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  • Glen Perkins Signs Extension With Twins

    Contract extensions are usually popular with fan bases, which is not the norm for financial transactions. It’s easy to see why – all the ingredients are there. People love to emotionally project a popular and productive player to be popular and productive for years. An extension does that, provided you don’t think too hard about the financial side of it. That’s the actuarial department's job.

    All the ingredients are also certainly there for the contract extension Glen Perkins signed with the Twins. Perkins has been awesome since moving to the bullpen, including being named an All-Star last year. He’s a hometown guy and media and fan-friendly. As Twins Assistant GM Rob Antony said, “I think there's a premium value for a closer that's 31, that's done a pretty good job for us, that fits in very well in this clubhouse, and means a lot to this team.” With that background, why wouldn’t a deal get done?

    The more interesting question for both sides might why a deal did get done, considering Perkins was already under team control for the next three years at a bargain rate. Here are how the deals compare:



    Perkins
    The deal gives Perkins a raise over what he would make the next couple of years and guarantees another $14M in future earnings. It costs him a chance to hit the free agent market in 2017, when he might have made almost twice as much as he will get paid over the last two years. Of course, he would have been be 34 at that point. The security was worth the big payday. That’s why Perkins approached the Twins about the deal.

    There is also an interesting provision that gives a subtle nudge to the Twins to NOT trade him. If he is traded, that option year changes from a team option to a player option. That makes him not quite the tradeable asset that he would be otherwise.

    Twins
    The Twins take on the risk of a 31-year-old getting hurt and being on the hook for another $14M. But the savings they could reap if he stays healthy are considerable. You’ll recall that as Joe Nathan approached free agency, the Twins signed him to a four-year deal that paid him $11.25 million starting when he turned 34 through turning 36. (That didn’t turn out so well.) This five-year deal tops out at about half that much money and ends when Perkins is 35.

    It also keeps Perkins anchoring a bullpen in those years when the Twins believe they’ll return to being competitive. “We believe that he’s going to be part of turning this thing around,” said Antony.

    Sweet Spot
    It is somewhat unusual for a team that already has a good contract to risk an extension. It’s also unusual for a premier player to seek one out. Perhaps in this case, the hometown ties played a part in overcoming those traditional obstacles. Antony concluded, “We know that this contract, [Perkins] signed, because he wants to be in Minnesota. We signed because we want to keep him here.” Together they found a deal that the team, the players, the fans and even the actuarial department can support.
    Comments 52 Comments
    1. spycake's Avatar
      spycake -
      Quote Originally Posted by SweetOne69 View Post
      The CBA prevents teams from doing this. A player's salary can only decrease 20% from one year to the next.
      This is not exactly true. The 20% rule only applies to arbitration. Extensions and free agents can agree to whatever salaries they want.
    1. Dman's Avatar
      Dman -
      Quote Originally Posted by alarp33 View Post
      Exactly. You seem to be the only person here who has grasped that this was completely unnecessary. Explore it after 2014 or 2015 if both parties want too. It's not going to be a killer contract even if he does fall off a cliff, but so so unnecessary
      I think that is why you have to look beyond the numbers for this to make sense. He worked with the Twins on his initial contract and gave them a favorable salary because he wanted to be here. He is an All Star closer and makes less than half what several premier closer's make. The Twins needed to do something to bring his monetary value more in line with his value to the team and the market.

      This is more about mutual respect than a cold hard deal about team control. I applaud the Twins for being human beings and fair about this rather than just cold hard business. It is far too rare that we see organizations do the right thing. That is why this deal makes sense IMO.
    1. alarp33's Avatar
      alarp33 -
      Quote Originally Posted by Dman View Post
      I think that is why you have to look beyond the numbers for this to make sense. He worked with the Twins on his initial contract and gave them a favorable salary because he wanted to be here. He is an All Star closer and makes less than half what several premier closer's make. The Twins needed to do something to bring his monetary value more in line with his value to the team and the market.

      This is more about mutual respect than a cold hard deal about team control. I applaud the Twins for being human beings and fair about this rather than just cold hard business. It is far too rare that we see organizations do the right thing. That is why this deal makes sense IMO.
      Why exactly did they need to bring his monetary value closer to his market value? I'm not trying to be a smartass, but where exactly would you draw the line? Hughes is making around $8million a year, if he wins Cy Young this year would you propose ripping up the final 2 years of deal and giving him 5 years for $110 million? If Perkins would have lost the closer job last year due to performance, it would only be fair that he reduce the remaining years of his deal?

      Signing a player to a longer term deal involves risk from both sides, the player is risking that they could out perform the deal and undervalue themselves, the team is risking guaranteed money for a player that could get hurt or underperform.

      Perkins and the Twins knew of these risks in 2012 when they agreed to contract. That extension looked pretty good in hindsight for the Twins, sometimes the extensions don't work out as well (Blackburn).
    1. Shane Wahl's Avatar
      Shane Wahl -
      This is a pretty cheap deal for a guy who in the post Mariano and soon post Nathan era, might be a top five closer. I really commend the Twins and Perkins for doing this. It also serves to give structure to the bullpen . . . not all of these potential fireballers coming up provide some very deep setup capability for 2015 and beyond.
    1. twinsnorth49's Avatar
      twinsnorth49 -
      Hughes is making around $8million a year, if he wins Cy Young this year would you propose ripping up the final 2 years of deal and giving him 5 years for $110 million?
      No, but if he won the CY Young I would certainly be thinking about extending him. The difference being Perkins has proven he can do it for years, for Hughes that would be an anomaly.

      If Perkins would have lost the closer job last year due to performance, it would only be fair that he reduce the remaining years of his deal?
      No, the last deal Perkins signed was mainly as a set up guy with some contingency pay if he became the closer. If he lost the closer job it still would have been pretty fair to both sides.

      Signing a player to a longer term deal involves risk from both sides, the player is risking that they could out perform the deal and undervalue themselves, the team is risking guaranteed money for a player that could get hurt or underperform.
      What's your point here? Never sign a long term deal in any circumstances on either side of the equation? This is nothing more than the inherent risk of doing business, sometimes you win, sometimes you lose and just as often it works out both ways. In this case it's a pretty good educated guess for the Twins that it works in their favor.

      All the Twins have really done is lock up a player they feel will continue to have value for them for an additional two years at a pretty decent price in the long term. If he doesn't stay healthy or under performs that's the price of doing business. If he continues on his present trajectory they secured him for an additional two years for far cheaper than they would have in his contract year.
    1. Trautmann13's Avatar
      Trautmann13 -
      This is such a good thing for TwinsTerritory that it is not even funny. Having another hometown guy to be a face of the franchise is great. Perk is such a kind guy to all the media and fans and is proving his worth over the last few years. I don't even care about the money, I feel having an elite closer is more important than most think and having one until '17 with Glen's status is simply great. Also I love how they didn't do this in a year or two, this shows that respect and love the organization shares with him. Great move for both parties.
    1. kab21's Avatar
      kab21 -
      With the amount of unspent money the Twins have this should be considered a non-issue. And it's not even a lot of money. Yes, they could have brought in a Jamey Carroll type veteran for this kind of money but this sends a nice message to players (Twins and potential FA's) that the FO will take care of you.
    1. Oxtung's Avatar
      Oxtung -
      IMO, not a great move. He and Willingham are the only players that could conceivably bring back a top tier pitching prospect that the Twins desperately need. Sure we have a lot of pitching talent in A-ball and below but above that....

      In addition, as others have said, there was really little reason to do this, and it isn't a particularly "Home town friendly" deal. This was also another opportunity to front load the contract come and gone (no worries about >20% paycut as you can see from David Wright's contract).

      The other problem I have with this is, contrary to the previously espoused views, the only research I could find on the subject shows that elite relievers don't stay elite for long. Also, long term deals to relievers aren't a great idea in general.

      Sorry if this was a little rambling/confusing. It's 2am and I'm really tired but wanted to hammer this post out before signing off.
    1. Oxtung's Avatar
      Oxtung -
      Quote Originally Posted by SpiritofVodkaDave View Post
      Teams don't front load contracts like that, and it would make no sense for the Twins to do so, it would set a really bad precedent.
      Quote Originally Posted by TheLeviathan View Post
      Teams don't do it because players don't want to/have agreed as a union not to. That goes for front-loaded deals and hometown discounts. Lots of discussion on this in the past, probably not worth rehashing - just look up the threads.
      There are several contracts that have done this actually. David Wright, Ryan Braun, Scott Feldman, Dustin Pedroia all have this off season. Probably more I just don't remember them.
    1. Hosken Bombo Disco's Avatar
      Hosken Bombo Disco -
      Quote Originally Posted by Oxtung View Post
      IMO, not a great move. He and Willingham are the only players that could conceivably bring back a top tier pitching prospect that the Twins desperately need. Sure we have a lot of pitching talent in A-ball and below but above that....

      In addition, as others have said, there was really little reason to do this, and it isn't a particularly "Home town friendly" deal. This was also another opportunity to front load the contract come and gone (no worries about >20% paycut as you can see from David Wright's contract).

      The other problem I have with this is, contrary to the previously espoused views, the only research I could find on the subject shows that elite relievers don't stay elite for long. Also, long term deals to relievers aren't a great idea in general.

      Sorry if this was a little rambling/confusing. It's 2am and I'm really tired but wanted to hammer this post out before signing off.
      I think you are dreaming

      I can understand your concerns and have some of my own, but I also have some serious issues with the data in the articles you linked to. For starters, we could all try to measure closers by Saves and not WAR.

      Anyway, I think this is a good deal for both sides and I'm happy for Perkins. His head is in a good place and I agree w/ the Twins that he's more likely to perform like a veteran closer than many of the younger guys who come and go.
    1. Major Leauge Ready's Avatar
      Major Leauge Ready -
      I can see both sides of this argument. Perkins is a leader, recruiter of free agents and he is pretty darn good with the media too. That has value. Cuddyer filled this role very well. Unless I misunderstand the deal, we are only on the line for one more year with an option for a second year and the salary is below that of other relievers of his caliber.

      The other side of the argument has some merit too. When you are as bad as our favorite team and a couple years away from getting better, you dump all of the assets you can (IE Astros) and further build the farm system. Perkins is our best trade chip. There was also minimal value in extending him so there is merit in the position that this adds risk with little value.
    1. oldguy10's Avatar
      oldguy10 -
      I am 100 percent in agreement with this idea of dumping ALL of the assets and further building the farm system but are most fans on board with this? Plus we get mixed signals from ownership and management on the same subject as they both often are trying to build a decent product for the current year and looking to the future as well. I think it is impossible to do both well, so we'll see especially starting in 2015 when the so-called turn around is supposed to begin.
    1. Dave T's Avatar
      Dave T -
      Wow, pretty amusing thread. Let no good deed go unpunished, eh Twins?
    1. jorgenswest's Avatar
      jorgenswest -
      I don't understand the need. They had him with option through 2016. They had him in a contract that was trade friendly. Buying the 34 year old season of any reliever, 4 seasons down the road is a risk.

      I do understand honoring the loyalty. He was underpaid for his performance relative to other closers. He is a Minnesotan. This doesn't seem like a good business deal, but loyalty and treating players fairly can often be good business.
    1. BigTrane's Avatar
      BigTrane -
      I'm reminded of the Empty Bottle in Chicago and their slogan... "Cheep! Cheep!" Bigtime bargain.
    1. DuluthFan's Avatar
      DuluthFan -
      The Twins are trying to build a Major League team. Hopefully, it comes together sooner rather than later. While a team can be put together with only young prospects or with only veterans, it seems to me that the best teams have a combination of the two.

      I cringe every time someone brings up trading a good veteran for prospects to "build up the minor league system". At some point you have to stop trading away all of the team's good players. The Twins need major league players to be successful, not prospects. Yes, prospects can help in the future. All major league teams need a steady supply of prospects in their systems. But at some point you have to start putting the pieces together and field a major league team.

      The Twins appear to be making moves indicating that they are ready to put the pieces together. The Perkins extension in addition to the rotation signings seem to indicate that the team thinks it is time. The top prospects are close. The majority of them should reach the majors in the next year or two. So you're looking at 2016/17 to be competitive. The Twins will need a closer by then. Why not Perkins? Why worry about having to bid for Perkins' service when they don't need to? Perkins is a Minnesotan. Who better to give his best for this team? He is a homegrown Twins prospect, playing for the team he has grown up with. Why pay another free agent to come play for the Twins when we have someone who WANTS to play here? Who has taken a team friendly contract to stay here. Who has the skills to play the position.

      Let's stop trying to trade away the team's good players for untested prospects who may or may not ever make the team and field a competitive team. As fans, we have put up with three forgetable seasons. It's time to put the pieces together.
    1. Dman's Avatar
      Dman -
      Quote Originally Posted by alarp33 View Post
      Why exactly did they need to bring his monetary value closer to his market value? I'm not trying to be a smartass, but where exactly would you draw the line? Hughes is making around $8million a year, if he wins Cy Young this year would you propose ripping up the final 2 years of deal and giving him 5 years for $110 million? If Perkins would have lost the closer job last year due to performance, it would only be fair that he reduce the remaining years of his deal?

      Signing a player to a longer term deal involves risk from both sides, the player is risking that they could out perform the deal and undervalue themselves, the team is risking guaranteed money for a player that could get hurt or underperform.

      Perkins and the Twins knew of these risks in 2012 when they agreed to contract. That extension looked pretty good in hindsight for the Twins, sometimes the extensions don't work out as well (Blackburn).
      The Twins didn't have to do anything. They had a great contract for Perkins as it was. The risk of the new deal is greater for them than it is for Perkins as they have no idea what his value will be in those later years.

      Values for players are established in arbitration all the time. The better the players performance then the higher the value of the contract. Granted this isn't arbitration but the concept is similar. When a players value far exceeds his monetary compensation contracts get extended all the time to change the imbalance. I think that was done for Ryan Howard and others as well. I believe Mike Trout will be another one.

      If my theory is correct (and I have no proof what so ever that is) Perkins worked with the Twins on the earlier contract so that it would work for the closer and setup role. Neither side knew he would be an All Star closer at the time. Perkins worked well with them in negotiations then and so they were more amenable to reciprocate when his value changed. In short Perkins sold himself short to remain with the Twins and the Twins were willing to take on more risk to even that out. Tit for tat if you will.

      To your further point why not pay for performance etc. for everyone on the team? That is why the Perkins deal is sold the way it is. He is a great closer we want to lock him up long term etc, etc. Personally I don't believe that. Read between the lines, however, and this is about rectifying a performance to value imbalance. No team consistently pays for proportionate performance to monetary value. The players don't like it and teams don't like it. The stars have to align and in this case they did.
    1. Oxtung's Avatar
      Oxtung -
      I think the time to "dump all the assets" was when the FO decided not to spend in 2012. At that point it was clear this was going to be a multi-multi year rebuild and that our assets would just be aging with no hope of winning. I even advocated trading Mauer to the Red Sox that offseason (and still think it could have been the right move).

      At this point though I don't think "trade everybody" works. We have the payroll to have some pieces in place when our young guns come up and I think it will be beneficial to do so. It will help turn things around quicker, there is always a chance Buxton, Sano, Meyer put up big numbers right off the bat and I'd hate to waste those years because we didn't have a supporting cast. There is potentially a benefit (though not necessarily true or needed) to having veterans around the club house.

      In today's game if you want to go to the playoffs you have to be a top 10 team in starting pitching. If you want to advance you have to be top 5 (I've actually done the research but have never bothered to write it up into a blog...I should get around to that someday). That said, I think we are short a premier pitcher. If Meyer turns out to be a 2/3 we're sunk. The Twins won't pay the asking price for an ace. IMO the Twins need another pitcher that could develop into that front of the rotation player because counting on Meyer for that is just too risky. Before anyone says Kohl Stewart, he won't be with the Twins until 2017 at the earliest and even that would be counting on him coming in and being an Ace from day 1. It's more likely he'd take a season or 2 until he's in form. So you're looking at 2018-2019 before the Twins are truly competitive if Meyer doesn't turn into the stud we need.
    1. Oxtung's Avatar
      Oxtung -
      Quote Originally Posted by Hosken Bombo Disco View Post
      I think you are dreaming

      I can understand your concerns and have some of my own, but I also have some serious issues with the data in the articles you linked to. For starters, we could all try to measure closers by Saves and not WAR.

      Anyway, I think this is a good deal for both sides and I'm happy for Perkins. His head is in a good place and I agree w/ the Twins that he's more likely to perform like a veteran closer than many of the younger guys who come and go.
      If you can find some counter evidence or articles I'd be happy to read it. As I said that is the only research I've read on the subject. BTW, I think using saves to judge pitchers is a pretty poor analytic. Saves don't actually tell you about a players pitching but rather about the effect of that pitching. It is a secondary measurement. You can rack up saves and be a poor pitcher and vis-versa.
    1. Oxtung's Avatar
      Oxtung -
      I want to add that I can see the human side of this argument. Minnesota guy, loyal, etc... From what I can tell Perkins is a great guy, I think he even brought a round of drinks for some of the TD guys from the bullpen late last season, but I don't see how that helps the Twins get to the World Series. To me, as a fan, that is the point of this game so if a move doesn't further that agenda I don't agree with it.
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