Thursday, January 29, 2009
ADAM DUNN A RED SOX - DON'T BET ON IT
Both Red Sox boston.com blogs have advocated signing Adam Dunn. As a stat-head, it is a requirement to like Dunn so El Guapo's Ghost is on the bandwagon too. With his price apparently coming down, Dunn would be nice lineup insurance for a number of hitters. But the outlook of each party would have to change before we see the slugger in Boston.
Dunn's camp would need to conclude that next year's sluggers market will have greater supply than this winter's. Carlos Delgado, Jason Bay, Rick Ankiel, Vlad, and Holliday are likely to be available. Bobby Abreu, Jason Giambi, Jermaine Dye and Mags Ordonez could join them as well. Teams could have more options next year, which should depress prices even if the economy improves. Of the potential free agent class next winter, Dunn is arguably the most one-dimensional player of the group, albeit incredibly consistent, at a time when the market appears to be shifting back to more athletic multi-tooled players. A two-year plus contract could be the best possible option for only a dual tool player.
For the Sox to have interest in Dunn, Bay inking an extension would have to be remote. Even though playing 81 games in front of the Monster decreases the defensive value of a Sox leftfielder, Bay is still a better player than the Big Donkey. Second, the Olde Towne Team would only want a leftfielder through 2010 and they think it is going to be tough to sign any of the other options above to only a one-year deal.
The above scenario is plausible, but the Sox would probably need to offer Dunn more than a Pat Burrell type contract - $18 million over two years. More realistic is that Dunn signs with one of the clubs that doesn’t get Manny.
Both Red Sox boston.com blogs have advocated signing Adam Dunn. As a stat-head, it is a requirement to like Dunn so El Guapo's Ghost is on the bandwagon too. With his price apparently coming down, Dunn would be nice lineup insurance for a number of hitters. But the outlook of each party would have to change before we see the slugger in Boston.
Dunn's camp would need to conclude that next year's sluggers market will have greater supply than this winter's. Carlos Delgado, Jason Bay, Rick Ankiel, Vlad, and Holliday are likely to be available. Bobby Abreu, Jason Giambi, Jermaine Dye and Mags Ordonez could join them as well. Teams could have more options next year, which should depress prices even if the economy improves. Of the potential free agent class next winter, Dunn is arguably the most one-dimensional player of the group, albeit incredibly consistent, at a time when the market appears to be shifting back to more athletic multi-tooled players. A two-year plus contract could be the best possible option for only a dual tool player.
For the Sox to have interest in Dunn, Bay inking an extension would have to be remote. Even though playing 81 games in front of the Monster decreases the defensive value of a Sox leftfielder, Bay is still a better player than the Big Donkey. Second, the Olde Towne Team would only want a leftfielder through 2010 and they think it is going to be tough to sign any of the other options above to only a one-year deal.
The above scenario is plausible, but the Sox would probably need to offer Dunn more than a Pat Burrell type contract - $18 million over two years. More realistic is that Dunn signs with one of the clubs that doesn’t get Manny.
Sunday, January 25, 2009
EVALUATING YOUK’S CONTRACT
Unlike the contract for Dustin Pedroia, the Sox are not getting a bargain by signing Kevin Youkilis. If you were a member of RSN living under a rock, the first or third baseman is getting a $41.125M four year contract with a $13M option or $1M buyout in 2013. The deal appears to be close to a 2006-2007 market deal for Youk.
The present value of Youk’s contract is approximately $38.44M (assuming the signing bonus is paid in 2009, the option buyout is paid in 2012 and 2% interest rate). If the option is exercised, the present value of the deal reaches $49.02M, but let’s focus on the guaranteed monies flowing to Youk.
Since the “Greek God of Walks” is still under the Olde Towne Team’s control for the next two seasons, his salary would be subject to arbitration. The basic rule to find compensation for arbitration eligible players is 40% of market value (MV) for first years, 60% of MV for second years and 80% of MV for third year eligible players. MV is determined by finding comparable players.
Youk is most comparable to Mike Lowell and Aramis Ramirez who are corner infielders that have signed free agent contracts over the last few winters. The average yearly present value of Lowell’s contract was $12.02M and $14.11M for Ramirez. The mean of both is $13.06M and 60% is $7.84M, 80% is $10.45M. All thing being constant, Youk could expect roughly $18.29M over the next two seasons, but those forecast earnings should be discounted due to the risk of injury, production declines, etc. 2009 was discounted at only 5%, which reduces Youk’s salary to $7.45M. 2010 was at 10% or $9.4M.
In 2011, KY would have become a free agent. If the market for free agents rebounds back to 2006-2007 levels, Youk would receive $13.06M. Again discounting the expected market value by 15% gives him a salary value of $11.10M. Since Youk would expect to attain at least a two-year contract, 2012 would be a guaranteed salary and would not need to be discounted. Following this logic, Youk would have the following salary values:
2009 - $7.45
2010 - $9.40
2011 - $11.10
2012 - $13.06
The present value of the above cash flows is $38.36M or roughly the same as Youk’s deal signed a few weeks ago. Since the Olde Towne Team owns Youk’s rights for two more seasons, he is on the wrong side of 30 and one has to question KY’s ability to move across the diamond in 2011 at the age of 32, the Sox should have gotten a larger discount.
Unlike the contract for Dustin Pedroia, the Sox are not getting a bargain by signing Kevin Youkilis. If you were a member of RSN living under a rock, the first or third baseman is getting a $41.125M four year contract with a $13M option or $1M buyout in 2013. The deal appears to be close to a 2006-2007 market deal for Youk.
The present value of Youk’s contract is approximately $38.44M (assuming the signing bonus is paid in 2009, the option buyout is paid in 2012 and 2% interest rate). If the option is exercised, the present value of the deal reaches $49.02M, but let’s focus on the guaranteed monies flowing to Youk.
Since the “Greek God of Walks” is still under the Olde Towne Team’s control for the next two seasons, his salary would be subject to arbitration. The basic rule to find compensation for arbitration eligible players is 40% of market value (MV) for first years, 60% of MV for second years and 80% of MV for third year eligible players. MV is determined by finding comparable players.
Youk is most comparable to Mike Lowell and Aramis Ramirez who are corner infielders that have signed free agent contracts over the last few winters. The average yearly present value of Lowell’s contract was $12.02M and $14.11M for Ramirez. The mean of both is $13.06M and 60% is $7.84M, 80% is $10.45M. All thing being constant, Youk could expect roughly $18.29M over the next two seasons, but those forecast earnings should be discounted due to the risk of injury, production declines, etc. 2009 was discounted at only 5%, which reduces Youk’s salary to $7.45M. 2010 was at 10% or $9.4M.
In 2011, KY would have become a free agent. If the market for free agents rebounds back to 2006-2007 levels, Youk would receive $13.06M. Again discounting the expected market value by 15% gives him a salary value of $11.10M. Since Youk would expect to attain at least a two-year contract, 2012 would be a guaranteed salary and would not need to be discounted. Following this logic, Youk would have the following salary values:
2009 - $7.45
2010 - $9.40
2011 - $11.10
2012 - $13.06
The present value of the above cash flows is $38.36M or roughly the same as Youk’s deal signed a few weeks ago. Since the Olde Towne Team owns Youk’s rights for two more seasons, he is on the wrong side of 30 and one has to question KY’s ability to move across the diamond in 2011 at the age of 32, the Sox should have gotten a larger discount.
Tuesday, January 20, 2009
IF IT WERE ONLY THIS EASY...
Monday, January 12, 2009
DEEP IN THE HEART OF TEXASS
Since Michael Young wants out of Texas, it might provide the Sox with an opportunity to net Jarrod Saltalamacchia or Taylor Teagarden for a lower price than Clay Buchholz or Michael Bowden. No; the Olde Towne Team would not take on the overpaid, all batting average offensive, and questionable glove shortstop. But they would provide the financial relief that would help the Rangers get something for Young.
Given Rafael Furcal's $30 million deal with the Dodgers, Texas will have to eat $30-$40 million of Young's $80 million contract to attain a player with a reasonable shot at assisting the Rangers run in the first half of the next decade. The shortstop could help out the situation as well by deferring more than the current $15 million. Regardless of the dollar shuffling between Young, his future team and the Rangers, Texas could use some salary relief, so they can add the last pieces to their playoff puzzle in the coming years.
Assuming the Sox are not on Kevin Millwood's no trade list; they could take on his $11 million 2009 salary while likely saving the Rangers another $12 million. Millwood would likely be the Sox sixth/spot starter-long relief guy, so the former All-Star would not log enough innings for his 2010 option to vest. This would not be the case in Texas, as he may be the Opening Day starter. Hence, the Sox could save the Rangers $23 million or more than half the estimated cash necessary to trade Young. The savings could motivate them to accept a David Pauley, Daniel Bard or Josh Reddick - for - Millwood and Saltalamacchia or Teagarden deal.
***
Congratulations to Jim Rice and Rickey Henderson! These two players, more than any others, are the reason why I’m posting. I may finally make the drive to Cooperstown this summer. More to come on my appreciation for Jim and Rickey.
Since Michael Young wants out of Texas, it might provide the Sox with an opportunity to net Jarrod Saltalamacchia or Taylor Teagarden for a lower price than Clay Buchholz or Michael Bowden. No; the Olde Towne Team would not take on the overpaid, all batting average offensive, and questionable glove shortstop. But they would provide the financial relief that would help the Rangers get something for Young.
Given Rafael Furcal's $30 million deal with the Dodgers, Texas will have to eat $30-$40 million of Young's $80 million contract to attain a player with a reasonable shot at assisting the Rangers run in the first half of the next decade. The shortstop could help out the situation as well by deferring more than the current $15 million. Regardless of the dollar shuffling between Young, his future team and the Rangers, Texas could use some salary relief, so they can add the last pieces to their playoff puzzle in the coming years.
Assuming the Sox are not on Kevin Millwood's no trade list; they could take on his $11 million 2009 salary while likely saving the Rangers another $12 million. Millwood would likely be the Sox sixth/spot starter-long relief guy, so the former All-Star would not log enough innings for his 2010 option to vest. This would not be the case in Texas, as he may be the Opening Day starter. Hence, the Sox could save the Rangers $23 million or more than half the estimated cash necessary to trade Young. The savings could motivate them to accept a David Pauley, Daniel Bard or Josh Reddick - for - Millwood and Saltalamacchia or Teagarden deal.
***
Congratulations to Jim Rice and Rickey Henderson! These two players, more than any others, are the reason why I’m posting. I may finally make the drive to Cooperstown this summer. More to come on my appreciation for Jim and Rickey.
Saturday, January 10, 2009
Ken Rosenthal is reporting that the Sox signed Takashi Saito.
This is a similar situation to the John Smoltz signing, as both are old power pitchers coming off of season ending injuries last year. Unlike the Brad Penny signing, Smoltz and Saito are true low cost - high reward signing. Both could be have a big impact during the dog days instead of making a July deal.
This is a similar situation to the John Smoltz signing, as both are old power pitchers coming off of season ending injuries last year. Unlike the Brad Penny signing, Smoltz and Saito are true low cost - high reward signing. Both could be have a big impact during the dog days instead of making a July deal.
Wednesday, January 07, 2009
Peter Gammons is reporting that the Sox are close to signing Rocco Baldelli. It is to be announced at the BBWD.
Tuesday, January 06, 2009
Thank you - Red Sox!
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