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Wednesday, September 11, 2019

Why the Dodgers’ handling of Kenta Maeda highlights the potential conflicts of interest with contract incentives - CBSSports.com

If I raise my eyebrows at the suggestion, does it say more about me or the writer of this piece?

The Dodgers have had a brilliant season, and could well soon appear in a third consecutive World Series. They don’t have to operate in a way that raises eyebrows about their true intent, which makes the possibility of suppressing Maeda’s earnings all the more maddening.

Jim Furtado Posted: September 11, 2019 at 09:17 AM | 16 comment(s) Login to Bookmark
  Tags: dodgers, kenta maeda

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   1. flournoy Posted: September 11, 2019 at 09:48 AM (#5878357)
Seems pretty unfair to bury this in the ninth paragraph of the article:

The Dodgers do have a ton of quality starters, and the case can be made that Maeda is the weakest of the bunch
   2. Nasty Nate Posted: September 11, 2019 at 09:56 AM (#5878362)
From the article:
Maeda has one of the least-favorable contracts in the sport: an eight-year pact that guarantees only $25 million and is incentives heavy to the point of being laughable -- the result, reportedly, of the Dodgers finding "irregularities" during his physical. (Why the Dodgers would want eight seasons of someone they deem an injury risk is a question worth asking.)
It's not a question worth asking because you just explained how it was a team-friendly deal. People talk about contracts in an upside-down manner; the "years" are what the team gets, not what a player costs.
   3. What did Billy Ripken have against ElRoy Face? Posted: September 11, 2019 at 10:01 AM (#5878363)
It's not a question worth asking because you just explained how it was a team-friendly deal. People talk about contracts in an upside-down manner; the "years" are what the team gets, not what a player costs.
Come on. Yes, I agree that Maeda's contract is team-friendly. But your second sentence is equally "upside-down." The obligation is mutual - the player has to play for the team for the years, and the team has to pay the player. The team "gets" the years and the costs.
   4. Nasty Nate Posted: September 11, 2019 at 10:17 AM (#5878369)
I'm not sure what you mean. The player gets the money.
   5. PreservedFish Posted: September 11, 2019 at 10:29 AM (#5878373)
I think what Nate means is that most people tend to look at the years of a contract disdainfully. E.g., "Hosmer signed for 8 years? Man they're gonna regret that."

But given a certain amount of money, the teams should want as many years as possible.

So in the case of the injured Maeda, if they had previously agreed to $25M guaranteed before the medical issue was uncovered, it would make just as much sense as anything for the Dodgers to counter with the same dollar figure but increased contract length.
   6. What did Billy Ripken have against ElRoy Face? Posted: September 11, 2019 at 10:39 AM (#5878375)
I get that in the specific instance of Maeda's contract. What I object to is the categorical statement that the years are the benefit to the team. The years are equally an obligation to the team. If we're only talking about a situation where the overall dollar figure is held constant, then yeah, no problem.
   7. Nasty Nate Posted: September 11, 2019 at 10:51 AM (#5878378)
What I object to is the categorical statement that the years are the benefit to the team. The years are equally an obligation to the team.
No, they can release a player any time they want. The money is the obligation. (of course the years don't turn out to be a benefit if the player is actively hurting the team)
If we're only talking about a situation where the overall dollar figure is held constant, then yeah, no problem.
I think we're on the same page. I just saw the implication from the article that somehow $25m/8 was worse for the team than something like $25m/6.
   8. What did Billy Ripken have against ElRoy Face? Posted: September 11, 2019 at 10:57 AM (#5878381)
No, they can release a player any time they want. The money is the obligation. (of course the years don't turn out to be a benefit if the player is actively hurting the team)
That's the other thing - in practice, teams far too often fail to recognize their sunk costs. Big long-term contracts influence roster and playing time decisions.
   9. PreservedFish Posted: September 11, 2019 at 11:10 AM (#5878387)
There could also be quirks in the budgeting process. It's plausible that a GM in some strange situation might prefer a player for 3 years, $75M rather than 4 years, $75M. (If they knew they had budget room for the next 3, but were doubtful about the player's longevity and had other big plans to spend big in Year 4).
   10. Nasty Nate Posted: September 11, 2019 at 11:13 AM (#5878390)
That's the other thing - in practice, teams far too often fail to recognize their sunk costs. Big long-term contracts influence roster and playing time decisions.

Yes, that happens. Nevertheless, I file that under choice rather than obligation.

In retrospect, the Chris Davis contract would have been better for the Orioles at $160m for 1 year!
   11. Nasty Nate Posted: September 11, 2019 at 11:15 AM (#5878391)
There could also be quirks in the budgeting process. It's plausible that a GM in some strange situation might prefer a player for 3 years, $75M rather than 4 years, $75M. (If they knew they had budget room for the next 3, but were doubtful about the player's longevity and had other big plans to spend big in Year 4).
That would have to be a very strange situation. Otherwise, it could be frontloaded so that the Year 4 salary was really low.
   12. PreservedFish Posted: September 11, 2019 at 11:24 AM (#5878395)
True
   13. Bhaakon Posted: September 11, 2019 at 12:25 PM (#5878410)
I can't only really think of two reasons to do that. 1) There's a transcendent talent available on the FA market in 3 years and you want budget space (which is risky to the point of insane, 3 years is an eternity and there's no guarantee the player will want to play for you even if you offer the most money). 2) You have a lot of cost-controlled players who are going to hit arbitration/free agency after that third year and either push you over the luxury tax or your self-imposed budget (Which is still potentially dumb for the same reason, IMO, but in that situation front-loading won't help with the luxury tax threshold).

Or, iff MLB imposed a more significant payroll floor, there might be a weird market in oversized 1-3 year contracts.
   14. Joyful Calculus Instructor Posted: September 11, 2019 at 03:26 PM (#5878460)
The years are equally an obligation to the team.


This would only be true if they were obligated to give him a roster spot. If he's so bad, he's not worth a spot on the roster, they can just release him.
   15. Walt Davis Posted: September 11, 2019 at 06:37 PM (#5878494)
in practice, teams far too often fail to recognize their sunk costs. Big long-term contracts influence roster and playing time decisions.

Sure. Some of this is understandable -- the player was very good to great to get the contract so you don't want to release the guy after one bad year in case it was just a random bad year. Also it is a sunk cost so the question becomes "what do we gain by releasing him?" Obviously it's counter-productive to block a productive prospect but it's not necessarily counter-productive to trot Pujols out there again when your best available alternative is Justin Bour (but maybe he's just having a bad year).**

But yes, even given those, teams do seem overly reluctant to move on. One thing that might help is if MLB/MLBPA could come to some agreement on how a player can retire but still get his money, possibly in some deferred manner. (Said arrangement obviously requiring some sort of agreement by team and player or possibly some independent arbitration such that an unhappy player can't just retire and get all his dough.) Make it as easy as you can for the Angels and Pujols to have the necessary talk and schedule Pujols Day. That saves the mutual embarrassment of releasing Pujols.

But none of that applies to Maeda. One "advantage" of that contract is that if he stinks or is broken after year 5, all the Dodgers have "sunk" is 3/$10 ... that's easy to walk away from and there's zero risk he'll take PT from anybody more deserving. So yes, the question of "why would you sign an injury risk for 8 years?" has the answer "because the monetary commitment is so freaking low there's almost no way we lose on this deal and those extra years only increase the chance that we make out like bandits."

As to 3/$75 vs 4/$75 ... well dealt with already but I'll add that, assuming the team can afford 3/$75, the 4/$75 gives them an extra $6.5 M to spend in the first 3 seasons which might buy them an extra 3 wins over that time. (And, if the player is truly done after 3 years, wasting $18.5 in year 4 might cost them 3 wins.) In theory, maybe you don't need/want those 3 wins in the first 3 years but really want them in year 4 ... but that raises the question of why are you signing this expensive player to begin with if you're not expecting to compete over the next 3 years?

** Sure, the best solution there is to acquire a decent 1B but that requires money/talent and the basic premise here is that the money is tight and the quality talent isn't there to begin with.
   16. Walt Davis Posted: September 11, 2019 at 06:54 PM (#5878500)
On Maeda ... he might have a legit gripe. He might indeed be no better than LA's 6th best starter when everybody is healthy. But he seems to have lost his rotation spot to 25-year-old rookie Tony Gonsolin who ... needs a makeover ... and otherwise is pitching pretty well but probably a bit worse than Maeda and is getting a bit HR-lucky. It's more than close enough that you can make a convincing 'baseball' argument but it's not the sort of move teams usually make. I'd also suggest that with the division wrapped up, the Dodgers should probably move to a 6-man rotation from here. However Maeda has always been moved to the pen in the playoffs and they moved him to the pen in late Sept 2017 and mid-Aug 2018 and moving him there for Sept 2019 to get ready is also easy to defend on baseball terms.

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