Friday, December 15, 2006

Transaction Recap: Red Sox, Angels, Blue Jays, Mariners

Red Sox:

Signed Daisuke Matsuzaka to a 6-year, $52 million contract (rating: 6/10)

Traded SP/RP Phil Seibel to the Angels for RP Brendan Donnelly (6)

If you don't want to read through a diatribe on time value of money and contract status, I'll summarize: This was about the best deal the Red Sox could have gotten. The contract alone, without the posting fee, rates an 8 or 9.

With the posting fee, that's a total of $103 million to Matsuzaka for his six years before free agency. Is he worth it?

The math on the true cost of the deal is a little tricky. On one hand, the Red Sox are saving some money because the posting fee will not be subject to the luxury tax. It's my understanding that the Red Sox are now in the 40% luxury tax bracket, so a savings of $21 million in taxes is nothing to sniff at.

However, they have to pay $51 million up front. Given the time value of money--a dollar today is worth more than a dollar in 2010--this signing, without accounting for the luxury tax factor, is actually comparable to a 6-year, $124 million contract.

What do you get when you put it all together? The effects almost wash out. Isn't math great? If Matsuzaka signed a 6-year, $102 million deal with this structure:

'07: 14M
'08: 16M
'09: 16M
'10: 18M
'11: 18M
'12: 20M

he would be costing the Red Sox roughly the same amount in 2006 dollars.

Now that we've wasted a few minutes to get back where we began, is Matsuzaka worth the money? Yes and no. He's certainly a better pitcher than Andy Pettitte, who's getting similar money per year, or Barry Zito, who's asking for 6 years/100M. But Pettitte is signed for only two years (the second being a player option), while Matsuzaka is committed for six. As with most pitching free agent signings, the length is a bigger question than the dollars. While it seems clear that Matsuzaka will be a very good pitcher in the majors, it's unknown how his workload in Japan will affect him injury-wise.

Should the Sox have gone fewer than six years, to minimize risk? It's not that simple. Normally, players must accumulate six years of service time before they hit free agency. Scott Boras attempted to negotiate a clause allowing Matsuzaka to become a free agent at the end of his Red Sox contract, so a four- or five-year deal might have left them with less return on their initial $51 million investment. Even without this clause, Matsuzaka would have earned more than $12 million in 2012 through arbitration unless he was significantly injured or very ineffective.

Put simply, a shorter contract would have achieved nothing. Credit goes to the Sox front office for holding firm on this.

Angels:

Traded RP Brendan Donnelly to the Red Sox for SP/RP Phil Seibel (6)

On to the trade. When I saw this item, my first reaction was "Who the hell is Phil Seibel?" As it turns out, Seibel is a player of interest. After years as a low-grade prospect and a 2005 apparently spent rehabbing, he broke out in 2006, posting a 1.24 ERA across three levels with a K:BB ratio of 83/15. In 15 AAA innings, he was sick, giving up six hits and three walks while striking out 22. He's a lefty, and lefties rarely come up with numbers like that.

Two important caveats apply: It's only one season, and Seibel was 27 years old in 2005. Still, the Angels have been great at finding useful relievers in the minors in the past, and this looks like another move.

I like the trade for both sides. Donnelly, though he's struggled the past two years, still owns a career ERA of 2.87. He shouldn't command a big salary in arbitration, and the Sox get his services for two years. The Angels' current bullpen is very strong, so they're dealing from depth to acquire a young talent with six years left on his free agency clock. It will be interesting to see if they make any further moves, as Scot Shields and Ervin Santana are rumored to be heading to five different cities per day.

Blue Jays:

Agreed to terms with CF Vernon Wells on a 7-year, $126 million extension (3)

I admire the Jays' efforts to put together a contending ballclub in the tough AL East, but they're spending too much money on players who aren't that special. While they're throwing a third-world nation's GNP at names like Wells, Thomas, Glaus, and Burnett, guys like Orlando Hudson slip through the cracks, and you're left with a supporting cast that will drag the team up to second place, if they're lucky.

Last year's Jays offense overperformed nearly across-the-board, especially Wells, Alex Rios, Reed Johnson, Lyle Overbay, and Gregg Zaun. That got them within eight games of a playoff spot. Factor in the regression these players will suffer in 2007 and beyond, subtract Ted Lilly and Justin Speier, and you're left with...third place.

Along the Frank Thomas signing and last year's acquisitions of B.J. Ryan and A.J. Burnett, the Wells signing demonstrates that the Jays have mastered the art of signing players after they have maximized their market value. The goal of free agent prospecting isn't to sign Frank Thomas this year for $18 million, but to sign him last year for $500,000 plus incentives. You go looking for B.J. Ryan, inexpensive future closer, rather than B.J. Ryan, expensive former closer. Acquiring a player who's coming off an unexpectedly good year is a good way to set your fans up for disappointment.

Wells would have returned a king's ransom in trade, either now or at the trade deadline, but instead the Jays are stuck with yet another overpaid, overrated big name. He has a career OBP near the league average, and although he has the reputation of a top defender, his Fielding Bible ratings and Baseball Prospectus' FRAA both paint him as a league-average center fielder. Despite what Peter Gammons says, Wells is a worse player than Alfonso Soriano, though he will be two years younger at the time he starts the contract. Basically, unless you thought the Soriano contract was reasonable, you shouldn't like this one either.

One last point: the Jays should have learned from this year's examples of J.D. Drew and Aramis Ramirez and not given Wells a clause allowing him to opt out of the deal after 2011. Basically, this means that if Wells is actually worth $21 million a year at that point, he'll go play elsewhere, but if he's an albatross, he sticks around. If it takes an extra few million dollars to avoid including this clause, it's an investment worth making. This goes for any big contract, not just this one.

Mariners:

Signed SP Miguel Batista to a 3-year, $25 million contract (3)

This is the going rate for league-average pitching, but Batista is a poor bet to be a league-average starter going forward, what with his 1.2/1 K:BB ratio in his last two years as a starter.

Being able to induce groundballs has its value, but it is just one skill of many a pitcher must possess to be successful. When you combine a poor strikeout rate with below-average control, all the grounders in the world won't save you, especially when your infield defense is below-average, as is the case in Seattle.

What's particularly galling is that the Mariners are spending money and making moves as if they will contend in 2007. Reportedly, they are on the verge of acquiring Jose Vidro from the Nationals, hoping this allows them to move Jose Lopez to third base and trade Adrian Beltre. While Lopez's defense at second was awful last year, he doesn't yet have the bat to play third base for a contender, and replacing Beltre in the lineup with Vidro will not get the Mariners any closer to the playoffs.

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