Thursday, June 19, 2008

Let the Negotiations Begin!

It has been reported that Tim Beckham, the first pick overall received $6.15M bonus from the Rays. I don't know why Rosenthal says that Top Picks that are High School players typically get less than college players, it has always been the rule of thumb that they get more because they have the leverage of going to college instead of signing with the drafting team. I have not heard this exception for top picks, but the example he gave certainly holds, David Price got $8.5M last year and Beckham "only" got $6.15M. Perhaps it has to do with college prospects being that much more developed and ready for the majors atop the draft.

Note: the $8.5M figure must be the total value including the fact that he signed a major league contract. According to my handy dandy Baseball America book, his bonus was "only" $5.6M, which was backloaded, and that would mean that the major league contract included $2.9M in salary. And that technically means that Beckham got more bonus than Price received, though obviously a lesser contract in total dollars overall.

Now, how this applies to the Giants:

1) This is like the first domino falling, Alvarez and Hosmer might still take to the deadline, but Matusz and Buster Posey are not Boras clients and will base their demands relative to what Beckham got as the 1st pick. Matusz signing would give us another data point to calibrate against Posey. A lot of the waiting is often just waiting for the guy before you signing so that you don't leave any dollars on the table.

2) In addition, Posey was considered strongly for the #1 pick and thus this signing gives an indication of Posey's worth. Then again, Lincecum was also considered for the #1 pick but "settled" for something around what the #8 pick got.

Giants Thoughts

Many commenters seem to think that Posey would use Weiter's contract as a starting point but most comments I've seen comparing the two says that Weiter is clearly the better prospect. Many also based their analysis on the rumored $12M demand but, again, I think that was just a red herring that Posey's advisors did to push Posey to a team more ready to compete than the teams typically up top.

That said, I think Posey's advisors do want more than the $2.7M bonus or so slotted for the #5 pick. I am still comfortable with what I wrote before, that they will start negotiations in the $5-6M range and would be happy with something between $3.0M and $4.9M. That would put them comfortably around what the #2-#3 picks got last year, plus the Giants indicated that a major league contract would not be out of the question, so if you tack that on top, like Rosenthal did with Price, that would push the deal up to the $6-8M range, or similar to what the #1 pick got between this year and last year.

As I had linked in a previous post, Posey comes from very humble beginnings and I don't think that he is looking to get every dollar he can get, he just wants something fair, much like what Lincecum wanted.

Sidenote: Wouldn't it be cool if Posey wins the Golden Spike? That would give us two of the last three winners, as Lincecum won in 2006 (Price in 2007).

1 comment:

  1. Follow up with info from BA: http://www.baseballamerica.com/blog/draft/?p=379#more-379

    Both Beckham's and Upton's big contracts are spread over 5 years, rule for two-sport athletes, so the biggest up-front bonus ever is the $6M Wieters got last year. Posey is not a two sport so that won't happen.

    David Price's $5.6M? Heavily backloaded and the MLB calced its present value at only $4.8M.

    I guess that's because it's a MLB contract and so they can monkey around with when the money is paid. Perhaps that is why the Giants were willing to give Posey a MLB contract, so that they can spread the money around. Thus they could give him a big contract, but the present value could take a hit and push it down a lot.

    Now I can see Posey getting what Wieters got as a total contract value, but the present value will be down since Wieters got his upfront and the Giants will probably backload Posey.

    ReplyDelete

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