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Transaction Oracle— A Timely Look at Transactions as They Happen
Wednesday, January 23, 2008
Devil Rays - Signed Shields
Tampa Bay Rays - Signed P James Shields to a 7-year contract.
According to SportsTicker, 3 years, $12 million guaranteed with the rest coming in the form of options. It's hard to dislike this signing from either party's perspective This is something I've been advocating for some time - locking up players with 1 or 2 years of service time provided that their MLB performance isn't out of whack from their minor league performances. Early on in the service time clock, after all, is the only opportunity you can really offer a play a drastic change in income standing. Going from $300,000 to $4 million is huge. The guaranteed outlay is still small on relative terms and becomes even better as long as MLB's revenue growth dwarf's cost-of-living growth. $4 million for a 2008 individual is obviously less money than $4 million for a 1998 individual, but $4 million for a baseball team is a drop in a much larger bucket than it was then.
Even when these deals work out badly, when talking about the money involved, they're still not very damaging to the bottom line. Take the Eric Hinske. He was signed to a 5-year, $14.75 million contract before his sophomore season. He was disappointing offensively, injured, and his defense got worse. But he still ended up about 5 wins better than replacement level over the course of his contract.
2008 ZiPS Projection - James Shields
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W L G GS IP H ER HR BB SO ERA ERA+
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Projection 9 10 29 29 193 209 94 28 38 156 4.38 101
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Top Comps: Dennis Eckersley, Kevin Millwood
Dan Szymborski
Posted: January 23, 2008 at 12:04 PM | 17 comment(s)
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That includes defense, though the Rays should improve more than typical with their changes. Eck's peripherals weren't as good as his ERA in those days, too.
By contrast Shields DERA was 6% better than NRA, so his defense really sucked.
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1976 101 105 125
1977 112 98 119
1978 139 96 109
1979 150 104 120
1980 99 98 112
Fair enough, but I think this downplays the cost. The cost is that they could have had a look at those first two years for "free." At the end of that time, they'd have realized he wasn't the player he appeared in 2002 and either would have let him go or would have gotten those other 3 years for substantially less money. At at the end of those 2 years, they'd probably gotten most of those 5 wins out of him at essentially no cost. Anyway, it was probably something close to $10 M flushed down the drain.
But reminding us of the Hinske signing sure makes the Tulo extension look better. 5 seasons later, with MLB revenues nearly doubled (?), you can buyout Tulo's arb years for about the same price as Eric Hinske's. What's not to like.
As to this signing ... does anyone know if he was going to be a super-2? Or the structure of the deal?
Assuming no super-2 status, this means they're buying out his first two arb years at about $11 M. That seems high given pitcher risk. If he was going to be super-2, then they're getting his first 3 arb years at about $11.5 M and that seems like a reasonable price.
Either way, they are getting options on his last arb year and first 2 FA years for $26-28 M (there are incentives apparently). That looks like a very nice deal right there. Even an average starter might well be expected to earn something in the $35-40 M range by that time.
So good upside on this deal for the Rays and with only $12 M guaranteed, not a major downside. Obviously if Shields flames out, they've flushed $12 M, but short of that, hard to see how they could lose more than maybe $6 M on this one.
Makes me wonder if there are some details we're not aware of yet -- like an opt-out clause or some other major escalator. Three option years on a contract is almost unheard of and there's no obvious reason Shields should have given them that. At the least, I would expect those options to be reasonably easily vested ones and/or ones the Rays have to decide to exercise very soon.
The other point is that in the not-insignificant chance that Shields turns out to be an above-average starter through his pre-arb years, the club has themselves a bargain during the option years.
This contract approach leads to long-term competitiveness. We'll see if they do the same thing with whomever of Sonnanstine, Niemann, McGee, Davis and Price emerges as a solid major league starter. I am guessing that they will try.
Ladies and gentlemen, your NESN studio analyst for 2023 - James Shields.
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