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Thread: Another Free Agent?

  1. #221
    Twins News Team All-Star TheLeviathan's Avatar
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    Quote Originally Posted by JP3700 View Post
    Inflation is obviously the biggest factor. I believe the assumed inflation rate for baseball salaries is 5% a year. That's a significant amount of money when you're talking yearly salaries in the eight figure range.
    It can be the biggest factor, and likely is in the largest contracts, but that reasoning doesn't hold in a situation like Drew's. Front-loading a 3/30 deal or a 4/52 deal is not nearly as impactful with inflation as a 7/200 deal. You're talking a couple million dollars in order to save much more than that in payroll flexibility.

    Say, for instance, we gave Garza 20-20-7-6 instead of 13M per. The first two seasons are basically at market value, but you lose maybe 1M in inflation. The subsequent seasons are closer to 1.75M. So you lose 4.5M over the course of his contract in terms of inflation value. But what you gain in 2016 and 2017 is

    A) Potential trade value (low pay for high rewards)
    B) Significant advantage in payroll flexibility
    C) Maximizing that you are paying the player the most money when they are most likely to contribute.

    And here is where I take my biggest issue: It's a bit disingenuous to say it's "understood" that it has to be that way. It's only "understood" to pay more on the back end because that's the environment players have demanded.

    As the original poster in this discussion mentioned - the Twins are precisely in Scenario B. (And I would suggest the idea we're the first to ever be in this scenario to be a bit unlikely. It happens, and not rarely) We have a rough idea of when the kids are arriving. We have payroll flexibility now and can anticipate wanting more later. Could we lose a million or two in inflation dollars to front-load Drew? Yes, but I guarantee a savvy GM would see that as minimal risk for the idea of having 5-7M more in payroll flexibility and the extremely high value of perhaps having a pretty good SS making 3-4M when you are looking to add more to your roster. (He has high trade value now and he's giving you huge bang for your buk when you need it most)

    Teams like Oakland, St. Louis, Tampa, etc. where they are very savvy and buyout arb. years to extend the life of retaining players could certainly utilize this strategy with some regularity. Yet....it doesn't happen.

    And the reason for that is it is a threat to player negotiating power and the union discourages it. I have no doubt that for teams this often works well for them too, but the buck ultimately stops with those with the most to lose and those most in control of the terms. In free agency that's the player, not the team.
    Last edited by TheLeviathan; 01-26-2014 at 08:09 AM.

  2. #222
    Twins News Team All-Star TheLeviathan's Avatar
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    Quote Originally Posted by old nurse View Post
    Ian Kinsler had a front loaded contract.
    A reason for a team to front load a contract would be anticipated cash flow. St Louis can anticipate revenues and project in 2-3 years. If Miller, Wacha et al continue to develop, St Louis in a couple of years would have a payroll issue.
    This is another reason similar to my second scenario. You have a variety of arbitration players coming up in staggered years so you front end a few of them so that you can afford to keep them all long-term.

    Again, something many mid to small markets could utilize. Only the Cardinals have seemed to do so at all. I'm going out on a limb to suggest the Cardinals are not doing this out of ignorance or stupidity about inflation. More likely, they see those lost value dollars as considerably less important than retaining all their players.

  3. #223
    Senior Member Big-Leaguer jay's Avatar
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    Quote Originally Posted by JP3700 View Post
    I was never attempting to remove context from the posts I replied to. My thought was that since their post was already up, I could shorten my responses while making it easier to understand what I was specifically replying to.
    I am by no means the forum expert on proper form (nor much of anything else, really). It just seemed like a newer phenomenon here that I've seen used poorly elsewhere. You're absolutely right that there's a balance to strike between quoting a whole thousand-word post and zeroing in on what you're responding to.

  4. #224
    Senior Member Big-Leaguer jay's Avatar
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    Quote Originally Posted by TheLeviathan View Post
    A) Potential trade value (low pay for high rewards)
    B) Significant advantage in payroll flexibility
    C) Maximizing that you are paying the player the most money when they are most likely to contribute.
    There are certainly plenty of logical reasons to front-load a contract from both the team and player perspective. I think this is why it gets thrown out so frequently, despite only happening in such rare occurances.

    Kind of like talking about moving to get out of this ridiculous cold... great idea and logical in many ways, but we just don't end up doing it.

  5. #225
    Twins News Team All-Star TheLeviathan's Avatar
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    Quote Originally Posted by jay View Post
    Kind of like talking about moving to get out of this ridiculous cold... great idea and logical in many ways, but we just don't end up doing it.
    We could always live in Yatusk right?

    The funny thing is, for the very reason it is often smarter for teams to backend for inflation, it's pretty much always smarter for players to front end to maximize value.

    I find it dubious that the party largely in control in free agency (players) would allow the other party to dictate the terms. It's far more likely they are dictating the terms against their own immediate self-interest for the larger best interests of the union and future players.

    And to you AHsaves - maybe times, they are a'changing. I have read palers front ending to avoid tax hikes down the road. MAybe its a new trend, its certainly happened more in the last year than it had in years. if true, it speaks to my point about players deciding that.
    Last edited by TheLeviathan; 01-26-2014 at 09:28 AM.

  6. #226
    Senior Member Big-Leaguer jay's Avatar
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    I'd throw in a dash of ego. I've always assumed it doesn't happen much because player X says 'I'm looking for Y dollars'. Some GM says he can make that happen, but only by backloading (and inflating) the dollars.

  7. #227
    Senior Member All-Star cmathewson's Avatar
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    I'd like a right handed power bat, and there are a few left. It looks like we can get a bargain.
    "If you'da been thinkin' you wouldn't 'a thought that.."

  8. #228
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    Quote Originally Posted by USAFChief View Post
    Mod hat: I think this has been a good debate, and I've enjoyed it. Hats off to all.

    Carry on.
    How is 5 pages of discussion about Stephen Drew (who was never mentioned by the Twins as a potential free agent the Twins are going after) a good thing. The discussion was SUPPOSED to be about Gardy's comment on circling back on someone the Twins had actually been tied to this off-season. The only ties I've seen between the Twins and Drew was by someone nationally who said the Twins should go after Drew, not by the Twins themselves. This thread has been co-opted. I'm glad CMath attempted to get back to the original topic. I have no problem with a discussion on Drew, but it should be in it's own thread, not this one which was supposed to speculate about potential free agents the Twins might reactivate discussions with.

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  10. #229
    Senior Member All-Star Hosken Bombo Disco's Avatar
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    Re: front loading contracts: maybe it boils down to a player not wanting to take a steep pay cut before he is forced to?

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    Senior Member All-Star Willihammer's Avatar
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  13. #231
    Senior Member All-Star crarko's Avatar
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    Based on Barardino's quotes from Ryan, I'd say it's a better than even chance they are talking about Johan.

  14. #232
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    RE: front-loaded contracts

    Example: 4 years $52MM total; $20MM, $20MM, $6MM, and $6MM. It would be easy for a negotiator to conclude that a team is willing to pay $20MM per season and to conclude you are willing to pay $20MM per season for his client. At best the team would negotiate was the final two years would be at player option--a really bad deal for the team. They might just as well offer a two-year contract at $20MM each and eliminate the risk of the last two seasons.

  15. #233
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    Quote Originally Posted by crarko View Post
    Based on Barardino's quotes from Ryan, I'd say it's a better than even chance they are talking about Johan.
    This makes the most sense.

  16. #234
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    If front-loaded contracts--or "aging curve" contracts were regularly instituted, it would cut out a lot of these bloated albatross contracts like Wells and Matthes and Soriano and Howard and Pujols; they could be built so that they were much lower dollar figures in the far years.

    Tom Tango has for years done great work on calculating, extremely accurately, what sort of contracts free agent players should, and do get. In his calculations, for players in the decline phase (usually post-29), he factors in a .5 WAR decrease per year. At a going rate of 6 million/WAR, it would make a lot of sense to have contracts that look like, in Drew's case: 3/30, with the years being 13/10/7. That would also mirror his expected contribution to the team, and would make his 2016 salary palatable (and maybe more platoonable.)

    I also thought declining contracts didn't really ever happen, though, but they do, albeit infrequently, and this conversation has helped illuminate this.

    I also think Drew for 3/30 would be a great deal, cheaper than he is worth.

  17. #235
    Senior Member All-Star cmathewson's Avatar
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    Berardino did quote Ryan as saying that some of the remaining free agents have draft compensation issues, "which is scaring away other teams" [emphasis mine]. The two left with those issues are Morales and Drew.
    "If you'da been thinkin' you wouldn't 'a thought that.."

  18. #236
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    Well Garza is gone

  19. #237
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    Sounding like arroyo per wolfson. No contact regarding cruz drew or e santana/himenez

  20. #238
    Senior Member All-Star Willihammer's Avatar
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    Quote Originally Posted by AM. View Post
    If front-loaded contracts--or "aging curve" contracts were regularly instituted, it would cut out a lot of these bloated albatross contracts like Wells and Matthes and Soriano and Howard and Pujols; they could be built so that they were much lower dollar figures in the far years.
    Frontloading would give the illusion of better value in the final years only by accelerating the inflation of the price of a "Win." In other words, the back end of these deals would be better values because by the time a player reaches year X the price of a Win would have already risen to 12 million instead of just 10, even though the player performs the same.

    Back loading on the other hand makes the final years appear to be lousy values only because they have helped stall salary inflation and keep the price of a Win rising only to to 10m in year X instead of 12m (or whatever).

    There's a shared incentive to backload and I have to think anyone who bucks this trend gets a phone call or communication from MLB about it.

  21. #239
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    Quote Originally Posted by Willihammer View Post

    ...There's a shared incentive to backload and I have to think anyone who bucks this trend gets a phone call or communication from MLB about it.
    I also remember reading something a few years ago suggesting the union opposed the idea, worrying that those artificially low salaries would somehow be used as comps to keep salaries low for younger players with similar production at the time. Doesn't seem like a very good reason to me, but that wouldn't keep people from worrying about it.

  22. #240
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    Quote Originally Posted by TheLeviathan View Post
    And here is where I take my biggest issue: It's a bit disingenuous to say it's "understood" that it has to be that way. It's only "understood" to pay more on the back end because that's the environment players have demanded.

    What's disingenuous is completely changing what I said in an attempt to somehow support your point.

    This is what I said:

    When you sign an aging player, it is understood that you are getting his best season(s) early in the contract.
    I'm pretty sure this is more disingenuous:

    It's only "understood" to pay more on the back end because that's the environment players have demanded.
    Considering it is pure speculation stated as fact.

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