Don’t get me wrong, I think Pavano is excited to be back. He sure sound genuinely excited, and there have been several reports saying he expressed his desire privately to stay with the Twins from the very beginning. He’s not in a bad place, and clearly likes the situation. I’m happy for him.But there’s a reason he didn’t sign this same deal back in September or October. It’s because Pavano, who was viewed as possibly the second best free agent starting pitcher on the market, just signed a deal that was worth somewhere between half and three-quarter of his market value.
(That last sentence is not debatable. For instance, Ted Lilly signed for $33M guaranteed over three years. Jorge De La Rosas signed for two years and $21.5M. Hiroki Kuroda gained $12M for one year. Pavano was in their class, if not above.)
Pavano can blame a good chunk of that lost money on the collective bargaining agreement. That’s what allowed the Twins to offer Pavano, a Type A free agent, arbitration. Since he turned it down, it was going to cost every other MLB team a high draft pick to sign him. That severely restricted his potential suitors.
But the Twins had to take a risk to put that loadstone around Pavano’s neck, and his agent didn’t make them pay. By offering Pavano arbitration, they essentially offered him a 1-year/$11 million contract, because that’s how much he would’ve made in arbitration. When Pavano turned that down two months ago, the Twins breathed a sign of relief as it was pulled off the table.
So instead, a month later, he and his agent were without that offer as leverage, and seemingly without any other serious suitors. Thus, the Twins new offer was for twice as long, but at only 1.5 times the price. The Twins essentially got a “buy one year, get the second at 50% off” deal with this signing.
I’m sure Pavano and his agent will put a happy face on the deal, and nobody is going to be unhappy with a guaranteed $16.5M in his pocket. But there is no question – none – that if they had to do it again, they would have accepted that arbitration offer in November. The extra $5.5M now in hand is nowhere near the money that was available in that bush.
(This signing also further strains the credibility of those who might claim that the Twins paid $7M to Capps just so they didn’t need to sign a multi-year deal. By that logic, the Twins would’ve been happier signing Pavano to the same 1-year/$11M contract they essentially offered him in arbitration. We can safely assume that wasn’t on the table.)
The Twins played this exactly right, and deserved the luck that they got. What’s more, the pitching staff suddenly has an abundance of riches - unless this deal leads to some payroll cutting in which they trade away one of their other starting pitchers. It’s not impossible. There have been rumors going back to the winter meetings that the Twins might shop a starter to other teams if they acquire Pavano. Furthermore, the Twins not only have six pitchers for 2011 – they have the same six pitchers under their control for 2012, too. (And don’t forget Kyle Gibson waiting in AAA.)
If the Twins can’t afford it, we’ll likely hear of another trade. But if they can – and the bargain they just got helps - it’s a nice problem to have. Plus, if a move isn’t made this winter, it’ll be a fun topic to talk about as the trade deadline approaches.
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8 comments:
Actually, assuming Bill Smith wasn't given some sort of "hard ceiling" payroll budget that would have limited his options if Pavano had accepted arbitration, I would have preferred paying $3 mil more for just the one season. To me, the "present value" of a two year $16.5 mil contract for a pitcher of his age, talents, and medical history would be about 2/3 of that figure. If he got any kind of no-trade clause, I'd feel even stronger about preferring to pay a bit more for a 1-year deal.
But perhaps that's just me.
Don't think it strains credibility to think the Twins wanted Pavano for two years and Capps for only one. Much easier to believe than the many fans who posit the Twins go into the offseason without a plan in place. They so obviously do. There's a small amount of risk, some arm-twisting and, perhaps, a bit of luck involved, but there is a plan. It seems to have been executed exactly as drawn up and with no surprises at all ... so far, at least.
But there is no question – none – that if they had to do it again, they would have accepted that arbitration offer in November.
Strongly disagree with the assumption. I think the added year and the fit with the Twins was worth more to Pavano than the money left in the bush. He's made plenty of money and an additional $16M is nothing to sneeze at -- especially when he can stay in a comfort zone, with a proven contender, when his alternatives likely were the NYY, where much of the fan base despises him, or a pretender like the Nats.
I think Geek is basically wrong here.
De La Rosa is 5 years younger than Pavano and left handed. Lilly is the same age as Pavano, but he is also left handed and his numbers are considerably better than Pavano's. This analysis is just misreading the actual "market". I am sure his type A status played into teams choices, but so did his age and history of injuries.
I agree with Jim. I think the Twins would rather have had Pavano take one year at $11 million than this contract. And I doubt Pavano is regretting his decision to refuse arbitration. He wanted multi-year deal and he got one. He would have preferred three years with more money, but that may still happen depending on how the option vests.
"This signing also further strains the credibility "
Actually, I think it strains your credibility on this topic Geek. You keep insisting that a multi-year deal is equivalent to a one year deal at the average salary. It isn't and it never has been. Players want to get as much money guaranteed as possible. They know they are one injury away from being unemployable.
"But perhaps that's just me."
You an every GM in baseball I suspect. Evaluating players in the present is hard enough, guaranteeing a player's salary 2 or three years off in the future is a huge gamble.
By the way, I also think it's more than a little presumptive to assume Paano would have gotten $11 mil for 2011 had he accepted arbitration. That may very well be what his agent would have submitted, but the Twins would have submitted far less... $9 mil maybe. The Twins COULD have ended up paying 11 if the parties went through the process to its completion, but it's far more likely they would have settled at something close to 10. The only way the Twins would have been on the hook for 11, I think, is if they ended up going through the hearing process and losing.
The Twins have an "abundance of riches" at starting pitcher? I hope that was sarcastic, because they have a talented headcase and 5 interchangeable finesse pitchers who get blasted in the playoffs. They have an abundance of mediocrity, not riches.
Yet another Geek column in which he demonstrates a remarkable inability to grasp major league finances.
"Market value" is, by definition, whatever the market determines. Pavano was a free agent, and was only able to get a 2 year deal for the dollars the Twins gave him. That is, by definition, his market value.
De La Rosa is 5 years younger than Pavano and left handed. Lilly is the same age as Pavano, but he is also left handed and his numbers are considerably better than Pavano's. This analysis is just misreading the actual "market". I am sure his type A status played into teams choices, but so did his age and history of injuries.
I agree with this.
While I think it was a forgivable notion to imagine Pavano as the #2 on the market initially, it's a notion that should really be abandoned at this point given how thoroughly the market has upbraided it. In truth, he was about the fifth best option overall and his camp overplayed itself by imagining that Pavano was everyone's #1 or #2 backup plan to Cliff Lee. It should be quite clear by now that he wasn't.
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