I Was Wrong in Guess on Lincecum's Long-term Contract Size; Phillies Was Wrong Too
And reading up on that win (in particular, an article from ESPN, which is here), I would venture that the Phillies should have fired whoever did that blunder, as it was probably a $2.5M mistake that costed the rest of the MLB teams as now that is the new precedence.
If this is not another horrific example of why the arbitration system sucks, I don't know what is.
The arbitration win was for $10M for Howard versus the $7M offer by the team, and the arbitrator ignored (rightly) the arguments the Phillies gave that justified that offer and probably trumped them by noting that Miguel Cabrera, just the year before, got $7.4M in arbitration. The ESPN author, Jayson Stark, noted a source who said that had the Phillies offered more, then the arbitrator might have gone with their number, but they could not see giving Howard less than what Cabrera got the year before, which the Phillies arbitration expert should have known (and which, if I'm right, is ironic, because the Phillies gave that expert, who I believe is Amaro Jr., a promotion to GM just after the World Series win).
Giants Screwed by Phillies Blunder
Now that's water under the bridge (or spilt milk) for the rest of the MLB to work against. And that is the mess we are left with as Giants fans.
Sidenote, this is kind of like how the Giants (i.e. Colletti) screwed up the Pierzynski arbitration offer. Even I knew that the going expected "price" would be at least $2.5-3.0M for A.J. but for some reason the Giants (i.e. Colletti) offered $2.25M while Pierzynski asked for $3.5M and won because the Giants were off by that much. That's how the arbitration system works, it doesn't matter how outlandish the players offer is, but hinges on whether the team's offer is fair or not. If it is not fair, the outlandish wins, but if it is fair or over-priced, the team "win" but basically the players' salary in general can never go down in arbitration, but can go really up. Stupid system, whoever created that system should be the Baseball Hall of Shame.
How Much for the Lincecum In the Window
So Roger is totally right, Howard's award makes my guess wholely not in the ballpark. And Lincecum is comparable, both are doing things that younger players don't do, though Howard's is historic versus Lincecum's "merely" doing things that are rarely done.
To get an idea of the ratio from hitter to pitcher, luckily last year the two top got contracts, A-Rod and Johan Santana. A-Rod got $27.5M per year whereas Johan got $22.9M, which is roughly 83%. With Howard getting $10M, that would put Lincecum at $8.3M to start, under the assumption that the contract would begin with his first year in arbitration, which I assume would be next off-season when he should be a Super-2 eligible player, leaving four years of arbitration control by the Giants.
Then you got the salary inflation of 10% that has ruled the market since the last market crash, which from a base of $8.3M would lead to a four year contract totalling $38.5M. So Lincecum's agents are probably looking at a contract in the $35-40M range to cover those 4 years under the above assumptions.
However, those are assumptions that Lincecum's agents will be using, and one could argue that a young pitcher like Lincecum is more risky than a pitcher with proven durability like Santana, both in terms of injury and performance. I think around 20% is probably a fair enough discount to account for that risk, dropping the contract to the $28-32M range, or about $30M.
There is also still the matter of 2009, when he is still under Giants control, so I could see the Giants offering to shift some of the dollars forward, so that he gets more money in 2009 than later, but still offer the same total amount, as there is still value in that and he normally would be getting maybe $750K for 2009 anyway, not that much compared to the total value of the contract. At least, that is the way I would approach it if I were the Giants.
Super Lincecum?
Per Roger's comment about going year to year, I think that was more a negotiating ploy to buy more time than their thinking that Lincecum was Superman and injury free. I think Lincecum's agents are aware of the risk of injury to young pitchers. I think what they were doing was stalling to get one full season under Lincecum's belt to boost their case for a larger contract.
Based on what Lincecum did overall in 2007, the Giants could and probably did argue that a contract similar to Cain and Lowry would be the proper starting point. The best way for the agents to put the kibosh on any talks would be to say "NO" to any talk of long-term contract and make it clear to the Giants to not to bother to negotiate. They were probably afraid the Giants will throw some big numbers Lincecum's way and he would not be able to resist.
But as I noted in various posts (and analyzed in one), Lincecum was sub-3 ERA (2.96 ERA to be exact) after his brief bout with pitching poorly in 2007. He obviously would be paid a heck of a lot more if he had a sub-3 ERA to offer than the 4.00 ERA that he had in 2007. So their plan was probably to roll the dice on 2008, thinking that he could reduplicate what he did in the latter part of 2007 plus stay injury free, never thinking that he could put together a Cy Young type of year.
That would explain the sudden turn-around in attitude on the part of Lincecum's agents regarding the long-term contract. If they really thought that he would be injury-free, then why not go into arbitration each year, as you either end up with a fair contract or an outrageous contract, it is a no-lose situation for a player (which explains why some teams try to avoid arbitration at all costs, like the Giants have done since Sabean took over as GM). Instead, they basically opened up immediately about their availability for negotiating a long-term contract.
Thus, I think they planned this, so that Lincecum could have a great season and put himself in line for a great contract based on that great season and not base on his mixed results in his first season, as he was learning to pitch in the majors. And it worked beyond their wildest dreams. Plus Howard's arbitration win also brought them untold millions as well.
And just thinking about it, for 2008, they were risking maybe $10M by waiting but now they are risking about $30M should they keep to their stance of going year by year. Not that $10M is not a huge sum, but it is similar to Lincecum giving up on six figures the year before with the Indians, before getting $2M from the Giants. He probably looked at the big picture: even before the Howard decision and the Cy Young, he probably would have been looking at least $20M if he had a year like he did in the latter half of 2007. So they were risking $10M in hopes of landing $20M after 2008.
With his $2M bonus, Lincecum, while not set for life, could take the gamble on pitching well and injury free in 2008. And that is what they bet on, 2008, not on every year, the way I see it. And obviously, they won the jackpot and now has to reel it in and get a nice big contract from the Giants.
http://www.nj.com/yankees/index.ssf/2008/11/giants_to_enter_sabathia_sweep.html
ReplyDeletei do not like the looks of this
Wow, that's quite a surprise. Thanks for the heads up.
ReplyDeleteWell, that would certainly make a contender out of the Giants in 2009 if they could land Sabathia and Furcal.
I don't care for it if it means trading off Cain, as many have speculated, as obtaining Sabathia could free the Giants to trade off Cain for power up in the middle of the lineup.
But if the Giants get Sabathia for the purpose of freeing a pitcher to trade, I would have to think that Lincecum could also become available too, under that scenario, as he could be enough to swing getting a big young bat in the middle of the lineup, whereas Cain probably would not draw such a bounty in trade.
I would absolutely not be for trading either Cain or Lincecum, but that could be a possibility if Sabathia is signed.
Hopefully, if this is truly what the Giants are doing, they keep everyone and have a monster rotation of Sabathia, Lincecum, Cain, Zito, and Sanchez. With a rotation like that, even the offense of last season would be good enough to be a pennant contending and if Sandoval is the real thing, could be enough to win the division.
Removing the other starters and adding Sabathia's 2007 stats results in a team ERA of 3.82 for the Giants (obviously better if you use his 2008 stats). Add on about 0.2 for unearned runs brings us to 4.0 runs per game. The team scored 4.0 runs per game in Aug/Sept and adding Furcal would push us above that. That's an above .500 team.
Who knows, this could be part of Neukom's envisioning increasing payroll in the future and would not preclude signing up Lincecum and Cain into their free agent years, which would be my worry if Sabathia is signed.
It could also lead the Giants to move Bumgarner and Alderson slowly up the system, and by the time they are ready to join the team, the team could have moved both Sanchez and Zito by then, opening two spots for a rotation of Sabathia, Lincecum, Cain, Bumgarner, and Alderson.
For example, Bumgarner moving up one level per year would mean reaching the majors in 2011-2, when Zito only has 2-3 years on his contract, which would be much easier to move at that point.
I think the Giants realize what they got in Lincecum and Cain PLUS realize that many fans have bonded with the two as Giants players, that they are fan favorites, and thus if they are serious about signing Sabathia, then they are going for creating a monster starting rotation and not, as some fans had speculated, to enable trading of a starting pitcher.
Think of how the Giants would do in the playoffs with a rotation headed by Sabathia, Lincecum, and Cain plus Zito and maybe even Sanchez if he is lights out enough. If that is not enough to plow through the playoffs, I don't know what is.
Obviously, even if we do get Sabathia and Furcal, 2009 is probably still a transition year - a year of being competitive but not necessarily contending - unless the young players develop as we hope and not as we expect.
However, by then more salary would be opened up and enable signing a big hitter, should we still need one, and 2010 would be the year we start going for it again with a rotation of Sabathia, Lincecum, Cain, Zito, and Sanchez.
I feel myself getting excited by this news!
I should also add that the 3.82 ERA is a scenario based on Sabathia pitching like he did in 2007, Lincecum, Cain, Zito, and Sanchez in 2008 overall. It would be improved by:
ReplyDelete* Sabathia pitching like he did in 2008
* Zito pitching like he did in the latter part of 2008 for the whole of 2009
* Sanchez pitching like he did for over half the 2008 season for the whole of 2009
Those could push the ERA down another 0.2-0.3. That would push the team wins to the high 80's from .500 or so, if the team only scored 4.0 runs per game.
I start to get giddy when I think about Lincecum-CC-Cain-Zito-Sanchez as a real possibility for next year. And I think one of the least talked-about features of signing CC is that come trade deadline, a veteran power hitter or veteran reliever would be willing to waive their no-trade clauses to come here. Similarly, free agents will want to come to beautiful SF where we have built a team predicated around godly pitching and where their power bat is the last piece to the puzzle.
ReplyDeleteIt works out almost perfectly pitching-wise. We would have a minimum of 1 year to bolster Sanchez's and/or Cain's value(s). No matter how you look at it we would have to trade either both of them or at least one of them. With so much money tied up in starting pitching in the near future (Tim/CC/Zito), it would be impossible to keep both Cain and Sanchez long-term. That is why Bumgarner and Alderson are so crucial. They are top quality prospects that, if un-rushed, will fill the void almost seamlessly while not heavily impacting the budget until the tail end of the mammoth contracts.
Meanwhile ANY talented arms are filtered directly into the bullpen so that the bullpen stays cheap while effective for the near future. Lowry is a team-player...maybe he can fit into a long-relief role so there is no pressure on a hurried return. That would buy us some time to trade Sanchez and Pucetas could start the year in AAA.
Here is what I posted at Extra Baggs at his CC post, plus a few new thoughts and transitions:
ReplyDeleteOne thing that caught my attention here was CC’s interest in getting more than Santana annually, who got $22.9M per. CC will only be 28 next season. So, as BigWig notes, a shorter but higher annual could work: 5 years plus option, maybe two, vesting based on IP over the previous 3 years, at say $26M would be $130M plus maybe a $8M buyout for a total of $138M. He would still be only 32 his last season with us, with options for 33 and 34.
I think the only way this would work is to NOT trade any of the pitchers this off-season but do trade either Winn or Rowand. I still say Lincecum and Cain are untouchable. With a rotation of Sabathia, Lincecum, Cain, Zito, Sanchez, when they are all on the top of their game, we will be willing a lot of 3-2, 4-3 games, even with our offense, which was averaging 4.0 runs at year end. 2009 should still be a rebuilding year even with Sabathia, unless the young guys come through.
The hope then for 2009 is that we learn which young guys are keepers/contributors for 2010 and beyond. In particular, hopefully Sanchez can put together a full season of his roughly first half of 2008 when he was as dominating as Lincecum or Cain, and that would be a trading chip that would get us the middle of lineup hitter we need after the 2009 season ends. Sanchez should have three years of arbitration control, or even better maybe the Giants could even sign him now to a $9M contract to cover the next 4 seasons, to make him low cost too. Think something like the Volquez trade.
In addition, losing Molina, Roberts, Winn off the roster would open up more cash for signing another veteran hitter next off-season to go with this hitter we get for Sanchez.
Here is my comment at El Lefty Malo, http://www.leftymalo.com/2008/11/cc_you_real_soon.php, post on CC:
ReplyDeleteThanks for the info on the park costs; I thought it was $20M per year to 2018. Even at $18M, should end around 2018 still.
Seems right. $18M for 20 years to 2018 with $170M debt implies 8.5% interest rate or IRR. Also, remember, interest paid results in taxes saved on revenues too, though declining over time as more principal is covered in each payment.
The key to making this work is that Neukom has publicly stated that, basically, money is no object given the right plan presented to him. He should not have much more Microsoft millions to stoke the Giants fire, but he should have a rolodex of Hi-Tech buddies who he have met over the years and talked with him about his ownership interest in the Giants and expressed interest in some way. He could start cold-calling them when the team needs more money.
The key is to add new investors who can help pay for the new players, that is the model that got the D-backs their World Series championship, that is the model that brings them back to competitiveness after nearly going bankrupt with their original financing plan (they basically bought their title). I want someone to buy the Giants a title.
The Comcast money helps too. (ELM quotes Extra Baggs noting that Giants have money from Comcast deal socked away).
With a rotation of Sabathia, Lincecum, Cain, Zito, and Sanchez (then Alderson, then Bumgarner), our rotation would be a juggernaut per my hypothesis that having a dominating rotation is the way to playoff success (my examples being Unit/Schilling for D-backs, Koufax/Drysdale for Dodgers).
Or for an olden day example applicable for the Giants, there was Christy Mathewson single-handedly winning the Giants the 1905 World Series. While those days of single pitcher taking over are over, if we can have two aces, that could duplicate it.
Adding a third ace in Sabathia would push that up exponentially, I believe. And if Sanchez can pitch like an ace again, the more the merrier for us in the playoffs.
People cry about offense, but it goes both ways. If we have a rotation which can keep scoring under 4.0 runs per game (ERA without #5 in 2008 was 4.00 basically; with Sabathia's 2007, around 3.82 ERA), our offense in 2008, even with all the experimentation, scored 4.0 runs per game. That's over .500 right there.
Our offense should be even better in 2009 because Burriss or SS FA would beat Bocock/Vizquel, our 1B couldn't get worse, OF should be same or better if Rowand hits like he can, and Sandoval could not be worse than Castillo at 3B, and should be better. Plus, imagine how well Lewis could play with a healthy bunion!
And as I noted on my blog, Lincecum and Cain probably lost at least 10 wins that they had left to the bullpen, saving 8 of those 10 lost wins would bring us close to .500 right there, the team was very close to .500 in 2008, just by tweaking the bullpen.
In all, given the lack of plus hitters likely to join us, getting Sabathia would still improve the team's RA greatly and people forget that the two ways to win is to either improve RS or to reduce RA. Getting CC would reduce RA greatly.
Are you crazy? there is no way that Tiny Tim signs a 4 year deal worth 30 million. That’s half of what his worth is. I don't quite follow your logic of how Johan’s contract value vs. A-Rod contract is relevant. 1st more than likely CC will sign a contract worth more than Johan’s, so that whole 80% is out the window, and second Howard’s contract compared to other 1st baseman (not named Giambi) with similar numbers1/3 less (Todd Helton and Jim Thome 16 million) so Howard’s contract, I think, is fair. If you look at pitchers similar to Timmy some are all making close to or more than15 million a year. So why would Timmy sign a 8 million/year contract for his arbitration years when he is guaranteed close to that amount his first time up. And if he can build of this year and repeat these results, year after year who knows how much he will get. Bottom line, the giants pay him this year a little less than Cain (to show respect for Cain’s seniority, but also to show appreciation for Tim). And if Tim dominates again next year he will probably go to arbitration unless the Giants give him a 10 million/year plus contract. And if he doesn’t dominate he will probably take arbitration until he dominates again.
ReplyDeleteCan I also just say that I hate how all the rumors just assume that the Yanks can sign anyone and everyone and can trade for anyone and everyone!!!! Personally, living in Philly, I would love to see the Yankees get Cameron, I mean he sucks! I would also love to see K-Rod with Mets, that would be entertaining when the Mets come to town, I go to about 20-30 games a year and the Phillies are a phun team to watch and to see them beat up on the Mets, shinning accomplish would be awesome!!!
Hater, you are comparing a number of players who are not arbitration eligible, there is usually a pretty steep discount involved when you are still under control by your team. You need to compare him with other arbitration awards in the past.
ReplyDeleteSo, no, I'm not crazy. I may be off with my logic, please feel free to correct it once you grasp what I say just above about how you properly compare salaries for ARBITRATION eligible players.
Yes, he could build it up year after year. Or he could be like Mark "the Bird" Fidrych, or more recent examples, Mark Prior and Kerry Wood, and blow out his arm and is never effective again. Meaning he gets zero.
Or you never know, you could be crossing the street and a crazed NY driver could run him over. Again, he gets zero.
So the impetus to signing a contract of the size I mentioned hinges on what he can logically expect going forward relative to the risks inherent with throwing a baseball violently in a motion that the human body is not meant to handle.
The Yankees pretty much can sign anyone they want - if they wanted to. They can make $100M in contract mistakes and still spend as much as any other team.
Now, some players will have local agendas that will affect their decision. Like Carlos Lee wanting to be in Houston near his ranch. Thus he didn't even bother to see what the Giants were willing to offer him, even though they said they were ready to up their offer, once he got what he was hoping to get from the Astros.
But for most players, if the Yankees outbid other teams by a significant amount, it will be hard to turn down the money, almost every player will have his price at which he'll decide, "you know, it wouldn't be that bad to live and play in NY for that money".
Yeah, the Phillies are a fun team, lots of great players. And I wouldn't mind seeing the Yankees and Mets and LA teams sign overpriced free agents, like Pavano , Andruw, Mathews Jr.