Monday, October 27, 2008
Mark Teixeira would be a two win improvement over Mike Lowell. And no two 2009 Red Sox wins is worth $20 million. (The player forecast is based on finding a weighted average of runs created over the last three seasons for each player, translating that into team runs scored and finding the impact of those additional team runs by using Bill James Pythagorean formula to measure winning percentage - if you want the calculation leave me a message in the comments section.) The notion that Teixeira is insurance against a decline of David Ortiz or whomever is not reasonable. No one purchases a 40-inch HDTV just in case your 38-inch boob tube in the living room and the 20-inch in the bedroom goes on the fritz. If T-Rex comes to N.E., then someone sits or goes.
As I’ve said before, the Sox have essentially maxed out every major baseball related revenue source. The only probable variable revenue stream is the selling of advertising on NESN. Even for the leading regional sports network, a slow economy will decrease demand for ad time and put downward pressure on NESN’s current rates, which are some of the highest in the market. Hence, the analysis is essentially a comparison of cost, as will be the case going forward this winter since demand in 2009 is unlikely to fall off.
If the Sox did sign Teixeira, who I love as a hitter and should be leaving the Sox after six years, they could trade Lowell. Unfortunately, the return will be small given his contract, coming off an injury, age and likely loss of leverage with the inking of Teixeira. If the Sox find a team to take on all of Lowell’s salary of $12 million, they would need to net a prospect(s) worth around $8 million. The above scenario seems unlikely.
The Olde Towne Team does have the financial flexibility with sunk cost (Schilling, Timlin, etc. contracts) coming off the books to justify the deal this year and next, but the length of a Teixeira contract - probably seven plus years - is an issue. It would limit the Sox ability to offer an eight figure deal to a player in the future that would be more of an organizational need - think Joe Mauer. The opportunity cost of allocating at least $140M over seven years to an All-Star first baseman is not prudent when you have other more cost effective alternatives. As we know, Lowell is in the fold though 2010, Lars Anderson is a highly touted prospect possibly ready when Lowell‘s contract expires, and productive first baseman are typically easy to find each winter as a plan B.
The small upgrade over Lowell, the lack of incremental revenue streams, the presence of options with more value in the short and long-term, and the loss of financial flexibility thereby limiting future more pressing acquisitions makes a Sox signing of Teixeira highly unlikely (in general, the same can be said for the rumored possible acquisitions Matt Holliday and Garrett Atkins). Theo and the Trio make rational decisions and signing T-Rex would be just the opposite.