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Thursday, May 15, 2008

The Disincentive for the Red Sox to Lock Up Their Young Players

In the past month or so, some of baseball’s most prominent young players have been locked up to longterm deals. The Rays lsigned Evan Longoria shortly after his Major League debut. A few days ago, they extended Scott Kazmir for a very tidy little sum of 3 years/$28 mil (ensuring many more frustrating games for the Red Sox). There was also a 6 year/$70 mil deal for Hanley Ramirez. And today, the Brewers announced an eight-year deal with last year’s NL Rookie of the Year, Ryan Braun.

Hey, the Red Sox have a bunch of good young players. Why are they not locking them up to deals before they get expensive. How about an eight-year deal for our ROY, Dustin Pedroia? Or for that kooky Jonathan Papelbon fella?

There are many possible reasons that Boston might not want to lock up its youngsters longterm, but I think one stands out above the rest: the luxury tax. The luxury tax salary limit is based on the average annual value (AAV) of contracts, and locking up pre-arb players longterm greatly increases their AAV. To small payroll teams like Milwaukee and Florida, this is no big deal. They’re never coming close to the limit, so they can give out these contracts without worry. But for the Red Sox and other high payroll clubs, it’s a concern. Dustin Pedroia’s AAV right now is about $400K. Lock him up for 6 years, $30 mil and it shoots up to $5 mil immediately. Do that with two to three guys and all of a sudden your taxable payroll is up $10-$20 mil. When you’re already pushing the luxury threshold (or over it), that’s the last thing that you need.

The way the system is set up, it’s best for the Red Sox to keep doing what they’re doing. Play it out through the arb system, year to year, and happily pay the going rate for these guys. As their salaries go up, so will the luxury tax threshold. 

Darren Posted: May 15, 2008 at 06:51 PM | 46 comment(s)
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   1. Marcel  Posted: May 16, 2008 at 01:22 AM (#2782911)
Well, Papelbon has already said he prefers to go year-to-year because he wants to make as much cash as possible, so a club friendly deal is pretty much out of the question for him. Pedroia is nice player, but certainly not anywhere near the caliber of Ramirez or Braun. Besides the batting average, he doesn't put up flashy numbers so he isn't likely to get very expensive in arbitration. No reason to try and lock up Ellsbury when he doesn't even have a year of service time yet. Plus there's the fact that Reddick could make him expendable in a couple of years anyway. And as for the young pitchers, they all have tons of upside but they could all also break at anytime. Might as well keep them on the cheap until their arbitration years hit and maybe then try to work out a deal like Kazmir's.
   2. Golfing Great Mitch Cumstein  Posted: May 16, 2008 at 06:36 AM (#2782933)
But what about the back end? If the Red Sox think that they will be bumping up against the tax threshold throughout the length of the contract, they will avoid the tax at the end because of both the depressed AAV and the savings on a long term versus single year contract. I realize it is better to save money now than later, but I am not sure how drastic the savings would be.

My concern is more what Sven is saying. The young players aren't the same talents that the other guys are. As these deals become more prevalent, I wonder what the players' expectations will be. Will some become upset if a team plays hardball? Another thing I wonder about is how Boston fans will react to the Sox losing Pedroia, Youk, Ellsbury, or some other player they have an emotional attachment to?
   3. OCD SS  Posted: May 16, 2008 at 06:52 AM (#2782937)
I thought Paps wants a long term deal, he just wants one where the Sox also pay full market value as if he were a free agent.

But what about the back end? If the Red Sox think that they will be bumping up against the tax threshold throughout the length of the contract, they will avoid the tax at the end because of both the depressed AAV and the savings on a long term versus single year contract.


Wouldn't it then be smart to get the middle value by signing them to deals that buy them out of arbitration, but still allows the club to keep a lower payroll for a few years? It also would have the nice benefit of making sure a player is actually, you know, kind of good. No one wants Angel Berroa V2.0 (or just someone who gets injured - Paps' shoulder might be a factor here).
   4. Dave Cyprian  Posted: May 16, 2008 at 08:34 AM (#2783002)
Mitch, if the team keeps winning, fans learn to love the new players. Happens every time. (See Damon, J, Martinez, P).
   5. Golfing Great Mitch Cumstein  Posted: May 16, 2008 at 10:27 AM (#2783121)
Mitch, if the team keeps winning, fans learn to love the new players. Happens every time. (See Damon, J, Martinez, P).

Except for the obvious difference between the players you cite and Youk, Pedroia, and Ellsbury, the latter are home grown. Not only does that mean there is a different emotional attachment (and I would assume for the sake of argument that the difference is insignificant), but the arguments for not going hard after the players is different. It is easy for the team and its supporters to argue that signing Pedro in his thirties for four years is silly, that Damon was too expensive. I think public opinion won't grasp arguments at the relevant dates like Pedroia isn't great and that 2b age poorly; Youks, although he has a cool name and wrote Moneyball, is likely at his peak and doesn't hit particularly well for his position; and that although the chicks dig him like Damon, Ellsbury will never match his performance.

I just have this sense that the fanbase significantly overrates prospects and young players and that it will affect the reaction of fans to losing players.
   6. villageidiom  Posted: May 16, 2008 at 10:50 AM (#2783151)
Except for the obvious difference between the players you cite and Youk, Pedroia, and Ellsbury, the latter are home grown.
OK, add Nomar, Trot, and Lowe to his list.

If the Red Sox think that they will be bumping up against the tax threshold throughout the length of the contract, they will avoid the tax at the end because of both the depressed AAV and the savings on a long term versus single year contract.
It all comes down to one word: Manny.

If they part ways with him after 2008, that's $20 million of AAV coming off the 2009 payroll. They could go with an Ellsbury/Coco/Drew OF, or call up Moss, or something like that - or they could sign someone more cost-effective, or even bring back Manny at something lower than $20m, I suppose. Their decision on Manny or his replacement determines how much $$ is freed up for long-term deals for the young players, [EDIT] and still stay under the luxury tax threshold. [/EDIT]

As an aside, let's say the season ended today. What do you think Manny would get on the open market? What do you think he'd settle for if the Sox offered an extension (in lieu of picking up the options)?
   7. jmurph  Posted: May 16, 2008 at 11:05 AM (#2783175)
They could go with an Ellsbury/Coco/Drew OF, or call up Moss, or something like that


Not sure if you're advocating for that or not, but that would be one terrible offensive outfield. Without Manny, or a power-hitting replacement, you'd have one guy on the entire team(Ortiz) that would be a lock to hit 20 HRs. That would scare me going into a season.

Manny couldn't get 20 on the open market, because no one seems to be getting 20, but I'm sure someone would give him 3 or 4 years for 15+ per. I would think (and hope) that Boston will do their best to lock him in for 3 or 4 years at less than 20 per, and if they can't they'll just activate the option.
   8. Golfing Great Mitch Cumstein  Posted: May 16, 2008 at 11:09 AM (#2783182)
Lowe wasn't homegrown and was coming off two league average years and a horrible September 2004 (Granted with a great October). It would be tough for any fan to get to worked up about the others. Between injuries (both) and ineffectiveness (Trot) it was clear they were no great loss. I am considering the possible situation that the Red Sox decide not buyout FA years and let them walk at free agency. They would be good players just under 30 years old, but there could be good reasons for the Red Sox not to sign them.
   9. Marcel  Posted: May 16, 2008 at 11:28 AM (#2783207)
I thought Paps wants a long term deal, he just wants one where the Sox also pay full market value as if he were a free agent.


True, but he also said that he has no problem going year-to-year to maximize his earnings if they won't offer him a market value deal. And considering the contracts that Rivera and Cordero got this past off-season, that would make absolutely no sense for the Red Sox. He'll probably make around 8 or 9 million through arbitration (less than what the aforementioned are making per year,) so the only way a long-term deal makes sense now is if his next three years come in at that price or lower and he gives up a couple of free agent years.
   10. villageidiom  Posted: May 16, 2008 at 11:39 AM (#2783229)
It would be tough for any fan to get to worked up about the others. Between injuries (both) and ineffectiveness (Trot) it was clear they were no great loss.
I'm pretty sure at the time of the deal that the Nomar trade was not seen as "no great loss". And to Dave's point, fans got over that one pretty quickly because the team kept winning.

I'm also pretty sure that fans overrated Trot Nixon due to emotional attachment. I'll grant you that overrating him meant little because he'd earned a low rating to begin with.

I know Lowe wasn't strictly homegrown, but effectively he was. It's not like there was a lesser emotional attachment because he came up with Seattle and pitched a dozen games there.
   11. What Zupcic?  Posted: May 16, 2008 at 11:45 AM (#2783236)
speaking of Trot, does anyone know if he retired? I know he was in AZ spring training camp but did he hang it up after not making the team?
   12. Marcel  Posted: May 16, 2008 at 12:00 PM (#2783249)
I think he's playing in Tuscon.
   13. Dave Cyprian  Posted: May 16, 2008 at 12:08 PM (#2783254)
Good question Zupcic. This story from the Arizona Daily Star profiles Nixon, who is apparently hitting better than .330 for the Tucson Sidewinders, Arizona's AAA affiliate.
   14. Golfing Great Mitch Cumstein  Posted: May 16, 2008 at 12:09 PM (#2783256)
The Red Sox did have their minions in the press to rip apart Nomar after the trade, cushioning any blow. I think the Lowe distinction is important. There wasn't a couple of years preceding his Red Sox debut that fans heard about him and could get (over)excited about him. Plus, his performance was so variable, both in role and performance, that I don't think there was much excitement.
   15. JB H  Posted: May 16, 2008 at 12:35 PM (#2783284)
Despite his comments, Papelbon seems like the perfect type of guy to give up year or two of free agency. He didn't sign for a lot out of college and he's a lot more likely than other young stars to never get a big payday. I wouldn't be surprised if he signs for like 4/30 with a team option year.
   16. Golfing Great Mitch Cumstein  Posted: May 16, 2008 at 12:53 PM (#2783304)
vi,

Looking back on this, I realize it isn't a big deal and "keep on winning" will most likely prevail. My fear is that the newspapers and talk radio will be filled with "We gotta keep Pedroia/Ellsbury/Youk because their true sox" arguments while any discussion of their abilities will be lost. For reasons I won't go into, I listen to too much radio.
   17. Marcel  Posted: May 16, 2008 at 01:06 PM (#2783317)
Firstly, it's "they're," not "their." Secondly, if the media starts refering to players as "true red sox," I will officially become a Rays fan. You can't give the Yankees #### for so long about having players that are "true Yankees" and then turn around and do the same thing.
   18. Dave Cyprian  Posted: May 16, 2008 at 01:27 PM (#2783337)
Mitch, consider this. The Sox have such a strong hype machine that the fans are already very knowledgeable about young players like all of those that you mentioned, before they truthfully have done much at the major league level. Well that hype machine will continue-- It may be best typified by comment #1 of this very thread where Sven is already talking about Reddick (who the hell is he? ps I don't read minor league threads on ST, sorry Darren) replacing Ellsbury in 3-4 years. So the fans will be excited about whoever is next down the pipe, and if the team wins, the young players become the new stars. It doesn't matter who drafted or developed them-- Josh Beckett seems to be pretty popular around here. If the team lost good players and went into the tank, then, and only then, would the fans pine for bygone talent.
   19. villageidiom  Posted: May 16, 2008 at 03:05 PM (#2783462)
My fear is that the newspapers and talk radio will be filled with "We gotta keep Pedroia/Ellsbury/Youk because their true sox" arguments while any discussion of their abilities will be lost.

It'll happen anyway. There are still people calling talk radio shows suggesting that Boston got "nothing" in the Hanley Ramirez trade, just as every now and then when Pedro is actually pitching someone calls to suggest it was a mistake to let him go.

The key is the winning part. As soon as things turn sour you'll hear two things:

(1) We gotta trade away ah slumpin' prospects fa stahs!!

(2) We should nevah have traded away ah prospects who went on ta be stahs!!

Try not to let it get to you. Or hope that things never turn sour.
   20. Golfing Great Mitch Cumstein  Posted: May 16, 2008 at 04:55 PM (#2783593)
Sven,
I can do without the grammar corrections. I hardly ever make them, so screw.

I think some of this is projection on my part, but also a counterreaction to the overreaction I witness all the time in local media.

Whatever. I want to get this back to the point of the post. Are the Red Sox better off financially avoiding buyout contracts because of the luxury tax? I don't think it was as straightforward as the original post made it out to be. As I pointed out, there are more considerations, but I don't know the math and salary projections to make any definitive claim.
   21. Matt Clement of Alexandria  Posted: May 16, 2008 at 05:12 PM (#2783614)
Are the Red Sox better off financially avoiding buyout contracts because of the luxury tax?
It's certainly not the only consideration, but I think Darren is right that it should be, and most likely has been, a part of their decision process.

I don't think the luxury tax would or should prevent them from locking up a Scott Kazmir, and health permitting, I expect Clay Buchholz to have a nice little contract signed in a year or two. Pedroia and Youkilis are secondary players, Ellsbury probably is, Papelbon arguably is. You don't need to sign them to early contracts because you won't be saving all that much down the road, as you will with actual stars.

Now, there's a good case to be made that Papelbon ought to be counted among the actual stars, and the Sox are holding off more because of health concerns. Could be.

It's also an interesting question for the next couple years of which young players they lock up. If Clay Buchholz is healthy and is everything we think he is, it would be quite foolish not to extract good contract terms from him early in his career. But that would require passing over the less-good young players, which probably wouldn't be so easy to sell from a management standpoint. It will be a test for Tito and the front office to make sure that Pedroia knows he's valued even when he isn't being offered a long term deal.

Or they could just offer everyone long-term deals, and that still could happen relatively soon.
   22. tfbg9  Posted: May 17, 2008 at 08:33 AM (#2784008)
Off topic, hijack, what have you, but:

Greg Gagne, about sucking so bad for the Red Sox last year:

Gagne acknowledges there were mechanical flaws, which were amplified by him tipping his pitches. But as far as the former Cy Young winner is concerned, nothing was more of a factor in his struggles with the Sox than his frame of mind.

“It was mental,” he said. “It kind of snowballed. I came over here and tried to do a little too much. I was trying to adapt and tried to do a little more than I was capable of. I had a hard time staying within myself and because of it I kind of got out of my element a little bit."

So he wasn't injured. It was mostly in his head. I was right. Screw ya's all!!!

Heh heh.
   23. Matt Clement of Alexandria  Posted: May 17, 2008 at 08:46 AM (#2784012)
18.2 IP, 26 H, 14 R, 1 HR, 9 BB, 22 K - Gagne in Boston
18.2 IP, 21 H, 13 R, 4 HR, 14 BB, 18 K - Gagne in Milwaukee

I guess he just can't handle that ol' Milwaukee pressure. It looks to me like he just sucks.
   24. Dan Szymborski  Posted: May 17, 2008 at 08:47 AM (#2784013)

Greg Gagne, about sucking so bad for the Red Sox last year:


Why would he have to justify his sucking? He was 45 and hadn't played in the majors in a decade.
   25. tfbg9  Posted: May 17, 2008 at 10:20 AM (#2784058)
**yeah, Eric Gagne**

I guess he just can't handle that ol' Milwaukee pressure.



Strawman flail! You repeatedly insisted he was hurt. I was saying it was some type of a mental problem, and IIRC, I was not insisting that the only kind of mental thing it was was the "can't handle the Boston pressure thing." He says he wasn't hurt, and that it was a mental thing. You were wrong, looks like.

Seems to me, BTW, if he's trying to save face, it would be better to say he was hurt rather than choking out there in Boston.
   26. Matt Clement of Alexandria  Posted: May 17, 2008 at 10:34 AM (#2784065)
Seems to me, BTW, if he's trying to save face, it would be better to say he was hurt rather than choking out there in Boston.
But his performance suggests that if he was hurt in Boston, he's still pitching hurt in Milwaukee. Since he hasn't been diagnosed with an injury, of course he wouldn't say he has one - ballplayers never admit current injury. When a pitcher has a sudden drop in effectiveness, and this is continued into the next season and a new team, the simplest explanation remains an injury.

Your suggestion seems to be that Gagne had mental problems in Boston which have not cleared up over the offseason or the move, and are now having the exact same negative effect on his pitching in Milwaukee that they did in Boston. If Eric Gagne avoids the DL this year, and especially if Eric Gagne starts pitching well again, I'll be shown to most likely be incorrect. But at the moment, I'm sticking with it.

-Another possibility is that his half-season of success in Texas was the fluke. That is, ever since coming back from injury, (and going off steroids?) he's turned into a shitty pitcher, but he just got lucky pitching in Texas for a couple months. Then the league caught up to him, and he hasn't been able to get anyone out since. That's also reasonable.

I think that for your argument to be workable, Gagne has to turn it around at some point. The idea that his mental block has persisted runs counter to any understanding I've ever heard of the emotional and cognitive aspects of sport.
   27. tfbg9  Posted: May 17, 2008 at 10:47 AM (#2784073)
Are Lugo's rash of errors due to injury?
   28. Matt Clement of Alexandria  Posted: May 17, 2008 at 10:53 AM (#2784078)
Lugo's seen little change in overall effectiveness. I expect we'll see him improve his F%, and the problems were likely a combination of normal variation in performance and mental issues.

When a player sees a major drop in overall production as a result of mental issues, we expect it to go away over time, and especially to go away with a change of scenery. That hasn't happened with Gagne.
   29. tfbg9  Posted: May 17, 2008 at 11:18 AM (#2784091)
That is, ever since coming back from injury, (and going off steroids?) he's turned into a shitty pitcher, but he just got lucky pitching in Texas for a couple months.


Not shitty, but maybe just an OK run of the mill bullpen guy. And that the loss of ability without PED's has him spooked to the point that he becomes shitty.

I think that for your argument to be workable, Gagne has to turn it around at some point. The idea that his mental block has persisted runs counter to any understanding I've ever heard of the emotional and cognitive aspects of sport.


Wrong. He could suck for one more month and get released.

Have you ever played sports?
   30. Chip  Posted: May 17, 2008 at 11:22 AM (#2784094)
Since he hasn't been diagnosed with an injury, of course he wouldn't say he has one - ballplayers never admit current injury.


Especially not players with surgically repaired arms who are on their second consecutive one-year contract. As long as you can muddle through and make it out there without your elbow snapping in two, you can hope for a run of luck like you had first half of '07 to bag another $10M or more payday for '09, or better yet, the multiyear deal you wanted but couldn't get this past offseason.
   31. Matt Clement of Alexandria  Posted: May 17, 2008 at 11:34 AM (#2784100)
Have you ever played sports?
I could ask the same thing. Though maybe this would explain a lot - did you have a numbingly persistent mental block that consistently prevented you from achieving athletic success?

Myself, I had a lot of temporary mental issues and mental blocks, and I fought through them and returned to my usual level of performance. I never had a mental block that persisted over multiple seasons that caused a massive and ongoing drop in performance, and I never knew anyone else who had one either. Well, that's not quite true. I knew one guy that happened to, on a college track team. But he was an obvious outlier.
   32. Toby  Posted: May 17, 2008 at 01:13 PM (#2784137)
Steve Blass
Steve Sax
Chuck Knoblauch
Rick Ankiel
Mackey Sasser
...
   33. battlekow  Posted: May 17, 2008 at 02:07 PM (#2784206)
Gagne isn't injured. See here for a good discussion of his problems with his changeup.
   34. Chip  Posted: May 17, 2008 at 02:49 PM (#2784286)
Gagne isn't injured. See here for a good discussion of his problems with his changeup.


I don't see how that page shows him to be uninjured.
   35. battlekow  Posted: May 17, 2008 at 03:04 PM (#2784310)
I didn't say it did; I said it was a good discussion about his problems with his changeup. My opinion that he is uninjured comes from watching him pitch this year.
   36. Matt Clement of Alexandria  Posted: May 17, 2008 at 05:47 PM (#2784495)
Steve Blass
Steve Sax
Chuck Knoblauch
Rick Ankiel
Mackey Sasser
If this is meant as an argument, could you explain how any one of these players is comparable to the 2007-2008 Eric Gagne? They are quite comparable to each other (well, I think so, I don't know Sasser's story), but they seem easily differentiable from Gagne, who is merely sucking, not chucking the ball into either the backstop or the face of Keith Olbermann's mom.
   37. tfbg9  Posted: May 17, 2008 at 06:43 PM (#2784560)
Here's what I think happened to Gagne.

He was a product of 'roids in his great years. Just my educated guess, but I think he was. And once off the 'roids, he lost that 97-99 mph fastball, it became 92-94. Off the 'roids, he was also missing that ultra-confidence, that invincibility feeling that one hears about. The injury compounded all this, or perhaps the other way around, I don't know. He was pitching in a tougher league, and in a much higher pressure enviornment. Very few give a rat's as$ in Texas about the Rangers. And every time he made a mistake in Boston, it seemed to get hammered off a wall. He got booed.

All of this stuff got into his head. That's what I think. Am I sure he's not nursing a bad elbow or whatever in order to
snag one last payday? No, I'm not. But I think all of the above have contributed to a crisis of confidence, coupled with a real loss of ability; an unfound change-up, and a significantly less dominating heater.
   38. Toby  Posted: May 17, 2008 at 09:03 PM (#2784708)
I wasn't trying to make an argument .. I was just trying to see how you were going to defend your statement:

"I never had a mental block that persisted over multiple seasons that caused a massive and ongoing drop in performance, and I never knew anyone else who had one either."

in light of the examples I gave.

I take no position on whether Gagne sucks for physical reasons or mental ones, but I do think your denial that a persistent mental block can exist and cause a massive ongoing drop in performance has no merit. That's all.

As for Mackey Sasser, he developed a mental inability to throw the ball back to the pitcher, and eventually had to be moved from catcher.

And yes, these cases I mentioned are all like each other. They all involve throwing ineffectively, which is why they are not out of place in a discussion about Gagne.

Sorry to interrupt. Now I'll go back to lurking for another few weeks ...
   39. Darren  Posted: May 18, 2008 at 12:52 PM (#2785057)
The Red Sox apparently don't see the disincentive angle:

As major league teams continue to sign young stars to contract extensions well before they hit the open market, including the Milwaukee Brewers inking ’07 NL Rookie of the Year left fielder Ryan Braun to the richest deal in club history, the Red Sox [team stats] attempted to execute their own preemptive strike last offseason.
   40. Toby  Posted: May 18, 2008 at 01:15 PM (#2785093)
I don't want to beat this point to death, Mikael, but another good example just occurred to me:

BHK.

I did some digging and here's some highlights from a recent article about him:

It's hard to explain how a player of Kim's talent witnessed his effectiveness to decline so sharply without any major injuries or off-field troubles.


Released from the Red Sox before the 2005 season, Kim regressed as a journeyman, completing his transformation from being dominant to anonymous to unemployed in a span of less than five years.

Kim admits that part of the problem was ``mental."


full article
   41. Darren  Posted: May 18, 2008 at 01:40 PM (#2785132)
Kim might think part of the problem was mental, but Kim's decline from excellence to mediocrity coincides quite nicely with his velocity dropping from mid-90s to mid-80s.
   42. Chip  Posted: May 21, 2008 at 07:51 PM (#2790145)
   43. Valentine  Posted: May 27, 2008 at 08:26 PM (#2796118)
Darren, I believe the Red Sox currently have at least $10M of room under the salary cap and could be even farther under next year as they shed some dead-weight salaries. At least one long-term deal could be accommodated without a luxury tax hit, and it could help reduce the burden down the road.

Still, food for thought. Reminds me of salary cap management in the NFL.
   44. Darren  Posted: May 27, 2008 at 09:49 PM (#2796279)
They could accommodate one youngster, but then what do you tell the others? Really, my point is more of a general one.
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