Sunday, February 24, 2013

Options For Everyone

The business of Baseball transcends the game in many ways. Oftentimes purist fans want to forget about the business side of Baseball as it takes away from the joy of watching America's Pastime the way it was meant to be watched. On the other hand, like in medicine, philanthropy, and other parts of life, Baseball is a business, no matter how much we wish it weren't. While many heads in the clouds hope that one day Baseball will return to just a bunch of boys playing game after game in the summer sun, the business side of Baseball isn't going anywhere. In fact, embracing the money side of the game can enrich one's fandom. Determining the length, dollar amount, and other parts of contracts makes up such a large part of analyzing the game, that some focus solely on such topics. If your looking for a good website for all things business oriented concerning Baseball check out Maury Brown's website For now, I want to discuss the idea of an option. 

Adam LaRoche
Every player's contract has an average annual value, a yearly dollar amount that when combined equals the total value of said player's contract. So, for example, this offseason Adam LaRoche of the Washington Nationals signed a 2-year contract worth $22 million. He will earn $10 million in 2013 and $12 million in 2014. That $22 million counts as his base salary. Options are one-year additions that teams and players' representatives negotiate on when discussing a contract that have a dollar amount associated with them, but are not guaranteed unless the option is "picked up" or the option vests. Options give teams and players flexibility. Sometimes tacking on an option to a contract can make negotiations run more smoothly, other times they can be deal breakers, causing the two sides to forgo a contract and move on. More often than not, options are useful tools for both a player and the team; giving both sides a bit more wiggle room when discussing contracts involving tens of millions of dollars.

A few different types of options exist, including team options, player options, mutual options, and vesting options. I'll give a quick synopsis of each type, using examples to illustrate the positive and negative affects of each. First, let's discuss the team option. Team options, or club options, are the most commonly utilized form of the option. In his book, "The Extra 2%", Jonah Keri mentions club options when discussing ways in which the lowly Tampa Bay Devil Rays, now known only as the Rays, got the most out of the contracts they offered to top tier players. Keri describes it best when he says, "But with a club option, the team wields all the power. Got a 40-home run hitter? Keep him. Did he turn into Mario Mendoza? Happy trails." Team options give a club's front office complete latitude as to whether to keep or release a player. If an option has a dollar amount that a player would not find on the open market due to attrition in productivity then the team will choose to not pick up said option because no team wants to waste money on a player who isn't worth the money he will receive.

James Shields
On the other hand, using the example of the Rays, tacking on multiple team options onto a contract given to a young player could allow a team to keep said player for relatively less money than that player would make on the open market, making such an option very valuable. For example, when the Rays offered James Shields a contract early in his career, they added three player options on to the end of the deal, anticipating that Shields would only get better with time, and thus giving them complete autonomy when making the decision to keep him or not. Veterans who sign contracts during their prime years rarely allow teams to add club options onto their deals, preferring the other types of options instead, but young players who haven't proven their worth yet, or older players who are on the wrong part of the aging curve accept team options because it leaves some possibility that they could continue playing without becoming a free agent. Oftentimes, if a team refuses to give a player a contract without a club option attached, the player's agent will demand that a buyout clause be attached. A buyout clause is a dollar amount that a team must pay the player if said team decides not to pick up the club option, thereby securing the player some money no matter which way the club decides to go.

Derek Jeter
Now that you understand what a team option entails, let's move on to a player option. Player options are simple; they constitute the exact opposite of a club option. If teams place club options on younger or older players' contracts, player options are more often seen on contracts of players in their prime, or franchise players' contracts. Since the team has the money, front offices rarely want to allow a player to decide whether he will play another year after the base years of his contract have expired. It leaves teams with fewer alternatives, making it more difficult for General Managers and their staffs to plan for the future. On the other hand, some players are just worth it. For example, Derek Jeter, the face of the Yankees franchise, a future first-ballot hall of famer, and a consistently productive player even in his late thirties, had a player option attached to the contract he signed with the Yankees in 2010. The foundation of the contract runs through 2013, with a player option worth $8 million for 2014. Jeter's AAV for the base of the contract is about $17.6 million, significantly more than the dollar amount associated with the 2014 player option. Like club options, player options commonly have buyout clauses linked to them. In Jeter's case, the team has a $3 million buyout option they must pay if Jeter declines the player option for 2014. Player options are rarer than club options, but for a player as important to a one club as Jeter is to the Yankees, teams will do whatever is necessary to ensure that player signs a deal with them.

Conceptually, player and club options have little complexity to them. But wait, there's more. Another type of option seen in Baseball is the mutual option. This type of option combines the aspects of a team option and a player option. Essentially, a mutual option is an option that both the player and team must agree to. Wendy Thurm, a former lawyer, and writer for describes the positive and negative aspects of a mutual option best:

"A mutual option is a hedge against volatility in the market for that player in that particular option year. If the player’s value plummets, the team can decline the option and pay the buyout. If the player’s value rises, he can decline the option and seek a better deal as a free agent. If the player’s value is stable, however, then it might be in both parties’ interest to exercise the mutual option."

So, mutual options give both the team and the player the ability to come together and make a decision. This may seem like the most mature option available because it very well may be. Player and club options give control to one side, shutting out the other, but mutual options, like the negotiation of any contract, allow both sides to have a say. For a good example, let's take Adam LaRoche's contract, mentioned above. In LaRoche's deal, the two sides negotiated a mutual option for 2015 worth $15 million, substantially more than the $11 million AAV of the years preceding 2015. This option, like so many others, comes with a buyout clause. If the two sides don't agree to the mutual option, the Nationals must pay LaRoche $2 million in his departure.

Bobby Abreu
So, we've gone through club options, player options, and mutual options. All that's left is the vesting option. Recently the diligent writers at published a piece about vesting options, publishing with it a list of examples in which vesting options were and were not triggered. A vesting option is the same as the other types of options, except that in order to trigger the option, the player must attain some predetermined level of productivity. For example, the Angels gave Bobby Abreu a vesting option for 2012 that would be triggered if Abreu reached at least 433 plate appearances in the 2011 season. If he did not come to the plate 433 times or more the option would be moot, but if he achieved that minimum number of plate appearances he would be an Angel for another season. We see vesting options pop up most often on the contracts of older players or oft-injured players. These conditions cause instability, and a team doesn't want to be "on the hook" for money if a player cannot prove to the team they can perform on the field. For relief pitchers vesting options often involve appearances or games finished, for hitters we see plate appearances used, and for starting pitchers, innings pitched are most commonly used as a barometer. Sometimes vesting options come with clauses that allow a player to decline said option even if the option has vested, but not all incorporate such provisions. 

So, now you know everything and more about contract options in Major League Baseball. Maybe for some fans these topics detract from the fun and childlike innocence attached to the game, but for most, it offers another fascinating aspect to the non-playing side of sports. So much of the analytical revolution in Baseball combines on-field play with off-the-field decisions made by MLB front offices. No matter your preference, I hope you've learned something, so that maybe, the next time you hear he details of a contract, you might understand them a little better. 

Saturday, February 16, 2013

Call to The Pen

Last season, the Orioles shocked the Baseball world by turning the tables on the usual suspects in the AL East by winning 93 games, nabbing second place in the AL East, and one of the two wild card spots. The O's made the playoffs in 2013, making their way back to the post season for the first time in 1997. After making quick work of the Texas Rangers in the wild card play-in game, the Orioles ran into the Bronx Bombers in the ALDS. The Yankees outlasted the O's, beating them in a decisive game 5 to move on to the League Championship Series.

Since then, the AL East has undergone a make over. The Red Sox ridded themselves of big contracts like Carl Crawford and Adrian Gonzalez, as well as distractions like Josh Beckett. The Sox have since replaced that trio with a group of veterans like Shane Victorino, David Ross, Ryan Dempster, Jonny Gomes, Mike Napoli, and Stephen Drew. General Manager Ben Cherington prudently signed no players tied to draft pick compensation, and predominantly went after players considered "sure things" as opposed to big names and thus big risks.

Across the border, Blue Jays made the deal of the offseason, acquiring Jose Reyes, Emilio Bonifacio, Josh Johnson, and Mark Buehrle from the Miami Marlins in exchange for a bus load of prospects. After  years of prospect cultivation and development, the Blue Jays decided to use some young talent as currency in order to make a run at the playoffs. The Jays added the cherry on top of the sundae by making a second deal, this one for the reigning NL Cy Young award winner, knuckleballer R.A. Dickey. With this infusion of talent and experience, especially in the rotation, the Blue Jays are prime to make the playoffs for the first time since 1993.

The Rays, that scrappy young club from St. Petersburg, continued to rake in the young, talented, cheap, and team controlled players by trading veteran pitchers James Shields and Wade Davis to Kansas City. In Return the Rays received stud prospect Wil Myers along with pitcher Jake Odorizzi. While this deal didn't compare in size or impact to the dealings of the Blue Jays, the Rays secured one of the top MLB-ready talents in the minors without trading AL Cy Young award winner David Price, who's expensive arbitration years just kicked in. While this move might set the Rays back at first, with prospects like Chris Archer and youngsters like Jeremy Hellickson and Alex Cobb vying for places in the Rays rotation, Tampa looks to remain relevant in 2013 as well as the foreseeable future.

The Yankees offseason involved signing a number of older veteran players to short-term contracts, plugging holes, in order to stay under the luxury tax, but also not fall into the cellar of the AL East. The Yanks brought back Ichiro, Andy Pettitte, and Hiroki Kuroda, while adding veteran Kevin Youkilis to man the hot corner at 3rd. While these moves seem a bit desperate on the surface, the Yankees made shrewd moves that should keep them germane in the AL East in 2013. The only hole in the Yankees roster seems to be behind the plate, but the team has all spring training to figure out their backstop issues.

So, with every team in the AL East realistically eyeing the playoffs for the first time in years, what aspect might separate one from the rest of the pack? Last season, the Orioles used their brilliant bullpen to push them just past the Rays into the playoffs, and it seems as though the relief core may be the key to the east once again. In 2013, the O's bullpen put up a combined 6.4 fWAR, which ranked 3rd in the American League behind only the Royals and the Rays. Orioles relievers made quick work of the final innings of a game not by utilizing the strikeout, but instead by inducing more ground balls than any other AL East pen. In addition, the O's gave out few free passes, ranking second, behind only the Rangers, in BB/9.

Red Sox
Blue Jays

The Orioles didn't have the best offense, nor stellar starting pitching, but Buck Showalter's bullpen kept the team in every game, making the Orioles a deadly foe in close games. Unfortunately for Baltimore, their incredible winning percentage in 1-run games and extra inning games came halted in the ALDS in which 4 out of the 5 games played ended with a margin of victory of just 1 run. Given that the Orioles bullpen became their key to success, and the growing parity in the AL East, what have Baltimore's rivals been up to?

David Robertson
The Yankees lost a key part of their 2012 bullpen, righty Raphael Soriano, but they were able to parlay his success into an additional draft pick by offering him a qualifying offer that he didn't accept. Instead, once Soriano signed with his new club, the Washington Nationals, the Yankees picked up a compensatory pick, which turns out to be the 32nd pick in this summers upcoming draft. The Yankees willingly parted with their 2012 bullpen anchor given Soriano's desire for a lucrative multi-year contract, the ability to obtain a draft pick in return, and most importantly knowing that future Hall-Of-Famer Mariano Rivera would return in 2013 to fill the hole left by Soriano. In addition to Rivera's return, the Yankees still have Nate Robertson, the strikeout machine, who has posted a 12.20 K/9, 2.70 FIP, and accumulated 6.0 fWAR since 2009. Between Robertson, Rivera, and a mix of Boone Logan from the left side, the Yankees bullpen should hold up late in games.

Roberto Hernandez
The Rays made some minor changes to their bullpen, but given their recent success, these changes should prove fruitful. Tampa traded ground ball specialist Burk Badenhop to the Brewers, replacing him with Roberto Hernandez, the pitcher formerly known as Fausto Carmona. Carmona, like Badenhop throws from the right side, and more importantly throws a hard sinker that induces a great number of ground balls. Since becoming a regular in the Majors, Hernandez has posted a ridiculous 58.4 ground ball percentage, good enough for a 2.26 GB/FB ratio. Hernandez did most of his previous work from the starting rotation, and while the Rays may ask him to spot start in a pinch, his role will be out of the bullpen where Joe Madden expects him to induce ground ball after ground ball. The Rays also resigned Joel Peralta while retaining the services of All-Star closer Fernando Rodney by picking up the 2013 team option attached to his contract. Add those names to lefty fire baller Jake McGee, and the Rays bullpen looks ready to buttress their young starting pitching for another season.

Koji Uehara
The Red Sox made headlines by signing lots of free agents this offseason, including a few in the bullpen. The Sox signed southpaw, and well traveled, Craig Breslow, now onto his 7th MLB franchise, to a conservative 2-year $6.25 million contract, added former Ranger's righty Koji Uehara for 1-year and $4.25 million, and traded for former Pirates closer Joel Hanrahan. In addition, the Sox will benefit from the return of Andrew Bailey from an injury marred 2012 campaign, especially since Bailey's 2013 will determine how much money the reliever will get paid in his 3rd year of arbitration. Oliver, a projection system created by Hardball Times' Brian Cartwright, projects good numbers from the Red Sox bullpen, especially from Uehara, who I think represents the keystone to success for this relief core. Also, don't forget about Daniel Bard, who many at spring training say is progressing nicely and might fit into the Sox pen around after All-Star break if the team moves a pitcher a the trade deadline.
Name ERA K/9 BB/9 FIP
Koji Uehara 2.99 10.15 1.39 2.74
Joel Hanrahan 3.64 9.90 3.93 3.08
Andrew Bailey 3.99 8.25 3.20 3.12
Junichi Tazawa 3.77 8.67 2.89 3.28
Craig Breslow 3.75 7.93 3.32 3.51
Alfredo Aceves 4.35 7.10 3.44 3.86
Andrew Miller 5.17 8.58 6.34 4.10
Total 3.95 8.65 3.50 3.38

The 2013 Blue Jays bullpen looks eerily similar to the 2012 pen that ranked middle of the road in some statistical categories and poor in others amongst AL teams. They coaxed lefty Darren Oliver to return, and remain hopeful that Sergio Santos can overcome shoulder surgery to return to his level of nastiness by June. The Jays put a lot of faith in their starting rotation, stocking it with work horses like R.A. Dickey and Mark Buehrle, as well as possible ace Josh Johnson. These three starters should lessen the load on the Blue Jays pen, but given Johnson's injury history and Buehrle's age, the Jays may need to call on their relievers in 2013 more often than they expect.

Darren O'Day
How about those Orioles? Did the organization with the golden bullpen do anything to improve on 2012? Instead of adding or subtracting, the Orioles did their best to keep their 2012 bullpen in tact for 2013. The O's avoided arbitration with Jim Johnson and Darren O'Day, two of the most utilized and important parts of their 2012 relief prosperity. The team returns Luis Ayala, Tommy Hunter, lefty Brian Matusz, and Troy Patton, all of whom they hope will continue to perform at a high level. While the O's may not have "upgraded" their bullpen, the team expects to add one if not two highly touted starting pitching prospects in mid-season, Dylan Bundy and Kevin Gausman. With the addition of these young stars to an already solid starting pitching staff, the Orioles have no need to tinker with a bullpen that already promises to keep men off base, and to induce lots of double plays late in games.

The AL East is a free for all in 2013, with no one team looking like the current favorite. Given that fact, each team has done their best to ensure that their bullpen won't be the one to falter in 2013. Most of a team's success derives from hitting and starting pitching, but with 5 teams so close to each other in talent and projected wins, it may come down to which relief core can hold the lead in the latter third of the game. While we can only attempt to predict which bullpen will be the most valuable in 2013, it is safe to say that the competition for the, most-likely, 2 playoff spots in the AL East should be fierce.

Tuesday, February 12, 2013

The Newest Tribesman

Michael Bourn
Yesterday the Indians announced that they had come to an agreement with free agent outfielder Michael Bourn on a 4-year contract worth $48 million, or $12 million AAV. The contract has a vesting option for a 5th year worth $12 million pending Bourn reaches 550 plate appearances in the final year of his contract at which he will be 34 years old. When the offseason began, writers, pundits, and experts ranked Bourn as one of the top free agents. On my own big board of top-50 free agents, I had Bourn ranked as the fourth best free agent behind only Zack Greinke, B.J. Upton, and Josh Hamilton. The Dodgers signed Greinke to a 6-year $159 million deal, Upton got 5 years and $75.25 million from the Braves, while Hamilton inked a 5-year $125 million deal with the Angels. Of the top 4 free agents on my list, Bourn received the fewest years and least amount of money. For more on how Bourn compared to free agent center fielders check out my article from earlier this offseason. For more on Bourn's value, check out this recent Summerpastime article.

Essentially, Bourn is a speedy player. Every positive aspect of his game relies on his wheels. He has a good on-base percentage, but to continue as a dominant leadoff hitter past the age of 30, his walk rate needs to rise. Here's a snapshot look at some of the better leadoff hitters from 2012 and where Bourn ranks:

Name Team R SB BB% OBP fWAR
Mike Trout Angels 129 49 10.50% 0.399 10
Michael Bourn Braves 96 42 10.00% 0.348 6.4
Austin Jackson Tigers 103 12 10.90% 0.377 5.5
Jose Reyes Marlins 86 40 8.80% 0.347 4.5

So, given the information we know about Bourn, was this deal a success from his position? Going into the offseason Bourn and agent Scott Boras wanted a contract that totaled higher than $100 million with at least 5 guaranteed years. Instead of that mega-deal he signed for less than half that amount of money, but was able to find 4 guaranteed years with the possibility of a 5th. From this we can garner that getting more years was more important to Bourn than getting the highest AAV possible. Prior to Bourn's new contract agreement, many speculated that he might look for a one-year deal, in the hope that he might find better luck next offseason. I think teams in need of outfielders looked at Bourn as an upgrade, a great defender, a threat on the base paths, but not a player built to sustain such qualities by even age 33. Fortunately, free agents willing to take less money have a better chance of finding a deal because it allows teams with less money to become involved in negotiations. The Indians fit that mold perfectly. Jose Reyes received more money and more years, but he signed his contract at a younger age, he switch hits, and has shown more power than Bourn has. So, the answer to the original question is that this contract wasn't a success by Bourn's original standards, but by any realistic set of criterion $12 million AAV is the perfect fit for a player like Michael Bourn. 

From the players perspective this is the best available option, and he took it, but what about from the Indians' perspective. In 2012 Cleveland lost 94 games, and the last time the team went to the playoffs was 2007, remember the bugs

The Indians haven't been trending well of recent, which resulted in the firing of manager Manny Acta, the hiring of Terry Francona, and the release of former big-time players like Travis Hafner and Grady Sizemore. The Indians of 2013 won't look anything like the team that stormed to the ALCS in 2007, but given the weaknesses in the American League and particularly the AL Central, and the addition of the 2nd wild card spot, the Indians 2013 season outlook continues to improve. 

Since one player cannot turn a 94 loss team into a playoff primed squad, what else have the Indians been up to improve? Chris Antonetti, the GM of the Indians, started his offseason by getting rid of dead weight like Hafner and Sizemore, which allowed him to move on from those well known, but injury hampered, names. Next, Antonetti inserted the Indians into a three-way trade involving the Diamondbacks and the Cincinnati Reds. In exchange for parting with soon-to-be free agent Shin-Soo Choo, the Indians received outfielder Drew Stubbs from the Reds and high-level pitching prospect Trevor Bauer from Arizona. While Bauer is far from a proven commodity, he is young, under team control at a cheap price, and most importantly, loaded with talent and upside. Given the Indians mediocre farm system, Keith Law ranked them 19/30 MLB teams, adding an MLB ready top of the rotation starter like Bauer made the Indians the clear winners of the three-team trade.

Nick Swisher
Next, the Indians made a few minor moves like signing Brett Myers to a 1-year deal as a starter, not a reliever. In addition, Mark Reynolds joined the club to mix in at 1st base and DH. Next the Indians made their biggest splash of the offseason by signing Nick Swisher a 4-year $56 million contract. Swisher has Ohio connections, will make $14 million AAV, and provides a great upgrade in the Indians lineup. With the addition of Bourn, about 32% of the Indians 2013 payroll will go to Swisher and Bourn, but even for a mid-market team, the proportions could be worse. Swisher does every thing the Indians needed, he gets on base, switch hits, has power, and can play both outfield and 1st base. With the addition of Bourn, the Indians have a top of the lineup that could do some serious damage to opposing pitchers, causing them to work harder, throw more pitches, and possibly give up more runs in the process. Given Cleveland's project lineup, 5 starters are projected by PECOTA to have higher .328 OBPs in 2013. Cleveland's new lineup will strikeout more than the average team, but it will also produce more homeruns, a higher on-base percentage, and more stolen bases than it has in the previous 4 seasons.

From a hitting standpoint, Bourn adds run production. With Asdrubal Cabrera, Jason Kipnis, Nick Swisher, Carlos Santana, and Mark Reynolds/Jason Giambi hitting behind Bourn, the Indians and their fans can expect the club to score a lot more runs than they have been accustomed to in recent years. Defensively, the Indians have more options now than before. If Terry Francona, Chris Antonetti, and others want, the team now has the ability to move Drew Stubbs or Michael Brantley for an upgrade elsewhere. On the other hand, a defensive outfield of Brantley, Stubbs, and Bourn would be a vacuum for fly balls.
Name Inn DRS UZR UZR/150
Michael Bourn 3888.2 51 35.3 11.9
Nick Swisher 3201 -5 11.5 4.7
Drew Stubbs 3666 -3 4.8 2
Michael Brantley 2833.2 -10 -12.4 -6.4

Don't be dissuaded by Brantley's poor numbers, he plays a much better left field (8 DRS & 3.4 UZR in 2012) than he does center field. An outfield with Stubbs and Brantley in the corners and Bourn in the middle would have a lot of range, which cuts down on hitters turning doubles in to triples and singles into doubles. Over the course of 162 games, such range could benefit the Indians in a subtle yet vital manner. From the numbers above, Swisher doesn't seem like a bad outfielder, so why relegate him to first base? First, playing a less demanding defensive position might cut down on the possibility of injury. Second, Swisher has average range at 1st base, and has posted a positive DRS (3) since 2010. So, moving Swisher to 1st doesn't hurt in the infield, and it improves the team's overall defense in the outfield. While moving Brantley or Stubbs could help, keeping both might give the Indians the best chance to compete for a playoff spot in 2013.

In Baseball, like all other aspects of life, timing often dictates success or failure. In this case, the timing of the Indians interest in Bourn makes me see this signing as a big win for Cleveland. With spring training approaching and few teams catering to the type of contract Bourn originally wanted, the Indians swept in offered Bourn the security he wanted and snatched him up for a reasonable AAV. While Bourn got the best available deal, the Indians made a smart, savvy, and productive move to improve their club now. Cleveland may not be a hot destination for free agents, but it's considered more highly valued than Kansas City, another AL Central team that improved this winter, albeit through controversial means. This puts Cleveland into the conversation for a playoff spot, a turnaround that 94 loss teams rarely expect. While the two wildcards seem the most likely possibility for Cleveland, I think that the AL West and East are too powerful, and that the best chance the Tribe has of reaching the postseason will be by unexpectedly winning the AL Central. Knocking off the Tigers, who are vastly better than their divisional opponents won't be easy, but given the uncertainty of injuries and other unaccountable factors, the Indians now have a chance. Despite the fact that Bourn rejected a qualifying offer from the Braves, Cleveland won't have to relinquish their first-round pick in the draft as it is protected due to the Indians' abysmal record in 2012. The Indians lost their second-round pick when they signed Swisher, and the acquisition of Bourn causes the team to lose their competitive balance pick, which would have been the 71st overall pick.

The Indians made a great deal here. Most sabermetricians will tell you that Bourn's production will decline in the next few years, and I stand with them, but the Indians are only on the hook for a guaranteed 4 years, and given their lack of other stars, paying Bourn $12 million AAV should be worth it. At the very least, even if the Indians don't make the playoffs in 2013, they should be more exciting to watch, win more games, and thus bring more fans to Progressive Field. On the bright side, Bourn could burn out just around age 34-35, meaning the Indians got the most out of him while they could, another sign that Antonetti made a sly deal. Cleveland got their man, Bourn finally found a team, the rest remains unknown, but that's the fun. 

Friday, February 8, 2013

King of The Hill

Felix Hernandez
Yesterday USA Today reported that the Seattle Mariners and ace pitcher Felix Hernandez have agreed to a 7-year $175 million contact. Felix's previous contract wasn't set to expire for two more seasons, but his new contract doesn't extend on top of those two years, instead it modifies the next two seasons and adds 5 more. The aspect of this news that stands out the most is that Felix Hernandez, at 26 years old, is now the highest paid pitcher of all time. The previous high for AAV for a pitcher was the recently signed Zack Greinke. His contract with the Dodgers was set to pay him $24.5 million annually, but after 2 years of Hernandez's deal, Felix will be receiving $25 million annually.

So, did Felix Hernandez deserve this contract, and if so, why did he sign it, and why did the Mariners offer it? First, Felix deserves to be paid like a top 5 pitcher because his numbers prove it. Felix has played 8 seasons in the Majors, all for the Mariners, coming up as a 19 year old, and immediately began throwing 190+ innings in only his second season in the Majors. Hernandez, like many young ace pitchers, came in throwing in the mid 90's with his fastball, showing sharp breaking balls including a slider with velocities peaking above 90 mph. Comparing heat maps of Hernandez's pitches from early in his career to his most recent seasons shows a move from pitches near the middle of the plate to the corners. Hernandez's does a great job of keeping his pitches low and away to righties and on the inside corner to lefties, the perfect combination for pitching success. This maturity on the mound has shown in King Felix's numbers as well. Due to his improved precision and strategy, Felix's BB/9 has been getting steadily less and less since peaking in 2008. While Hernandez's ground ball percentage has been seeing some attrition, Felix has countered it with an increase in strikeouts while his swing percentage (the total percentage of pitches a batter swings at) has remained constant, showing better control and precisions despite drops in velocity and number of ground balls induced.

Hernandez's statistics have been following the typical age curve for a starting pitcher as constructed by the good people at As you can see, velocity should begin to trend down around age 27, but FIP, BB/9, and K/9 should all remain constant until age 29 or so when the edges begin to fray. This graph is meant to generalize the production of starting pitchers over time, it doesn't take into account that Hernandez, who has huge amounts of talent, may age better than the average or even above-average pitcher. The Mariners weren't completely trusting in Hernandez's ability to age like Greg Maddux, not giving him a 7-year extension, but adding 5 years onto the already guaranteed 2 years from his previous contract. This decision shows that the Mariners understand that even the best pitchers reach stumbling blocks after they turn 31 years old. On the other hand, if there was a pitcher or two I would be counting on performing at a high level will into his thirties, Felix Hernandez is near or at the top of my list. In his career Hernandez has shown an ability to stay healthy and stay on the field. He's thrown over 200 innings 5 of his 8 MLB seasons, from 2008-2012. Hernandez has reaching the disabled list twice in his career, in 2007 and 2008, which isn't unreasonable as his innings work load had just increased dramatically, a change that commonly leads to some arm issues.

Now that I've answered whether Felix Hernandez was worth the money and years in this deal, now let's talk about why King Felix would sign this contract. First, the money is on the table now. Hernandez, like all other athletes know that once their careers in professional sports end their income will fall drastically, so they go for the most money and for financial security whenever they can during their careers. Hernandez had two years remaining on the 5-year $78 million contract he signed in 2010, taking him through his arbitration eligible years. He could have played out those seasons in Seattle and then explored his options, and there would be many, on the free agent market as a 28 year old, but instead Felix resigned with the team that scouting him, drafted him, developed him, and has treated him as well as a team that has won recently can. Seattle has been a team never lacking a franchise player, loved in the city, no matter the Mariners winning percentage. In the 90's the team had Ken Griffey Jr., between 2000 and 2012 it was Ichiro Suzuki, and with this new contract, the torch has officially been passed to Felix Hernandez. Hernandez is loved by the city of Seattle, when he starts at home; Mariners fans in right field count his strikeouts, calling themselves the King's Court. In addition, Seattle, while not New York or Boston, is a fairly metropolitan city, ranking 22nd in population according to the most recent census data.

Another reason for hope in Seattle, and thus another justification for Felix resigning in the Emerald City, is Seattle's incredible group of young talent. ESPN's Keith Law recently ranked Seattle as having the 8th best farm system in the league with a solid core of young starting pitchers like Taijaun Walker, James Paxton, and Danny Hultzen. In addition, they sport a top infield prospect in Nick Franklin, young catching prospect Mike Zunino, and young players already with the big club like Jesus Montero, Michael Saunders, Kyle Seager, and Dustin Ackley. So, maybe the Mariners won't be a winning team this season or even next season, but just around the time Hernandez's AAV goes from $20 to $25 million the Mariners should have the type of team ready to compete for the playoffs. This shows that Hernandez has faith in the Mariners system, and when the face of the franchise shows confidence in the team, the fans won't be far behind.

So, while Felix may have given up a chance to make maybe more money in a bigger city like Boston or Chicago, and might have lessened his chances of winning a World Sereis, there were numerous solid justifications for resigning with the Mariners. So, the only question left to answer is the simplest, why the Mariners would offer Felix a contract of this length and magnitude. The Mariners aren't a big time franchise, but the team has never had a problem spending money on free agents, a la Chone Figgins. In addition, Hernandez will now make up 20% or more of Seattles overall payroll. We've recently seen how big contracts can still force the hands of the richest teams as with the Alex Rodriguez situation with the Yankees. The Mariners may be extending a lot of money to Felix, but as we've already proven, he's worth the money. The Mariners have most of their future success tied up in youth, and you is inexpensive. This paradigm is conducive to having a large portion of the payroll going to one or two players because young players are cheap. Signing Hernandez allows the Mariners to now change their marketing strategy to make King Felix a brand, a name that every citizen of Seattle knows. Given Seattles solid history of rabid fandom and passion for the Mariners, the team will have little trouble anointing Felix Hernandez the next Sultan of Seattle.

Justin Verlander
So, this deal looks good, it benefits the player, the team, and the fans, but what does it mean for the rest of the league? Baseball is a business and in Hernandez's contract changes the landscape of the market just like Zack Greinke's did before this and Cole Hamel's deal did before that. Two of the top 3 pitchers in the league have contracts ending in two years, and without a doubt King Felix's new deal will affect both of their next contracts. Clayton Kershaw, currently 24 years old, and Justin Verlander, currently 29 years old. Verlander has been the best pitcher in Baseball since 2009; he won an MVP and Cy Young award with the Tigers, and has brought them to two World Series. He may get similar AAV to Felix Hernandez, in fact he may get a little more, but he won't get a 7-year deal. At his age a 5-year contract would be the most I would go.

Name Team IP K/9 BB/9 HR/9 ERA FIP WAR
Justin Verlander Tigers 953.2 9.22 2.37 0.73 2.95 2.93 28.6
Felix Hernandez Mariners 954 8.43 2.49 0.61 2.81 3.03 24.2
Zack Greinke - - - 833.1 8.9 2.21 0.71 3.37 2.93 23.5
Clayton Kershaw Dodgers 836.1 9.41 3.11 0.55 2.6 2.87 20.8

Clayton Kershaw
As for Kershaw, Hernandez's contract impacts him greatly. If Kershaw wants an extension now, he could get a deal similar to Hernandez due to his youth and his already stellar career. On the other hand, if Kershaw plays through his current deal becomes a free agent at age 26, Kershaw could sign a contract of similar length to Hernandez but for even more AAV. That would seem like the most lucrative path for Kershaw, but if the native Texan wants to stay with the Dodgers, and like Jared Weaver with the Angels, not want to deal with contract speculation, he could sign an extension now and still get a second huge deal around his age 30 season. Overall, the Dodgers have a lot of money, holes burning in their pockets, and so one way or the other, Kershaw will make a lot of money, most likely in Los Angeles.
So, while $175 million sounds like a huge amount of money, and it is, we now see that the money is justified, for all parties involved. Felix Hernandez and the Seattle Mariners now go hand-in-hand; Felix represents the city, similar to the Mariners greats before him. In 2011 he won the AL Cy Young award, in 2012 he threw a perfect game, now he's the highest paid pitcher of all time, and, as all Mariners fans hope, he will be a World Champion down the road. If there was ever a more perfect road to Cooperstown, I haven't heard of it yet. Now comes the hard part, everything just has to work out. 

Thursday, February 7, 2013

Who Get's The Big Fish?

Prince Fielder
Baseball fans rejoice. We've almost made of through the long, difficult, and trying winter with little to no live Baseball to watch. Free agency merely gives the most dedicated and starving Baseball fan a bit of respite, but it only satisfies us enough to bridge the gap of the offseason until Spring Training facilities open and Baseball is officially deemed "open for business". 4 days remain until pitchers and catcher's report to either Florida or Arizona, and another few weeks until their teammates join them. While most players have had their plane reservations booked for weeks, some players' destinations continue to remain unknown. Free agency doesn't stop just because Baseball fans, players, coaches, and executives can see the Promised Land from across the Jordan River. No, instead agents, front offices, and owners work diligently to find the last missing piece to the puzzle.

Recently the Oakland Athletics deal Chris Carter, Brad Peacock, and Max Stassi to the Astros in exchange for Jed Lowrie an a bullpen pitcher. So, not only does Free Agency continue up to the start of the season, but team's will always be looking to improve by exchange. While predicting a trade is virtually impossible without, and sometimes even with inside information, speculating on the possible destinations for the remaining free agents becomes more and more fascinating every minute we move closer and closer to the promised land that is Opening Day.

Michael Bourn:
Michael Bourn
Since the October, numerous pundits have predicted that Bourn would be the Prince Fielder of the 2013 offseason. Last year, Fielder, one of the top 3 free agents of 2012, remained unsigned until January 26th, when the Detroit Tigers and Dave Dombrowski moved their chips, $214 million worth to be exact, into the pot. The Tigers landed Fielder, which not only helped Miguel Cabrera become the first player to win the Triple Crown since 1967, but made Detroit a power house team. The Tigers reached the World Series, and while they lost, few Baseball people would bash that massive contract due to Fielder's predicted value, current value, and the huge push he gave the franchise as a whole.

Is Michael Bourn Prince Fielder? No, I think we can all categorically say the two are quite different. Fielder is a bull of a man with incredible power to all fields while Bourn is a small scrappy contact hitter with lightning fast speed. Power doesn't diminish into a player's 30's as quickly as speed does, making teams even more wary in the face of a long-term high price tag deal with Bourn. In addition, the market this offseason was stocked with talented outfielders making negotiations for a contract difficult, and causing teams to use prospect instead of cash to attain outfield help. The Nationals traded for Denard Span, the Phillies for Ben Revere, and the Braves for Justin Upton. So, where does that leave Michael Bourn? Bourn is a player completely built around his speed and ability to get on base. In addition he brings superb defense in the outfield, closing on balls with great speed, combined with a very good first step, solid leaping ability, and an above average arm.

2009 0.354 61 83.5% 11 9.9
2010 0.341 52 81.3% 30 19.4
2011 0.349 61 81.3% -3 -6.4
2012 0.348 42 76.4% 24 22.4

As you can see from this chart, Bourn gets on base with regularity, consistently putting up numbers above the league average (.315 in 2012). Bourn recently turned 30 years old, generally a harbinger of an attrition of production, which accelerates if built on speed rather than power.

It's possible that Bourn could still attain the type of contract that he and mega agent Scott Boras wanted in November, something in the neighborhood of 5+ seasons and $100 million, that possibility dwindles every second we get closer to Spring Training. More reasonable figures being reported recently have put Bourn in a 3-year deal with an AAV of $15 million or so. Most sabermetricians and pundits would tell you that, for example, a contract of 3-years $46 million with a vesting option for a 4th year that would be worth $16 Million, and a buyout of $3 million would be reasonable to acquire Michael Bourn. So, in essence, the player, in this case Bourn, overvalued himself in a saturated market, and now that there is a definite time frame established, the player is adapting to the market in order to come to a conclusion. This is market economics, it's one reason of having no salary cap enhances Baseball's image as opposed to making the players look greedy and overpaid. Bourn turned down the Braves' qualifying offer in November, making him less appealing to teams that would be forced to lose a draft pick as part of acquiring the speedy outfielder. It also makes teams more likely to want to negotiate a multi-year deal with Bourn, so as to get more out of him, making up for the future of a lost 1st-round draft pick. So, while some reports have team's looking to sign Bourn to a 1-year deal, I don't see it as likely unless said team wouldn't be forced to give up a draft pick.

Team's that could still be fits for Bourn include the New York Mets, Philadelphia Phillies, Texas Rangers, Baltimore Orioles, and Seattle Mariners. The Mets have no legitimate outfielders currently on the roster. While the team has worked hard to build up depth in the infield and starting rotation, the outfield has been untended to, unless you count Jason Bay, but that attempt officially failed when the Mets dropped Bay from their roster. While Bourn fits a big need for the Mets, he would likely not boost them into a playoff spot, so spending a high AAV even for 2-3 seasons may not be worth it for Sandy Alderson and his bunch. There is still a slight possibility the Mets will be allowed to retain their first round pick even if they were to ink Bourn to a deal, but MLB has yet to rule on the situation. Most likely, the Mets would have to forfeit that pick, making them even less likely to go after Bourn.

 The Phillies have many more reasons to like Bourn. Ruben Amaro finds himself with a high payroll, older team, and 2 platoons at the corner outfield spot. He also sees a division that just got tougher, due to recent acquisitions made by the Nationals and Braves, and a team on the cusp of the playoffs in the Phillies. The Phillies already have a leadoff type hitter in Ben Revere, as well as an aging but still viable Jimmy Rollins, so, you might be asking yourself, why the Phillies would want another speedy player. Adding Bourn would give the Phillies the "2003 Juan Pierre/Luis Castillo" look at the top of their lineup, essentially providing the muscle in the lineup with more and more opportunities to hit with runners on base and in scoring position. In addition, Bourn's defense would make playing inept defenders like Delmon Young and Darin Ruf in the outfield. Bourn came up with the Phillies, knows the organization well and would be a valuable asset to the Phillies. The question all comes down to money. If Ruben Amaro is willing to pay a higher AAV in order to get Bourn to agree to a shorter deal, it would be worth signing him, giving up their first round pick, but if Bourn demands more than 3 years, the Phillies should continue to use restraint.

The Rangers lost Josh Hamilton this offseason to rival LA. Hamilton may not have played much longer in centerfield had he stayed in Texas, meaning that the team was always willing to go with the combination of Craig Gentry and Leonys Martin in centerfield. If Jon Daniels signed Bourn, he would most likely play the majority in center field in 2013, and even 2014, but moved to a corner spot not long after the All-Star break in 2014. Bourn doesn't have power, so he won't benefit from Arlington's home run tendencies, but the combination of Bourn, Elvis Andrus and, eventually Jurickson Profar in the 9-1-2 spots would be incredibly difficult to stop, and would neutralize ground ball innings eaters like the ones recently signed by the Angels. The Rangers have money to spend, and given the state of their farm system, losing a draft pick wouldn't cause too much strife. In the end here, it comes down to the price tag. If Bourn is willing to lessen some standards the Rangers could be on board, but otherwise I wouldn't bet on Daniels blinking first.

The Orioles have the ability to benefit greatly from an acquisition involving Michael Bourn. While the Orioles already have a talented young center fielder in Adam Jones, Bourn would buttress Baltimore's defensive outfield by playing in right, moving Nick Markakis to platoon with Nolan Reimold in left field. For a team many think will regress in 2013, adding Bourn could keep them in contention for longer, possibly long enough to return to the playoffs. Fangraphs recently released the Steamer projections for 2013. An outfield with Bourn, Jones, and a platoon of Markakis and Reimold is project to look like this:
Bourn 6 35 0.309
Jones 28 9 0.347
Markakis 17 4 0.351
Reimold 16 6 0.332
Total 67 54 0.335
While the platoon in left would cause both Markakis' and Reimold's numbers to decrease a little due to less playing time, the DH spot allows for manager Buck Showalter to keep them in the lineup even if they don't have a spot in the field. The combination of a full year in the majors for Manny Machado, the prospect of Dylan Bundy coming up to the big club mid-season, and the addition of Bourn to the outfield would be the perfect counter punch to the Rays' trade for Will Myers, and Red Sox flurry of signings, and the Blue Jays Miami buying extravaganza.

The Mariners are a fit for Bourn because they are without a good lineup, and Bourn might put some more fans butts in seats. GM Jack Zduriencik had made some questionable decisions of recent, but no one would blame him for trying to sign Bourn. Seattle can spend some money, and Bourn might provide the young Mariners hitters with a runner on base more often when they hit. Bourn might only consider a long-term deal with the Mariners since so much of their success is tied up in their core young players. The Mariners aren't winning anything in 2013 with or without Bourn, so signing him all comes down to pressure from ownership, and to a much lesser extent to look active and not portray an air of dejection. 

Kyle Lohse:
Kyle Lohse
Then there's Kyle Lohse. Lohse is the best starting pitcher left on the market, but unlike Bourn, many predicted Lohse would have trouble finding a team. For more on why teams might be wary to sign Lohse read Glenn DuPaul's editorial on the issue here. Lohse looks to regress heavily in 2013, is asking for a hefty sized AAV, and will cost the team that signs him a draft pick having turned down the Cardinals qualifying offer. He's a solid pitcher, with a solid track record, but he's already undergone serious arm surgery in his career, is in his 30's, and doesn't have a power arm. Lohse constitutes the definition of a player who is the "last piece" to a team. Raphael Soriano, recently signed by the Nats constituted he same. Both are expensive cars that a guy would never buy until he's older, rich, and already enjoying life. He's the "cherry on top", not the foundational ice cream. So, where could he land? 

According to multiple projections systems, Lohse's 2013 numbers should look in the neighborhood of these numbers: 
2013 194 5.67 2.04 0.91 3.85 3.86

While those numbers may not be worth $10 million AAV and the loss of a draft pick, to a playoff team hoping to put themselves in the preseason conversation of World Series possibility, Lohse could very well be worth it. Teams like that include the Rangers and Cardinals with the Pirates and Brewers also in the conversation. 

The Rangers are a team that many thought would be active this offseason, but have continued to lie in wait until they pounce. Still, Lohse could make sense for the Rangers. Signing Lohse would allow the team to trade prospect Martin Perez, a player many teams would be interested in acquiring. If the Rangers could use Perez to get an outfielder like Dexter Fowler, or with a better set of prospects, Carlos Gonzalez, the Rangers could move back into a better position in the AL West. Lohse might not fair incredibly well in Arlington, but half a team's games are played on the road, and Lohse would be the 4th starter, a veteran presence, but not an ace. 

The Cardinals recently found out that they have lost Chris Carpenter for the season, and he still may retire. The cardinals have the best farm system in the Majors, and have no need to fill Carp's spot with a free agent. Trevor Rosenthal, Joe Kelly, Shelby Miller, and Lance Lynn would compete for the 4th and 5th spots with Carpenter gone. In addition, Jaime Garcia may not be ready for Opening Day, so those four pitchers could compete for 3 Opening Day rotation slots. The Cardinals have a lot of internal and cheap options, but re-signing Lohse could work for them. Lohse liked playing in St. Louis, which most consider to be a desirable place to play. The Cardinals don't need him, but adding Lohse could better their odds of winning the NL Central. 

The Pirates don't need Kyle Lohse, but his addition could prove fruitful. The Pirates have been on the cusp of making the playoffs for the last 2 seasons. They have the talent to play like a playoff team for 3/4 of the season, but not all of it, causing the Buccos to be on the outside looking in in October. With Gerrit Cole expected to make his debut this season, and the possible addition of Lohse, the Pirates could put themselves squarely ahead of the Brewers and right in the wheelhouse of the Reds/Cardinals for 2013 and more likely 2014. The Pirates probably don't want to increase payroll, especially after recently adding Francisco Liriano and Jonathan Sanchez, but If Neal Huntington wanted to take a risk it might be worth it here. I wouldn't count on this happening, but it is good to see the Buccos in a position to possibly win something.

The Brewers recently lost Cory Hart, due to injury, for the first part of the 2013 season. They have almost the least amount of pitching depth in the starting rotation of any NL team, and they have had a quiet offseason. In addition, the team is in danger of falling into 4th in the Central this season, and that is without the awful Astros to make them look better. Lohse would provide them with someone to go behind Yovani Gallardo, but it would be a patch up job with potential issues all over the place. Doug Melvin isn't a GM to sign a guy just to sign him; the Brewers only go after Lohse if they make an ancillary move. This team needs their 1st round draft pick too much to make a serious contract to Kyle Lohse. 

Both Bourn and Lohse come with more risk attached to them than any other free agent, making GM's circumspect when evaluating them as possible acquisitions. Boras found Prince Fielder $200+ million on January 26th, but neither Bourn nor Lohse have the value that Prince Fielder did. Given their lesser status, I predict Bourn to sign within the next next 2 weeks at 3-4 years and a contract between $50-65 million. Lohse a few days after Bourn for 3 years and $24 million. Recently I've been having an inner conflict between my hear and my brain concerning free agent signings, so to appease both body parts I'll report both outcomes. My brain says Bourn goes to Texas while my heart says he fits best in Baltimore. As for Mr. Lohse, my brain says the Cardinals re-sign him, but my heart thinks he fits best in Pittsburgh. These are the two top players left on the market, they represent the scraps of Baseball we continue to cling to until very soon, Baseball officially returns, and all Baseball fans can emerge from their torpor. Opening Day is coming; we just have to have a little more patience.