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Monday, March 09, 2020

Flaherty set to push Cards’ salary formula to new heights, but will he avoid a renewal?

Within the next week, the Cardinals must complete contracts with all the players on their 40-man roster who have fewer than three years of service time, or the team will unilaterally impose the salary. Most of the contracts, such as center fielder Harrison Bader’s, are agreed upon and completed. According to multiple sources, Flaherty’s is not.

A year ago, Flaherty rejected the Cardinals’ formula-governed offer and was renewed by the club, with $10,000 lopped off as penalty. Flaherty criticized the system, not the Cardinals. A year away from arbitration rights, Flaherty is in the same spot despite a historic second half and Cy Young Award votes.

It’s fixed, the parameters of the game’s business is stacked against him, and his only option is to pitch his way out. Exceptionally.

“Make him an offer, and where it goes it goes,” said John Mozeliak, president of baseball operations. “From a zero-to-three standpoint, the moment you start deviating is the moment that somebody can go, ‘Well, why don’t you do that for me?’ We remain disciplined to the formula. Some people like the formula. Some people don’t. It’s hard to please everyone.”

RoyalsRetro (AG#1F) Posted: March 09, 2020 at 09:29 AM | 26 comment(s) Login to Bookmark
  Tags: salary

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   1. PreservedFish Posted: March 09, 2020 at 10:11 AM (#5928938)
A year ago, Flaherty rejected the Cardinals’ formula-governed offer and was renewed by the club, with $10,000 lopped off as penalty.


Dick move.
   2. salvomania Posted: March 09, 2020 at 10:22 AM (#5928940)
Per a few posts down from this one, the Cardinals just did the same thing for 2020.

Not exactly creating an atmosphere conducive to retaining him in St. Louis after 2023.
   3. salvomania Posted: March 09, 2020 at 10:28 AM (#5928942)
“From a zero-to-three standpoint, the moment you start deviating is the moment that somebody can go, ‘Well, why don’t you do that for me?’ We remain disciplined to the formula

Same excuse justice system uses when imposing harsh sentences for relatively minor offenses. "It's not us, it's the algorithm."

It's as if good judgement, critical thinking, and discretion can't be relied upon for making decisions anymore.

"Well, why don’t you do that for me?" Well, dude, he could say, give us a 6 WAR season at age 23 and we'll talk.
   4. Itchy Row Posted: March 09, 2020 at 10:50 AM (#5928947)
Negotiation is a gateway drug.
   5. What did Billy Ripken have against ElRoy Face? Posted: March 09, 2020 at 10:57 AM (#5928950)
Dick move.
Now it's $20,000. You keep talking back and it'll be $30,000.
   6. Barry`s_Lazy_Boy Posted: March 09, 2020 at 10:58 AM (#5928951)
penny wise pound foolish
   7. Ziggy: social distancing since 1980 Posted: March 09, 2020 at 03:30 PM (#5929053)
"disciplined to the formula" = "saving money". The analogy with criminal justice isn't a good one. Unlike in the criminal justice case, they are (at least attempting to) use good judgment. Sticking to the formula (they think) will help them keep costs down, which is at least a part of their job. (Whereas sending people to prison for as long as possible is not a judge's job.)

As for making it harder to keep him long-term: I'm not sure that this is a cost. I'm not sure that it's not a cost either. But how much value is there really to signing a free agent at market value? Sometimes it works out, but, man, the real profit is to be made on the pre-arb guys. So I'm not sure about the wisdom of paying pre-arb guys more money in exchange for the "benefit" of signing them as free agents.
   8. PreservedFish Posted: March 09, 2020 at 03:37 PM (#5929057)
What is a "zero-to-three standpoint"?
   9. Moses Taylor, glorified meat shield Posted: March 09, 2020 at 03:40 PM (#5929060)
So I'm not sure about the wisdom of paying pre-arb guys more money in exchange for the "benefit" of signing them as free agents.

I think there's clearly ancillary benefits though. Yes, it's easy to say the highest big wins in FA, but sometimes it's close and those other things make the difference. Sometimes it makes a bigger impression on the mid or lesser FAs. Sometimes it helps facilitate an early extension or even slight discount. Sometimes it just makes guys happier and they might even play better. Not that players have a lot of "trade me" leverage. Or that it's really quantifiable, but we're talking about completely immaterial amounts from the team perspective (and not just team value, the actual payroll budgets).

Now, if the Cardinals real position here is they have no real intention of trying to sign someone like Flaherty to a market rate FA deal when that time comes (or any other of their own FA) and they're doing everything they can to try and maximize those arb years, so be it. I wouldn't want to do it that way, but it's at least defensible. OTOH, the $10k fine is spiteful and pointless - both from a monetary value and there's literally no upside whatsoever to operating that way.
   10. Yonder Alonso in misguided trousers (cardinal) Posted: March 09, 2020 at 03:49 PM (#5929062)
What is a "zero-to-three standpoint"?

Presumably executive-speak for years of pre-arbitration service time.
   11. Nasty Nate Posted: March 09, 2020 at 03:53 PM (#5929065)
I never knew that they went through the dog-and-pony show of "offers" and players "accepting" for these situations. I don't really understand the point of a charade negotiation.
   12. salvomania Posted: March 09, 2020 at 04:51 PM (#5929078)
But how much value is there really to signing a free agent at market value?

I'm thinking more like what they did with DeJong, and what a lot of teams have done recently, signing a contract that goes through his arb years with options into his FA years.
   13. Walt Davis Posted: March 09, 2020 at 04:56 PM (#5929083)
These days it's not really good will for eventual FA but good will for an arb buyout including the first couple of years of FA. But that's usually about "we will actually treat you nicer than we are required to" (like "here's $850,000") not "take this or the 'offer' goes down by $10,000." The penalty is the very bizarre part.

As to analogies, it's similer to Theo's argument in the Bryant case that since he'd screwed over players on service time for his entire career, it sets a precedent that he wasn't screwing over Bryant on service time. (Not Theo's exact words but an argument the arbitrator apparently bought.)
   14. Smitty* Posted: March 09, 2020 at 05:32 PM (#5929094)
On the topic of goodwill for future negotiations, I think teams are usually thinking that the goodwill doesn’t buy any tangible benefits. I think they’re largely right. Let’s look at the theoretical benefits from the goodwill:

1. Player is happier thus may play better. These are highly competitive, driven people as a rule who know that future paydays rely on playing well today. I think it’s highly unlikely that Flaherty (as an example) would play better with a higher salary this year.

2. Player may be more likely to sign an arb buyout deal. Given that the team controls the player for 6 years anyway, these deals are largely a question of finding the right trade off of financial upside for financial security. If, for example, the Cards wanted to buy out Flaherty the dollar figures needed to do so would likely not significantly change based on Flaherty’s mood on his pre-arb payments. Even if the player gets emotional, they are advised by an agent who won’t.

3. Likelihood of resigning/extending near free agency. Again, this is largely a financial decision. Paying Flaherty (again as an example) more than they have to now likely would have little impact on signing him 4 years from now. If another team beats the Cards offer in 4 years, he’ll leave. If the Cards have the best offer, he’ll stay. As Ziggy pointed out, with the way big free agent contracts tend to end up this may not be much of a benefit even if it “works”.

I’ve seen similar dynamics play out in my own career (which of course has significantly different dynamics than professional sports). When I was new to the management track, I had an employee who let me know that their old company offered them more money to come back. She was willing to stay if we could match the money, as she liked the environment and work better in her current job. She was a good but not superstar employee, I wanted to keep her and went to bat for the counter offer. The senior leader that had sing-off power would not allow a counter, as in her experience counter offers rarely kept the employee on board for long. While the employee was mad she didn’t get a counter offer, she stayed because she decided the better work environment and more interesting work was more important to her than the extra money. The lack of goodwill did not cost the company because it was still the best place for the employee (in her own estimation)

A couple of years later a competing company offered me a hefty raise to jump ship. This same Sr leader may an exception to her policy and gave me a counter offer. This bought a lot of goodwill. But In the next year the work environment deteriorated and I jumped ship for a better opportunity (and I’m glad I did).

The point is, the player is going to make the decision they feel for their future, and the small amount of goodwill from pre-arb payments in the past will have little impact on that decision, one way or the other.

Oh, and don’t you hate pants?
   15. What did Billy Ripken have against ElRoy Face? Posted: March 09, 2020 at 05:52 PM (#5929100)
1. Player is happier thus may play better.
Counter: Player is still required to wear pants.
   16. Smitty* Posted: March 09, 2020 at 06:19 PM (#5929105)
Yes, yes, good point.
   17. eric Posted: March 09, 2020 at 07:27 PM (#5929113)
I also don't think goodwill does much when it comes to negotiating 8- or 9-figure contracts. And, especially since baseball executive jobs seem to have fairly high turnover, any GM spending more today for some vague hope of some sort of payback four years from now would just be setting the table for someone else to eat.

In four years Flaherty will be surrounded by completely different teammates, that much more integrated into the St. Louis social scene, and likely dealing with completely different front-office personnel, even if the GM and/or PBO is still the same (although those faces might likely be different, too). If he has some leftover "ill-will" based on how his first couple of years in the league unfolded, exactly who will that ill-will focused at? He's surrounded by completely different people and in a completely different situation. He'll just sign the biggest contract, either way. And a gigantic contract offer is the best way to create some goodwill in a hurry. Money heals all wounds.

Also, the Cardinals GM is Mike Girsch. If you read his background, it makes the existence of and Cardinals' absolute reliance on this "formula" more understandable.
   18. Walt Davis Posted: March 09, 2020 at 08:00 PM (#5929117)
I think teams are usually thinking that the goodwill doesn’t buy any tangible benefits

They must think it buys some (tangible?) benefits or they wouldn't have a "formula" that tells them to pay Flaherty more than the minimum. They're under no obligation to pay him more than $563,500. You may be correct in the main point that giving them an extra $200 K now does not save you anything later but whether it's avoidance of clubhouse griping or willingness to attend voluntary team functions or buying favor in arb settlements (or from the arbitrator) or thinking it will keep the MLBPA from insisting on service-time based minima or whatever reason, teams have generally decided it's worth going above the minimum on good players. Who knows why but the Cubs did pay Bryant about $100 K more than min in 2017 and a whopping $500 K more than minimum in 2017 and I think it's safe to say the Cubs do not consider maximizing Bryant's finances a top priority.
   19. Bhaakon Posted: March 10, 2020 at 03:39 AM (#5929154)
I agree that good will doesn't often buy tangible benefits, or at least not large ones. But bad will is another matter entirely. Shaving money off here seems counterproductive in a way likely to complicate future dealings.

Otoh, a guy willing to fight you over salary when he has zero leverage is likely to go to the mat when he actually has a leg to stand on whether you're munificent now or not.
   20. Barry`s_Lazy_Boy Posted: March 10, 2020 at 10:05 AM (#5929178)
But what is the formula gaining the Cardinals? By systematically surprising zero to 3 wages they save how much per year? $50k? $100k at the most? On a team payroll of $165.2M.

They are saving 1/1652nd of their payroll. Is that worth it? Doesn't it seem like whatever minor good will they get would be more valuable?
   21. Nasty Nate Posted: March 10, 2020 at 10:14 AM (#5929180)
But what is the formula gaining the Cardinals? By systematically surprising zero to 3 wages they save how much per year? $50k? $100k at the most? On a team payroll of $165.2M.

They are saving 1/1652nd of their payroll. Is that worth it? Doesn't it seem like whatever minor good will they get would be more valuable?
Isn't there formula about paying more than they have to, not less?
   22. Ron J Posted: March 10, 2020 at 10:32 AM (#5929185)
#21 They're paying more than they absolutely have to. But not meeting player expectations for early excellence.

In a perverse way I think that a perceived inadequate bonus is worse than a "formula" that boils down to, pay everyone the minimum required by the CBA. I mean it's easy to understand the latter.
   23. Barry`s_Lazy_Boy Posted: March 10, 2020 at 10:59 AM (#5929197)
They pay slightly more than legally bound, and if you don't thank them properly, they fine you $10k.
   24. Smitty* Posted: March 10, 2020 at 11:00 AM (#5929198)
The more I look the more interesting this topic gets. Prompted by Walt’s comment, I poked around Cot’s a little. It does appear to be standard practice to give raises each year after year 1, and performance has been a factor. The upper limit seems to be Trout getting 1 million in his last pre-arb year. Non stars seem to get roughly 10-20k raises each year. So it seems teams are willing to buy some goodwill but may not be interested in negotiating for that goodwill.

The 10k penalty mentioned in the article is definitely ridiculous and uncalled for given that the team has all of the leverage.
   25. Nasty Nate Posted: March 10, 2020 at 11:11 AM (#5929201)
The 10k penalty mentioned in the article is definitely ridiculous and uncalled for given that the team has all of the leverage.
Isn't that what the player wants when they symbolically reject the offer? Well, maybe not "wants" but if they are trying to have their disagreement with the system be noticed, there has to be a consequence, right? The players aren't holding out or anything. It would be weird to take a stance of "I refuse to accept your $650,000 (or whatever) salary, but I expect to play for a $650,000 salary."
   26. Walt Davis Posted: March 10, 2020 at 04:58 PM (#5929316)
The upper limit seems to be Trout getting 1 million in his last pre-arb year.

Bryant topped that at $1.05 3 years later (he had just won MVP). I don't know if that was the record then or still. For Trout and the Angels, about a month later they agreed on Trout's first buyout contract which included a $5 M signing bonus (for 2014 I assume although Cot's doesn't explicitly sa so). Depending on where those negotiations were at the time of the $1 M deal, the Angels may have figured they were gonna pay that money one way or the other.

Looking at some other obvious candidates -- the Indians were quite cheap with Lindor ($623 K); Mookie got $950; Judge $684; Springer seems to have gotten bare minimum salaries while Bregman got $640 and Correa got $1 M. Baez got $660; Noah got $605; Seager and Bellinger both got $605.

Bryant might still be the record. That's a pretty wide range. On Springer, story at the time was he refused to sign a long-term deal before/upon promotion so the Astros kept him back. Maybe they continued to "punish" him for his insolence. It's worked out well enough for him with $49 M in arb for his 4 years.

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