Tuesday, March 06, 2007

The $80 Million Mistake

Amidst the madness of this offseason's baseball market, many teams are sticking with the same losing plans they've been on for years. The Giants continued to sign AARP-eligible free agents, while the Mariners again allowed Bill Bavasi within 50 feet of a telephone. And in Arlington, the Rangers gave a five year contract (Chan Ho Park, anyone?) to a shortstop (hmm...) for a big annual salary (A-Rod, Juan Gone, Park, etc.).

I speak, of course, of the $80 million the Rangers are giving Michael Young to be with the team through 2013, when he'll be 36. Naturally, everyone and their mother is trying their best to rationalize the deal. The goal of this post is to debunk the most common excuses.

(Note: I normally don't make it a policy to openly mock people who pretend to know things about baseball and economics, at least not while they're within earshot, but this is the most convenient format.)

"Salaries are up everywhere this offseason"

This one would make sense, if it were true. Though salaries are up almost across the board, middle infielders are the guys who aren't profiting from the bull market. While Carlos Lee and Sarge Jr. collected the megabucks, Adam Kennedy got three years and $10M, Marcus Giles managed only one guaranteed year, and Ronnie Belliard couldn't even finagle a MLB contract. On the other side of the keystone, Julio Lugo was the only shortstop in a market where several conteders were looking to upgrade at the position, and still managed to sign one of the more fair-valued deals of the winter.

Technically, this won't apply to Young by the end of the deal, since he won't be playing in the middle infield when this contract expires. More on that later.

"The Rangers want Young to be the face of their franchise"

Turning baseball decisions into subjective arguments is a great way to completely miss the point while simultaneously rationalizing poor moves.

That said, even this argument doesn't hold water, because the Rangers have a better player, three years Young's junior, whose contract is also up after 2008, and who could already be considered the face of the franchise. Mark Teixeira is a big offensive threat, like Young, but is younger, plays good defense, and could probably have been signed for a similar deal.

Fitting Tex into the 2009 budget has suddenly become a challenge. If Texas commits to Young instead of Teixeira, it could turn into their version of the Cubs picking Ryne Sandberg over Greg Maddux in the '92-'93 offseason.

"$80 million won't look like much after two more years' inflation"

In a way, it's ironic that I'm disputing this, since people often forget about the effects of inflation in a long-term contract. However, in almost all cases, the inflation is more than offset by the decline in the player's value over the course of the deal.

Often times, a team will sign a player for too much money or too many years, because they need the player now and are willing to take future risks to win in the present. This is a dubious strategy, but at least it gives the team immediate help to fill a pressing need. Giving Michael Young five years from 2009-2013 does nothing to help the team in the short term; he was already signed for the next two years.

If Young had come to your team this offseason and offered to sign for either $7 million and two years or $87 million and seven years, would you have opted for the latter? Actually, the money for the first two years is irrelevant since it's a sunk cost, so let's say it's a decision between $30 million for two years and $110M for seven. Are you still leaning for the long-term deal?

"Young deserves a big raise"

Some argue that Young, formerly one of the game's most underpaid players, needed to be compensated for his on-field production. I hear this a lot, and frankly it annoys the hell out of me. If a player with a moderate salary is just going to demand a raise whenever he offers a positive return on investment, what should motivate the team to sign him in the first place? Either the player will collect a fat paycheck for doing nothing, else he will demand a raise until he is overpaid once again. It's essentially the system the NFL is currently working with.

Years ago, when Young signed his current deal, he opted for financial security over the prospect of riches. I'm not saying he made the wrong decision (at the time; remember the title of the website), but he should have been prepared for the consequences, including the possibility that he will have left $20 million on the table by taking the guaranteed contract.

It's strange that fans often feel sorry for underpaid figures in sports, people who still collect more money in a year than most of us will see in a lifetime. In Chicago, everyone spent the offseason clamoring for Lovie Smith to get a new, higher-paying contract. As a Bears fan, I definitely approve of the job Lovie has done with the team, but if he wants a higher salary, he shouldn't have signed a low-paying contract through this year. It's not like he would have offered to give the money back if he had been fired. Lovie, of course, got his wish with a $22 million extension.

"Young provides offense at a scarce position"

This one is true--for now. Young has two major factors working against him, though. For one, his offense is built largely around batting average, which is less likely to hold up over time than the ability to hit for power. Put another way, if you had to invest in Jason Bay or Freddy Sanchez for the next seven years, you would be stupid to pick Sanchez. Furthermore, his numbers are inflated by the home park he plays in. All in all, strictly in terms of offensive value, Young is probably about the seventh or eighth best shortstop in the league, both right now and going forward.

But then, to call him a shortstop at all is a bit of a stretch. Michael Young is the worst defensive shortstop in baseball by any number of metrics. The Fielding Bible, which included an essay by Bill James on why Derek Jeter is the worst defensive shortstop in baseball history, still ranked Young below Jeter. His numbers are in a zone where only a player labeled as a franchise cornerstone--like Jeter, Junior Griffey, or Young--could avoid a move to a less demanding position.

Entering last year, with Alfonso Soriano out of the picture and shortstop prospect Ian Kinsler coming up, the Rangers could have moved Young back to second base, but chose to stick Kinsler there instead, because Young was entrenched. Now, much like with Griffey or Jeter, it seems Divine Intervention will be necessary to move Young elsewhere on the diamond.

Young's defense, which rates poorly now, is certainly not likely to improve between now and 2013, when he will be 36. Sometime along the way, he MUST be moved or he'll begin costing the Rangers more than 20 runs per year with his glove.

Where will he go? Young didn't rate well at second base, either, so it's not a great option. First base, third base and the outfield are all possibilities, but it's no guarantee he can be a decent defender at any of those spots.

So, what's the verdict?

Your honor, we the jury find the Rangers guilty on the count of fiscal irresponsibility. They will serve a sentence of four years paying for Alex Rodriguez to play for a rival team while languishing between second and third place in the AL West.

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