Sunday, December 21, 2008
JOHN HENRY DOES NOT BLUFF
“We met with Mr. Teixeira and were very much impressed with him,” Sox principal owner John Henry wrote in an e-mail to media members. After hearing about his other offers, however, it seems clear that we are not going to be a factor.”
Henry’s statement should not be construed as a bluff. As I said back at the end of October,
“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... Theo and the Trio make rational decisions and signing T-Rex would be just the opposite.”
Let me expand…
From 2009 to 2011, a T-Rex acquisition and subsequent trade of Lowell COULD equal out or even slightly benefit the Sox. But when the $160+ million first baseman is entering his age 32 season, Teixeira’s forecast becomes more volatile.
Below is a summary of Teixeira’s top ten comparable hitters through the age of 28 in order from most to least.
1) Carlos Delagdo has had mostly above average to MVP type years after his age 31 season. He has been up-and-down.
2) Kent Hrbek was above average from age 31-33 with his last season being an average hitter at 99 OPS+.
3) Fred McGriff was average to good after the age of 30. Like Delagdo, he was inconsistent from year to year.
4) Other than Jim Thome’s lost season and last year at the age of 37, he has been the model of a very good and consistent hitter posting OPS+ of 144 to 155 from the age of 32.
5) Will “The Thrill” Clark was an above average from the age of 32 to 35.
6) Jeff Bagwell produced an OPS+ of 152 in his age 32 season, and then 139, 135, 128, and 115.
7) The only old-timer and HOFer, Willie McCovey, was up-and-down after the age of 32 season. It would seem McCovey was sick in 1970, his age 32 year, hitting 289/444/612 and an OPS+ 181.
8) Richie Sexson has flopped since his age 30 season when he produced a 144 OPS+.
9) Shawn Green has been an average hitter since the age of 29.
10) Paul Konerko has declined since his age 30 season in 2006 going from a 134 OPS+ to 102 last year.
If we use Teixeira’s comparables as a guide for his projection, then we can conclude one of two routes: 1) He could have up-down above average to very good years through his age 33-36 season like Delgado, McGriff, Clark, and McCovey, or 2) Teixeira could steadily decline similar to Hrbek, Bagwell, Sexson, Green, Konerko. Since Thome is a positive outlier and group 1 has a slightly higher average similarity score, Teixeira having up-down above average to very good seasons in his mid-30’s is slightly better than a coin flip. Regardless, Teixeira from age 33-36 is a big gamble. He could decline each season and become a roster albatross or be an average-to-very good first baseman from year-to-year.
This type of forecast in the last half of a long-term deal is not unusual. Teixeira is a typical very good corner slugger. He is not historically odd and great like Alex Rodriguez or to a lesser extent, Albert Pujols (who will be a free agent after the 2011 season). With these super freaks an exception to objective analysis could be rationally made, since the above production forecast is highly variable due to few good comparable players. For comparison purposes, Teixeira’s top ten ranged from 935-899, Mike Lowell’s 923-895 and A-Hole’s 775-638.
With long-term deals, the projected gains in the first few seasons should offset the riskier production and cloudier revenue and team forecasts in the later part of the agreement. The first three years of a potential T-Rex contract is unlikely to gain a ROI large enough to offset the risk after the age of 33. Hence, Henry and the Sox are making the right decision.
“We met with Mr. Teixeira and were very much impressed with him,” Sox principal owner John Henry wrote in an e-mail to media members. After hearing about his other offers, however, it seems clear that we are not going to be a factor.”
Henry’s statement should not be construed as a bluff. As I said back at the end of October,
“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... Theo and the Trio make rational decisions and signing T-Rex would be just the opposite.”
Let me expand…
From 2009 to 2011, a T-Rex acquisition and subsequent trade of Lowell COULD equal out or even slightly benefit the Sox. But when the $160+ million first baseman is entering his age 32 season, Teixeira’s forecast becomes more volatile.
Below is a summary of Teixeira’s top ten comparable hitters through the age of 28 in order from most to least.
1) Carlos Delagdo has had mostly above average to MVP type years after his age 31 season. He has been up-and-down.
2) Kent Hrbek was above average from age 31-33 with his last season being an average hitter at 99 OPS+.
3) Fred McGriff was average to good after the age of 30. Like Delagdo, he was inconsistent from year to year.
4) Other than Jim Thome’s lost season and last year at the age of 37, he has been the model of a very good and consistent hitter posting OPS+ of 144 to 155 from the age of 32.
5) Will “The Thrill” Clark was an above average from the age of 32 to 35.
6) Jeff Bagwell produced an OPS+ of 152 in his age 32 season, and then 139, 135, 128, and 115.
7) The only old-timer and HOFer, Willie McCovey, was up-and-down after the age of 32 season. It would seem McCovey was sick in 1970, his age 32 year, hitting 289/444/612 and an OPS+ 181.
8) Richie Sexson has flopped since his age 30 season when he produced a 144 OPS+.
9) Shawn Green has been an average hitter since the age of 29.
10) Paul Konerko has declined since his age 30 season in 2006 going from a 134 OPS+ to 102 last year.
If we use Teixeira’s comparables as a guide for his projection, then we can conclude one of two routes: 1) He could have up-down above average to very good years through his age 33-36 season like Delgado, McGriff, Clark, and McCovey, or 2) Teixeira could steadily decline similar to Hrbek, Bagwell, Sexson, Green, Konerko. Since Thome is a positive outlier and group 1 has a slightly higher average similarity score, Teixeira having up-down above average to very good seasons in his mid-30’s is slightly better than a coin flip. Regardless, Teixeira from age 33-36 is a big gamble. He could decline each season and become a roster albatross or be an average-to-very good first baseman from year-to-year.
This type of forecast in the last half of a long-term deal is not unusual. Teixeira is a typical very good corner slugger. He is not historically odd and great like Alex Rodriguez or to a lesser extent, Albert Pujols (who will be a free agent after the 2011 season). With these super freaks an exception to objective analysis could be rationally made, since the above production forecast is highly variable due to few good comparable players. For comparison purposes, Teixeira’s top ten ranged from 935-899, Mike Lowell’s 923-895 and A-Hole’s 775-638.
With long-term deals, the projected gains in the first few seasons should offset the riskier production and cloudier revenue and team forecasts in the later part of the agreement. The first three years of a potential T-Rex contract is unlikely to gain a ROI large enough to offset the risk after the age of 33. Hence, Henry and the Sox are making the right decision.
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Thank you - Red Sox!
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