Winter Meetings: Day 1

Today was day 1 of the infamous winter meetings. For those of you unaware, Baseball's winter meetings occur every year around the first week of December. It is a week full of most of Baseball's executives, reporters, agents, and coaches who gather in a hotel to perform a number of activities. Front offices look to improve their clubs, agents look to get their clients signed to lucrative deals, coaches give interviews, and reporters disseminate the mounds of information they compile.

This year the winter meetings are being held in Nashville, Tennessee at the Gaylord Osprey Hotel and Convention Center. In the past, the meetings have lacked the fanfare that has more recently become commonplace, but due to the high profile free agents, infinite number of possible trades, and most importantly the MILLIONS, and I capitalize that word for a reason, of dollars thrown around, Baseball's Winter Meetings have become the event of the offseason.

So, let's recap a bit of the action we have already witnessed on just the opening day of the meetings.

Mike Napoli

Red Sox sign C/1B Mike Napoli to a 3-year $39 million contract: First, at this year's winter meetings, this is Ben Cherington's Red Sox, not John Henry's Red Sox. By that I'm implying that Cherington now has the reins to the Red Sox horse, music to the ears of Red Sox fans sick of signings like Carl Crawford. With Cherington making mostly autonomous decisions, his front office penned Mike Napoli to a three-year contract with an average annual salary of $13 million. Napoli played the last 2 years for the Texas Rangers, catching, playing a bit of first base, and DHing for Ron Washington's club. In 7 seasons, Napoli has been worth 20 wins according to Fangraphs, 16.8 wins according to Baseball-Reference, and 21.2 wins according to Baseball Prospectus. He's a versitile player, having the ability to both catch and play first base. The Red Sox already signed David Ross to a 2-year deal, and retain both Ryan Lavarnway and Jarrod Saltalamacchia, so why would the team make this deal? First, the Red Sox needed a first baseman, so if their plan is to have Napoli (-4 DRS at catcher, 0 DRS at 1st base) at first base, this seems like a good deal as far as that position is concerned. If the team expects Napoli to catch even 50 games, it points towards Cherington compiling as much catching talent as possible in a market where few catchers remain with numerous teams looking for catchers. Essentially, it allows the team to trade someone like Saltalamacchia or Lavarnway for a better return than they would regularly see. Napoli is a masher; he hits for power, and is patient at the plate (.248 career ISO, .356 career OBP). Bottom line is, the Red Sox got a solid player at a position they needed for a reasonable contract.
My grade: B+ (could become an A if the team can move Saltalamacchia for a decent prospect)

Pagan

Giants sign Angel Pagan to a 4-year $40 million contract: Pagan had been quite the enigma in Baseball circles in that he has previously been traded for Andres Torres, but he's also put up 3 seasons of 2.9 wins or more (Fangraphs). Due to the Giants recent World Championship, Pagan is far more a household name than before, but many might be surprised at a $10 million annual average salary for a center fielder that had to compete with Michael Bourn, Josh Hamilton, B.J. Upton, and Shane Victorino in the center field market this offseason. On the other hand, just like Upton's recent signing with the Braves, this contract looks like a perfect fit. Pagan is 31, and might not be playing center field in 2 seasons, but the value he adds by getting on base, and adding more than a .400 slugging percentage gives him the potential to easily be worth 2.0 wins per season, which is the number he must achieve to justify his new average annual salary. The Phillies and Giants were said to be the two main players for Pagan, and not too surprisingly, Pagan resigned with the world champions. The Giants got a player that could play two solid seasons in center followed by 2 Melky Cabrera-like seasons in either corner spot, while doing a great job setting the table at the top of the Giants lineup. Sure, Pagan is set to regress a bit over the next few years, but if he can put up even 75% of his average annual production, we will look back on this deal as a steal for San Fran.
My Grade: A- (good for player, good for team, only randomness can screw with this one)

Joakim Soria

Ranger sign Joakim Soria to a 2-year $8 million contract: The Rangers have recently made it a priority to sure up their bullpen. This has a lot to do with affects their starting pitchers feel from the immensely hitter friendly ballpark in Arlington, and the team's desire to get solid talent for reasonable prices despite the drastically inflated market for relievers. Soria is coming off of his 2nd, yes I said 2nd, not first, reconstructive UCL surgery (commonly know as Tommy John Surgery). Soria is a 28-year-old righty reliever who has never had a season in which he didn't post at least a WARP, rWAR, or fWAR less than 1.0. That might not sound like much, but given the fact that relievers throw 30% of the innings that starters do, being worth $5 million a season is nothing to sneeze at. What surprises me here is the length of the deal, Rarely do pitchers coming off any arm surgery get more than a one-year deal, but Soria got 2 years. This bodes well for fellow free agent reliever Brian Wilson (also coming off of TJ Surgery), but also shows that the Rangers think Soria will return to his previous form. The average annual salary of $4 million per season represents the concerns the Rangers have, but more so, it shows just how inflated the market for relievers has gotten. With pitchers like Jonathan Broxton and Brandon League getting incredibly inflated deals for their given skill sets, the Rangers would rather go after an injury plagued player than with upside than a proven reliever for way too much money. Maybe if every team didn't employ the ridiculous pitcher for an inning bullpen system none of this would have happened.
My Grade: B (could be great, could be awful, not a lot to lose for the Rangers either way)

James Loney

Rays sign James Loney to a 1-year $2 million contract: This deal intrigued me a lot. I recently wrote about Loney's potential to be a serious bounce back candidate for next season. He has continued to get on base and play good defense, two things the Rays look for in their players. Due to the hype surrounding Loney when he played in LA, most see his recent production as putrid as opposed to average. In order to satisfy this deal, Loney needs to be worth ~ 0.3 wins (Fangraphs) at the end of the 2013 season. Bill James projects him to post a .319 wOBA, with a .337 OBP, and .127 ISO. PECOTA sees Loney as a 1.5 WARP player next season (worth more than $8 million), with a .345 OBP, and .143 ISO. The Rays have little money to spend, and usually pursue improvements in their club via trade and not free agency due to those financial constraints (come on Rays fans, support your team). In this case, the Rays got a steal. In an offseason in which Loney was in the top 4 in the 1st baseman market, Tampa irked out a deal in which they will essentially pay Loney pennies. One thing is for certain, Loney will play above average defense at first base, something he has done almost every season he's played. With a number of ground ball pitchers, and good infield defense, this can only further's the Rays' ability to subdue opposing offenses, even when the ball is put in play. I projected Loney to make more than $6 million for next season at a 1-year deal. He's getting less than 1/3 of that money in this deal. My Grade: A (The only person unhappy with this deal is Loney's agent?)

For more on the winter meetings, I recommend following www.mlbtraderumors.com or checking out Ken Rosenthal, John Paul Morosi, Buster Olney, or Tim Kurkjian on Twitter. Come back tomorrow for a recap of day 2 of the winter meetings.

Now What? Part II

Erving "Magic" Johnson co-owner of the LA Dodgers 

In the first installment of the "Now What?" three part series, I explored the problems many professional athletes encounter in their post-sports careers.  Professional athletes usually retire with large sums of money that they must then put to some use.  As was previously discussed, athletes like Curt Schilling and Allen Iverson chose paths that inexorably led them towards bankruptcy and humiliation.  In part II, I will delve into the lives of those professional athletes who have experienced financial success following productive and lucrative careers in sports.

Michael Jordan was the greatest basketball player the world has ever seen.  Few people would truly disagree with that statement.  What is the answer to this question: "Who was the greatest point guard ever?"  Not everyone (Celtics fans), would say Magic Johnson, but I would.  Johnson won 5 NBA championships, 3 league MVP trophies, and 3 Finals MVP trophies, and those are only a few of his accolades.  Magic Johnson, by all accounts, had one of the most prolific NBA careers of all time, but it was cut short when he discovered he was HIV positive.

For many professional athletes at the height of a hall-of-fame career, this news would cause them to become recluse.  Instead, Johnson decided to begin his second career, as a businessman.  Not long after retiring from the NBA in 1995, Johnson began searching for investors for an urban rebuilding project he predicted would become a money maker.  Most rejected his proposal, but friends urged Johnson to use his considerable wealth for the venture.  Johnson's proposal was to put in place food, retail, and entertainment stores into predominantly poor, black, and hispanic neighborhoods in Los Angeles.  He believed he understood what the people in these communities wanted.  Where most saw dilapidated  shopping centers, Johnson saw a business opportunity, one in which he could dually profit and supply desired demands to lower-class citizens of Los Angeles.

He showed his business acuity by meeting with gang leaders, the California Public Employees' Retirement System, and other community leaders in order to perfect his investment plans for urban Los Angeles.  He instituted different food and beverage options in the blacker area movie theaters, switching from the usual options to sweeter drinks, spicier hot dogs, and buffalo wings.  Johnson racked up business success after business success, eventually leading him to create Magic Johnson Enterprises, a company Forbes estimates to be worth over $700 million.  He owns 5% of the Los Angeles Lakers and recently joined Guggenheim Partners and Stan Kasten in buying the Los Angeles Dodgers.  Success after a professional sports career doesn't even begin to describe Magic Johnson, he is a  tycoon.  

Mo Vaughn, MVP turned Businessman

If Magic Johnson represents one end of the spectrum and Allen Iverson the other, Mo Vaughn sits comfortably between them.  Maurice "Mo" Vaughn played professional baseball for 13 seasons, accumulating just over $100 million in the process.  He made 3 All-Star teams and was crowned the 1995 American League Most Valuable Player.  Two events, one negative and the other positive, happened in Vaughn's post-MLB career.  First, the Mitchell Report demonstrated that he knowingly took performance enhancing drugs supplied by Kurt Radomski.  Second, he decided to invest in creating better living spaces for poorer New York City residents.  


Towards the end of his MLB career, the Anaheim Angels traded Mo Vaughn and his $70+ million contract to the New York Mets.  Once in New York, Vaughn experienced debilitating injuries that forced him to retire in 2003.  After retirement, Vaughn, the child of a high school teacher and principal, decided to give back to the city he felt he had failed.  Instead of donating money to non-profit charities, Vaughn decided to assist New York City and simultaneously begin his second career.  The former Red Sox 1st baseman created OMNI New York LLC., a company whose main goal is to invest in and repair low-income-housing.  Vaughn partnered with savvy businessmen and others more experienced in the world of low-income housing in order to create a juggernaut of a company that has bought and rehabilitated 1,142 housing units in New York City.  The company has been a success, and in 2009 Vaughn moved to purchase and recondition low-income housing near Boston, another city in which he played Major League Baseball.  

Good deeds can include profit

While former athletes like Curt Schilling and Allen Iverson squander their millions by investing poorly and spending like a teenage girl at Coach with daddy's Mastercard, others like Johnson and Vaughn became successful businessmen in their post-sports careers.  So, why did it work out for Mo Vaughn and not Curt Schilling?  Vaughn found a niche market, diligently researched the venture, and then asked for help from those with more experience than he.  Johnson utilized his knowledge of the day-to-day lives of low-income minorities to eventually provide them with products they desired.  Somehow, both Johnson and Vaughn were able to help communities, as many former professional athletes do, while simultaneously finding a way to make a profit.  Building your own video game studio, so cleverly named 38 Studios, depicts a self-centered man who wanted to first have fun and secondly run a business.  Johnson and Vaughn saw their ventures not as fun, but money-making opportunities that would both benefit the community and create new careers for themselves.  


If professional sports leagues were to write a manual for how to succeed after retirement, Magic Johnson and Mo Vaughn should be included.  In addition to businessmen, former pro athletes have successfully run non-profits (Dikembe Mutombo), become broadcasters, or chose to remain in sports as coaches (Robin Ventura) and administrators (John Elway).  The end of an illustrious sports career does not imply success after the fact, but with so many positive examples, there must be hope for all of them.  
Next time you watch a former profession athlete receive a community service award, provide play-by-play analysis, or buy/rehabilitate low-income housing, remember the numerous ways in which that person could have selfishly slapped the American Dream in the face by squandering their millions, but instead decided to take the opposite path.

Now What?: Part I

Athletes dazzle us with their incredible competitiveness, talent, and will to win.  Following a player from prospect to professional athlete to veteran provides fans with exhilarating and fulfilling memories.  During these careers, most professional athletes earn exorbitant amounts of money, placing them in the United States' top tax bracket as well as the everyday citizen's category of rich.  One question remains: "Once retired, what do athletes do with the money they made during their careers?" This three part series will explore the financial highs and lows of professional athletes after they retired from their given sport.  Part one focuses on athletes who'se retirements have been marred by financially difficulty.

Curt Schilling

Curt Schilling is in trouble.  By all standards, the former Phillies, Diamondbacks, and Red Sox pitcher needs help.  Following retirement from Major League Baseball, Schilling decided to create and run his own video game company.  He called it 38 Studios, named for his jersey number throughout his career.  From an outsiders perspective this venture seemed harmless.  A rich man who wanted to exploit the video game craze, and, more importantly, put his personal stamp on the project.  Unfortunately for Schilling, venture capitalists did not agree with Curt's optimism for the company, refusing to invest millions of dollars in the video game studio.  In response to a lack of funds, Schilling sunk about $50 million of his own into the company.  In his 18-year career, it is estimated that Schilling made just over $114 million.  


Despite putting almost 50% of his MLB earnings into 38 Studios, the company required more money for day-to-day operations.  Thus, Schilling applied for and was subsequently granted $75 million in loans from the state of Rhode Island.  The recent recession has caused strife for most state economies, but Rhode Island has been hit harder than most.  38 Studios recent filing for chapter 7 bankruptcy only deepens an already hurting state economy that, like George Foreman, cannot afford another Muhammed Ali sized punch, lest they fall to to the mat in defeat.  Schilling faces numerous other issues including an inability to pay for his employees health insurance, and failing to pay some employees' salaries.  Overall, I think it reasonable to call 38 Studios a sunk venture in need of serious help.  Schilling screwed the pooch in every way, showing his ineffectiveness as an entrepreneur, CEO, and citizen.  While Schilling could do no wrong on the mound, he did everything wrong when it came to investing his millions and running a company.  

Allen Iverson

Schilling does not constitute the only famous millionaire athlete to incur financial troubles after retiring from professional sports.  Not to pick on former Philadelphia athletes, but no conversation concerning athletes financial troubles can begin or end without including Allen Iverson.  The former 76ers MVP guard has hit rock bottom.  After securing himself as one of the greatest professional basketball players of all time, and racking up over $200 million, Iverson retired from the NBA in 2010.  During that illustrious 15-year career, Iverson supported more than 50 of his closest friends, a family, and his "thug" desires.  "The Answer", as Iverson was known during his career, owes $859,000 to a Georgia jewelry store and $2.5 million on a house in Denver, Colorado.  In addition to simple debt, Iverson's wife has filed for divorce, which could cost the broke former NBA All-Star even more money.  


So, to recap, Schilling took his riches and invested poorly, irresponsibly managed his business, and now wants help cleaning up the mess he made.  Iverson lived above his means, leaving us wondering how a millionaire could be so stupid, and faces more legal issues due to divorce.  These two former athletes shed light on a number of common problems that plague former professional athletes.  Poor investments, frivolous spending, unreasonable loyalties for friends, and familial issues lead to the most prolific falls from grace.  


What can we learn from these regrettable situation?  First, we learn that no matter how iconic and rich a person is, the ability to lose everything remains constant.  The American Dream is built upon every person striving for more and greater life pursuits.  More often than not, one of these chief goals is to attain wealth.  Professional athletes are blessed with special talents, and simultaneously work incredibly hard, thus earning themselves the title of millionaire.  Unfortunately, earning millions of dollars does not imply financial acumen or the ability to make informed and well-calculated decisions.  


So, what are the issues involved, and how can athletes help themselves to avoid financial ruin?  First, athletes need to take their educations more seriously.  Almost every NFL and NBA player attends college, but few take advantage of the gift of education.  Maybe, instead of majoring in fitness and exercise science, athletes should consider taking a few classes in economics.  This might be a smart decision, even if said athlete plans on leaving school early for the pros.  Second, finding smart, experienced, and trustworthy financial advisors to educate, instruct, and assist in investments and money management might prevent future financial collapse.  This advice only grazes the surface, and with so many professional athletes wasting their fortunes every iota is necessary.


In the second and third installments of this ongoing series, I will delve into professional athletes' successes in retirement, the future of post-athletic financial activities, and my take on the whole situation.    

Power Rankings June 13th

Top Ten Teams as of June 13th: On Mondays, most sports websites come out with their power rankings. Power rankings are a complete ranking of teams in a sports league from top to bottom. Usually websites list the team, their record and then a small piece about how they have been playing lately. Power rankings often are superficial, worth only a quick glace because they provide little information and are fairly subjective. I find baseball power rankings uninteresting because they rarely surprise me, and untrustworthy due to lack of substance. That being said, for sports for which I have less in-depth knowledge, I like power rankings. They provide me with a quick overall summary rather than requiring me tolook into in depth stats and other analysis to get a sense of what is going on.

Despite my lack of enthusiasm for baseball power rankings, I figured I would provide my own rankings for this week. I won't go into all 30 MLB teams, but I will mention my top 10.

1. Boston Red Sox:
The Red Sox have been on fire the last few weeks. Adrian Gonzalez is proving to be exactly what the Red Sox were hoping he would be: an RBI machine that can hit for average while playing well above average defense at first base. Their pitching has been great too, with old timer Tim Wakefield filling in very nicely for the injured Daisuke Matsuzaka. The Sox pitching staff gave up only 6 runs to a fairly potent Blue Jays offense in a three game series. To give some perspective on the Sox offensive awesomeness, they scored 16 runs in one game against the Jays, which is 2.5 times the number of runs the Jays scored in the whole series. If they keep this up, they will have a chance to sport the MVP (Gonzalez), Cy Young winner (Lester) and at least an AL Pennant.

2. Philadelphia Phillies:
The Phillies are a team with a specific modus operandi. They out-pitch you at least 3 out of every 5 games, most likely 4/5. Halladay, Lee, Oswalt, and Hamels all looked great their last times out, including Oswalt's best start since coming off of the DL. The bullpen has had some ups and downs with injuries and bad pitching from J.C. Romero, but overall most games they only pitch the 8 and 9 innings. Between Madson, Contreras, Stutes (rookie), and Bastardo there isn't much left to want out of the backend of a bullpen. The offense still leaves something to be desired, but with pitching like the Phillies have, you don't need massive amounts of runs. Ryan Howard's batting average is low, but his rbi totals are 3rd in the National League. Chase Utley seems to be hitting his stride lately, but that was against meager Chicago Cubs pitching. Overall the team has a .320 obp which is good for 18th in the majors. If they get number up, more runs will come.

3. New York Yankees:
I thought about putting the Milwaukee Brewers in this spot, but the Yankees can't be overlooked so noticeably, even for someone who despises them. Curtis Granderson, Mark Teixeira, and Alex Rodriguez are doing the heavy lifting for the Yankees offense. Home runs are their go-to weapon, especially for left-handed hitter with Granderson (20), Teixeira (19) and A-rod (13). They use that short porch in right-field to perfection. Pitching-wise, they will most likely lose Jaba for a while, which hurts because he was pitching very well. Colon will go to the DL as well, but they can combat that with good hitting. The Yankees’ strategy for the near future has to be to score lots of runs to back a barely above average pitching staff. Oh, and Jeter accomplishing 3,000 hits is nice too. There is a good article by Tyler Kepner in NYT Sunday sports section on Jeter and Roberto Clemente.

4. Milwaukee Brewers:
Fourth place is where I will put the recently rising Brewers. Greinke, Gallardo, and Marcum make up a solid pitching staff that is currently healthy and pitching well. With Axford handling the end of games, the Brewers have innings 1-6 and 9 covered for probably 4 out of every 5 games. Everything else is dependent upon their hitting which is outstanding. They have: Prince Fielder, 2nd in NL in HR(19), 1st in NL in RBI (58), 4th in NL in BB (37), 2nd in NL in SLG (.627), and 3rd in NL in OPS (1.042) and Ryan Bruan, 6th in NL in HR (14)4th in NL in RBI (48), 1st in NL in R (48), 5th in NL in BB (35), SB (14), SLG (.560), and OPS (.958). The Brewers are designed to win now, and although St. Louis has held the top spot in the NL Central most of the year, the Brewers could easily take over the top spot and hold it until September.

5. Atlanta Braves:
The Braves have come on very strong of late. They have been doing so with all around good play. Their pitching, which is stellar, has been just that, with Jair Jurjens, Tommy Hanson, and Derek Lowe pitching well in their last three starts. Tim Hudson has had his ups and downs this year, but he's a sinker ball pitcher who throws strikes and overall such pitchers do well. Hitting-wise, they have been getting great performances from Brian McCann and Freddie Freeman. Freeman, a rookie, is hitting well against both LHP and RHP. With Jason Heyward on the DL, this team has hung around offensively, and has done so well enough to boast a .576 winning percentage. Much kudos to Frank Wren, GM of the Braves, for putting together a great bullpen of pitchers who all throw hard.

6. St. Louis Cardinals:
Although the Cardinals were recently swept by division rival Milwaukee, the team still has 38 wins, and is only out of the division lead by .5 games. With Albert Pujols beginning to put up better power numbers and Lance Berkman crushing the ball behind him, the Cardinals have the middle of the order muscle needed to win. They also have an underrated pitching staff. Chris Carpenter hasn't pitched up to his usual ways, but Jaime Garcia, Kyle Lohse, and Jack Westbrook are performing at least average to above average. The Cardinals are a good team, but if they don't play very well over the next two months, the Brewers will take a commanding lead in the central that may prove insurmountable.

7. Texas Rangers:
No matter what changes the Rangers make, their success has always been centered around their hitting, and this season is no different. Michael Young, a healthy Josh Hamilton and Nelson Cruz, Adrian Beltre, and Mitch Moreland have given opposing pitchers fits. Young, Kinsler, and Moreland all have OBPs in the top 40 in the AL. Pitching-wise, Jose Ogando has been a great surprise and C.J. Wilson continues to grow and succeed against good lineups. Agreat stat for them is Ogando’s 0.90 WHIP, which is pretty good. They should be able to hold off the Angels and Mariners' meager attempts to win first place in the west.

8. San Francisco Giants:
The Giants are the most puzzling team in the major leagues. Their lineup is riddled with no-names and old has-beens, yet they lead the NL west and have the most come-from-behind wins in the majors. This team uses their huge and oddly shaped ballpark to its advantage. They have a great fan base, a great manager in Bruce Bochy, and probably the best end –of-the-game pitchers in the game. Sergio Romo, Javier Lopez, and Brian Wilson are shut down 8th and 9th inning pitchers who rarely relinquish a lead and predominantly keep their team in the game late, allowing for comebacks. Lincecum hasn't pitched as well as past years, but he has the ability to pitch a complete game shutout every time he takes the hill. With Matt Cain and Jonathan Sanchez behind him, this team will always be in the game. Losing Buster Posey and Freddie Sanchez won't be easy, but this team has yet to stop surprising me this year with their tenacity and ability to prevent opposing teams from scoring, two variables that often lead to victories.

9. Detroit Tigers:
The Tigers have been really good lately. There is no other way to say it. They have given up the six fewest hits of any pitching staff in the AL, which is an improvement from last year. When the Tigers went to the World Series they did it with pitching. Justin Verlander is a top 10 pitcher with top 5 talent. The fact is, although their pitching is decent, their offense is fantastic, carrying them to the top of the AL Central. Miguel Cabrera is putting up MVP-like stats again, though he is getting help from Victor Martinez, Brennan Boesch, and Johnny Peralta. The biggest surprise has been Max Scherzer, who has 8 victories, and a 2.53 strike out to walk ratio. He needs to limit the number of base runners because he pitches better from the windup, but overall he's having a career year.

10. Arizona Diamondbacks:
This may seem odd—the D-back making the top ten—but winning-percentage-wise, they have the Cleveland Indians bested. The Indians were my next choice for this spot, but they have sputtered lately losing 9 out of their last 10. Arizona has the best run differential in the NL west, with a +22 in comparison to the 1st place Giants who have a -3 run differential. The D-backs weren't supposed to be this good, in fact they were supposed to compete with San Diego for the bottom of the NL west, which is code for competing for the worst record in the NL. Their offense is centered around hitting the long ball, they have the 3rd most runs scored in the NL, and they have the top slugging percentage and HR's hit. With a sub 4.00 team ERA that is equal to the major league average, the D-backs have discovered what I call the "Colorado Rockies playbook for success". They take good arms that are unproven and hope they pitch at least at average while allowing their young, speedy, powerful hitters to unleash their impressive power numbers on other average pitching staffs. In the past it has been Carlos Gonzalez, Troy Tulowitzki, Seth Smith, and Todd Helton performing these tasks for the Rockies. In this case Justin Upton, Chris Young, Ryan Roberts, and Kelly Johnson are putting up the necessary power to propel the D-backs into the power rankings top ten.