Friday, January 15, 2010

Head vs. Heart

An extra post today, because I just heard that Mike Redmond signed with the Indians. I wrote this for the TwinsCentric Offseason GM Handbook , basically an open letter to Bill Smith about the tough decision he had to make. Honestly, I wouldn't have faulted Smith either way, and that's a tribute to Redmond.

Personally, I wish the best for him, even with Cleveland. And I selfishly hope he'll come back to the Twins when his playing career is over.

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Head vs. Heart… Head vs. Heart…

That’s what this decision is going to come down to for you. For years, Redmond has defied his age, but sooner or later Father Time has his day.

After five years of being the ideal backup catcher, the 38-year-old declined across the board this year. He hit .237, with just a 588 OPS. That latter number is BELOW that of Nick Punto. He threw out only five of forty runners. And he missed time early in the season with a sore shoulder.

This performance was made grimmer by the fact that the Twins suddenly seem to have a replacement for Red Dog. Jose Morales utilized his time with the Twins while Joe Mauer and Redmond were dealing with injuries. Morales posted an 742 OPS and threw out 8 of 26 stolen base attempts this year. He’s also 26 years old and financially desirable (i.e. cheap).

The head says it’s time to go with Morales. He’s not as good as he was this year offensively, but he’s certainly shown enough to earn the backup spot. Plus, if Mauer were to leave after 2010, you would like Morales to have as much experience as possible.

But the heart, the heart says Redmond just had a down year. That the shoulder was worse than we know. That the rotation needs a veteran hand occasionally. That the clubhouse needs some leadership, and the coaching staff needs one less kid to baby sit.

You can try to avoid the decision. You can offer Redmond an organizational coaching job, and be sure to be generous with the salary when you do. But if he wants to continue playing – and who would blame him if he did? – you’re going to need to decide whether to listen to your head or your heart.

Estimated Contract: 1 year, $900K

Thursday, January 14, 2010

An Average Way Below Average

Check out this page for a second. Open it up in a new window while you read this. (Right-click, choose "Open in new window")

The link is to FanGraphs.com, a great site which is largely responsible for why we are all relying on Ultimate Zone Rating (or UZR) so heavily as a defensive metric. FanGraphs.com updates UZR’s regularly, so the stat has become readily available, which is a huge reason that it is widely used. The other reason is that it seems to be a good stat for judging defensive prowess; far from perfect, but good.

The page I linked to is one of several valuable ones at FanGraphs.com. It shows qualified right-fielders, and I'd like you to sort by the last column, UZR/150 (which is the projected UZR of players over 150 games). UZR’s are supposed to measure the number of runs a player is better or worse than average at that position. So in this case, you can see that Nelson Cruz is at the top of the list, +13.4 runs better than average, while Brad Hawpe is at the bottom of the list, -25.4 runs worse than average.

But what struck me about this list is how two-thirds of the players are below average. Of the 19 qualified players (which I think means they played at least 900 innings in right field), only 6 of them are above average, and those six “saved” just 59.8 runs. But 13 are below average, and they cost their teams 140.3 runs.

Overall, the number of runs saved should be almost exactly the same. That’s how you determine what average is.

So what’s the explanation?

  • Possibly the right fielders who played in 2009 were worse than in previous years, and it’s the previous years benchmarks that are set. I don’t know if I’ve ever heard how far back UZR goes in determining what “average” plays are.

  • Perhaps right-fielders are substituted in late games by better defensive options frequently. Those subs drive up the average, making the hitting right-fielders looks worse defensively.

  • There are definitely a handful of above average fielding outfielders that didn’t play quite so much. In fact, it looks like there are a number of outfielder with between 590 and 900 innings who are above average, but didn’t make this list. I wonder how many of them are superior defensive outfielders who can’t hit enough for a regular spot and spend time there for some other reason.

Ultimately, I don't know how important this is. But it is interesting that of the guys who are given the most playing time in right field, so many of them are below average. If anyone cares to study this more, or has some takes on it, I'd love to see it in the comments.

Wednesday, January 13, 2010

Blogging and Taxes

I’ll start with an apology to the greatest readers a guy could have. This isn’t going to be about baseball, and it isn’t going to be applicable to most of my regular readers. This is for the other bloggers out there. What's more, it's a repeat story, but since it's tax season, and since I don't really have time for a decent post anyway, let's run with this for today.

Besides, maybe it'll make you some money.

We’ll get back to our irregularly scheduled baseball coverage in our next entry…..

Bloggers, I really wish someone had told me seven years ago what I’m about to tell you.

Last Saturday, at the Twins bloggers gathering, the question was raised about whether or not bloggers can deduct certain costs from their taxes. The answer is ‘yes’, and the further answer is that this can be worth hundreds of dollars. But first, let’s get the disclaimer out of the way….

I am not a tax adviser. You should not mistake what I’m saying for advice from a tax adviser. This is general information only, and for specifics about everything I am about to tell you, you’re going to want to talk to an actual tax adviser. In fact, most of what you’re going to read here can be gleaned from spending about 45 minutes with a tax adviser. So you might want to do that if you have any questions.

The Strategy
You can deduct expenses related to your business, and if your business is blogging, then you can deduct those expenses. You can do this even if you aren’t actually making any money from blogging, provided it’s a “business”. This deduction applies to both your federal and state taxes.

For example, let’s say you find $2500 of expenses related to your business. (We’ll get to where you are finding those expenses in a second). And say you pay 28% federal tax and 6% state tax which means your paying about 34% in taxes. And say you also make all of $100 in income from ads on your blog and the occasional freelance writing gig.

Then your business lost $2400 this year. You can write that amount off, so you have $2400 less taxable income. Which means you don’t need to pay a 34% tax on that $2400, meaning you pay $816 less in taxes. And, since most of us have taxes already withheld from our paychecks, you’ll get back an extra $816 back in your tax refund. That’s how you make several hundred dollars from blogging.

By the way, the specifics of the above example might not be dead-on accurate. That’s because I’m not a tax adviser. I constructed it as a general example of how reducing the amount of taxes you need to pay can end up getting you extra money. You’ll want to talk to a tax adviser for specifics.

Making Blogging your Business
Blogging is your business if you are in it for a long-term profit. Otherwise, it’s a hobby. If it’s a hobby, you can still deduct some expenses, but you can’t deduct any expenses beyond the income you make. So in the example above, you would only be able to deduct $100 (because that was the only income you had), and you would only make back $34. You want your writing/blogging to be a business.

And, if you’ve been doing this for any length of time, it probably is, even if you haven’t been recognizing that. So it’s time to treat blogging, and the expenses associated with it, like you would if it was a business. So:

  • Record your business expenses in a timely manner – This is THE MOST IMPORTANT part, so we’ll cover it more below.

  • Have a plan to make a profit long-term. For instance, write up a plan that states how you’re going to build an audience on your blog, how you are going to try and use google ads to raise revenue, use your blog and audience as a marketing tool to draw freelance writing gigs, etc.

  • You may want to register your business with your state. If it’s located in the state of MN, you can do so by filling out a form on this MN state government web site and paying $35. Name it whatever you like, such as Lastname Publishing or Lastname Media.

  • Document instances where you tried to market your business, like times you tried to get paying jobs as a writer, or attempts to get ads on your site. You need to be able to show that you are actually trying to make money.

Again, it’s not important that you end up turning a profit, though if you end up doing so, you’re really in good shape. If you make money two out of seven years, the IRS can’t say you’re a hobby. But even if you lose money for twenty straight years, if you run your business like a business, you can be safe.

How safe? I don’t know. You might want to ask a tax adviser. Which I am not. I’m just trying to pass along some general information here.

Identifying Expenses
A lot of things can be counted as business expenses for your publishing company. The important part is the documentation (which I’ll get to in a minute). For example, as a baseball blogger you could deduct:

  • Tickets to a game. And food at the game, for that matter.

  • A portion of your cable TV bill. - If you can claim that you wouldn’t have cable TV at all without your blog, then you can write it all off. Or, if you estimate that 50% of your viewing on cable is sports for your baseball blog, you can write off 50% of your monthly cable bill.

  • A portion of your hi-speed internet connection bill. - Again, if you can claim that you wouldn’t have hi-speed connection without your blog, then you can write it all off. Or, if you estimate that 75% of your internet use is because of your blog, you can write off 75% of your internet bill.

  • Computer/laptop – Are you getting it for your business? If so, it’s mostly deductible.

  • Baseball publications – The books you read about baseball.

  • Baseball subscriptions – The ESPN Insider or Baseball Prospectus subscription you have.

  • Cell phone – Maybe. You could conceivably deduct the portion of it that is related to your blogging. Or, if you also have a land line and you use the cell phone as your business phone, you could do the whole thing.

  • Mileage – Going to the game? In 2009, you can deduct $0.55 per mile for the trip you make. In 2009, I think it was $0.55 per mile.

  • Parking – For the game

  • Entertainment – If you attended the blogger get-together, you can deduct that. Watching a game at a bar with friends and writing about it, or using it for research? You can deduct that, too.

  • Web site costs, URL registration costs, etc. - That $35 cost you paid to register your domain name and the other $35 you paid to register your business is tax deductible.

There is one thing you probably don’t want to try and deduct. On Saturday, someone asked if space in your home that is used for the business is deductible. The answer I got is that you probably don’t want to do that. The IRS is pretty sensitive about it, and has really tightened their interpretation of it. For instance, the space must be solely and exclusively used for the business, like a separate room. And even then, there are some factors when you sell your house that you need to consider.

Again, like everything in this story, you’ll want to consult a registered tax adviser for the full story. Because – and I don’t know if I’ve mentioned this - I’m not one. And this is meant as general information.

How Do You Do It?
You need to treat these expenses like true business expenses, and that means you need to track them “co-temporaneously.” That means that you need to document the expense at or about the time it happens. An easy way to do this if you have a daily planner is to reserve a section for documenting these expenses.

For instance, if you dropped $20 at last Saturday’s BW3 gathering, you would turn to 3/14 in your planner and write:“$20.00, BW3 in Roseville, Blogger gathering to discuss future plans and watch USA/Canada.” And if the trip was five miles from your house you might then scribble: $5.50, 10 miles round trip to BW3”. I think you could also instead update a spreadsheet or something with that info (including the date), so you can add up the expenses later. Just remember that it has to happen at or about the time the expense happens.

It doesn’t hurt to have receipts, but the only time you need receipts is when it is an entertainment charge that is $75 or more. So even if you walked away from the BW3 without a receipt, but you know you dropped $20, you can claim it.

How much can you deduct? As much as is legitimate. But you’re likely to receive some extra attention from the IRS if it exceeds a couple of thousand dollars per year.

Finally, when you do your taxes, you’ll want to fill out a Schedule C. You can download/see that form here. Again, if you have any questions, to be safe you should probably contact a tax adviser for assistance. Because I’m still not one. And this is just meant for general information.

Review
Let’s try boiling down this whole thing into a hundred words or so as a summary:

  1. If you treat your writing as a business, you can subtract expenses related to that business from your personal income, which lowers your taxes and could get you a bigger refund.

  2. To treat your writing as a business, at the very least you need to document those business expenses at or about the time they happen. If the entertainment expense is more than $75, you’ll need a receipt.

  3. You can deduct a lot of stuff, including some utilities, entertainment, mileage, research and office equipment. You’ll deduct these on Schedule C, using the supporting documentation you have from #2.

  4. I’m not a tax adviser. For specifics, you should talk to one. This is for general information.

The internet has changed writing considerably, and I think it’s generally been for the better. But it still isn’t clear how we’re all going to make a living from it. So many of us are just plugging along, building eyeballs, exercising our writing muscles, and hoping that business model emerges that makes sense. In the meantime, let’s make sure that we’re getting what we can monetarily from it. Hopefully this entry will help with that a little.

Even if it is just general information from a guy who is not a tax adviser.

Tuesday, January 12, 2010

Watching Washington

The Washington Nationals generate a few rumors regarding second basemen yesterday, which might be of interest to Twins fans.

The most interesting is that they Nationals are willing to do a 2-year deal with Orlando Hudson. I would think that anyone interested in Hudson would be willing to do a two-year deal. Certainly the Twins should be willing to do a two-year deal - they may have "candidates" to play second base in 2011, but they sure don't have anyone they need to save a spot for.

The most eyebrow raising news was a tweet from Nationals beat reporter William Ladson, saying that Hudson wants to get paid $9 million for 2010. I bet you do, Orlando. I'd like Jessica Simpson to stop by my place covered in dark chocolate. I think we have about the same chance of that happening. It still feels like Hudson will be available for $10-$12 million over two years. If so, the Twins need to be all over that, but we'll save that 800-word rant about seizing opportunities for later. It sounds like something that needs to start with a Stephen Covey quote. You've been warned.

Finally, Ladson also tweeted that the Nationals had interest in Adam Kennedy. It's been awhile since I've thought about Kennedy. It was November 5th, to be exact. Before that, it was when I was editing the TwinsCentric GM Offseason Handbook. Let's see what we said about him there....

Adam Kennedy
Age: 33 (DOB: 1/10/76) | 2009 Salary: $4M
2009 Stats: .289/.348/.411, 11 HR, 63 RBI
Perhaps best known in Minnesota as that Angels second baseman who randomly went deep three times on the Twins in an ALCS game back in 2002, Kennedy is actually very much the type of player they are likely to target this winter. He's a veteran who generally hits for a good average with a bit of power, he can play both second and third competently, and he has a good reputation around the league. His main drawback is that he bats from the left side. Still, at the right price, he could be a quality addition.
Estimated Contract: 2 years, $9M

Hm, left-handed, huh? I forgot about that. I'm going to hope that this Kennedy thing isn't a ruse by the Nationals to get Hudson to play ball. I'd have no problem with the Nationals signing Kennedy (though I suspect we overestimated the contract he'll get) and leaving Hudson one less suitor in the market.

There is one other thing worth noting about all these Nationals rumors and second baseman: as of a couple of months ago, they didn't need one. They informed Cristian Guzman, who is under contract for $9 million next year, that he was going to be moving from shortstop to second base because he defense has slipped so much. Nothing like a glut of free agents to make a desperate organization reverse course.

But that glut is something that Twins fans should keep in mind. There are still an awful lot of good free agent fits out there, and now we know that the Twins still have some money to spend. So we can call off the attack dogs for now.

But we're watching. And sharpening up those Stephen Covey quotes. Be afraid.

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I'll be talking Twins with Fanatic Jack on his podcast starting around 9:00 tonight (Wednedsday). Jack is likely to rant about the Twins inaction this offseason, while I get to try to delay the inevitable aneurysm he's eventually going to have. I hope you can tune in.

Monday, January 11, 2010

Wrapped up in Cuddles

I'll admit - I'm a little taken aback.

Twice in the last week I've been accused of being a bobo for Michael Cuddyer. By two different people, in two different places, for two different reasons. Now there are worse guys that you could be a bobo for, to be sure. But I find this shocking.

It wasn't too long ago that I was on the opposite side of the coin, and the people accusing me of loving him were the ones defending him. He was supposed to be a stud who was victimized by his lack of playing time by the evil Ron Gardenhire. I pointed out that his playing time was reduced when he consistently crapped the bed in April. I'm pretty sure the exact quote I used is "sometimes a guy just isn't who you want him to be."

But right now, Cuddyer is awfully close to what I want him to be. He's a power-laden, right-handed power hitter who seems to be a solid teammate. I've been waiting for this guy since 1988, when the Twins traded away Tom Brunansky. Instead I'm supposed to point out his warts? Now that he's actually hitting? OK, I'm game. Let's point them out:

  • His range makes him a below average corner outfielder, despite his power arm.
  • He's fought injuries throughout his career.
  • The Twins minor leagues are crawling with outfield prospects who could eventually replace him.
  • He's going to soak up almost $19 million worth of payroll over the next two years.
And to these, I'll respond with five points:

1. Nobody ever said he was going to be a great outfielder. That was the knock on him from the day he arrived. It's why he grabbed bench in the final games of the 2002 ALCS. But he uses his arm well, and he's learned to play the wall well. That still makes him below average, but to suggest he's brutal like Vladamir Guerrero or Jermaine Dye is borderline silly.

2. He was injured a LOT early in his career with the Twins. He's also had 623 plate appearances in three of the last four years. The primary problem the missing year was an injured hand, which is hardly a recurring injury like a back or hamstring problem. Don't get me wrong - an injured hand is worth worrying about unless those hands hit 30 home runs the following year. Then I think we can assume they're OK.

3. The outfield prospects that everyone is so excited about are all at least three years away from the majors. None of them has even played in AA ball yet. I'm OK with getting excited about them, but I don't think we need to figure out the Opening Day lineup for 2012 just yet.

4. Cuddyer is a slight bargain at that price, and to confirm it you just need to look at the free agent market this year. Here are the top four outfielders on the market according to the TwinsCentric Offseason GM's Handbook, along with their age and OPS in 2009.

Matt Holliday - 29 - 909 OPS
Jason Bay - 31 - 921 OPS
Bobby Abreu - 35 - 835 OPS
Johnny Damon - 35 - 854 OPS

If you were going to put Cuddyer in that list, he's going to rank 3rd as a 30-year-old who posted a 862 OPS. Now here's the guaranteed money those guys made so far:

Matt Holliday - $120 million/7 years
Jason Bay - $66 million/2 years
Bobby Abreu - $19 million/2 years
Johnny Damon - unsigned, but reportedly turned down $20 million/2 years

It looks to me like Cuddyer could have had a three-year deal, and maybe a four-year deal (he's younger than Bay). And it looks like the minimum he would have commanded in a very tough year for outfielder is $9-10 million. There is almost no chance that a team would be able to sign him at $19 million over two years.

Guys who provide Cuddyer's numbers don't just fall from the sky. Just ask the Braves, who have been shaking the bushes trying to find a right-handed slugger who can play at least a little defense. They aren't out there. Cuddyer couldn't be much farther from "replaceable."

5. The man hit 30 home runs, drove in 94 RBI and hit .276. That makes up for a lot of warts, even if you ignore the fact that he's doing it right-handed in a lineup dominated by left-handed hitters.

You want to maximize Cuddyer's value right now? Just keep him healthy and happy. There is no lineup in which he would be more valuable than the Twins lineup. There is no outfield in which he would be more valuable than the short right field of Target Field.

And maybe there is no better player over whom to act like a bobo. Apparently I'd better hope so.

Sunday, January 10, 2010

History Repeating?

The team has had plenty of recent success, but things are looking even brighter. They’re moving out of their putrid dome into their new downtown state-of-the-art ballpark. Situations where they need to trade away players, like they did with their Cy Young ace a couple of years ago, should be a thing of the past. In fact, with the new stadium they’ve already locked up most of their key players to long-term deals. So far, so good.

But there’s a huge concern. The face of the franchise is only under contract for just one more year, and everyone knows the team is going to need to gulp hard, dig deep and offer a record-setting deal to keep him. It has to happen. Nobody can imagine him playing for another team. Nobody can imagine the Mariners without Ken Griffey Jr.

Or did you think I was talking about someone else?

The Mariners did offer that record-setting contract back in 1999. Shortly after Safeco Park replaced the Kingdome, the Mariners offered an 8-year, $148 million contract to Griffey, only to watch him turn it down. It turns out the problem wasn’t the money. Griffey had other concerns.

On October 25th, 1999, pro golfer Payne Stewart died in a bizarre plane crash. He and four others had lost consciousness during the flight due to oxygen deficiency when the plane lost pressurization. The plane eventually ran out of fuel and crashed near Mina, South Dakota. Stewart was a close friend of Griffey’s and the tragedy impacted him deeply.

Griffey informed the Mariners that he would not be signing an extension and desired them to trade him someplace closer to his home in Orlando. Later, he further restricted the teams to which he would accept a trade to Cincinnati, his hometown. That February he was traded for cheaper, younger players and signed a contract for just $116 million, $30 million less than what he had been offered by Seattle.

The cautionary tale is full of lessons that one could take to heart if one wishes. New stadiums don’t guarantee anything. Delays can cause unforeseen circumstances to change attitudes. Money isn’t the only player's whim a club must satisfy. And players and teams, whose identities seem intertwined, don’t always work things out the way they probably should.

But there is one final lesson that may be more heartening to Twins fans.

It turns out the Mariners found something else to do with that money. They went on a free agent spending spree that included signing closer Jose Mesa (2 years/$6.8 million), John Olerud (3/$20M) and Aaron Sele (2/$14.5M). But the defining move happened the next year when they reached across the Pacific and paid $13 million to Ichiro Suzuki’s Japanese club just to negotiate with him. On top of that they paid him $14 million over his first three years.

And the Mariners, who had averaged 81 wins in Griffey’s last four years with the team, averaged 98(!) wins in the four years after he left. Without Griffey (and Alex Rodriguez, who would leave after the 2000 season) the Mariners made it to the American League Championship Series in 2000 and 2001.

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FYI - I'll be on Travis Talks Podcast talking about the offseason at 9:00 on Monday night. I hope you can tune in or stop by is you have anything you want to talk about. Also, I would highly encourage you to join me on Twitter too. I'm doing a lot more posting there than I am here lately.