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!

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.

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.

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).

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

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?

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).

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.