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Tuesday, December 27, 2022

Braves’ Sean Murphy: Inks extension with Atlanta

Murphy agreed to a six-year, $73 million extension with Atlanta on Tuesday, which includes a $15 million club option for 2029.

The contract buys out three years of arbitration eligibility and could keep Murphy in Atlanta until the 2030 campaign. The 28-year-old was acquired from Oakland in mid-December after he posted a .250/.332/.426 slash line with 18 home runs and 66 RBI for the Athletics last season, and he also won a Gold Glove in 2021.

RoyalsRetro (AG#1F) Posted: December 27, 2022 at 10:22 PM | 9 comment(s) Login to Bookmark
  Tags: braves, sean murphy

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   1. The Duke Posted: December 27, 2022 at 11:02 PM (#6110996)
They are so far ahead of everyone else with this strategy. All of them have surplus value so they can make deals as needed
   2. sunday silence (again) Posted: December 28, 2022 at 12:17 AM (#6111008)
Can we run the numbers on this and see what a bargain these buy out types of contracts obtain? Everyone has different projection systems, assume Murphy is a 3 WAR player next season. He's still in early prime so I'll make his theoretical (no missed time) projection as 3 3 3 3 2.5 2.5. total 17 WAR.

From the other thread it seems FG projections usually 120% of what happens in real life w/ injuries, so like 84% of projected. BUt he's a catcher so lets say with added risk he's about 75% likely to put that up so 17 x 75% about 13 WAE

So about $6M/war for this buy out contract, as opposed to contracts on the free market running about $12M+/war (using my method) or $10M/war using more standard method.
   3. John Reynard Posted: December 28, 2022 at 04:34 AM (#6111025)
Assuming you think Murphy is actually an OPS+ 120ish hitter for a few years still, this looks like a good-enough deal for Atlanta. I'm not sure it was worth tossing all the prospects at too though. Maybe they know flaws on Contreras though and that is why they sent him packing.

This has a decent chance of being bad in a couple years though, much like the Olson instead of Freeman thing looks pretty bad after just 2022.
   4. Walt Davis Posted: December 28, 2022 at 02:13 PM (#6111062)
#2 ... but the arb years were always going to be cheap by $/WAR with the added benefit of walking away if they turn out not to be cheap enough.

#1 ... this has been everybody's strategy since Cleveland started this 25+ years ago. It is curious that Atlanta is able to get so many guys to agree. As to any "innovation" on Atlanta's part, it's that they have done this very early (the Longoria approach) although that too is the same thing the White Sox did with Robert and Jimenez (and maybe others). That is not the case with Murphy who is already arb-eligible.

Signing a C through 33 doesn't seem like a great idea to me. But I don't know who to comp Murphy's arb to. Realmuto was a while ago -- he got $19 for his 3 arb years, losing TWICE in arbitration. I personally think Realmuto is better but it was a few years ago. Still, if this is what Murphy was looking at then Atlanta just signed him for 3/$54 for ages 31-33 three years in advance. That's not good at all.

I'm not sure how much arb awards defense but Contreras got $21 for his 3 years. Grandal was a long time ago now but he got $16. Will Smith is projected to make $5.2 in his first year which is $700 K more than Contreras.

I haven't followed Murphy but it seems he's clearly below Realmuto and Smith but he's probably as good, quite possibly better than Contreras because of defense. But almost regardless, looks like he'd make $20-25 M in his 3 arb years, making the FA buyout portion about 3/$50. That's cheap compared with Contreras but it's also several years in advance. Using #2's numbers, with injuries, he's be projected to about 6 WAR so the FA years are about $8.5-9 WAR. If you want to compare this with FA conttracts on a $/WAR, you have to look just at that portion but you have to also acknowledge the discount they get because they already had control over the next 3 years. If you wanted Contreras on your team for the next 3 years, you had to front up with 5/$85; if the Braves wanted Murphy on their team for the next 3 years, they didn't have to do anything at all.

If we look at the Acuna deal, the Braves have probably "lost" money to date on that deal. It's halfway done, he's produced 14 WAR for about $21 M (after 2020 correction). That's solid but not the superstar production we were hoping for, mainly due to injuries. The "overpay" comes mainly because he made $15 M in 2022 while, coming off a 3.6 WAR 2021, I don't see him getting a $15 M arb award as a "super 3." The Braves would still have control over him for the next 2 years when they'll be paying him $34 M which is probably a bit moe than he'd get. Obviously having him for 2/$34 with a 2/$34 team option starting in 2025 will likely still be somewhere between a nice bargain that makes it work it out nicely to a windfall.

The White Sox have now paid Robert $12 M (2020 adjusted) for his 3 "free" years and gotten 7.5 WAR in return. Unfortunately his career high in PA so far is 401, just 2.1 WAR after a stunner of a half-2021. His arb years are now going to cost them $37 which is probably more than he would have made otherwise although he's probably just one healthy year away from making that at least break-even. They will then have a 2/$40 option. Again, those two years will probably work out in the Sox favor quite a bit -- seems better than Nimmo for 8/$160.

The Tatis deal was the Acuna deal on steroids (ha!) and that hasn't worked out too well so far. Clever to serve the suspension in a $6 M season, not one of the $37 seasons at the end. Not working out so well for the Padres so far. I'm suprised (and it's just starting) but the Franco deal is also off to a rough start due to missing half of 2022. The Rays will pay him $50 M through his arb years then have him for 5/$125 after that which will likely be a huge bargain by 2028.

The key point is that when evaluating these deals, you simply have to start with the fact that the team already has control of the player for the next X years at bargain prices. Most of these buyout deals seem to pay max $ during the arb years -- virtually guaranteeing the team "loses" money in the first part -- then you get the part where the team is taking a relatively small risk with the potential for a big return but doing so 3-5 years before they need to take any risk at all. But the team deserves no credit for getting a great $/WAR during the arb years -- that's the CBA, they already had that. Teams deserve credit if they do a better job of leveraging that control into a successful long-term deal -- Atlanta did amazingly with Albies, good with Acuna, the White Sox did not do well with Robert and the Red Sox failed miserably with Mookie.

It seems folks tend to overestimate how much players make in arb. Correa's pre-FA years cost the Astros about $26 M -- compare to Robert ($50), Acuna ($56). I think Mookie holds the all-time record at $60. Seager $27; Lindor $52 (for 31 WAR); Judge $40. Guaranteeing Acuna that much money in his pre-FA years guarantees you will at best break even and likely pay him $20-25 M more than otherwise -- you damn well better get a great deal on some FA years. I haven't looked in detail but it seems to me that arb salaries have taken a decent jump over the last couple of years so maybe it's about to explode.

Anyway, what the Braves have done is sign Murphy to a 3/$50 extension three years early while guaranteeing him something close to max arb salaries. That will probably work out for them (especially relative to an alternate universe where they go year to year then sign him for 5/$85 when he's FA) but it's hardly a stroke of genius.
   5. Walt Davis Posted: December 28, 2022 at 03:04 PM (#6111066)
The Olson situation is another interesting example. He made $5 M in his first year arb in Oak. That's a pretty big first year arb. Usually if you had another big year, you might get $10 then $15. If you blew the doors off, maybe you'd get $12 then $18-20. If you weren't so impressive, it might go $8 then $12. Entering 2021, Olson was looking at $20-30 in his last 2 arb years.

Now Olson did blow the doors off with a 5.8 WAR season in 2021, following a 4.9 back in 2019. That might well have pushed him up to a whole other level but certainly puts him on the $25-$30 track at least. So the Braves gave him ... $36? His 3.3 WAR in 2022 was a bit disappointing but good enough to keep him on the same arb trajectory I think.

That's not a big overpay, $5-10, might not be an overpay at all. Then they gave him a 6/$132 extension through age 35. Compared with Freeman's 6/$162 through age 37, that looked like a good deal -- still does really but, yes, Freeman starts out ahead. In this case, they were extending Olson just 2 years early and 1B tend to be pretty durable so you'd think those 6 FA years are likely to still produce at least 15 WAR -- nobody's gonna get upset about 15 WAR for $132 M. Murphy's reasonably similar -- they're jumping 3 years early and he's a C so I'd still rather have the Olson deal from the team perspective.

They've guaranteed Harris $45 M for his arb years but he was gonna be a super-2 eventually so that's not too bad for 4 arb years, then they get 2/$22 plu2 2/$35 in options. That's fine, even if the arb years end up an overpay, 2/$22 in 2029/30 will be chump change. They had Riley's super-2 year at $4 M. With two 6-WAR years under his belt, he probably was looking at $40+ M for his last 3 arb years -- Braves have given him $58! Including his first year, that ties him with Bryant for what might be the super-2 record (Soto will own this record). (Note, other than hardware, he's as good as Bryant at the time and not likely to have Bryant's mini-collapse. But having gotten that first year for just $4 M, I think it's very unlikely an arbitrator would put him on a $58 M arbitration track.) After that, he gets a 7/$154 extension through age 35 which obviously is a bargain next to, for example, Arenado just in raw dollars but with less confidence he's as good as Arenado.

So if the Braves have a strategy here, it's in overpaying during the arb years to get a potentially huge break on the FA years. That also evens out the CBT hit -- Riley and Olson make nearly the same AAV in their last 2 arb years as they do in their FA years.

I just want to make sure we're clear that, using Riley for example, the Braves turned 15 (12-18) WAR for $40 M (and the opportunity to walk away if he collapses) into 15 WAR for $58 M and locked into 7/$154 three years early. Should still be a very good contract for the Braves (and obviously pays Riley over $200 M) but it can't be compared directly to an FA contract because the Braves already owned that first 15 WAR for $40 M. The Braves may or may not be doing a better job of exploiting that leverage -- it's hard to tell if they're better at or they just do more of it because they have the most elite young talent.
   6. sunday silence (again) Posted: December 28, 2022 at 04:34 PM (#6111078)
Yeah I didn't really think about it that way but good pt. Walt
   7. The Duke Posted: December 28, 2022 at 05:14 PM (#6111085)
The Braves secret sauce is the club options which most people tend not to factor in. They are super low in most cases such that if the player is good, then they'll exercise. If the player is great they have a windfall. If the player craps the bed, they just move on. This makes all these deals much more club friendly. these club options which look reasonable today will look tiny in 5-8 years

Another point to make is that they are using these primarily on position players who are much more predicable. Strider is an outlier but they didn't take a ton of risk there and bought two free agent years

Then you have the Freeman/Swanson dynamic. Let the old guys walk even if they have a couple prime years left instead of paying them a lot into their 30s. The cardinals did this Pujols and it worked great

They also are also benefiting from portfolio theory. One or even two of these might come in as negative values (see: Olsen), but the 6-7 deals will be wildly surplus value in aggregate

And finally, they have an embarrassment of great players with which to do this. If you look at the Cardinals it would be a grouping like Edman, Walker, Nootbar, Carlson, Donovan, and Gorman. With the exception of Walker (possibly), there's a lot more uncertainty. The Braves have hit the jackpot with young talent but kudos to Mgmt for maximizing the value to the team.
   8. The Duke Posted: December 28, 2022 at 09:26 PM (#6111118)
The Braves beat writer for the Athletic has a good article up on the Braves practice. Well worth a read
   9. John Reynard Posted: December 30, 2022 at 07:03 PM (#6111395)
They also are also benefiting from portfolio theory. One or even two of these might come in as negative values (see: Olsen), but the 6-7 deals will be wildly surplus value in aggregate

I get what you're doing here with portfolio theory. But, the best portfolios in investments are those made up of inversely correlated assets (which all have an a base pre-risk return above the risk-free rate). The risk for the Braves is that if 3 of the contracts don't pan out (lets just say Acuna, Olson, Murphy.....for random names, but, perhaps the most likely to underperform) then you have a team where you probably let Max Fried walk to keep together, that is more like an 85 win team. That is problematic.

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