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Monday, June 09, 2014

Max Scherzer takes out insurance policy after turning down $144 million extension

It’s interesting to note that Boras’ research found that injuries to pitchers tend to decrease after they have pitched at least four years in the big leagues, and that position players are far more likely to break down due to their workload.

I wonder how far the Tigers could push this.  150 pitch starts?  Regular starts on three days rest?  Pitch him out of the pen between starts?  Obviously diminishing returns, but if he’s so eager to be out the door, let’s see how high we can push Boras’ blood pressure.  Apparently Max gets paid either way.

Robert in Manhattan Beach Posted: June 09, 2014 at 03:40 AM | 71 comment(s) Login to Bookmark
  Tags: boras, insurance fraud, max scherzer, tigers

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   1. PASTE Thinks This Trout Kid Might Be OK (Zeth) Posted: June 09, 2014 at 08:47 AM (#4721682)
I wonder how far the Tigers could push this. 150 pitch starts? Regular starts on three days rest? Pitch him out of the pen between starts? Obviously diminishing returns, but if he’s so eager to be out the door, let’s see how high we can push Boras’ blood pressure. Apparently Max gets paid either way.


Well, doing such things for vindictiveness would be neither right nor wise, but certainly there's no reason at all for the Tigers to worry about protecting Scherzer's arm now. Let 'er rip.
   2. Shooty Survived the Shutdown of '14! Posted: June 09, 2014 at 08:51 AM (#4721684)
It’s interesting to note that Boras’ research found that injuries to pitchers tend to decrease after they have pitched at least four years in the big leagues

The Injury Nexus! That used to be BP's favorite phrase.
   3. vivaelpujols Posted: June 09, 2014 at 09:23 AM (#4721699)
This whole thing seems crazy. Why would Scherzer turn down a 144 million dollar extension? There's such thing as an insurance policy for "lost potential earnings"? Does this mean some insurance agency gives Scherzer 140 million if he ##### his shoulder up tomorrow? Why would they do that?
   4. GregD Posted: June 09, 2014 at 09:25 AM (#4721701)
If you are willing to pay a high-enough premium, there's an insurance policy for anything, right?
   5. snapper (history's 42nd greatest monster) Posted: June 09, 2014 at 09:29 AM (#4721703)
If you are willing to pay a high-enough premium, there's an insurance policy for anything, right?

Unless the moral hazard is too great. An insurer won't write a policy where the insured is better off after the insured event/claim happens.

i.e. you need a sufficiently large insurable interest. The damage to you from the event has to be at least as large as the insured benefit.

For example, there is no price at which an insurer will give you a $100M policy on your $1M house in case of fire. Even if the premium was $95M, you'd still have the incentive to burn the damn thing down (that's the moral hazard).

In the same vein, no insurer would give Scherzer a $300M policy, b/c it would give him every incentive to get "injured".
   6. Jose Can Still Seabiscuit Posted: June 09, 2014 at 09:41 AM (#4721711)
Why would Scherzer turn down a 144 million dollar extension?


Because he thinks he can make more. I'm with you, I would have taken that deal in a heartbeat. This is his one realistic shot at the big pay day so maximizing it makes sense. I just cannot imagine how much more he think he will get. Of course there is ample evidence over the years that just when we think a player turned down a good deal someone offers even more money.
   7. Jose Molina wants a nickname like "A-Rod" Posted: June 09, 2014 at 10:01 AM (#4721723)
FWIW, his FB is down an MPH from last year and he's been crappy over his last 3 starts.
   8. TJ Posted: June 09, 2014 at 10:05 AM (#4721725)
Is there an insurance policy for only being offered smaller contracts because you weren't as good your free agent season as you were the one before?

Look, I'm a big Scherzer fan. I hope he's right and gets more. But no one is going to offer him a better deal at age 30, especially since there is no way he can match his performance from last season. It was a career year, and that was the time to strike while the iron was hot. Max will be lucky to get a five-year, $100 million dollar deal as a free agent...
   9. PASTE Thinks This Trout Kid Might Be OK (Zeth) Posted: June 09, 2014 at 10:13 AM (#4721727)
Scherzer will get more than $144 million from the Yankees this winter--if he gets there healthy.

For a pitcher that's a gargantuan if. A pitcher should always sign any reasonably large contract, because any game--any pitch--might bring ruin.

Whatever insurance Boras has purchased for him--I'm pretty sure this is a routine thing Boras does--isn't likely worth nine figures. As for the Tigers, Boras clients don't sign extensions and I'm sure the offer was a formality on their part; there's no sense making the player feel slighted and pissing him off by making no offer at all, and no risk he'll sign it since Boras clients don't sign extensions.
   10. Nasty Nate Posted: June 09, 2014 at 10:21 AM (#4721729)
Scherzer will get more than $144 million from the Yankees this winter--if he gets there healthy.

For a pitcher that's a gargantuan if. A pitcher should always sign any reasonably large contract, because any game--any pitch--might bring ruin.


I think people have to remember that an injury (even a bad one) doesn't bring his future earnings (the downside) to zero dollars.

E.G., if he has Tommy John surgery tomorrow, he will still earn tens of millions of dollars in the future in baseball.

If he has a bad second half, he will still earn tens of millions of dollars in the future in baseball.
   11. RoyalsRetro (AG#1F) Posted: June 09, 2014 at 10:22 AM (#4721732)
Yea, Mark Prior was still getting money from teams for almost a decade after he last pitched in the big leagues.
   12. PASTE Thinks This Trout Kid Might Be OK (Zeth) Posted: June 09, 2014 at 10:31 AM (#4721738)
Of course, Nasty Nate. But do you consider it a good gamble to turn down $144 million for a chance to get $180 million, with the downside risk being that you get hurt and end up with maybe a 2 year/$30 million contract?

Maybe I'm too conservative, but for a pitcher guaranteed long-term security is a wonderful thing.
   13. Good cripple hitter Posted: June 09, 2014 at 10:35 AM (#4721744)
Unless the moral hazard is too great. An insurer won't write a policy where the insured is better off after the insured event/claim happens.


See the entry for "Lloyd's of London", subheading "Hennig, Curt".
   14. Nasty Nate Posted: June 09, 2014 at 11:00 AM (#4721765)
Of course, Nasty Nate. But do you consider it a good gamble to turn down $144 million for a chance to get $180 million, with the downside risk being that you get hurt and end up with maybe a 2 year/$30 million contract?


I'm not sure whether or not it is a good gamble. He seems to be hedging it with the insurance (although I didn't read the article).

Another factor is the freedom to pick his next team. I have no idea if that's worth much to Scherzer, but I guess there's a chance he doesn't want to play for Detroit.
   15. Heinie Mantush (Krusty) Posted: June 09, 2014 at 11:01 AM (#4721767)
Scherzer is 85 IP of a 125 ERA+ into his 2014 season. We're about 40% of the way through the season, so he's on pace for 200+ IP. Since the start of 2013, Scherzer has a 3.03 ERA.

If he can just hold to roughly this level of performance, 144M is probably on the very, very low side of what he'd get in FA as a 30 year old ace in a market even remotely similar to the current one. EDIT: Assuming Scherzer is really willing to just go to the highest bidder regardless of anything else, that is.


   16. RoyalsRetro (AG#1F) Posted: June 09, 2014 at 11:12 AM (#4721781)

Maybe I'm too conservative, but for a pitcher guaranteed long-term security is a wonderful thing.


Isn't $30 million pretty much long-term security?

Once you get to a certain level, I have to think its worth the gamble. With what the guy has earned already, and what he can earn even rehabbing, he's pretty much set for life.
   17. Barry`s_Lazy_Boy Posted: June 09, 2014 at 11:15 AM (#4721784)
Once again, Boras trades a player's best interests to maximize the highest potential dollar amount they can possibly get in free agency.

   18. snapper (history's 42nd greatest monster) Posted: June 09, 2014 at 11:16 AM (#4721785)
Once you get to a certain level, I have to think its worth the gamble. With what the guy has earned already, and what he can earn even rehabbing, he's pretty much set for life.

But to turn that around. If he's already set for life, what does $200M buy him that $144M doesn't?

The only real explanation for turning down the offer is he doesn't want to play for the Tigers anymore. That's a good reason to decline the extension.
   19. snapper (history's 42nd greatest monster) Posted: June 09, 2014 at 11:18 AM (#4721787)
Once again, Boras trades a player's best interests to maximize the highest potential dollar amount they can possibly get in free agency.

Well, duh. Agents get paid a % of the contract. They're going to maximize that.
   20. RoyalsRetro (AG#1F) Posted: June 09, 2014 at 11:20 AM (#4721789)

But to turn that around. If he's already set for life, what does $200M buy him that $144M doesn't?


$56 million worth of stuff.

Seriously, its a lot of money. Its worth the gamble if you already had $10-30 million in the bank like Scherzer pretty much does. No one on Wall Street says "I won't take a small gamble to make $56 million more because I already have $10 million".
   21. Nasty Nate Posted: June 09, 2014 at 11:22 AM (#4721791)
Once again, Boras trades a player's best interests to maximize the highest potential dollar amount they can possibly get in free agency.


Well, duh. Agents get paid a % of the contract. They're going to maximize that.


If it's a bad gamble for Scherzer, it's a bad gamble for Boras too....
   22. Joey B. "disrespects the A" Posted: June 09, 2014 at 11:22 AM (#4721792)
I love seeing references to "Boras' research" as though he's Max Planck or someone.
   23. snapper (history's 42nd greatest monster) Posted: June 09, 2014 at 11:22 AM (#4721793)
Seriously, its a lot of money. Its worth the gamble if you already had $10-30 million in the bank like Scherzer pretty much does. No one on Wall Street says "I won't take a small gamble to make $56 million more because I already have $10 million".

Bad analogy. The people on Wall Street are risking other peoples' money. Scherzer is risking his own.

What "stuff" can you buy with $200M that you can't with $144M?
   24. PASTE Thinks This Trout Kid Might Be OK (Zeth) Posted: June 09, 2014 at 11:23 AM (#4721794)
Another factor is the freedom to pick his next team. I have no idea if that's worth much to Scherzer, but I guess there's a chance he doesn't want to play for Detroit.


We know that Scherzer doesn't care where he plays next, cares only how much money he can get, because he has hired Scott Boras as his agent.
   25. snapper (history's 42nd greatest monster) Posted: June 09, 2014 at 11:25 AM (#4721795)
If it's a bad gamble for Scherzer, it's a bad gamble for Boras too....

Not necessarily. Boras has a portfolio of players, so he gets to diversify his risk.

If he has 10 hypothetical players who are choosing between $100M now and $150M in FA, he can have 3 completely bust, and still come out ahead by waiting until FA.

Since the players are undiversified, and Boras is diversified, they should have different risk tolerances.
   26. Johnny Sycophant-Laden Fora Posted: June 09, 2014 at 11:37 AM (#4721806)
If he can just hold to roughly this level of performance, 144M is probably on the very, very low side of what he'd get in FA as a 30 year old ace in a market even remotely similar to the current one


Scherzer has a 127 ERA+ from 2012-2014.
looking at guys with 400+ IP 2012-2014:
Kershaw: 512 ip/162 ERA+: over $30m AAV
Ok Kershaw has his own zip code

Sale: 458/143: signed a 38/3 extension
Anibal Sanchez: 434/134, $16.5m AAV
Yu Darvish: 477/132, (can't really be used as a $ comp)
Verlander: 542/131, $28m AAV
King Felix: 534/129: $25/26 AAV
Cliff Lee: 501/128: signed for 120/5 coming off a 3 stretch better than Scherzer's current one- so we have inflation but we also have the fact that Scherzer is/was not as good as Lee was (Which Scherzer may not acknowledge of course)
Scherzer: 487/127: turned down 144/6
Greinke: 469/125: 147/6? signed after a three year stretch NOT A GOOD as Scherzer's current one, career year was just before that stretch though...

The deal Max [allegedly] turned down is similar [slightly better than] to the Hamels' current deal, Hamel's 2-3 years preceding such deal were better than Scherzer's (IMHO)


Personal opinion: the deal allegedly offered to Max was very reasonable considering Scherzer's performance and what comparable pitchers in comparable situations have gotten- sure he could get more, he could also easily get less. I honestly think the team was taken aback when Max/Boras dismissed it so out of hand.
   27. Nasty Nate Posted: June 09, 2014 at 11:41 AM (#4721810)
Not necessarily. Boras has a portfolio of players, so he gets to diversify his risk.

If he has 10 hypothetical players who are choosing between $100M now and $150M in FA, he can have 3 completely bust, and still come out ahead by waiting until FA.

Since the players are undiversified, and Boras is diversified, they should have different risk tolerances.


Yes, they have different risk tolerances. But my point was that if Boras goes around making more bad gambles than good gambles, it will cost him money in the long run.
   28. SoCalDemon Posted: June 09, 2014 at 11:42 AM (#4721811)
If it's a bad gamble for Scherzer, it's a bad gamble for Boras too....


This isn't really true. An agent (especially Boras) has lots of players under contract, and these things would tendto even out such that Boras will end up with more money in the long run. But Max Scherzer only has one Max Scherzer to work with. There is no "tend to work out" in this case.
   29. snapper (history's 42nd greatest monster) Posted: June 09, 2014 at 11:45 AM (#4721816)
Yes, they have different risk tolerances. But my point was that if Boras goes around making more bad gambles than good gambles, it will cost him money in the long run.

From an expected value basis, yes. But maximizing expected value is probably not a "good deal" for Scherzer.

I mean, if someone offered you a coin flip bet of your entire net worth vs. 110% of you entire net worth, or your entire slary this year, vs. 110% of your salary, you probably don't take it, even though it increases your expected value.
   30. Nasty Nate Posted: June 09, 2014 at 11:50 AM (#4721823)
An agent (especially Boras) has lots of players under contract, and these things would tendto even out such that Boras will end up with more money in the long run. But Max Scherzer only has one Max Scherzer to work with. There is no "tend to work out" in this case.


From an expected value basis, yes. But maximizing expected value is probably not a "good deal" for Scherzer.


I see what you mean.
   31. Barry`s_Lazy_Boy Posted: June 09, 2014 at 11:53 AM (#4721825)
Well, duh. Agents get paid a % of the contract. They're going to maximize that.

If you are a terrible agent, you will. There is more to representing someone than "risk it all for largest upside".

Its worth the gamble if you already had $10-30 million in the bank like Scherzer pretty much does. No one on Wall Street says "I won't take a small gamble to make $56 million more because I already have $10 million".

At the end of this season, Scherzer will have made $30M. I'd be very surprised if he had $10M in the bank.

There is way more value to landing the $144M than upping the $144M to $180M.

Plus, the insurance has a very real cost that surely runs into multiple millions. You don't get a $144M payout with a $200k premium, given the likelihood of pitcher injury. So he has already paid for some of the upside.

EDIT: Insurance payout is probably something like 80% of $144M. Or 80% of difference between $144M and next contract, in case of injury.
   32. PASTE Thinks This Trout Kid Might Be OK (Zeth) Posted: June 09, 2014 at 11:56 AM (#4721827)
I honestly think the team was taken aback when Max/Boras dismissed it so out of hand.


I doubt it. They're aware of how Boras operates. I doubt they thought for a second there was any chance of Boras accepting.
   33. snapper (history's 42nd greatest monster) Posted: June 09, 2014 at 11:57 AM (#4721829)
If you are a terrible agent, you will. There is more to representing someone than "risk it all for largest upside".

That's Boras' pitch; "I'll get you the absolute most money possible". It works for enough guys to sustain the model, so he doesn't care if a few guys get screwed along the way.
   34. Nasty Nate Posted: June 09, 2014 at 11:58 AM (#4721831)
I doubt it. They're aware of how Boras operates. I doubt they thought for a second there was any chance of Boras accepting.


But they did make some unusual public statement, didn't they?
   35. Misirlou's been working for the drug squad Posted: June 09, 2014 at 11:59 AM (#4721833)
Who has gotten screwed by Boras? Honest question, I really don't know.
   36. bunyon Posted: June 09, 2014 at 12:05 PM (#4721840)
I'm sure he does okay with the ladies, Duck.
   37. eric Posted: June 09, 2014 at 12:27 PM (#4721857)
I like how people always assume the players are somehow innocent victims of Boras's. Maybe Boras attracts players who tend to go for top dollar, so they agree with his methods.
   38. Barry`s_Lazy_Boy Posted: June 09, 2014 at 12:41 PM (#4721868)
That's Boras' pitch; "I'll get you the absolute most money possible". It works for enough guys to sustain the model, so he doesn't care if a few guys get screwed along the way.

Ok, that may be Boras' specific pitch, which is different then your earlier blanket statement: Well, duh. Agents get paid a % of the contract. They're going to maximize that.

Who has gotten screwed by Boras? Honest question, I really don't know.

I think there are a lot of players who have suboptimal outcomes in their career because they allowed Boras to chase max dollars. Stephen Drew is this year's most obvious example. I don't think any get "screwed", but I do think some end up with a choice they somewhat regret.



   39. Ron J2 Posted: June 09, 2014 at 12:46 PM (#4721869)
#18 Two things I can see, either of which may or may not matter to Scherzer.

1) Money as a means of keeping score. Nothing new here. See for example Bill Russels's "Wilt plus a dollar" contracts. As a group athletes are very competitive and where they rank on the salary scale matters to a lot of them.

2) Money for non lifestyle choices. Maybe Scherzer wants to get involved in F1 or some other exceedingly expensive venture.
   40. RMc is a fine piece of cheese Posted: June 09, 2014 at 01:55 PM (#4721926)
What "stuff" can you buy with $200M that you can't with $144M?

About 39% more of the same stuff?
   41. Jose Can Still Seabiscuit Posted: June 09, 2014 at 01:57 PM (#4721929)
Who has gotten screwed by Boras? Honest question, I really don't know.


"Screwed" is relative but both Stephen Drew and Kendrys Morales are worse off financially than they were had they accepted the QO this off-season.

More generally one of the things about Boras that would lead me to hire him is I don't recall stories of him ever being involved in anything untoward with a client's money. It seems like he gets them top dollar and isn't involved in shenanigans that leave these guys broke at the end of their careers. He's a shark but he's a shark who looks out for his friends.
   42. Jose Can Still Seabiscuit Posted: June 09, 2014 at 01:59 PM (#4721933)
What "stuff" can you buy with $200M that you can't with $144M?


For me the issue isn't so much what I can get with 200 vs. 144 as it is "is it worth the risk I might go from 144 to 30?" (the model laid out in #10). My gut is to say not it is not worth the risk but I am pretty risk adverse and not a professional athlete with insane amounts of self-confidence.
   43. valuearbitrageur Posted: June 09, 2014 at 02:41 PM (#4721974)
Screwed" is relative but both Stephen Drew and Kendrys Morales are worse off financially than they were had they accepted the QO this off-season.


Kendrys is debatable, but Drew was a clear winner.

He traded a small portion of this years salary to escape QO hell, so he can lock down a long term deal at a reasoble value.

And Boras doesn't hold these guys at gunpoint. He's made no decisions for any player.
   44. Barry`s_Lazy_Boy Posted: June 09, 2014 at 02:48 PM (#4721980)
Drew was a clear winner.

I agree that sitting out 1/3 of the season, watching your skills atrophy, and coming out and hitting 071/188/071 is a clear winner.
   45. Jose Molina wants a nickname like "A-Rod" Posted: June 09, 2014 at 02:48 PM (#4721981)
Isn't $30 million pretty much long-term security?

Once you get to a certain level, I have to think its worth the gamble. With what the guy has earned already, and what he can earn even rehabbing, he's pretty much set for life.


Invested well and accounting for inflation, taxes etc. 30MM gives you about a $720K/year income (I usually use 2K/mil/month). That's obviously very good, but that's what high end lawyers, doctors, etc. make. It's not f-you, private jet money. According to BB-Ref, he's made 30MM, but reduced by agents fees and taxes, he's probably around half that. So, add another 30MM to that and he's still doing very well, but on an annual income basis it's still very high end professional money, not rock star money. So, the big jump to me is from 30MM to 144. I.e. from very high professional to private jet owner.
   46. Nasty Nate Posted: June 09, 2014 at 02:54 PM (#4721989)
Kendrys is debatable, but Drew was a clear winner.

He traded a small portion of this years salary to escape QO hell, so he can lock down a long term deal at a reasoble value.


We don't need to re-hash all the issues again, but I think it's premature to call Drew a clear winner.
   47. Transmission Posted: June 09, 2014 at 03:02 PM (#4721994)
Somewhere I read that Scherzer is on record as saying that he is opposed on principle to not exercising the union's hard-won free agency rights, and wants to make as much as he can in order to set a higher ceiling as precedent for other free agents in the future.

Of course it is easy to make a "principled" stand when it could make you a hundred-millionaire a couple times over, but it also doesn't surprise me to think that more than a few strongly pro-union players might be concerned at the trend toward clubs offering to buy out free agency years for less than market value.
   48. Barry`s_Lazy_Boy Posted: June 09, 2014 at 03:23 PM (#4722005)
Somewhere I read that Scherzer is on record as saying that he is opposed on principle to not exercising the union's hard-won free agency rights, and wants to make as much as he can in order to set a higher ceiling as precedent for other free agents in the future.

That has been a consistent message from the MLBPA for a long time, so it is not surprising.
   49. 'zop sympathizes with the wrong ####### people Posted: June 09, 2014 at 03:27 PM (#4722009)
Invested well and accounting for inflation, taxes etc. 30MM gives you about a $720K/year income (I usually use 2K/mil/month). That's obviously very good, but that's what high end lawyers, doctors, etc. make. It's not f-you, private jet money. According to BB-Ref, he's made 30MM, but reduced by agents fees and taxes, he's probably around half that. So, add another 30MM to that and he's still doing very well, but on an annual income basis it's still very high end professional money, not rock star money. So, the big jump to me is from 30MM to 144. I.e. from very high professional to private jet owner.


I think you're overstating the quality of life if Scherzer has $70M in the bank left over from the $144. That's still high-end professional; the real inflection point in terms of lifestyle is somewhere in the $5-10MM/YR range. $2.5MM/YR is still a schlub, albeit an extremely rich schlub. But no jets, no house in St. Barts, etc.
   50. PASTE Thinks This Trout Kid Might Be OK (Zeth) Posted: June 09, 2014 at 03:31 PM (#4722014)
Suppose there was a star player, had been a star for years already by the time his free agency approached and has every reason to expect a $200M-plus contract, playing for a mid-market or small-market team. Suppose that, over the MLBPA's howling objections, this player said to himself and others, "you know what, I absolutely love playing in San Diego [or wherever], I want to win championships here, I'm financially set for life no matter what I do" and signs a long extension at half his market value.

Obviously the fans would love him, and probably the media would to. I wonder... how would his fellow players, both his teammates and others around the league, view him and treat him after that?
   51. valuearbitrageur Posted: June 09, 2014 at 04:24 PM (#4722080)
I agree that sitting out 1/3 of the season, watching your skills atrophy, and coming out and hitting 071/188/071 is a clear winner.


Sample size questions your assertions. 14 ABs.

We don't need to re-hash all the issues again, but I think it's premature to call Drew a clear winner.


From an EV standpoint, he clearly took the right course and it paid off.

He declined a QO that would have resulted in another QO, to try to get an acceptable long term deal. Some percentage of the time that works. This time it didn't, but he got a better deal, lost only $4M or so in income, but now much easier to get a long term deal at the price he wants. It's pretty clear that the QO reduced the value of his long term deals by significantly more than $4M, or he would have signed one. And it seems pretty clear 1 year older Stephen Drew should get significantly more w/o the QO hanging over him.

Now results may differ. If he hits .o71 rest of year for example. But if he ends up hitting .330 and leading Sox to Series again, his payday will be ginormous. All we can judge right now is whether he took a reasonable gamble, and so far the clear answer is yes.

And to those blaming Boras for anything. Boras doesn't make decisions, he makes recommendations. No children in baseball, if your favorite player gets greedy and leaves for more, don't blame Scott for getting him the most, don't blame the player for maximizing his remaining lifetime earnings for himself and his family and kids, and don't blame your favorite team for refusing to match an uneconomic contract.

Blame yourself for being such a dweeb that you think the world revolves around you and that others should live less optimal lives in order to optimize the pleasure YOU get watching your favorite team. Spend more time doing fantasy sports.
   52. Nasty Nate Posted: June 09, 2014 at 04:34 PM (#4722087)
He declined a QO that would have resulted in another QO a year layer, to try to get an acceptable long term deal. Some percentage of the time that works. This tine it didn't, but he got a better deal than the QO, losing only $4M or so in income, but now making it easier to get a long term deal at the price he wants.

You seem to be operating under the assumption that he would have gotten another QO after this year. That was never close to a 100% certainty. Yes, he escaped "QO hell," but it might not have been something he needed to escape in the first place.
It's pretty clear that the QO reduced the value of his long term deals by significantly more than $4M, or he would have signed one.

That's faulty logic. At the time, he didn't know that the contract he eventually got was going to be available.
   53. PASTE Thinks This Trout Kid Might Be OK (Zeth) Posted: June 09, 2014 at 04:35 PM (#4722088)
You had me with you right up until that last sentence, KT. #### fantasy sports.
   54. Barry`s_Lazy_Boy Posted: June 09, 2014 at 04:43 PM (#4722097)
From an EV standpoint, he clearly took the right course and it paid off.

This is a clear and precise answer that you, like Boras, is missing the forest for the trees.

Blame yourself for being such a dweeb that you think EV is the measuring stick for life.
   55. JRVJ Posted: June 09, 2014 at 04:43 PM (#4722098)
Going back to 1, I would think that the two things that Detroit should keep in mind are (a) They don't want to be seen as a team that destroys pitchers due to abusive use (such a reputation would be harmful for Detroit vis-a-vis free agent pitchers or even a pitcher which has a restriction as to where he can be traded to);

(b) They stand to gain a compensation pick if Scherzer rejects a QO after 2014.

Unless Scherzer's arm literally falls to the ground, I would think this compensation pick is a given - but still, there's a certain amount of risk that Scherzer can be injured in a terrible fashion which precludes them getting anything at the end of this season when Scherzer's deal expires.
   56. Johnny Sycophant-Laden Fora Posted: June 09, 2014 at 05:31 PM (#4722125)
He declined a QO that would have resulted in another QO, to try to get an acceptable long term deal. Some percentage of the time that works. This time it didn't, but he got a better deal, lost only $4M or so in income, but now much easier to get a long term deal at the price he wants. It's pretty clear that the QO reduced the value of his long term deals by significantly more than $4M, or he would have signed one. And it seems pretty clear 1 year older Stephen Drew should get significantly more w/o the QO hanging over him.


This is just so wrongheaded it boggles the mind.

1: Having a QO "hanging" over him wasn't the only reason Drew didn't get a "acceptable long term deal," in fact it was far less important than the fact that he'd missed nearly half of 2011 and 2012 due to injuries, and of the preceding 4 full years, two were good years (like 2013) and 2 were not- he's both inconsistent in both how much and how well he plays, that tends to put a damper on how much $ and years players get offered (oh sure sometimes such players do get offered nice fat long term deals, but most don't)
2: He was already on the wrong side of 30 and now he's a year older, that's not a good thing, that's a bad thing.

He's an offense first SS, who has an OPS+ of 97 from, 2011-2013

He's not as good as JJ Hardy who's the same age, but apparently Drew wants far more money, lots of luck with that one.
He seemingly wants the same deal that Rollins got, sure Dew at age 30 was roughly comparable to Rollins at 31/32 (when he signed that current deal)- but of course Rollins was both better and more durable than Drew prior to that point.

He's not much better (if at all) than Yunel Escobar, but wants more.

Jhonny Peralta? 2011-2013 WAR: 8.1 (Drew 4.7)
   57. theboyqueen Posted: June 09, 2014 at 05:53 PM (#4722135)
30MM gives you about a $720K/year income (I usually use 2K/mil/month). That's obviously very good, but that's what high end lawyers, doctors, etc. make.


I don't have any idea what "high-end" lawyers make, but there are essentially no doctors making that much money (practicing medicine anyway) unless they are involved in some sort of fraud. In California the range is more like $120K for a community pediatrician to maybe $500K for a neurosurgeon or something, with the vast majority on the lower end in between. I live in a city with a half a million people, 4 large health care systems, and lord knows how many doctors, and there are probably 2 or 3 making more than a half million dollars.
   58. SoSHially Unacceptable Posted: June 09, 2014 at 06:11 PM (#4722150)
two were good years (like 2013)


Well, it was good through the end of September. But the full Drew package in 2013 wasn't nearly as appetizing. Roll his abysmal postseason into his regular season stats and his .253/.333/.443 becomes something like .233/.298/.415.
   59. You Know Nothing JT Snow (YR) Posted: June 09, 2014 at 06:15 PM (#4722152)
I don't have any idea what "high-end" lawyers make


As much as they can steal.

but there are essentially no doctors making that much money (practicing medicine anyway)


Yeah, that seems way out of line for a working clinician.
   60. The Yankee Clapper Posted: June 09, 2014 at 06:23 PM (#4722157)
Having a QO "hanging" over him wasn't the only reason Drew didn't get a "acceptable long term deal . . .

Is there any better evidence that MLB is awash in dough than Stephen Drew all-of-a-sudden being a $14M player? That kind of money used to buy you something.
   61. Jose Molina wants a nickname like "A-Rod" Posted: June 09, 2014 at 06:47 PM (#4722168)
re 57. Yeah, I'm sure I'm wrong about doctors. I just meant very high end professional. In NYC (an outlier of course) 720K/year gets you a very nice life, but there is still a lot out of one's price range when it comes to apartments and such.
   62. Walt Davis Posted: June 09, 2014 at 06:54 PM (#4722170)
On Drew:

Suppose he took the QO. That's 1/$14.

Suppose he plays well enough to get another QO. He takes it. He's now at 2/$28. Compare that to this year where he's 1/$10 so now he's got to sign for at least 2/$20 just to break even and that's before we take account for whatever his expected value after 2015 would be in this scenario. So realistically, he's gonna have to sign for something like 2/$28 or 3/$40 this offseason to break even. Might happen but I'd put that near the top-end of AAV even if he plays like a healthy Drew.

Suppose he doesn't play well enough to get another QO. Then he's in the same boat this offseason as he already will be but he's out $4 M.

I agree that he should have turned down the QO because I thought he'd get a decent multi-year offer. Maybe he did get what I'd consider a decent one and turned it down. But, conditional on him not getting that offer, he cost himself by turning it down.

The positives and negatives for him this offseason are essentially the same. Hanley and Hardy are both also scheduled to be FA this offseason; the Dodgers and Yankees (and O's) will both be looking for SS. Looks like he'll be the #3 SS on the market. The wild card is whether the Red Sox see Bogaerts future at SS or 3B (Rfield dislikes his defense at both positions ... damn near Braunian in a very small sample at 3B).

Maybe the Sox will offer him 1/$14 this offseason. :-)

On Boras "screwing" players ... WTF? C'mon folks, we're supposed to understand probabilities, that every decision has the chance of going wrong, etc. Nobody gets screwed by Boras, sometimes his decisions, like everybody else's, achieve less (or more) than their expected value.

At the very least, let's have a fair 20/20 hindsight accounting. How many millions have Longoria and McCutchen left on the table? Sale's arb buyout might still work to his advantage if he gets hurt but there's no way the two option years for 2018-19 (at $26 M total) can work to his advantage -- what idiot agent advised him on that? (somebody named BB Abbott)

And while Kendrys Morales might have a legit gripe about Boras, Prince should be buying the guy a Maserati every Christmas.

And you've got a guy like Xavier Nady. Corner player with a career 99 OPS+, 4 career WAR and $20 M career earnings, currently making $775,000 to completely stink. From 2010-14, that's $6.5 M for -2.3 WAR, all on one-year FA contracts.

You know who else is a Boras client? Willie Bloomquist. From 2010-14, that's $9.2 M for -1 WAR with another $3M coming.
   63. Johnny Sycophant-Laden Fora Posted: June 09, 2014 at 07:00 PM (#4722173)
Is there any better evidence that MLB is awash in dough than Stephen Drew all-of-a-sudden being a $14M player? That kind of money used to buy you something.

:-)

I think Drew sees what Peralta got and is thinking "why not me?"
I'm sure that in his heart of hearts Drew thinks he's as good or better than Peralta, and that he laps Hardy... and that the only reason he didn't get Peralta $ was the QO.

He's also, for lack of a better word, greedy (I mean why else do you sign up with Boras?), so if the market said, "no, you're with this not that", he wasn't going to accept that answer if he could find an excuse instead. He (or Boras) had a ready excuse, I'm sure Drew wants to believe it was the Q thing and not the free market talking. My guess is that next year, if no "acceptable" deal emerges he blames Boras and fires him.

Personally, if I were a GM I'd view Drew as a stop gap at this point. He's gonna go the Reggie Sanders route, 1-2 year deals from here on out, he'll get $ because he's a decent MLB player, but he's at an age with a an unreliable history that's going to deter teams from offering him multi-year deals at anywhere near the same AAV they'd ink him to 1 for.
   64. valuearbitrageur Posted: June 09, 2014 at 07:11 PM (#4722175)
You had me with you right up until that last sentence, KT. #### fantasy sports.


Isn't that what I said?
   65. PASTE Thinks This Trout Kid Might Be OK (Zeth) Posted: June 09, 2014 at 07:16 PM (#4722179)
You mean by way of getting insufferable people to stop following real sports and leave the rest of us alone? A respectable dream, but there has to be a better way. The only thing worse than a woman who won't shut up about her children or grandchildren is... OK, let me back up. There are TWO things worse than that: An old person who won't shut up about his/her medical problems, and a man who won't shut up about his goddamned fantasy team.
   66. valuearbitrageur Posted: June 09, 2014 at 07:48 PM (#4722185)
This is just so wrongheaded it boggles the mind.

1: Having a QO "hanging" over him wasn't the only reason Drew didn't get a "acceptable long term deal," in fact it was far less important than the fact that he'd missed nearly half of 2011 and 2012 due to injuries, and of the preceding 4 full years, two were good years (like 2013) and 2 were not- he's both inconsistent in both how much and how well he plays, that tends to put a damper on how much $ and years players get offered (oh sure sometimes such players do get offered nice fat long term deals, but most don't)
2: He was already on the wrong side of 30 and now he's a year older, that's not a good thing, that's a bad thing.

He's an offense first SS, who has an OPS+ of 97 from, 2011-2013


Stephen Drew
Age  Games
/WAR
23   59 
/1.7
24  150
/0.0
25  152
/3.0
26  135
/2.9
27  151
/4.0
28  86
/1.9  (Ankle snappedmissed rest of season)
29  79/-0.3  (badgered into shortened rehab, -0.4 WAR first 40 games, +0.1 next 39 games)
30  124/3.1 


Drew was a well above average shortstop for 3 consecutive years until he shredded his ankle. The next year he was forced to end a rehab early, and was terrible for the first 40 games, and slightly better the last 39 games. Then he returned to his previous well above average level for the Red Sox in the next year.

The reason is he's been a decent defensive shortstop with a decent bat, 102 OPS+ since age 25 even with that half year 81 OPS+ while not yet at full strength.

He's not as good as JJ Hardy who's the same age, but apparently Drew wants far more money, lots of luck with that one.
He seemingly wants the same deal that Rollins got, sure Dew at age 30 was roughly comparable to Rollins at 31/32 (when he signed that current deal)- but of course Rollins was both better and more durable than Drew prior to that point.

He's not much better (if at all) than Yunel Escobar, but wants more.

Jhonny Peralta? 2011-2013 WAR: 8.1 (Drew 4.7)


Rollins was better, but the market has changed.

JJ Hardy's deal is a puzzler. He has been more valuable than Drew, but had bad timing to average 108 games and 0.9 WAR 2009-2010. He was going to be a free agent after 2011, and got off to a great start but still signed signed a very team friendly deal in July. I can only infer he loved being an Oriole or worried about injury, or his market even if he completed a strong season (which he did). He has been worth far more than he's been getting paid with Baltimore.

Ages 25-31
Player  WAR
/650 PA
Escobar  4.0
Drew  3.5
Peralta 3.3 


Escobar has missed some games but is the better player when he's played. But his personal behavior has also hurt himself in other ways. I can't explain why that's so important that teams won't pay for the real value he's produced.

Peralta is a little worse, was a year older & had the PEDs issue. But he got 5/$53M. Prices are going up. The question for Drew suitors is how many games do you expect him to play? Outside of that grotesque injury he's missed about 100 games in about 7 full seasons (counting his first half season and his half season pre ankle injury), so he's normally been just below 150 games per full season. The fact he missed 38 games last year has to be worrisome though.

You seem to think I'm saying Drew is in line for a megadeal, and that's not true at all. I think he & Boras thought he'd get a Peralta deal, but instead was offered some 3/30ish type deals. Removing the QO, even with at a year older, should get him closer to a 5/50M deal, assuming he doesn't crater this year. Not only is the cost of losing a pick (or it's perception among teams) significant, Boras also knew that Jeter was retiring after this year. Even if the Yankees don't sign Drew, they'll make the market price for middle infielders much higher. In fact, if Jeter wasn't retiring, would not be surprised if Boras would advise Drew to take the QO.

But even a 4/40M deal would be better than two consecutive QOs. It provides security, the Sox could yank next year's QO in spring training if he get hurt/performs poorly, and getting hurt next season means no long term deal or future QO.
   67. valuearbitrageur Posted: June 09, 2014 at 07:59 PM (#4722190)
Suppose he took the QO. That's 1/$14.

Suppose he plays well enough to get another QO. He takes it. He's now at 2/$28. Compare that to this year where he's 1/$10 so now he's got to sign for at least 2/$20 just to break even and that's before we take account for whatever his expected value after 2015 would be in this scenario. So realistically, he's gonna have to sign for something like 2/$28 or 3/$40 this offseason to break even. Might happen but I'd put that near the top-end of AAV even if he plays like a healthy Drew.


I think you are looking at it too short term. If he gets a 5/$42M, he comes out better because it's unlikely he can get 3 QOs in a row. The QO route has it's risks, he's one more bad season from no QOs, and a substantially lower free agent value.

The utility of locking down a long term deal is super valuable. But obviously the route he took has risks too, but a 3/30 is probably too close to 2 consecutive QOs. I think if he was offered a 4/40 last offseason, utility says he should have taken it.

But again, I think Boras probably considers the next offseason substantially stronger one to be a middle infield free agent (Yankees probably have multiple holes), so the potential reward for this strategy seemed much higher than we think to them.
   68. valuearbitrageur Posted: June 09, 2014 at 08:09 PM (#4722198)
think Drew sees what Peralta got and is thinking "why not me?"
I'm sure that in his heart of hearts Drew thinks he's as good or better than Peralta, and that he laps Hardy... and that the only reason he didn't get Peralta $ was the QO.

He's also, for lack of a better word, greedy (I mean why else do you sign up with Boras?), so if the market said, "no, you're with this not that", he wasn't going to accept that answer if he could find an excuse instead. He (or Boras) had a ready excuse, I'm sure Drew wants to believe it was the Q thing and not the free market talking. My guess is that next year, if no "acceptable" deal emerges he blames Boras and fires him.

Personally, if I were a GM I'd view Drew as a stop gap at this point. He's gonna go the Reggie Sanders route, 1-2 year deals from here on out, he'll get $ because he's a decent MLB player, but he's at an age with a an unreliable history that's going to deter teams from offering him multi-year deals at anywhere near the same AAV they'd ink him to 1 for.


The only thing you wrote here that I can argue with is the last paragraph. Average MLB players are worth $14M a year now (that's $6M/WAR), on one year deals. and not much less on longer deals. When healthy Drew's been well above average. An average player might be 2.1 WAR/150 Games, since age 25 he's been 3.4 WAR /150 even with the injury year.

I think you are right GMs will be skeptical about him, because of the injury, the missed games last year, and his last name & lack of "fire"( he's too far of the anti-Escobar in that regard). And because of Boras. But I have to think they can pencil him in for 8+ WAR the next 4 years worth close to $50M, (he was worth 8.6 the last 4 years even with one year of negative value due to the ankle), and someone will want to win games badly enough to pay near it. This isn't giving Prince Fielder $200M, a 4 year 45M deal going bad is so small it couldn't cripple KC or even San Diego.
   69. cardsfanboy Posted: June 09, 2014 at 08:30 PM (#4722201)
The only thing you wrote here that I can argue with is the last paragraph. Average MLB players are worth $14M a year now (that's $6M/WAR), on one year deals. and not much less on longer deals. When healthy Drew's been well above average. An average player might be 2.1 WAR/150 Games, since age 25 he's been 3.4 WAR /150 even with the injury year.


Only problem is that teams don't pay based upon war per 150 games, they pay based upon war per season(to simplify more or less) . Drew has been worth roughly 1.6 war per season over the past 3 seasons. Nobody is denying the quality they'll get for their money, it's the quantity that is making him risky. (as your second point points out)
   70. A Fatty Cow That Need Two Seats Posted: June 09, 2014 at 09:00 PM (#4722212)
xavier nady is still playing professional baseball?
   71. Nasty Nate Posted: June 10, 2014 at 04:25 PM (#4722768)
Drew is out of the lineup tonight because of his oblique. The wear and tear of 4 games really grinds on the body. It reminds me of the time JD Drew was a gametime scratch for opening day.

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