since you are estimating what you will have to pay him in any case. You can't compare what you have to win what you against what you think is likely, you have to compare it to what you have to lose.

If you are arguing that Span can't make more money than that, I think you are flat out wrong. He is only 26 this year, which means he is still on the upside of his career. He should get better, with very little decline before he is 30.

The truth is they are very likely to pick up that option or deal him to a team that will. This is really a no-brainer for a player who is a positive clubhouse presence, something you seem to neglect in your evaluation. But which the Twins are going to take into account in assessing his value.