Tuesday, January 29, 2008

Grand Theft Mets

Wow. Just wow. Not that Johan got dealt. Not that Johan got dealt to the Mets. That Johan got dealt for a package of prospects that, according to ESPN, "a package which some talent evaluators believe could be the fourth-best offer that Minnesota received during this process". Talk about missing your chance, Bill Smith.

Where to begin in evaluating this? Hard to say. I'll take a stab at a team-by-team thumbnail, assuming, of course, that the Mets and Johan can agree on the richest pitching contract ever.

Twins: It's too easy to just hang Bill Smith out to dry. I mean, he was given the GM title and the next day his first job is to trade the best SP out there? Talk about being thrown into the deep end, huh? Here's what happened in early December, when this really heated up:

In early December, the Yankees had offered a package built around pitcher Phil Hughes and center fielder Melky Cabrera, and the Red Sox talked about two separate deals, one built around left-hander Jon Lester and the other around center fielder Jacoby Ellsbury, with pitcher Justin Masterson and infielder Jed Lowrie prominently involved.

But the Yankees yanked their Hughes proposal off the table in early December, and Boston's interest waned, as well. Over time, the Red Sox pared back their proposals. Baseball operations personnel for both the Yankees and Red Sox were extremely wary of the double-barreled cost of acquiring Santana, despite his incredible record -- first, shipping out a boatload of prospects to get Santana, and then giving him a record-setting contract.

Rule #1 of Negotiation: never take the first offer. Now, I am guessing Mr. Smith viewed this "auction" as most of us would have in any auction: The bids start strong and improve over time as teams get either 1) nervous, 2) desperate, 3) excited, 4) some combo of all. Look at eBay; bids start low and as the deadline approaches, bids rise. I can see Mr. Smith saying to his colleagues: "Look, we've gotten some great offers. Once Boston or the Yanks really gets riled up, they will make us the offer we want."

Then a funny thing happened: Reality set in. The Yanks are already so far over the Luxury Tax threshold, they'd have to add 40% to the estimated $150M that it would take to sign Johan. Quick math says that Johan would actually cost the Yanks OVER $200M. Ouch. I'm guessing Theo & Co. thought "Well, we can't expand Fenway that much more than we have already and we really, really like our kids." Both teams got "buyer's remorse" without buying anything. Funny how a time-out can help one see clearly!

There were rumors of the Dodgers being a possible player. And, of course, the Mets. Not too many other teams who can pick up the tab for Johan. Thin market got a whole lot thinner, fast.

The Twins wanted Jose Reyes from the Mets; no go. They wanted Fernando Martinez, their #1 ranked prospect, in addition to the group they actually got (Carlos Gomez, Philip Humber, Deolis Guerra, and Kevin Mulvey); no go. So, when push came to shove, and Johan's been professional and quiet this whole time, Johan got sent to Queens for four good, not great prospects. Had Mr. Smith taken the first offers he got, he would have been better off. This is not a debatable point. Like I said at the top, I can't really fault him. He was in an impossible situation and I think the cost of not doing any deal was going up daily, meaning the longer he waits from here, the weaker the bids would get.

[UPDATE: Here's an excellent posting from Aaron Gleeman from the Twins POV. They have to be an angry bunch today.]

The Mets: A quick disclaimer: I don't root against the Mets, unless they are facing my team. I tell my kids that they only have to root against one team, my team's arch rival, and the Mets are not that team. I am happy when the Mets do well because I'm a NY'er and it's good for the area and makes things fun all around.

My thoughts: good for Omar. He promised an ace and he delivered, however costly it might be. Costly in losing four of his top ten prospects. Costly in the amounts he will have to pay for Johan's services. Not as costly as doing nothing. They had no ace prospect knocking on the doorstep. Some good guys but no aces.

Great for the Mets, as a team. Their late season collapse has been well-documented so no need to rehash it, but adding Johan to a team with so much offensive talent would make them the favorite in the NL, in my opinion. Sure, the Phillies are as exciting as any, but adding Johan to the NL has to be worth a whole heck of a lot. Not sure what the win share number is for Johan or how it'd extrapolate to the NL, but it's gotta add 5 wins to the Mets this year. I'll update once I can grab the win shares info. [UPDATE: Click here for The Hardball Times and win share info.]

What concerns me: A 6-7 year contract for a pitcher, any pitcher. Remember Kevin Brown's landmark deal? Great for a few early years and a disaster at the end. Injuries, age, etc. all made that a deal to regret. Mike Hampton anyone? Half of MLB is paying a piece of that train-wreck given how many times he's been dealt. We mock Pavano but who's 'stolen' more money due to not paying than Hampton? History is not on the Mets side, but again, Omar HAD to take on this risk. They needed to do this deal. [UPDATE: Here is a list of the current longest/largest MLB contracts. Of the top 15 contracts (in total contract value), three are starting pitchers (Brown, Zito, Hampton). Not a good sign that two signed for 7 years and the other for 8. Add in the remorse about the Giambi, Griffey, Helton contracts ($ and length) and just remember: Buyer beware.]

Keith Law, ESPN's prospect guru, weighed in (Insider access required; detailed review of the prospects at that link, too.) had this to add:

The Mets get Johan Santana without giving up Fernando Martinez, their best prospect, or Mike Pelfrey, their best young pitcher. They also immediately make themselves the favorites to win their division and have a good argument that they're the best team in the National League.

SI's John Heyman added this about the four players sent by the Mets:

Gomez is viewed as a potential star who is unproven as a hitter. Guerra is another who could be a star but he projects to pitch at Double-A next year. Mulvey and Humber could reach the majors this year but are seen as middle-of-the-rotation types.

Quick bonus Mets thought: Who would have thought that Pedro and Johan would be on the same team at any point in their careers? Two of the best pitchers over the last 20 years. Awesome, even if Pedro's not the same pitcher anymore.

RedSox: It's hard not to be impressed with what Theo & Co. have done with this team. All venom and hyperbole aside, they have been a model of farm system development coupled with deep pockets and front office smarts. They developed their own like Papelbon. They traded some super talents (Hanley Ramirez, anyone) for equally super, albeit pricier, talent in Curt Schilling, Josh Beckett and Mike Lowell. They have picked up a former Twin cast-off who only became Mr. Clutch Big Papi. They signed kept Manny (the previous regime actually signed him). They have developed a culture of TEAM. They have fun. And they win.

I think, as do most probably, they wanted Johan only if they could get him on the cheap. I don't really think they wanted to deal Buchholz or Lester or even Ellsbury. I am sure they feared the Yanks getting him, rightfully so. But, I am quite sure that Theo & Co. are happy tonite.

The guys at MLBTradeRumors had this to say about the Sox offer:

Boston's top offer was better as well. The Twins could've filled center field, shortstop, and closer needs immediately with Jacoby Ellsbury, Jed Lowrie, and Justin Masterson.

Yankees: As I mentioned earlier, adding Johan would have stressed out a payroll that most wouldn't imagine being stressed. Evidently, their IS a ceiling after all. Even with the new Stadium coming in 2009, the combined cost of their top talent and $200M in real dollars made it a deal impossible to make. I think we all know Hank wanted to do it anyways but it seems that cooler heads (read: Cashman and Hal) prevailed. I am very happy that things played out this way for the Yanks. Like their Boston peers, I am guessing Cashman, Hal & Co. are relieved to see Johan not heading to their bitter rival and giddy about him hitting the NL.

MLBTradeRumors had this to say:

If Smith had taken the Yankees' best offer, he'd have an MLB-ready pitcher who was very recently regarded as the game's best pitching prospect (Phil Hughes). He'd also have a solid regular center fielder in Melky Cabrera. And the Twins would've gotten a couple of upside players on top of that.

I am sure both Boston and NY feared Johan's 2nd half slide last year and the prospects of putting him in the AL East cauldron. Mets were better positioned to take that risk.

I've mentioned here several times (check the previous posts to the left) that I'm excited to see a new crop of kids emerge. No, they all won't be all-stars or HOF'ers, but if they are merely good to very good, that's great. This current Yankee team is aging and in need of a boost, precisely the boost these kids gave the team last summer.

I'm thrilled that Johan is heading to the NL. I am just as thrilled with the prospect of Bedard heading to the AL West.


In summary, I think this is a win for the Mets, clearly. I think the Twins did OK given extraordinarily difficult circumstances. I sincerely believe both the Yanks and Sox were not really offering everyone that was mentioned in the rumor mills. I think it was more of a ploy, a "prevent defense", if you will. I know the Yanks and RedSox are content with going ahead with what they already have, as well as readying the coffers for Sabathia next off-season.

Best of all, this "will they or won't they" is finally over.


ADDENDUM #1: For a very well done analysis, from the Yankees POV, of the overall costs to trade for Johan can be found here, in this article by Vince Gennaro. Some of the best tidbits:

On the cost side, we can expect the tab for Santana to be in the neighborhood of $25 million a year for six years. Since the Yankees are over the luxury tax threshold and A-Rod's contract virtually eliminates any chance that they will go below it in the near future, the Yankees will be on the hook for another $10 million per year in luxury taxes, raising Santana's cost to about $35 million per year. The net result is that Santana would be a value-added signing for the Yankees, even at his steep price – generating about $225 million in revenues and asset appreciation and costing about $200 million, yielding a rate of return of 24 percent on their investment, probably enough to compensate the Yankees for the injury risk associated with any free agent pitcher.

Hughes will be paid a modest (less than $500,000) annual salary over the next two years until he reaches arbitration eligibility. By looking at comparable players and adjusting for inflation, we can estimate that he should earn about $30 million in the next six years. Alternatively, his team would need to pay about $84 million in free-agent wages to buy the same wins. So Hughes' asset value is more than $50 million – the amount of payroll savings he will generate for the team that owns his contract versus buying his performance in the free-agent market. By including Melky Cabrera in the trade, another $10 million in asset value is added, and another pitching prospect further bumps up the total cost of the deal.

And the most interesting comment:

What would need to happen to make this a good trade for the Yankees? If Santana signs with the Yankees at $5 million to $7 million per year below the price he would have gotten in an open bidding war as a free agent next winter, or if Hughes becomes only a fifth starter or bullpen reliever, the deal could make sense for the Yankees.


E-5 said...

Flusser Rules #31, #43, #27, #29, and #48


Jason said...

Some translation:

E-5 is my dad. Yes, he's a former 3B back when he was a kid and still has a license plate and moniker that reads e-5. He was also at Mantle/Ford's fantasy camp in 1986.

Also, the "Flusser Rules" are part of a yet-to-be-published (likely never-to-be-published) book of business rules. It's a chapter list now, mostly penned by my father, with additions from my brother and I.

#31: As time goes by, making deals is as difficult as ever, but making money becomes easy.

#43: If it smells bad don’t do it! The converse isn’t always true.

#27: Some of the best deals are the ones you don’t make.

#29: You are not in business for the preservation of your competition.

#48: What minds creates, time kills!