I put this together on another site, decided it was good enough for this one too.....


I guess the closest comparable for Ricky here would be....Jon Lester,  who last March signed a 5yr extension worth $30m, with a 6th year option for $13m. He was 25 last year, same age as Ricky is now.

Here's what each had done when their contracts were signed:

J.Lester: 354.2ip, 6.7k/9, 1.9k/bb, 0.8hr/9, 1.39whip, ~.735oops, 3.81era, ~4.20fip, ~4.70xfip, 3.9war/200ip
R.Romero: 331.0ip, 7.4k/9, 2.0k/bb, 0.8hr/9, 1.40whip, .739oops, 3.94era, 3.90fip, 3.86xfip, 3.8war/200ip

And here's what each had done the year prior to signing the contract, with Ricky's year in progress still of course:

J.Lester: 210.1ip, 6.5k/9, 2.3k/bb, 0.6hr/9, 1.27whip, .688oops, 3.21era, 3.64fip, 4.08xfip, 4.9war/200ip
R.Romero: 153.0ip, 7.8k/9, 2.4k/bb, 0.6hr/9, 1.27whip, .677oops, 3.53era, 3.40fip, 3.60xfip, 4.5war/200ip

Based on that comparable, it's a fair deal....but of course that also depends on what kind of options are included in the deal.

In general I think this is a fair contract but not exceptional value. He had one more year at the min, so this is basically 30m for 4 years, 3 of which are arb year. For comparison, Josh Johnson got 4 years, 39 mill for 2 years of arb and 2 years of free agency.

If he pitches like this year for the remainder of the deal, it's about fair value. Of course, if he improves, it's a steal but there is always the downside of injury or regression with young pitchers. Time will tell, but I probably would have waited one more year and then tried to negotiate something like Josh Johnson.

I forgot Lester's deal. That's indeed a god comp. I think Lester's deal is a steal for the Sox, especially with that option in there as well. I would argue Lester is the better pitcher (even at the time the contract was signed). Still, that doesn't make this one a bad deal just not a steal.

I would argue Lester is the better pitcher (even at the time the contract was signed).

Based on?

The stats above certainly wouldn't support that argument

I like it, it's solid if not spectacular and the only argument I see against it is one that boils down to "never sign a long term deal! something might happen!"

The Gallardo contract is a better comparison, because it's the exact same 5/30.1. The difference is that Ricky's is being given 8 months earlier with a third of a season left to get through healthy, so if there isn't at least one team option for a 6th year this contract isn't a success.

Jordan Bastian is reporting on Twitter that there is indeed a team option.

frankly i can't see how this isn't fair value as long as he remains healthy and around league average. even at 4/30 - 7.5 mil /year average... how many league average pitchers are you going to be able to sign? so far in his career he's been worth far more than that. while i think 5 years is always risky, the jays could win BIG on this, and i see the odds of breaking even as ridiculously high.

Lester and Gallardo do look ot strikeout more hitters than romero though.

remains healthy and around league average

you mean regresses to league average.  Romero's one of the top 20 pitchers in the league by almost any metric.

Good analysis uglyone.

With any pitcher contract you have to assume some playing time will be lost to injury.  How much time is lost may be the difference between getting value from the contract or not.

There is an important difference between Lester and Romero.  Lester came up at age 22; his ERA+ numbers were 101, 115 and 144 at the time of signing.  Romero's have been 108 and 115. 

Comparing raw pre-2010 numbers in Boston with 2010 numbers in Toronto leads to the superficial similarity. 

There is nothing wrong with the dollar figures, but it's not something I would have done. It's quite possible that the club is going to have spend too much on pitching in a few years.  I would have kept my options open to see how the health of the various pitchers was, at least into next year.  The Sox were in a different position because Lester is the one they obviously needed to lock up. 

Did you just say your ops+ comparison there was less superficial than the numbers I laid out?

What happened to the "no deal longer than three years for a pitcher".  It is very risky.  I think the team chose cost certainty over injury and performance risk.

What happened to the "no deal longer than three years for a pitcher".

Pat Gillick moved on. That was his policy.

I see this deal and it reminds of Overbay's. There is no need to lock a pitcher up this earlier with guaranteed money when they have such a high injury risk. I just don't see why cost control could be such a worry compared to risk of locking into an Overbay or Hinske contract. I mean, just look at the crippling injuries Jays pitchers have had over the years.

I'm happy for the Jays and that they locked up a good player, but payroll better be there later. $ wise, I don't like the deal. The team's been burned too many times by guaranteeing money. You should only do these deals for elite talent, so perhaps GM AA thinks that is what RR is or will be. If that's what the team believes, then I'm okay with this deal a lot more.

Fangraphs has comment on its website:
http://www.fangraphs.com/blogs/index.php/ricky-romero-gets-a-deal/

"With the club option details unknown, I believe that if Romero can stay healthy, this contract is likely to end up being slightly favorable to Toronto. I don’t see Romero getting ripped off though, especially with so much uncertainty lingering in how future free agent markets are going to shape up. This is a fair deal to both sides."

As I said above, I agree with the assessment. However, I don't see the need to lock him in how. Why not wait for the standard 4/40 deal after 1 year of arb? I don't like that the Jays are the ones handing out the "largest [contract] ever given to a pitcher with his service time". If you lock him up with less than 2 years of service, it should be a steal and not be fair, imo.

I would describe my reaction as neutral. The deal is only a steal for the Jays if Romero is still good in years 5 and 6, at which point he would be making below the market rate, possibly well below. I don't think it's too much money given his performance, the only question is injury potential, where youjustneverknow. I hope he stays healthy, but most pitchers don't and 5 (or eventually 6) years is a long time. I guess they were worried that going year to year for him while he continued to pitch well would make him increasingly expensive.

If there was one guy I would bet on in this Jays staff it would be Romero though; I wonder what happens with Marcum (who's performance has been similarly good with lesser peripherals) and Cecil, whose performance has also been very strong but has even less service time than Romero.

I think the injury risk is overblown. Even when pitchers get injured they are still usually offered arbitration. Just look at McGowan was he not offered arbitration despite being about done. Romero may have some injuries but the likelihood he has an injury so bad that the jays release him (Chris Carpenter) is pretty low. I mean even if he blows out his elbow in 2 years and has to have TJ surgery the jays would still need to offer him arbitration and pay his salary or face another carpenter mistake. Is that not correct?
So the benefit of the deal may be that Romero makes a little more in salary these next 2 years and then his last couple years the hit won't be as big as it could be.

ay,
 i mean more over his short career, though i'll admit hes still above average. i should have just left out "remains".

I think it's a fair deal for both sides and it also sends a message to the younger pitchers that the Jays are willing to spend money to keep home grown talent and also keep the core of the team here.

I see this deal and it reminds of Overbay's.

You mean the guy who's provided better value, according to Fangraphs, than what he's been paid over the length of the contract, even while overcoming a lingering hand injury?

THAT Lyle Overbay?

If we get similar value on Romero (harder to do with a SP perhaps) then it's the obvious play

couple other thoughts -

A lot of the reaction seems to be framed under the old paradigm that dollars in Toronto are scarce. That flies in the face of all the evidence we've seen over the last nine months, and if anything, this deal adds to the body of evidence that this is no longer the case.

committing to 7.5 per (in the bigger years) on romero is one thing when you are budgeting in the 80's and quite another thing when you are budgeting in the 120's

Second, here's more evidence that you dare not even GUESS what Alex is doing because he's always three steps ahead of you, whether you are a fan, or a reporter, or maybe even a rival GM

I absolutely hate this contract.

Every Major League Club holds the hammer over the player for their first 6 years of their career. How often do 5 year contracts for pitchers work out for the team? I’m guessing less than 25% of the time. Rather than going year to year and paying for performance, the Jays are already banking on the fact Romero will remain healthy and productive for the duration of the next 5 seasons. There is very little upside for the Jays while Romero has the security of 30.1 million even if he blows out his arm in his next start. Frankly no pitcher should ever get a 5 year contract but at least I could understand if it was given out to the Lincecum’s and Hernandez’s of the world. While Romero has proven in his brief career to be a solid pitcher, I wouldn’t consider him to be an elite pitcher. This is a contract that will likely haunt the Jays down the road. I can only hope AA isn’t thinking about doing something similar for Marcum, Morrow, and Cecil right now.

We've just locked up about 22% of our starting pitching for the next six years for a very reasonable price - until the end of the 2016 season (if we want him that long).

IF - several of our Ubber Prospect kids push him out - his contract will be movable - OBVIOUSLY - health permitting. We've got control for two free agent years. We've got control through the heart of our 2012 - 2016 "Years Of Glory".

I'm a happy puppy, Ricky's a happy puppy and AA is a happy puppy - happy puppies all round!

How often do 5 year contracts for pitchers work out for the team? I’m guessing less than 25% of the time.

I wouldn't reserve that to pitchers.

It wouldn't take much head scratching to cite you half a dozen long term contracts given to hitters that failed.

What you are arguing against is long term contracts in general, not any specific subset.

consider this -
The Red Sox (obviously not a poorly run team) gave Josh Beckett $68 million for his age 31-34 seasons;
The Yankees gave Burnett $82.5 for his age 32-36 seasons;
The Astros gave Roy Oswalt $73 million for age 29-33
Dan Haren makes almost $5 for 28-32

the list goes on and on.

the Jays gave Rick-Ro less than half what Beckett is getting for his age 26-31 seasons

To put a finer point on it - the Red sox (and the rest of those teams) are getting in almost every case, post-prime years for premium money. The Jays are getting ALL of Romero's prime for MUCH less cost, comparatively.

The only way you hate this deal is if your position is that one should NEVER sign a pitcher to a multi-year deal.

Like I said in the Adam Lind thread ( http://www.battersbox.ca/article.php?story=20100403132516252 ), I prefer the old Gillick approach of not signing players long-term until they have just one year left before free-agency.

If it turns out the players perform "annoyingly" well and make a name for themselves in the playoffs and become more expensive, then you'll have the extra revenue to afford the bigger contracts anyway.

The real risk is tieing up millions in somebody who turns into a chump.  I hope this doesn't happen to Mr. Romero, but it's an unnecessary risk for the Jays to be taking.

(What is the list of Jays players who have got these unnecessary contracts, i.e. long-term deals more than a year before free-agency?  Hinske, VWells, Rios, AHill, Lind, Romero?  It doesn't seem to be a good track record.)

Willrain, 07-10 contract 24 mill, fangraphs value says about 25 mill. That is not a win for the Jays when you are buying out arb years. He's not going to be worth a pick and he's basically untradeable. Worse still, he had his worst seasons (injured and ineffective) when the Jays were going for it. I'm sure if he hadn't gotten hurt, it would've been a fantastic contract. However, that is not what happened.

The Jays would have paid probably half that 24 million if they hadn't signed that contract. Paying even value to a player under team control is fail.

the Jays gave Rick-Ro less than half what Beckett is getting for his age 26-31 seasons

You are comparing a player not yet eligible for arbitration with one that was a potential free agent. Apples and oranges. Any issues you might have with Beckett's contract are a separate matter entirely.

The Jays would have paid probably half that 24 million if they hadn't signed that contract. Paying even value to a player under team control is fail.

How you figure?

poor performance in '07 because of injury wouldn't have greatly deflated his value at the arb process.

Overbay made 3.56 via arbitration for 2006 and the $4.2 he ended up with (including the signing bonus) for 2007 was entirely what one would expect if he had gone to arb, if not less than.

in 2008 he was coming off a terrible year precipitated by injury - but the injury would have mitigated the instinct to suppress his salary. He was contracted for 5.8 and at the worst reading that is $1 million more than he might have got via arbitration.

coming in to 2009 he would have been a free agent, coming off a reasonable rebound season from the injury, offering premier defense, and the potential to get back to his 2006 form (which for the most part he did)

could that have been bought for significanty less than 2/15? Adam laRoache has similar value, I suspect, and he signed his last arb deal in 2009 for $7.05, and signed as a free agent for (if the option is exercised) $12 mil over 2 years.

So, yeah, maybe you could argue they paid at most $4 mill too much, being generous with the pessimisim.

But HALF?

only if you assume they non-tendered him after 2007 which seems like a very unlikely event.

How would they have gotten 4 years service out of an arbitration eligible guy at an average salary of $3 mil per year when the past pre-contract year was $3.8?

Will, you can't use Beckett's and the other contacts as comparison. Those were FA years, Romero is under control for the next 4 years. The Jays could have waited two years and then still signed him. That may cost more less or the same. Who knows. This is why the contract is "fair". But given the leverage, there was no need to go for a fair deal.

You are comparing a player not yet eligible for arbitration with one that was a potential free agent. Apples and oranges. Any issues you might have with Beckett's contract are a separate matter entirely.

It is and it isn't.

In terms of leverage, there's no comparison.

but leverage has nothing to do with how much you spend for each marginal win ON THE FIELD.

The point here is whether one had rather pay the market rate later (for those two free agent years we bought) or pay somewhat more (and not a whole lot) in the mean-time to discount those years.

YES, if Romero's arm falls off, we lose - everyone knows that. but the same is true (more so) for an older guy. For ANY long-term deal.

laying that aside, one ust remember that, except for two abberational contractions, the free agent market is prown to huge inflation. it's a very conservative guess to presume the market price for a pitcher of that skill set will increase by 20% over the 4 years between now and his (former) first year of free agency.

if the cost of that year for Beckett is almost $16 million now - and let's assume a 10% discount for romero possibly not being that good, then what's a $14 million deal today is likely a $17 million deal in 2015.

THAT is the downside of waiting to see what the future holds. Potentially two years of ace pitching in 2015-16 for a combined $20.5 million is a substantial bargain.

and what did we pay for that bargain? laying aside the aforementioned arm injury, let's say he regresses ala Cole Hamels in 2009. do you know what Fangraphs values Hamels "subpar" 2009 at? $16.9 million

If they are wrong to the extent that they have the value TWICE what it should be, the Jays are still paying less than hes worth (assuming the $7.5 salary)

If you assume a pretty ordinary progression through the arbitration years, if he's just a middling above average guy and not ace quality, then itwould look something like this:

'11: 500k
'12: $4 mil
'13: $6 mil
'14: $8 mil

So the Jays are on the hook for maybe 2-3 million too much for that, in exchange for an option on saving 1015 million in the last two years.

I can't see how that is a bad gamble.

and that brings me back to Beckett - whatever might be said about signing a pending Free Agent vs a guy with years of control left, the value of the deal is in what we DON'T have to pay in '15 and maybe '16 because we pay a bit more now. and what we might have otherwise paid then is directly comperable to what a guy like Beckett makes now.

the fact that we are also buying his prime years for this price, instead of his post-prime years, only skews things more.

The Jays could have waited two years and then still signed him.

Let's say they wait two years (actually 2+ but we know what we mean) and a best and worst case scenario.

in the worst case, Romero tears his labrum and goes the way of Dustin McGowan and he's a sunk cost. Net loss, assuming no insurance and assuming they be as patient with him as with Dusty, around $29 mil

In the best case, he wins a Cy in the next couple of years and contends for the other one - THEN they sign him to a five year deal, with an option, buying out his last two arb years (and yes, for that good a pitcher, he doesn't sign for less than five years). THAT contract probably looks like this:
in '11 he makes about half a mil, in '12 he makes probably $5 mil then signs for
10-12-15-15-15-18 (with a 3 mil buyout)

total contract: $70/85

total cost for the same six years on this contract: $57.5

So there's as much risk in waiting 2 years, financially, as there is in doing it now.
(and that, by the way, doesn't factor in potential baseball inflation, or currency factors)

(What is the list of Jays players who have got these unnecessary contracts, i.e. long-term deals more than a year before free-agency?  Hinske, VWells, Rios, AHill, Lind, Romero?  It doesn't seem to be a good track record.)

Using Fangraphs:

Wells (1) - paid - $14.7; value - $60.5
Wells (2): paid - $40; value - $18 (so far)
Hinske: paid - $10; value - about $8.2
Hill: paid - $7.8; value - $22.4 (so far)
Rios: about $7.25; value - $25.4 (and this year there's a $11.4 million value so far against a salary of $9.7)
Halladay(1): paid - $42; value - $69.1
Halladay(2): paid - $24.25; value $66.5
Overbay: paid - $21; value - $24.5 (so far)
Downs: paid - ~$8.75; value - $14.9 (so far)

total spent: $175.75 million (approx)
Total value recieved: $319.2 million

# of contracts:9
# of times royally burned: 1


someone is gonna have to point out the eivdnece for a poor track record to me.

Yes, this is dependent on Fangraph's valuations which are not the last word. but ever how one places the value on a marginal contribution, out of all the deals signed, on only ONE have the Jays decidedly gotten their butts kicked, and on at least 4 and possibly 5 (depending on what you think of the Downs deal) they made out like bandits.

If you start pulling Fangraphs' 'values' for contracts, most are going to look pretty good.  Marco Scutaro was a $20 million dollar player last year by their metric and Randy Ruiz in 130 at bats was worth more then 5 million dollars. 

You could field a team of 25 minimum salary players, win 60 games and look like a genius using the Fangraphs 'value' metric.   15 WAR would give you 60 million dollars of value for 10 million dollars. 

Someday, they will show us how valuable Matt Weiters was before free agency...  so far this year his 241/320/368 line has been 'worth' 6 million dollars. 

I'l agree that I find those values suspiciously high - maybe by 1/3 or more - but it's the only source I know if that even tries.

At least it's a consistant basis of comparison across the league (i.e. you can compare the value of doc's contract and the value of Sabathia's, even if both are overvalued)

In that sense, though I'm not gonna do that much work, one could compare - for instance - the deals signed over his career by JP to those signed by Epstien and make a reasonable comparison

I gotta agree with Moe. There is no need to do a fair deal. Last year, I thought Rickey tired later in the season. I think it would have been prudent to at least wait for this season to finish (and Rickey healthy) before doing a deal like this. I don't see enough risk for the reward, but again if the payroll is heading up big time, it's likely a non-issue.

It's not my money, but this is the first move by AA that I don't like. I guess if you are desperate for cost certainty it's a fair deal, but I'm not a fan of buying out arb. years, especially for a pitcher. If he excels during his arb. years, so be it, pay him the money he earns, but don't pay for the hope that he will earn the money.

Financially I don't see why the jays need the cost certainty, so the risk vs reward isn't worth it. The Jays control him for 4 years and any potential arbitration award isn't going to handcuff the team, so why take the risk of potential injury or regression in performance? To buy 2 years of free agency? You've still got plenty of time to deal with that.

Unlike StephenT, I don't mind the long-term deals signed early on for position players like Longoria and Pujols.  The Hill deal was something like that for the Jays, albeit at a lower level, and I wouldn't mind if the club signed Snider to a long-term deal at some point next year.  Gillick had a more conservative policy with regard to pitchers than position players (which led to Key's departure), and that makes sense to me.

"So there's as much risk in waiting 2 years, financially, as there is in doing it now."

Yes, but only if you believe both events are equally likely. Unfortunately, the injury scenario is more likely (simply because so many happen). And even if you were to believe they are equally likely, you would think the Jays should pay less because of risk aversion on the player side (who can't pool risk the way the Jays can). Of course, most likely none of these drastic events happen and the contract will be slightly in the teams favour, which makes it a "fair" (because the team bears the risk) but not a great contract. But then why not wait at least until spring training next year? Or even later?

Btw, I guess this means Romero should replace Doc on the banner.

I don't have a real beef with the argument that next spring might have been the optimal time to do this deal....but when the difference between what seems best to me and what seems best to Alex is so marginal, i defer to the fella who has more information.

I like the commitment to star-level talent. It gives a solid but not excessive deal for the Jays given Romero's performance over the past two years, while being a deal fair to Romero given comparable contracts signed recently. The Jays take a $30M risk over 5 years for the opportunity to probably save $10M or so if he continues to average 3 WAR a year (a #2/#3 level starter). If this year is the new level and he hovers between 4-5 WAR a year (a solid #2 / borderline ace level), the savings grow dramatically.

Wow, this contract actually isn't backloaded. He won't make anything more than 7.5 per season. It's better to pay out more money before contention. 

I don't like contracts that cover the arbitration years. These contracts are made to cover asses, not to compete.

I see no upside for the Jays. These contracts make it harder to trade the player and commit the team to putting the guy out there regardless of his performance.  Romero won 13 games last year. He might do that again this year and the next, or he might be the next McGowan.

When you win your division, your primary concern is to keep all you players. When you finish 4th, the focus must be to improve.

It 'd be an interesting study to see if young pitchers take a bigger discount to sign long term over young hitters, to account for the addition risk of severe injury.  Tough to measure, but I'm sure someone's taken a stab at it.

These contracts make it harder to trade the player and commit the team to putting the guy out there regardless of his performance.

They have been adequately compensated for this risk.

I think people are underestimating how helpful it can be a GM to have a payroll with some cost-certainty.

Understandably, there's a bias against the deal given the Jays recent history w/long term contracts... but I doubt there's any predictive value there, the deal does seem to come a year early though.

except that the "recent history" as regarding signing pre-arb players is a MYTH.

The only time they got royally hosed was on Wells, and that was when he was a year away from free agency (ironically, the same point in his career that many here suggest we should be waiting for to sign guys like Romero)
and a loss MORE than compensated for by the two Halladay deals alone.

We've gotten even value, or plus value for every other deal, savew Hinske where the loss was marginal.

That's a track record that says "do this MORE" not "do this less"

From rotoworld.com:

"Ricky Romero, who signed a $30.1 million contract extension yesterday, tossed seven innings of one-run ball to beat the Angels on Sunday.
Romero walked three and gave up six hits while striking out four. The outing easily could have been worse, but Romero pitched out of a one out, bases loaded jam in the fourth by retiring Lyle Overbay and Edwin Encarnacion while allowing just one run. Romero is now 10-7 with a 3.43 ERA and 1.27 WHIP on the season, thus giving his owners a tidy profit on his low off-season ADP."

Sounds like a pretty impressive start. Not only did Romero shut down the Angels through seven, but he retired Overbay and Encarnacion to boot. Interesting choice by Gaston, leaving Romero on the mound to face the Jays in the fourth. Or maybe the Angels are paying part of the $30.1M owed to Ricky?

Hey, I'm on your side, I was just echoing the opinion at the beginning of the comment -- I definitely don't disagree. On the flip side, things haven't gone as badly as some state but a royal hosing and coming out even is hardly a ringing endorsement of the strategy. Heck, Lind/Hill contracts have to play out. Things could seem a lot worse in the future. Then there's Rios' contract...

I think teams breaking even is probably the most common outcome with these sorts of contracts. That's why I brought up the issue of cost certainty... there are reasons why teams keep locking up their players. Cost certainty is probably one. Another is that a team that has developed a play has mountain of data on them and that when signing a FA they wouldn't have, everything from health, personality, willingness to be coached, to something as nebulous as an opinion of their potential to grow as a player during the coming years. Romero probably rates well in the Jays' opinion on all of these factors.

I'd also be happy if Snider, Morrow and Escobar all got deals in the near future. Also, the more team options the better. What makes me happy about Romero's deal and offsets the over-payment at the start is the team option. That could be an absolute steal and where quite a bit of the surplus value on the contract could come in.

The only way you hate this deal is if your position is that one should NEVER sign a pitcher to a multi-year deal.

Whie I wouldn't go so far as to say never, I wouldn't do it unless it was going to a proven young elite pitcher. Even in this type of scenario, I would be nervous handing out a 5 year contract. The team basically carries all the risk in these types of deals with little upside.

On the flip side, things haven't gone as badly as some state but a royal hosing and coming out even is hardly a ringing endorsement of the strategy. Heck, Lind/Hill contracts have to play out. Things could seem a lot worse in the future. Then there's Rios' contract...

but that doesn't acknowledge the money saved on Doc.
And dumping the Rios contract doesn't mean he didn't give back as much value as he was getting paid. That was the counter-gamble, i.e. Beeston chose to gamble that Rios WON'T be a $12 million value guy when he gets to that pay grade.
THAT might end up being the bad gamble, rather than the original deal.

Even in this type of scenario, I would be nervous handing out a 5 year contract. The team basically carries all the risk in these types of deals with little upside.

Not so. If Romero even gets close to the Santana comparisons, the Jays will be paying him not much more than half the market for him in '14-'16 (collectively)

That's the risk Romero incurs in this deal.

I think for the Jays we need to divide the fangraphs values by roughly half to determine whether it's a good value or not. If the goal is 95 wins, what kind of payroll is Rogers going to budget to that end? If a replacement level team is assumed to win about 48 games, we need another 47 to expect 95. Fangraphs seems to be calibrated for about $4MM / WAR this season, which would make for a $188MM payroll. So if that's the value metric we are judging our contracts by we'd better hope that ownership is willing to reach deep into their pockets.

In any case, I'm not sure this contract should be evaluated solely in terms of some distribution of projected marginal wins divided by salary. There may be additional benefit provided to the Jays in terms of the optics of having a young core locked up, in avoiding difficult contract negotiations every winter through the arb years, etc. Perhaps negotiations with draft picks and latin american signings get easier if the team is known to be one that treats its young players well.

Seems the Jays under AA are doing the old Cleveland route.

For those of you too young, back in the 80's Cleveland had a horrid team and under 10k per game. Then a few young kids came up and looked extremely good. So around the time the Jays won their last WS they signed a batch of them. Looking at their 1993-1996 rosters (the early years of their peak) it probably included Sandy Alomar (CA), Albert Belle (LF), Carlos Baerga (2B), Kenny Lofton (CF), Jim Thome (1B), Manny Ramirez (RF), Chad Ogea (SP) and Charles Nagy (SP). Sadly I cannot find confirmation on it outside of seeing salaries in B-R that suggest a long term deal was probably signed.

For the most part it worked, but it took a killer quality team at the start for it. Still, without those deals it is a safe bet Cleveland would've collapsed a lot earlier than it did.

Now the Jays have Hill (2B), Lind (DH), and Romero (SP) signed long term. Wells is a different case as he was signed at the free agency stage, his earlier deal fit the current pattern. Lind I was worried about as he is limited in ability to shift position or save the contract with strong fielding (unlike Hill). Snider & Escobar would make sense to sign long term on the surface as both have the ability to be all-stars and Snider is still at the super-cheap stage while Escobar is just about to enter arbitration this winter with free agency post-2013 so he'd be a bit tougher to sign (5 years cover 2 years of FA and gets his age 28-32 seasons). The bigger questions hit in the rotation - do you sign Morrow long term (first year doing well as a starter, same arbitration/free agency as Escobar)? Do you sign Cecil (very long time until free agency)? I think it depends what each demands and how you project them out.

Me? I'd see what Snider & Escobar want, maybe offer Snider $20-$25 over 5 with 2 team option years at $10 per year (too low overall, but if he goes for it why not), Escobar would be more like $20-25 over 3 with 2 option years at $10-12 per year thus buying out a couple years of free agency. Morrow - ugh, I'd hate to estimate him as his range is so wide right now it is crazy.

Divide FanGraphs in half? Pretty drastic shift. Lets see what happens...

Wells (1) - paid - $14.7; value - $60.5/2 = $30.25
Wells (2): paid - $40; value - $18 (so far)/2 = $9
Hinske: paid - $10; value - about $8.2/2 = $4.1
Hill: paid - $7.8; value - $22.4 (so far) /2 = $11.2
Rios: about $7.25; value - $25.4/2 = $12.7
Halladay(1): paid - $42; value - $69.1 / 2 = $34.5
Halladay(2): paid - $40 (correction); value $66.5 / 2 = $33.25
Overbay: paid - $21; value - $24.5 (so far) = $12.25
Downs: paid - ~$8.75; value - $14.9 (so far) = $7.45

total spent: $191.5 million (approx)
Total value received: $319.2 million / 2 = $159.6

So gain/loss...
Wells: (1) +$15.55 (2) -$31
Hinske: -$5.9
Hill: +$3.4
Rios: +$5.45
Halladay: (1) -$7.5 (2) -$6.75
Overbay: -$8.75
Downs: -$1.1

Wow is that a tough standard to reach. But it is interesting to see when it was reached - with those who signed while pre-arbiration (Wells (1), Hill, Rios vs the one bad in Hinske). Those 4 work out to a net positive of $18.5 million despite Hinske and despite cutting Fangraphs value in half. Of note: Halladay also signed a long term deal pre-2000 for 3 years (no idea why Ash did that one as it was too short to cover Halladay's likely expensive period) which worked out to $3.7 million for $20.3 million (2002) plus 4.2 WAR at an unknown rate (at least $10 one would guess) - even cutting it by 50% you still get a killer deal and it includes his nightmare 2000 and his rehab in early 2001.

Basically what this tells me is that teams DO need to use 1/2 value for their long term deals as that allows the big 'woohoo' deals (Wells #1 and Halladay pre-1). The free agency years seem to need an adjustment factor of 2/3 or 3/4 rather than 1/2 to make sense though otherwise even deals that appear fantastic (Halladay #1/2) don't work out. Overbay is a bit of a misfit here though as he was just done one year of arbitration.

At 2/3 for free agency/near FA...
Halladay: (1) $46.07 value = +$4.07, (2) $44.33 value = +$4.33
Overbay: $16.33 value = -$4.67
Downs: $9.93 value = +$1.18
Wells: (2) $12 value = -$28

Makes more sense eh? Halladay worth a mil or so more a year, Downs a bit of a bonus, Wells & Overbay net losses.

At 3/4 for free agency/near FA...
Halladay: (1) $51.83 value = +$9.83 (4 years) (2) $49.88 value = +$9.88 (3 years)
Overbay: $18.38 value = -$2.63 (4 years)
Downs: $11.18 value = +$2.43 (3 years)
Wells: (2) $13.5 value = -$26.5 (3 years so far)

This fits even better imo - Halladay worth (over 7 years) about $2.8 bonus a year, Overbay's lost year shifting from positive to negative but otherwise would've been a bargain, Downs worth just shy of $1 mil more a year, Wells...er...yeah.

Net via 75% = -$7 million over 17 player years = net loss of $412,765 a year or the price of one pre-arb rookie. And that is due to one UUUUGLY contract which was pretty much forced by a president who was more of a salesman than anything.

Lesson to learn? The best time to sign a guy is pre-arbitration but do so at a 50% discount. Next best is at free agency level but use 75% or less as your margin. And never sign a contract anticipating an increase in average salary as you will get burned (Wells was at a peak for salary - a few others in that year were poor too).

Just double checked service time when signed...
Wells (1) = pre-arb
Wells (2) = last year pre-free agent
Hinske = pre-arb
Hill = last pre-arb
Rios = 2nd year of arbitration

Note that the one dumped was well into arbitration ala Overbay.

Simple question.  Is it simply assumed that salaries will continue to escalate every year?  Hence costs?  At what price do people simply stop attending a sport?  Then, when teams are almost wholly dependent upon TV revenues, etc., what happens?

Baseball revenue has always climbed and rarely slows strangely enough. But salaries have slowed drastically in the last decade. No one (outside of some pro-rated Clemens one year contracts) has reached A-Rod's $250 / 10 year contract per season level yet. Few $20 million contracts exist even though they were first signed in 2001. A total of 11 have been signed, 2 starting in 2001 (A-Rod & ManRam) then nothing until Clemens in 2006 & 2007 [pro-rated so not actual dollars], then Santana & A-Rod in 2008 finally breaking through (for real).

For a contract that will haunt a team look no further than Ryan Howard getting $25 per year for 2012-2016 - almost as much in raw dollars as Vernon's except over fewer years.

To get an idea on service time and how it affects contracts check this page to see contracts by service time (near bottom).

I would argue Howard's contract is worse that VW's.
1. He doesn't play an elite position,
2. Salaries are down (VW signed at an all time peak), especially for sluggers,
3. Have you seen his FA class AND 1B is set at most rich teams,
4. They gave him a 23m option w/ a 10m buyout for his age 37 season.

No one (outside of some pro-rated Clemens one year contracts) has reached A-Rod's $250 / 10 year contract per season level yet.

Except, of course, A-Rod's $275M / 10-year contract

Except, of course, A-Rod's $275M / 10-year contract

Didn't he opt our of his contract thinking he was going to get $350m?

Well, Boras may have floated that number...

Simple question.  Is it simply assumed that salaries will continue to escalate every year?  Hence costs?  At what price do people simply stop attending a sport?  Then, when teams are almost wholly dependent upon TV revenues, etc., what happens?

EVERY year? No.

There have been a FEW reversals in the past 16 years 2 noteable ones and a very small one the first year after the first of those)

but over the course of any given five year stretch? Yes, steady and reasonably predictable escelation.

when I have more time i'll try to find my previous work.

Mind you, this was based on the average salary, not on the ceiling established by the A-Rod's of the world.

IMO, the ceiling isn't predictive, but the average is.


that said, IS there a point at which teams can't afford that increase? in theory. but we've seen no real sign they are up against it.