The Deciding Factor

Dave · October 6, 2009 at 10:18 pm · Filed Under Mariners 

Yesterday, we looked at what the M’s needed to do this off-season in order to get themselves into a spot where they could line up in April and call themselves legitimate contenders. It’s not an easy path – they need to add a bunch of wins without a ton of money to spend or a lot of obvious upgrades to make. But before they decide on any particular course of action, there’s one issue that has to be resolved, because it is the domino that drives the rest of the decisions all winter long.

I speak, of course, of Felix Hernandez. You all know the situation – 23-years-old, two years away from free agency, and just established himself as one of the game’s premier pitchers. His talent is unquestionable, and if he was a position player, you’d hand him a blank check for as many years as he would sign for. But he’s a pitcher, and the risk of giving long term, big money contracts to pitchers is remarkably high. The M’s don’t have the luxury of time anymore. This is the winter where they have to decide whether they’re going to give Felix a massive contract or not.

If they’re willing to accept the risk associated with a 4-6 year deal for a pitcher, then they have to make every effort to get him signed now. The opportunity to get a big discount has passed. He’s going to be a rich man whether he signs an extension or not, as he’s looking at a salary of around $10 million for 2010 even if he decides not to sign a long term deal here. In order to get him to give up the potential jackpot he’ll hit if he makes it to free agency in two years, the team will have to make him an offer that compensates him as one of the game’s premier pitchers for years to come. They’re going to have to set a new precedent, shattering every record for a contract given to a pitcher who isn’t yet eligible for free agency. Or else Felix will just take the risk and wait, and once he’s decided to do that, he becomes an asset with declining value the longer the M’s keep him.

In all likelihood, the choice will come down to giving him something like $100 million over 6 years or trading him.

Both paths have their risks and rewards. If you sign him to something like 6/100, you’re trying to win immediately. At that point, you’ve risked enough of your franchise’s future that you’re committing to trying to make it pay off with a division title starting in 2010. Now, instead of focusing primarily on finding young players to build around, the M’s would be in a position where the future takes a bit of a back seat to the present. Practically every pitcher is a time bomb headed for surgery, with the only question being when they go under the knife. Once you’ve guaranteed a massive paycheck to a starting pitcher, you’re running on borrowed time – you can’t sit around and try to build around that pitcher, because there’s a pretty decent chance that he’ll be hurt by the time the guys from your farm system get to the big leagues.

So, if you sign Felix, you’re looking for guys who can help you win right away. You’re putting Morrow on the block and looking for a more reliable #2 starter. You’re sending Mike Carp back to Tacoma and going with two veterans at 1B/DH. You’re in it to win it, because the clock is ticking, and if Felix’s arm blows up before you win anything, you’re going to have a hard time contending with a $17 million albatross on the books every year.

On the other hand, if you decide that you just don’t want to be the kind of organization that bets its future on a pitcher, and you’re not willing to meet Felix’s demands, you have to start taking offers for him, and no matter how good Jack Zduriencik is as a GM, the Mariners aren’t winning anything in 2010 without Felix Hernandez. You can try to get some major league ready players back in any Felix deal, but there’s no replacing a +5 win pitcher. You might get enough talent back to put together another .500 season with encouraging performances from a new young core, but you’re not winning the AL West without Felix.

That, obviously, leads to an entirely different kind of off-season plan. In a post-Felix world, you probably listen to offers for David Aardsma too, because the team can afford to not have a “proven closer” if they’re playing for the future. You give long looks to Saunders, Tui, Carp, and Moore next year rather than displacing them with better players who have less future value. You probably cut payroll again and try to create enough flexibility to make a big splash in 2011. But in this scenario, you’re admitting that nothing short of a miracle will lead you to the playoffs in 2010.

There is potentially a third option, but I’m not much of a fan of it and I hope it doesn’t come to pass. Theoretically, the team could keep Felix without signing him to a long term deal, put a team around him to try to win in 2010, and then shop him at the deadline if they’re not contending, but that plan requires too many assumptions for my liking. The Blue Jays just found out how tough it can be to try to extract premium pricing at the trade deadline when the Yankees don’t need pitching, the Mets aren’t in the playoff race, and the Red Sox realize they’re bidding against themselves. By waiting until July, you’re letting teams who will be interested this winter drop out of the race, creating a depressed market for his services. The “teams pay crazy prices at the deadline” theory has been mostly eradicated – if you want top dollar, you trade in the off-season.

So, before the team starts pursuing their off-season agenda, they have to figure out Felix. Are they willing to take the risks that come with huge contracts for pitchers? If so, go into winning mode. If not, then we’re still building for the future, and going after a very different type of player.

Felix’s future in Seattle needs to be determined before the team begins to make too many changes. It’s decision time. Pay up or trade him.

Comments

141 Responses to “The Deciding Factor”

  1. mymrbig on October 8th, 2009 10:09 am

    You’d probably lose picks for any pitcher you are signing to a 4/75 contract.

    A 4/75 contract seems pretty unlikely unless you are getting an ace pitcher who is getting up there in age. Younger aces require more years, lesser pitchers require less money. Hard to imagine the pitcher who gets a 4/75 contract. A Loweianesque pitcher fits the bill. But still, you would be surrendering a draft pick, and any pitcher you signed for 4/75 would still have risk.

  2. misterawesome on October 8th, 2009 10:12 am

    We have to sign him, regardless of whether we “go for it” next year or not. I don’t know that it’s as black and white as it’s been laid out in the post. This team is headed in the right direction and signing Felix to a long term deal is going be a key part of keeping this team moving that way. It was bad business at the time to hand out long-term deals to Joh, Silva, Batista, etc but that shouldn’t mean that long-term deals themselves are flawed unless you’re “going for broke.”

    Why should this team and this fan base be punished by the long-term deals of past administrations? The team has money to support big $$ contracts so it can (as its proved) be a middling team despite a higher payroll. We are not the Marlins. We don’t need all the planets to align and them make a big strike. And I’m not sure the fans will tolerate a rebuilding process with so little to show from the past 5 years.

    I’d like to see a deal in place to make Felix the anchor of this team as long as his arm will allow. This was NOT the case with the Washburn and Silva signings, and it would be foolish to let this opportunity pass. In three years, this team will not have Silva, may not have Ichiro, and all the bad contracts with be off the books. Beginning this fall, the new regime has a chance to start spending some money and they should be allowed to see if they can spend it wisely. I don’t believe they need to have Felix taken away from them in order to do this, but could instead be able to let him and a shrewdly negotiated deal, but the centerpiece of “their” payroll moving forward.

    I’m not a crazy newbie fan drunk on the optimism over sneaking over .500. This team won’t win next year with or without Felix, but it’s making steady improvement and I don’t see how losing one of (if not the only one of) their premier assets could be considered improvement. We can absorb the risk, but we need to take it first. And this is a safer risk than the last several pitching contracts we’ve handed out.

  3. Dobbs on October 8th, 2009 10:14 am

    If Felix’s arm dies in year 3 and he’s done for his career, how exactly does the player option benefit the team?

    The player option only benefits Felix because he’ll opt-out if he’s worth more than the 2/20 that’s left and opt-in if he’s worth less than 2/20 (injury issues).

    So you might as well leave the player option off the table completely because the only way he stays for the last 2 years is if it’s beneficial to the team.

  4. Dobbs on October 8th, 2009 10:17 am

    “So you might as well leave the player option off the table completely because the only way he stays for the last 2 years is if it’s beneficial to the team.”

    I meant to say detrimental if he stays the last 2 years on a player option.

  5. Pete Livengood on October 8th, 2009 10:31 am

    Dobbs, that assumes that Type A comp and whoever you’d get for 4/75 would be a rough equivalent for Felix. I don’t think that is so.

    First, the only guys in any way comparable to Felix in terms of ability, experience and age are Greinke, Lincecum, and maybe Lester. Those guys are very unlikely to be available two years from now, and even if they were, they are just as unlikely to want to sign for 4/75 years as Felix will be now.

    Second, Type A compensation assumes that Felix doesn’t get hurt in the next two years, and furthermore, is FAR from the kind of compensation you’d demand (and get) in any trade for Felix. You are much more likely to get a guy like the 4/75 guy you want, and more/better prospects, if you trade Felix.

    That plus Dave’s point about not letting the size of your market (and the perceived value tied to how long the acquiring club will control Felix) diminish by hanging on to him too long is the crux of the “trade him this winter” argument. And it is a pretty compelling argument.

    At the risk of repetition, though, the only way I’d trade Felix is if he makes it very clear he won’t sign here, or that he won’t consider a deal here until he first tests the market. I’d make him a strong enough offer (6/100+) that he’d have to consider abandoning that strategy because of the secuirty it offers, and the chance to get a second big payday before 30. If he likes that, I don’t think there is a trade package out there that might realistically be offered that would make me bite. Maybe, but I doubt it.

    If that doesn’t work, I am fully on the trade him bandwagon, and I would consider the window to do it through about June 15 of next season, maybe longer if there are lots of big money contenders out there lacking pitching.

    I truly believe that the upside reward with Felix is so great (Seaver, Pedro, Clemens type great) that even with maybe a 1 in 4 or 1 in 3 chance of losing him for a year somewhere in that contract (and maybe a 1 in 5 or 1 in 6 chance of a Mark Prior type flameout) must be taken.

    You simply do not get many chances to lock up an elite ace. You get remarkably fewer chances to do so when they are 23. This isn’t about whether we contend in 2010 or 2011 – Felix is your chance at long-term contention, and to build on what was great about this year. Don’t give up on that until you’ve exhausted every possible strategy and offer to get him to sign.

  6. JMHawkins on October 8th, 2009 11:41 am

    I’m definitely in the “offer him a 6/100-ish contract” camp and accept the risk, but the risk is very real. However, like Dave said in a previous post, the M’s need to take some risks. They need to be smart risks (e.g. if Felix demanded 8/200 to stay, I’d say no) but they will be risks. Trading Lopez and handing Tui the 2B job for the next couple of years is one type of risk. Counting on 400 quality innings out of some combination of Silva, Snell, Vargas, Fister and Olson next year is another. Committing significant money to Felix is a third type.

    Roll the dice! The M’s need to take several risks, of different kinds. There’s no guaranteed path to winning a World Series.

  7. Mike Snow on October 8th, 2009 11:51 am

    The risk is real, but we also have to be realistic about what the risk is. It’s been mentioned by a few others, but I think a lot of people still respond to the risk discussion as if it were binary. Catastrophic injuries that end seasons and careers are not the only possibility, or even necessarily the most likely.

  8. BLYKMYK44 on October 8th, 2009 11:56 am

    I can understand the objective argument of trading Felix.

    However, if we trade Felix isn’t the organization basically saying that we will never have a game changing dominant pitcher on our team. Or, if we luck out and do get one it will only be for a one or two year time frame?

    Its my understanding that in the minors Felix was considered one of the best prospects in baseball. Even then, he only pitched for us four years and exceptional for us one year. Seems to show that even “developing” pitching doesn’t get you all that much time as a fan.

    Obviously, if Felix wants something that is far and above market level (say 10 years for $350 million) and New York is willing to pay I can get that. However, if Seattle isn’t even willing to pay market level for such a talent…then I have a really hard time understanding why I should invest my energy into supporting the team.

  9. BLYKMYK44 on October 8th, 2009 12:07 pm

    People said this when Randy Johnson was traded.
    People predicted this when Griffey left.
    People were sure this would happen post-A-Rod.

    – There is a big difference. When Jr. and A-Rod left the team was a playoff contender, including winning a season record number of games. On top of that they built a new stadium to attract fans.

    Based on Dave’s plan you are trading Felix specifically to rebuild (give Carp/Saunders/Tui more playing time). Not sure how you can call that a similar situation.

  10. BLYKMYK44 on October 8th, 2009 12:14 pm

    If we trade Felix are we targeting a top level position player prospect? Why trade for a young pitcher if we’ll most likely (best case scenario) be in the same position with that pitcher in 5 years?

  11. diderot on October 8th, 2009 12:25 pm

    So the downsides of keeping Felix are obvious: a) he gets hurts, and b) he takes up too much of the payroll to allow us to fill in the requisite surrounding parts.
    But I still think we’re understating the opposing risk–we simply don’t get enough back to make the trade make sense. For example, we gave away the farm to get Bedard–but would that be enough of a return for Felix?
    And more to the point, the risk in Felix transfers to whomever trades for him. He’s going to be exactly as expensive. But unlike the simple monetary cost to us, the trade partner also has to surrender considerable player value.
    There are a few teams (Yankees, Red Sox, Mets, and maybe the Cubs, Angels or Phillies?) who may believe they have enough cash flow to simply paper over their mistake if Felix gets hurt. I don’t remember the Pavano contract preventing the Yankees from contending.
    But do these teams have the players either on their rosters or in the systems to make the deal palatable to us? Just anecdotally, it seems like those are the same teams who’ve already had their farm systems pretty well picked through.
    So I come down in favor of keeping Felix simply because I don’t think we could come close to fair talent in exchange.
    If the Brewers said ‘here’s Escobar and Fielder’, I’d say yes in a heartbeat. But they aren’t going to do that.

  12. Mekias on October 8th, 2009 12:42 pm

    However, if we trade Felix isn’t the organization basically saying that we will never have a game changing dominant pitcher on our team. Or, if we luck out and do get one it will only be for a one or two year time frame?

    As long as make a legitimate attempt to sign him to a fair contract, I’m not going to criticize the M’s for trading Felix. The casual fan might not understand how we can let him go but if Felix wants 8 years/160 million or something, then so be it.

    Obviously, if Felix wants something that is far and above market level (say 10 years for $350 million) and New York is willing to pay I can get that. However, if Seattle isn’t even willing to pay market level for such a talent…then I have a really hard time understanding why I should invest my energy into supporting the team.

    Market level for a team like the Yankees is completely different than market level for the Mariners. For good or bad, we have a budget. We can’t afford to pay what the Yankees pay to players. But the reality is, if the Yankees or one of those teams don’t want you as a player, you’re “market level” collapses. We see this every offseason once the cream of the crop gets picked over by the “haves” and the then the “have nots” can finally pick up the scraps for peanuts.

    Unfortunately for us, the “haves” have a boner for Felix and we simply can’t compete. Our only negotiating leverage is that our contract protects Felix financially from an injury over the next two years.

  13. Mekias on October 8th, 2009 1:04 pm

    Personally I don’t think Felix will sign with us. A few reasons:

    1) Felix is young and confident in himself and his body. He’ll think he’s indestructable. So the risk of injury won’t seem that significant to him.

    2) Felix wants to win. Despite our 85-win team, he has to realize that we aren’t really that close to the playoffs and further away from the world series.

    3) I’m not familiar with Felix’s agent, but the type of contract that Felix can get in 2 years would be a HUGE feather in the agent’s cap. He could get a lot more business if he was the agent who signed Felix to the biggest pitching contract ever.

    4) Beltre leaving. From Beltre’s comments, his number one criteria this offseason is to get to the world series. That pretty much means that Beltre won’t be coming back. That’ll make it easier for Felix to cut ties with the M’s.

    5) “The grass is always greener” & “You don’t know what you had until you lose it”

    Felix will likely think that he can have everything by signing with teams like the Red Sox or Yankees. Those jobs are thought of as the dream jobs in the major leagues. Maybe once he gets there, he might realize what he lost (teammates, clubhouse atmosphere, small market love, etc) but he’ll make the decision thinking that everything will be perfect once he gets “the dream job”.

  14. Jeff Nye on October 8th, 2009 1:28 pm

    However, if we trade Felix isn’t the organization basically saying that we will never have a game changing dominant pitcher on our team. Or, if we luck out and do get one it will only be for a one or two year time frame?

    The sort of people prone to this sort of histrionics are going to find a reason to freak out no matter what you do; thus, they can be safely ignored.

  15. mymrbig on October 8th, 2009 1:29 pm

    If Felix’s arm dies in year 3 and he’s done for his career, how exactly does the player option benefit the team?

    It doesn’t benefit the team. But it isn’t any worse than a 6/105 deal without a player option. Same result either way.

    The benefit to the M’s is that if he opts out, they get out of the riskiest 2 years of the 6/105 contract. The benefit is if he gets injured in years 5 or 6 of the contract, which we already agreed are the riskiest years.

    The player option only benefits Felix because he’ll opt-out if he’s worth more than the 2/20 that’s left and opt-in if he’s worth less than 2/20 (injury issues).

    Fail. You are missing the whole point by asking (and answering) the wrong question. You need to look at the possible results from today forward, not just the option part of the contract.

    I’ll try and break it down a different way. The two most likely results are:
    (1) Felix stays relatively healthy and productive and declines the option. The end result is that the M’s signed Felix to a 4/65 contract. Looking prospectively from today (rather than retrospectively from sometime in 2014), this would be a fantastic result for the M’s. Less risk than the 6/105 contract and they net tons of value.
    (2) Felix breaks down in some way and sticks out the whole contract at 6/105. This is no worse than the 6/105 contract because it has the same end result.

    There are obviously other possible scenarios, like what happened with Burnett and the Blue Jays. Everyone seems to perceive that as some great tragedy for the Blue Jays.

    Burnett signed a 5/55 deal in the 2005/06 offseason. Personally, I thought this was a little overpayment ($11/year was OK, but I thought 5 years on Burnett was too risky). Dave was big about the M’s pursuing Burnett at the time, but I sense he thought 5/55 was probably a little too much, though I never saw any comments where he outright said he thought it was more than the M’s should have paid.

    Anyway, Burnett opted out after 2008, making the deal 3/31. Analysing the contract from THE TIME IT WAS SIGNED rather than at the time Burnett opted out, the Blue Jays got $46.3 million worth of value from Burnett, but only paid him $31 million. Sure, the Blue Jays probably would have liked to have him at 2/24 to finish out the contract. But they got fantastic value for him. That contract was a huge win for them. Maybe it could have been an even bigger win without a player option, but why complain when it ended up being a very good deal. And if Burnett had blown out his arm this year (or even early next year), everyone will realize why a player option can be beneficial to a team.

    If Burnett had signed a 3/31 contract instead of a 5/55 contract, everyone would have thought he should fire his agent. The Blue Jays got a good deal and would have taken that over 5/55 at the time if they had the choice.

  16. BLYKMYK44 on October 8th, 2009 1:38 pm

    The sort of people prone to this sort of histrionics are going to find a reason to freak out no matter what you do; thus, they can be safely ignored

    – Why? If they trade Felix because they don’t believe in a long term contract for a picther, then why would that suddenly change with the next pitcher?

  17. Jeff Nye on October 8th, 2009 1:52 pm

    You’d be assuming that’s why they trade Felix, and you’d be wrong.

  18. Pete Livengood on October 8th, 2009 2:09 pm

    Jeff, are you saying the only reason (in your opinion) the M’s will trade Felix is because he won’t sign a market-value deal here? Because otherwise, I don’t see that BLYK is wrong….

    Felix at 23 is as good a risk for a long term contract for elite pitching as I think you can ever expect to see. Sure, it’s one thing if they trade him because he simply isn’t interested in buying out those last two arb years and is dead set on testing free agency (too much risk in keeping him, then – I agree). But it’s another if they just don’t offer him the kind of money that it obviously will take to at least tempt him.

  19. Jeff Nye on October 8th, 2009 2:23 pm

    There’s this thing called “context”.

    If the Mariners trade Felix, it says NOTHING about what they will do the next time they have a similar decision to make about a player, because the circumstances will be entirely different.

    Is the inherent risk of a long term contract to a pitcher part of the equation? Sure. But saying things like “this team will never have a top-quality pitcher omgggggg” is exactly what I said it was, useless histrionics.

  20. Pete Livengood on October 8th, 2009 2:53 pm

    I agree with that, mostly. BUT, economy aside (and as “context” goes, that’s a pretty big one), as I said before, it’s hard to imagine a future context where signing an elite pitcher to a long-term contract presents less relative risk (because of age, mostly) or greater relative reward. It is not completely unreasonable to draw some inferences from a decision like that – if they make a lackluster run at extending him before pulling the trigger on a trade.

  21. Pete Livengood on October 8th, 2009 2:59 pm

    I guess I should add the unstated condition – it may say something about how this front office feels about long-term contracts for pitchers. That is another fairly big contextual factor, I would agree.

  22. Jeff Nye on October 8th, 2009 3:07 pm

    This is a team that is talent-starved aside from Felix, with a few notable exceptions. If the team says “you know, Felix is awesome, but we have so many holes to fill and so little budget to do it with, that we’re not going to be able to compete even with him on the roster; however, a smart trade involving him could let us completely reshape the roster for sustained success”, then you know what? That’d be a smart decision. It’s certainly not the ONLY way they could go, but honestly I’d rather see that than have this team go down the dangerous road of paying for wins on the free agent market again.

    That’s the context I was talking about; this team is still probably only a mid-80s win team even with Felix unless Zduriencik is able to pull off another miracle trade. Don’t get me wrong, I’d hate to see Felix go; but saying things like “trading Felix would prove that this team won’t pay to keep its stars” is ridiculous.

  23. Dobbs on October 8th, 2009 3:25 pm

    “Dobbs, that assumes that Type A comp and whoever you’d get for 4/75 would be a rough equivalent for Felix.”

    Actually it doesn’t assume that at all. I’m just saying you could use Felix the next 2 years with little to no risk and still get value from letting him go. Then sign someone else using that money that would’ve been spent on a risky value.

    “The benefit to the M’s is that if he opts out, they get out of the riskiest 2 years of the 6/105 contract. The benefit is if he gets injured in years 5 or 6 of the contract, which we already agreed are the riskiest years.”

    Here’s where you strayed. All years are equally risky, however a catastrophic injury towards the end of the contract is less problematic as one would be at the beginning. If he’s healthy the first 4 years, we’d gladly give him a 2 year 40 mill deal that you suggest he could opt out of.

    The problem is, what if he’s not healthy after 4 years and we’re stuck with 2 years and 40 million left?

    There is absolutely no benefit to the team with a player option and they’d be silly to include it without negotiating more favorable terms.

  24. JMHawkins on October 8th, 2009 4:12 pm

    1) Felix is young and confident in himself and his body. He’ll think he’s indestructable. So the risk of injury won’t seem that significant to him

    .

    Felix may be young, but I don’t see any evidence he’s an idiot. Even if he is, he has what appears to be a competent agent who will make sure Felix understands the injury risk (and point to his teammate Eric Bedard). The fact that he’s pretty much guaranteed $10M or so next year regardless of what happens works against the M’s, because even if he suffers a career ending injury on Opening Day next year, Felix will have made enough money to live comfortably and take care of his family. So to a certain extent he’s playing with house money if he gambles on FA, but I’ll guess that he’s still going to consider the risk and make an informed decision.

    2) Felix wants to win. Despite our 85-win team, he has to realize that we aren’t really that close to the playoffs and further away from the world series.

    Glad you know what he wants.

    3) I’m not familiar with Felix’s agent, but the type of contract that Felix can get in 2 years would be a HUGE feather in the agent’s cap. He could get a lot more business if he was the agent who signed Felix to the biggest pitching contract ever.

    Yeah, but Alan Nero (that’s his agent) has his paycheck riding on the same golden right arm. If they opt for FA and Felix blows his arm up, Nero isn’t going to see 10% of $200+ million. He’s going to be taking the exact same gamble, just at a lower percentage cut of the gross.

    4) Beltre leaving. From Beltre’s comments, his number one criteria this offseason is to get to the world series. That pretty much means that Beltre won’t be coming back. That’ll make it easier for Felix to cut ties with the M’s.

    Arooo?

    5) “The grass is always greener” & “You don’t know what you had until you lose it”

    Yes, this is the way everybody thinks, and that’s why Ichiro and Edgar signed those big contracts with the Yankees after a couple of good years in Seattle.

    Look, he might sign, he might not. I’m sure the M’s will offer him something, whether it’s close enough for him to seriously consider or not, I have no clue. If the ZOPA is non-zero, there’ll be a deal.

  25. Chris_From_Bothell on October 8th, 2009 5:11 pm

    but saying things like “trading Felix would prove that this team won’t pay to keep its stars” is ridiculous.

    Trading Felix may end up being the correct thing to do if the right deal can’t be done and/or all signs point to him being more valuable in trade than he is contributing to the team himself.

    It may end up bringing back a group of players, some of whom might form the core of a pennant-winning or wild-card-winning team in 1 – 3 years.

    It would also have been, literally, a conscious decision to not pay to keep one of its two main stars. Just as with Randy Johnson and A-Rod.

    These things aren’t mutually exclusive.

  26. DMZ on October 8th, 2009 7:08 pm

    You believe that the team in both those cases simply asked “should we pay to keep one of our two main stars?” and that was that?

    That seems like a pretty dramatic over-simplification of two entirely different situations, neither of which is analogous to what they face now.

  27. Jeff Nye on October 8th, 2009 7:16 pm

    Wait, you mean sometimes situations like this can be nuanced and a lot of factors can come into play?

    Surely you jest!

  28. DMZ on October 8th, 2009 7:21 pm

    Well, you know, just to throw this out there, Randy had that whole beef with the team president. And Alex had previously signed an extremely lucrative extension with the team during his arb years and had previously refused to seriously discuss a number of really heavy extension offers in the years leading up to free agency, and was also going to be the best free agent ever in a market flush with cash.

    Whereas none of these things are at all true of Felix.

  29. scott19 on October 8th, 2009 7:36 pm

    Not to mention that Alex was probably always destined to wind up either in NY or LA anyway, since, between here and the DFW metroplex, there were simply not enough rock stars or movie stars for him to date.

  30. rmac1973 on October 8th, 2009 8:29 pm

    It’s always a gamble to sign a pitcher to a long-term deal – the upside is locking in a dominant force on the mound; the downside is the historically-common risk of injury.

    At just 23 years old, Felix is in line for an enormous payday, but that’s assuming the 2010-11 version of Felix is as good or better than the 2009 version, i.e. 200+ IP, 200+ K, 17+ W, sub-3.00 ERA, ~3.00 FIP, etc… there’s no guarantee he can repeat his 2009 work, and there’s little chance he can do so by losing the best defensive 3B in the game.

    Pay him, sure, but don’t break the bank to retain him when he very well may be more valuable on the trade market than on the roster.

    Lots of decisions left to be made…

  31. JMHawkins on October 8th, 2009 9:20 pm

    I did some hypothetical calculations, just to see what one way of analyzing the decision might look like. Here are the assumptions (play with these as you wish):

    -Felix, if he stays healthy, will be worth an average of 6 WAR per year over the next 6 years.

    -Each year, there is a 10% chance of a serious injury that reduces his value to 1.0 WAR for the remainder of the contract

    -$4 to 5M per win is the range the M’s should be willing to pay

    So:

    2010: 90% x 6 WAR + 10% x 1 WAR = 5.5 WAR expected
    2011: 81% x 6 + 19% x 1 = 5.1 WAR
    2012: 73% x 6 + 27% x 1 = 4.6 WAR
    2013: 66% x 6 + 34% x 1 = 4.3 WAR
    2014: 59% x 6 + 41% x 1 = 4.0 WAR
    2015: 53% x 6 + 47% x 1 = 3.7 WAR

    Total: 27.1 WAR

    gives a range of $108 to $135M over the next six years for his risk adjusted expected value.

    Just to play with things a bit, if you change the injury percentage to 20% cumulative per year (74% chance over the life of the contract) you get 20.8 expected WAR ($83M to $104M). If you assume 5% per year injury change (overall 25% for the contract) you get 31.4 expected WAR ($126 to $157).

  32. Dave on October 8th, 2009 9:51 pm

    But here’s the thing – even if you took the 10% number and said “look, Felix is going to be worth $100 million over the next six years”, you’d still want him to sign for less than that because he’s not a free agent.

    The M’s have surplus value from Felix for 2010 and 2011. If they pay him market value, they’re forfeiting an asset. If you have to pay the market rate in order to keep him, then you’re probably better off trading him for the bundle of players you can get and then spending the market rate on someone else.

    That’s why this is going to be a tough negotiation. The point at which it makes sense for Felix to sign is not the same point at which the M’s get maximized value. In fact, those two points are probably tens of millions of dollars apart.

    This is a brutally tough decision. In my heart, I know I’ll be thrilled if the M’s announce they’ve locked him up. As a fan, I don’t want Felix to leave. I love Felix. But, Jack can’t be a fan, and if it’s going to take a market rate contract to sign him, then the organization is probably better off trading him.

  33. JMHawkins on October 9th, 2009 12:41 am

    That’s why this is going to be a tough negotiation. The point at which it makes sense for Felix to sign is not the same point at which the M’s get maximized value. In fact, those two points are probably tens of millions of dollars apart.

    Oh, yeah, this is a doozy of a case study in negotiating. There are I think three evaluations that play into it. One is what’s the value of that bundle of players the M’s could get in return for Felix. We haven’t even talked about that, and it would be pure Wild-Assed speculation. But that value has to be the WAR value of the players themselves over the period of club control plus whatever WAR the M’s could buy with the money not spent on Felix’ contract. If that delivers more WAR than any contract with Felix, then it’s no deal and good luck kid. Even if Felix was willing to sign a below-market contract, if Zduriencik had a deal on the table that brought more Wins in house through trades, then trade it is.

    And if the two sides have wildly different assumptions about injury risk, then there’s no ZOPA and no deal either. But if they have relatively compatible risk assumptions, I do think there’s overlap. I did some calculations from Felix’s POV, and the interesting thing is, the higher the assumed injury risk, the better the chance of a deal. Felix’s expected future salary drops much faster as the injury risk increases than does his expected delivery of WAR to the team. If both sides assumed a 25% chance of injury, there’s just no chance of a deal. If both sides assumed a 75% chance, it seems almost automatic – Felix could sign a contract $10M below market and still be happy.

    How can that be? A big part of it is the second contract, the one he signs after his first one ends. If he stays healthy through the duration of his first big contract, then he can sign another big one at the end. But only if he stays healthy, if he gets hurt, that payday goes away too.

    Now, the asymetry is that the M’s don’t bear the team-side risk of that second contract – whoever signs Future Felix does – so it doesn’t factor into the M’s calculations. But Felix still bears the player-side risk since it’s his arm. So a high assumed attrition rate means Felix wants to pull in the year of that second contract, he wants to sign it when he’s 29 and not 31, because there’s a greater chance he’ll still be healthy and command big dollars. So the value of letting the M’s buy out his last two arb years is higher.

    At this point, I’m probably not making sense any longer (if I ever was).

  34. rmac1973 on October 9th, 2009 6:55 am

    Is this case really any different than Junior’s case in the early/mid 90’s?

    Looking at the obvious differences, Griffey was a position player and Felix is a starting pitcher, but the timetables for their breakouts into national prominence and league-wide respect is roughly the same.

    Didn’t Seattle buy out Griffey’s final year of arbitration eligibility in the same way we’re discussing how the M’s might try to do with Felix? Yes, it appeared as though Griffey was consistently accepting less money to stay in Seattle than was speculated he could get on the open free agent market. Yes, we’re kind of all hoping Felix does the same.

    I’m curious, though – with all the hooplah being stirred surrounding Felix and his future in a Mariners uniform, what affect will Griffey’s presence on the 2009 team have on Felix staying? What about 2010 – if the M’s bring Junior back for next year, will that be a little incentive to Felix to ink a deal sooner instead of later? Then there’s the Beltre question, of course, and the fact that Felix and Adrian are close friends on and off the field.

    I think we can all agree that 2009 was surely a breakthrough campaign for Hernandez, but what makes everyone so absolutely certain he’ll be as good or better in 2010, 2011 and beyond?

  35. Mike Snow on October 9th, 2009 8:02 am

    I did some calculations from Felix’s POV, and the interesting thing is, the higher the assumed injury risk, the better the chance of a deal.

    How many healthy young men playing sports do you think are going to overestimate their risk of injury?

  36. mymrbig on October 9th, 2009 8:05 am

    Just some final thoughts on my player option suggestion.

    I am more concerned about risk aversion than maximizing return. Huge contracts for starting pitchers scare the bejesus out of me. I would certainly consider a long contract for a pitcher under the right circumstances, so I’m not totally risk averse. There has to be some balance.

    If the team isn’t willing to accept the risk of the 6 or 7 year deal, then there is zero reason to consider a player option.

    I don’t think they make sense unless the contract is 6 or 7 years. Maybe 5 years if the player is in his low 30’s when he signs.

    I would only advocate a player option for pitchers or batters with “old player skills.”

    There is no reason to have a player option only for the final year of the contract. At that point the team has already assumed too much of the risk to make it worth it. This might even be true for a 2-year player option, so maybe I agree with Dobbs a bit.

    I like it more the longer the contract, and I like it early in the contract. The option I described above (6/105 with player option after 4th year) is probably around where I would draw the line as a team. It might make a little more sense to have it after the 3rd year in a 6 year deal. Sabathia has a 7/161 contract with the opt out after the 3rd year. If I’m the Yankees, I’m perfectly fine if he opts out of the last 4/92 because that is a heck of a lot of money for an aging guy with a bad body and lots of mileage on his arm.

    For Felix, a player option makes more sense under a Sabathia-like contract. So if the M’s were willing to go 7/125 on Felix, a player option makes sense after 3 years, might make sense after 4 years, and makes no sense after 5 years (for the reasons argued by Dobbs).

  37. Breadbaker on October 11th, 2009 12:20 am

    If I were trying to figure this out, I’d ask these questions:

    1. How long do I think Ichiro can perform at a high quality level?
    2. When do I think Dustin Ackley will be a major league star? Same for Truinfel.
    3. Will there be a period when all three of those players are in the majors at a high level together? If so, is it also a period when Gutierrez will still be with the team?

    Then I’d see if I could budget Felix into one of those years. If I can’t, then I want to get back for Felix players who could be important parts of a team by then. If I can, then I want to keep Felix.

  38. rmac1973 on October 11th, 2009 9:06 am

    1. How long do I think Ichiro can perform at a high quality level?

    Well, if we’re going to err on the side of caution or underestimation, let’s say through 2011.

    2. When do I think Dustin Ackley will be a major league star? Same for Truinfel.

    Ackley – 1-1/2 seasons from now; Truinfel – never.

    3. Will there be a period when all three of those players are in the majors at a high level together?

    Possibly, but the window looks pretty narrow.

    If so, is it also a period when Gutierrez will still be with the team?

    He’s under club control through 2013, I believe.

  39. djtizzo on October 12th, 2009 7:28 pm

    Im trying to figure out how much exactly JZ has to spend this winter, can sombody help out? Ive heard everywhere from $50m to $15m…..Are the lower ends based on free agent resignings going back on the books? Also, how much is The King on the books for untill his contract is up, even taking into factor his arb. increases?

    This will give us a good idea on how much we can flash in front of The King come extension talk time! It sounds to me like the M’s have plenty of money to get this done quickly and for a long time!

  40. Rusty on October 13th, 2009 4:09 am

    Before I figuratively “signed on” to the idea of trading Felix this off season, I would want to see some type of objective analysis of trade value of a young star at 2.0, 1.5, 1.0, and 0.5 seasons prior to his free agent date. The trade value to time remaining under team control line would have to have a pretty steep downward slope for me to want to see Felix traded prior to 2011.

  41. Mike Snow on October 13th, 2009 7:45 am

    It is a pretty steep downward slope. Compare what the Braves gave up to get Mark Teixeira and what they got in return when they traded him.

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