Effectively Wild: A FanGraphs Baseball Podcast - Effectively Wild Episode 1942: Get Interested in Interest Rates!

Episode Date: December 16, 2022

Ben Lindbergh and Meg Rowley banter about the Pirates’ Vince Velasquez hype video, a “mutant option” for Cody Bellinger, and a Francisco Rodríguez-only Hall of Fame ballot, then (22:09) discuss Carlos Correa’s 13-year contract with the Giants and its implications for the NL West, the Twins and Cubs, and the future of old-player production, along […]

🎵 Music Playing 🎵 Everything is the same, nothing matters, it's not my hand upon the wheel. Hello and welcome to episode 1942 of Effectively Wild, a baseball podcast from Fangraphs presented by our Patreon supporters. I am Bellman Berg of The Ringer, joined by Meg Rowley of Fangraphs. Hello Meg. Hello. So before we talk about Carl's Correa, joined by Meg Rowley of BandGraphs. Hello, Meg. Hello. So before we talk about Carl's Correa, I have three things to make fun of. Okay. All right.

The first thing is that the Pirates released a hype video for their Vince Velasquez signing. Oh, no. Really? Yeah. Yeah, they just they put out a little 30 second ish Twitter video that shows Vince Velasquez putting on his jersey, his brand new Pirates jersey. And there's a little voiceover from Vince where he talks about the Pirates grit and grind. And there's just some some hype up music. And it seems like it's intended to get fans excited about the new acquisition, Vince Velasquez of the Pirates. And as a teaser of what's to come, there's a montage of Vince Velasquez performing well, which ends with him striking out Shohei Otani as if to say, hey, Pirates fans, check out this guy. We just got Shohei Otani. No match for him.

Coming into Pittsburgh, the model is, you know, the grit and the grind. for him. Coming into Pittsburgh, the model was, you know, the grit and the grind. And what the team could actually establish going into spring training is that grind and that hard work consistently day in, day out. I don't know that it was received the way that it was intended, just based on the Twitter replies and quote tweets and such, some of them are withering. And there's some expression of dissatisfaction and some comments about nutting. Maybe not in so many words, but certainly about Bob nutting and just about what it says about the franchise that they're putting out a Vince Velasquez hype video. Now, maybe they'll make hype videos for everyone. That would be nice.

But it is true that Vince Velasquez is not of the caliber of player I would think would typically be worthy of such a video. This is not necessarily someone who's going to put butts in seats and you put them on the cover of the media guide and you sell season tickets based on the fact that you signed Vince Velasquez. I mean, nothing wrong with Vince Velasquez. I don't feel bad making fun of the hype video that he got here. But you look at the Pittsburgh Pirates offseason and there just hasn't been a ton of activity.

I don't know who else he would make a hype video about unless you want to make a Carlos Santana hype video, a Harleen Garcia hype video. I guess he could make a G-Man Choi hype video. Anyway, maybe they have those in the hopper. But yeah, things look a little bleak when you're just trying to drum up excitement for 2023 by promoting your Vince Velasquez signing. Don't you think that if they had a G-Man Choi like hype video holstered that we would have seen that by now? Don't you think that would have

made it sway into the circulation? Yeah. Not that Vince Velasquez is bad. No. He's just not that good. So he had a decent season for the White Sox. But yeah, he hasn't had a good season in, gosh, I mean, 2016, I guess you could say was a good season.

2018 was arguably under the hood a pretty good season. And since then, not so much. He's kind of settled into a swingman role. A lot of people have been saying forever that they should just make him a reliever and set it and forget it. And maybe his stuff would play up in that role. And maybe it will. And maybe we'll look back on this in a year and say that Vince Velasquez was worth that

30-second video. I mean, I think that it's fine to park adjust hype, basically. That's what this is. This is park adjusted hype. This is Pirates level hype. Now, I wonder if they would have had better success rather than having it be entirely about Vince Velasquez, who, again, we don't mean to take any shots at Vince Velasquez.

Vince Velasquez, he's a rosterable big leaguer. He belongs on a big league roster. Yes, he does. This isn't meant to be taking shots at Vince Velasquez, but if I had been the Pirates and they had asked me about PR, because everyone asks me about PR. That's one of the things that I'm famous for is

thinking about PR. I might have waited and done a longer hype video that includes you know like g-man troy um and then all of their young guys who are so exciting right yeah they did make a video last week i think for quinn priester okay so yeah i mean maybe they're maybe maybe we are just thinking about this the wrong way that That one's almost two minutes long. How is it two minutes long? How is that true?

I don't know. Oh, boy. I was going to say, though, that maybe we're thinking about this the wrong way. Maybe we aren't the target audience for this. And maybe even Pirates fans aren't the target audience for this. Maybe the Vince Velasquez hype video is for vince velasquez's mom you know maybe the pirates are just like look we can't do a lot but we can take care of vince velasquez's mom you know we can so that he has something to send to the the family group chat you know when everyone's like

how's everybody's you know winter going happy holidays he can be like my winter's going great here yeah it doesn't sound like that but you know so how was the quinn priester one two minutes long i don't know but how was it how was it longer than vince velasquez's that's hard to say how is that yeah well so you're saying that the adjusted height plus on this yeah actually be pretty respectable by pirate standards. Yeah, I mean, like, I think that one of the things that people could learn and be made happier by, potentially, is the notion that when you have behaved kind of badly, which Vince Velasquez hasn't, to my knowledge, but the pirates, you know, there's all this nutting that they do, right? Sometimes the way to escape ire is to say nothing. You know, like sometimes you're better off saying, we project Quinn Priester for like one big league inning next year.

That seems like it's wrong. But also Vince Velasquez has thrown 726 and a third big league innings. How is his shorter than Quinn Priester? And look, Quinn Priester is like, he's a 50 future value prospect. He's a top 100 guy, but also, what? What? Like if you were like, here's Quinn Priester

and then the young big leaguers and also, you know, some of our other like top prospects. I get if you're the pirates, the way you can say something and not like attract attention is to be like, well, we got these prospects, you know? Right. And instead of doing that they they didn't they may have uh more in the works so maybe they're just building up they're just ascending the prospect list and maybe they have a whole series planned i mean you gotta parcel them out it's a long off season yeah that could be true and you know like i know that he has he has barely played you know he's barely played affiliated ball. But like if I were the Pirates, I'd just make every video about Tamar.

That would be what I would do. I'd just make it about the current exciting young guys on the big league roster and then I'd make them about Tamar. That would be my approach because it's easy to get excited about Tamar Johnson. Like he's exciting. He's exciting. Yeah, maybe they already have made one. I don't know. I haven't monitored the at Pirates feed that closely's exciting. Yeah. Maybe they already have made one. I don't know. I haven't monitored the at pirates feed that closely.

Wow. Yeah. They also have a video from earlier this month of the moment they found out in the draft lottery that they would be picking first overall, which. Oh, boy. Like, you know, yeah, I guess tell your fans, like, we will select first overall in the 2023 MLB draft. Like, yeah, that is newsworthy and somewhat exciting. But also, it's because you're bad. It's why you're doing that.

I just, look, if there were only two other big league teams that had lost more games than me me i would try to hide that right yeah they sent three tweets about getting the first overall pick which i mean it is exciting hopefully they do better than they've done with their previous first overall picks because some of those haven't panned out but no it's a good thing but ultimately the goal is to get to the point where you're not picking number one right Right. So. Right. Like, tired being excited about the first overall pick. Wired being like, the 30th overall pick.

Yeah. That's where you're like, oh, boy. Be the Yankees and you haven't had a top 10 pick in decades at this point. Yeah. Keep cranking out top 100 prospects. Yeah. They also sent a tweet about the Velasquez signing which they have a format for their twitter preview cards which is like signed in giant giant text and then in smaller text below

that it says who they signed like signed oh my gosh who did we get yeah velasquez. Oh, well. I mean, look, if you do social media for the pirates, this is what you got to work with. Again, you got to adjust our expectations of it. And if you want to present a rosy picture of the organization, I would maybe emphasize some other things. But now I'm looking at their Twitter and like they have a thing about O'Neal Cruz going deep in Lidl,

because he's been playing for Lise. It's so fun. They're big leaguers currently and a bunch of prospects who play in lead home and then they're a bunch of guys who you like haven't seen in a while or like are sort of career lead home guys but you turn on a lise game and when o'neill cruz is at the plate you're like oh that's o'neill cruz like yeah unmistakable it's pretty yeah pretty yeah i guess you can just dream on quinn priester maybe a way that you can't dream on Vince Velasquez. Maybe he could become a great late-inning reliever, but who knows what Quinn Priester could be.

So that seems like almost two minutes worth of content. He's a top 100 prospect. Yeah. They do have a thing on G-Man Choi, I will say. I'm scrolling here, and they have a nice G-Man Choi little card with a quote from Ben Charrington about how they felt good about that. Not that I've seen, but also I haven't, Ben. They do have a weird, so here's a weird one. Are the people who run at Pirates, are they okay, Ben?

I'm a little worried about them because here's what happened. On November 17th, here is a rundown of their tweets. The first tweet of the day is them wishing a happy birthday to JT Brubaker. And then the next tweet is them selling 2023 tickets. PNC is the place to be. And then the next tweet after that is the nice tweet about G-Man Choi. And then the tweet above that immediately is a GIF of someone in the PNC press box with Twitter open, closing their laptop and then throwing their laptop out the window. Are you guys okay?

Do we need to? Do we need to? Are you okay? Do we need to worry about you? I mean, we just spent the last couple of minutes being kind of mean, so maybe we're part of the problem, but are you okay? Because also, don't throw your laptop out the window. Those are expensive.

And if they hit someone, it would hurt really bad. Yeah. Was that an Elon Musk-related tweet? Is that a protest tweet? I don't know. Anyway. Oh, I don't know. There's your hot Pirates Twitter content that we're all asking for.

Apparently, this is a recurring joke. I'm looking. See, this is so much more time than I meant to spend on Twitter at all and especially on Pirates. We're not in on the joke. We're not following Pirates Twitter closely enough to get the references here. This is a joke. It's been a minute since we've seen this. Cry face emoji. At Pirates. Real ones

know. Okay. Okay. So elsewhere, yeah, we're not real ones. We're not. Elsewhere in the NL Central, there was a tweet that, I don't know whether it would have made our best of baseball Twitter draft, but it's definitely in the tradition of Arson Judge and Coe Camels. And this one is from Bruce Levine, who is a baseball analyst for WSCR AM and 670 The Score in Chicago. And he tweeted, Cubs make Bellinger deal official one year

with a mutant option. Oh! Cool! A mutant option. I like that. He has not retracted or deleted or acknowledged the typo in any way. He's just standing behind this and perhaps completely

oblivious to the reaction which has been loud. So a mutant, he's just standing behind this and perhaps completely oblivious to the reaction, which has been loud. So a mutant option. This has occasioned all kinds of discussion about what a mutant option would be. And people have been sharing lots of X-Men playing baseball, comics excerpts. There's a long history of Marvel baseball and mutants, actual fictional mutants playing baseball. So I guess we can all just quietly contemplate what the best mutant option would be. But this was not something I had considered when I did a pod about Cody Bellinger rehabilitating himself, mutants, they get hunted down, they get discriminated against, but they do have powers often that could be beneficial on a baseball field. So I look forward to finding out whether he exercises the option and in what way he does.

a third arm and it'll be out of the top of his head and then he will have to face a real dilemma which is do I put head hair on the arm or do I put arm hair on the arm it's out of my head but it's an arm yeah real ones know Ben

real ones do know and Bailey from Foolish Baseball he's a real one and he actually quote tweeted this and said he'll be picked up for 2024 if he grows a third arm. So I don't know if that was a reference to Effectively Wild, but he is a listener, past guest, and perhaps he has internalized that. So, yeah, I guess the mutant option is really no less likely to be exercised than the mutual option. It's about as real a thing. So that's a classic typo that we will always remember.

Yeah, and cherish. Yeah, I'll think of mutual options as mutant options. Mutant options. I mean, yeah, like you said, more fun to think about the mutual options because has a mutual option been exercised even one time? Even one time. It must have happened at some point.

I don't know. Has it? We should look that up. I don't think that there's ever been an exercised mutual option. I don't. I'm skeptical. I mean, I could be wrong because I don't know about all of the options ever in history. But I am skeptical that there has been even one exercised mutual option.

Am I going to Google and immediately find mutual option? I found a headline from 2013 hardball talk. The headline is a mutual option was mutually exercised. This was evidently former reliever Matt Belisle stayed with the Rockies for 4.25 million and there was a mutual option. So had the Rockies declined their half, they would have paid him a buyout. This was tacked on to a two-year deal, and apparently they both decided to trigger that

and have it be exercised. So I guess it has happened at least once. It's probably not the only time, but that's the one that quickly came to the top of my search results. It's not unprecedented. I have been hoisted on my own mutant petard. Yes. And the last thing to mock today. So we're not typically in the business of dunking on Hall of Fame ballots just because, you know, look, people are out there doing that, right? There's no shortage of that. Sometimes it can be a bit mean. Sometimes not. Sometimes it's kind of justified.

But look, we could do a whole podcast on that. If we started doing that, if we broke the seal, we opened that box, we could do nothing but critique Hall of Fame ballots. And I'd rather not on the whole. Hall of Fame ballots, and I'd rather not on the whole. But every now and then there's one that rises above or sinks below the rest in such a way that I feel moved to comment on it. And this was one that just came out this week from Art Davidson, who I believe is a longtime sports editor in Massachusetts. Maybe he was a sports editor of the Metro West Daily News and the Milford Daily News. He's not listed on the mastheads of those papers anymore, maybe he was a sports editor of the Metro West Daily News and the Milford Daily News. He's not listed on the mastheads of those papers anymore, so he may have retired at this point.

I'm not really that familiar with his work, but I am more familiar with him now because he released a ballot this week in which he voted for Francisco Rodriguez and no one but Francisco Rodriguez. Weird. Francisco Rodriguez and no one but Francisco Rodriguez. Weird. The Francisco Rodriguez only ballot that I never knew I would see and never contemplated could exist. This is like rarer than the mutual option being exercised is the only Francisco Rodriguez ballot. Now, some people speculated because he did vote for Alex Rodriguez last year, but did not this year.

And so some people were wondering, is this right? Is this a Ryan Tepera situation where he didn't mean to vote for this Rodriguez? He voted for the wrong Rodriguez. But it was revealed by Adam Doerr, who is one of the people who works on Ryan Thibodeau's Baseball Hall of Fame ballot tracker. who is one of the people who works on Ryan Thibodeau's Baseball Hall of Fame ballot tracker. He said in a follow-up tweet, since a lot of you are asking, yes, I did confirm that Mr. Davidson indeed voted for Francisco, not Alex. And I guess that he meant to vote for Francisco, not Alex. So the odd thing, I haven't seen a full rationale, but Art Davidson has voted for PD players in the past. Yeah. Not just A-Rod, but also others. So evidently his thinking on that has changed.

I don't know if this is some kind of statement vote. This is one of those votes that, like, if it gets to this point, just don't vote, really. Right? Like, I don't know what the grounds could possibly be for voting for first-timer Francisco Rodriguez and not say, well, Billy Wagner is still on this ballot, probably a better reliever candidate if you're going to choose one, let alone, let's say, Scott Rowland, who is just a better player and a more qualified candidate, or the other players who have some sort of strike against them but had better careers. I mean, that's the other thing. If you were going to go with a character clause type ballot, Francisco Rodriguez is not really a standout from the character and integrity standpoint either. Now, some voters, they look at that clause as really just reflecting on your on-field performance, I think. So whatever you did off the field, they kind of discount that and they don't think that counts toward character in the way that, say, cheating at baseball and being suspended for it and testing positive for PDs.

That's kind of how they interpret it which i guess is fair enough it's not really written that way but you could interpret it that way but boy if i were gonna go for kind of a character clause make a statement who can i vote for kind of ballot i don't think i would choose francisco rodriguez as uh yes this is this is the one with no stains, just unsullied personal records. It's just a weird one on multiple levels. Yeah, I almost have to just tip my cap and say this takes the cake maybe in this voting round. We'll see what else the voters have in store. But there are always a few that make you go, but this one more so than most, I think.

Yeah, I really struggle to understand it. Because even as a protest ballot, it just doesn't make any sense. The instructions say voting shall be based upon the player's record, playing ability, integrity, sportsmanship, character, and contribution to the teams on which the player played. So it doesn't specify character and contributions in a baseball-only context, if you could even divide those things neatly like that. So it's weird. If it is just kind of we shouldn't be considering character, I'm basically on board with that. So I'd be sort of sympathetic to that in a way if that were stripped from the rules, but just a weird one, just not even the best reliever candidate on the ballot, I don't think. So that alone just makes me question what

is happening here, but just pointing that out. So those are my three things that caught my attention and made me wonder what was happening in someone's head this week. And now I guess we can move right along to Carlos Correa, who is a San Francisco Giant. So Correa, I would say, he's like the last free agent on the board that really excites me. You know, like most of the top guys are gone now. They have found homes. I know that Dansby Swanson is still out there. I know that Carlos Rodon is still out there. But they just don't feel like full blue chippers to me.

Maybe they just don't excite me quite as much. I put them in a lower tier, even though Swanson, by war at least, arguably had the best season or as good a season as any of the free agent shortstops this past year. But is he as likely to repeat that? I kind of doubt it. He's a good player, but I don't know that he's an elite player the way that Carlos Correa is. And Radon, I think, as good as he was, maybe a little less dependable than some of the other top starting pitcher options. So most of the great guys are gone at this point, really.

It's looking at the MLB trade rumors, top 50. Only three of their top 20 or top 22, for that matter, are still available. Swanson, Rodon, and Andrew Benatendi. And then Nathan Ibaldi, not far from that group. So slimmer pickings. But the Giants got their guy. They were ready to try to bring in Aaron Judge and put this money toward Judge, and Judge chose to return to New York. And instead, the Giants got Carlos Correa, which, in my mind,

is not even a nice consolation prize or a pivot to plan B. even a nice consolation prize or a pivot to plan b if i were a giants fan i'd probably be happier to have cars gray in my corner on this kind of contract than i would judge i mean yeah it's great i do love that he managed to pick a team where it was like i'm just comfortable getting booed by dodger fans for the rest of my career yeah seriously i'm sure that people in la are licking their lips. They're like, oh boy, we're not saying that you all weren't justified before, but now you're just like going to go whole hog. They probably weren't holding part of the hog back before.

It's like the expression make some noise. And it's like, well, why leave noise on the table, right? If you're going to get rowdy in the service of distracting someone, do it. It'll be like 30 to 50 feral hogs now. it'll just be yeah much more rabid yes a a bushel a peck a herd no i think look we have been hearing for the last couple of off seasons not just this one but the last couple of off seasons that the giants were like ready to splash some money around and uh that they viewed themselves as being in a position to really challenge not only the Dodgers but to deal with like an insurgent Padres team right and that they were going to have

to do big stuff to counter that and I think that we've seen them you know like when we talk about the organizations in baseball that are really good at player dev now we tend to list the Giants among that list right that they are doing innovative stuff on the field that they have this like cool approach to coaching you know they seem to be shoring up all of the potential you know sort of ancillary on-field weaknesses but they wanted to splash big money around and they sure did do that and they got i mean i didn't do our top 50 ranking ben did but i think that i might have had korea at one if it had been just my ranking and i don't say that to like i mean i am knocking aaron judge by saying that but just in terms of what you can

expect from a production perspective what the versatility for him can be even after he gets to a point in this incredibly long contract where he isn't a viable defensive shortstop anymore. There's just a lot to like here. He's a great baseball player. When he gets to the point that he can't play short anymore, you can move him over to third, but I that he's you know more than a viable short stop now so you're gonna get you know the front end of this deal a bunch of really valuable production you do have to worry about health with korea but like you kind of have to worry about health with all of the really good guys with the exception of like turner stuff was and by that i mean trey like tended to be shorter duration than some of the others but i don't know i just i really like

it i think that he addresses a major need of theirs they weren't afraid to put the resources behind him that they needed to to sign him he's a great fit for the team he's going to be good for them for a long time and we are never going to hear the end of it from Dodger fans so I don't know like that's not a good reason to sign somebody but it's sort of a fun ancillary benefit for some, I guess. The Hanager deal that they just recently signed and then like Tommy La Stella and Anthony Discofani, like they seemed really reluctant, especially with pitchers, but maybe with anyone to go big and go long term. But they really did have space to spend and they had a need. And there's just no reason for them not to have ended up with one of the top players on the market. And they really did. They really did.

They can move Brandon Crawford over to third for his last year under contract now, and he should be fine there. And Correa, I mean, look, he's on a Hall of Fame trajectory, or he would be, aside from the sign stealing stuff. Yeah. And yeah, you're right. He's had health issues, although a little less lately. He's been more durable in the past few years.

He missed some time this past year, but for this and that, not anything super concerning in isolation. Still played 148 games in 2021 and 136 in 2022. Yep. And almost every game in the pandemic year. Right, right. So his trajectory there has been on the upswing rather than the decline which i'm sure was comforting to them yep his defensive stats were on the decline this past year so i guess you have to wonder how much you you buy into that whether that's a sign of something to come or whether it's just a blip because he's been really great defensively shortstop so there's been there have been some big swings in his defensive metrics like if you

look at where he graded out in 2021 he was one of the best defenders in baseball and then more lackluster showing this year offset a little bit by the fact that his bat was better but like yeah he wasn't he wasn't worth as much even when you factor in the the difference in playing time but i don't know like he's just really good sometimes it's like I feel like we're supposed to be clever with signing analysis. And sometimes it's just straightforward. Like they had a need, they had money to spend. They're like this guy.

I mean, I'm sure that they would have liked to bring Rodon back. And I guess the possibility exists that they still will, although they've spent some big money. So I wouldn't look at their offseason and be like, did you really do anything if they don't bring background shirt on? Just to be clear, I'm not being critical. I'm just saying that they seem like they have spent the money that they're going to spend. But the sort of shape of their signings, I think also illustrates something about what they think that they are

really good at and the different places where they can sort of deploy their skill. And, you know, sometimes that's just being willing to spend $350 million on one of the marquee, you know, free agents of the class. I think the best shortstop among them. And sometimes that's looking at, you know, some of the potential bounce back guys on the pitching side and saying, OK you know sean monia and ross stripling are not as dependable or as sexy as rudon i mean i'm not making a statement about their aesthetic that's for all of you to decide for yourselves but you know they're the production

is viewed as less reliable because they either don't pitch a lot or they had a down year like monia did right like stripling had a great year but it was his best year and they either don't pitch a lot or they had a down year like Mania did, right? Like Stripling had a great year, but it was his best year. And even he didn't pitch like a full, full compliment of any. So you're like, okay, they sign Correa, they're willing to spend money. And then they're looking at these guys and saying, these are dudes who we think are either probably good in the case of Stripling or can be sort of helped to become or revert to a prior good version of themselves in the case of Manaya, right? They have confidence in their pitching dev to do what they need to there. And I think that that's a reasonable thing for them to have confidence in given the success

that they've had over the last couple of years. So I don't know. I just, I like it. I think, you know, this is good. Ben, I say it's good. I say so too. I don't know what the just, I like it. I think, you know, this is good. Ben, I say it's good. I say so too. I don't know what the projected standings say now. I would imagine that the Giants are still below, that there's still some separation between the top two teams in that division and the Giants, but it's probably something like five wins less of separation

than it would be without Carlos Correa. Well, and I think that we're getting to a point in the offseason, and I know that the Dodgers brought in Noah Syndergaard yesterday, and they've made sort of other smaller signings around the margins. But I think we're getting to a point in the offseason with Los Angeles where we need to start reconciling ourselves to the idea that they are largely done like the big I guess that they could still take a run at Dan Spieswanz and I think he's going to end up being a cub that's my hot take it's not such a hot take a lot of people have said that but like the really big impact signings that we have seen other teams including other teams in their division do might not be coming for LA, either because they think their fans will boo them or more realistically, because they really want to reset their luxury tax penalties, maybe to make a run at Otani. How many teams are making a run at Otani next year? How

many teams are like artificially suppressing payroll so they can make a run at Otani next offseason? It's more than one. Anyway, but they want to dip below the luxury tax threshold. They do have some uncertainty about how much room they have to play with because of this still unresolved situation with Bauer. And so I don't think that they're going to be a bad team next year or anything like they are a good team as currently constituted but i have been mentally adjusting the nl west projected standings in my head all off season to be like la is not done and i think la might be done so you know it's it's uh i think we have a much clearer picture now that now that the padres are like okay fine we'll stop signing middle infielders, you guys. And the Giants have gotten Correa and LA is LA.

Like this is, I think we have a pretty good sense of what the hierarchy in that division is going to be as we approach opening day. There might be minor changes around the margins, but this might be, this is, you know, we look at it and you're like, Gavin Lux, starting, I almost said sharting shortstop, Ben. He's not that bad.

I was going to say. That's terrible, Gavin. I'm so sorry. I'm going to give you some vlog content if that were the case. Starting shortstop. I've never struggled to say that sequence of words ever before in my life, but I'm glad the first time I did it was on Mike Dillon. Leave it in. But yeah, you're just going to have lucks at short, see? No dangers there. I mean,

there might be dangers there, to be clear, because I think you can barely play second. But anyway. Yeah. Yeah. One thing that a friend of the show, Mark Simon, pointed out for Sports Info Solutions this week is that Carlos Correa is great at not making misplays, which seems like something that might make you optimistic about how he'll age. Like a lot of his defensive acumen comes from not screwing up and not bobbling balls as opposed to not just getting to every ball, which maybe you would lose range over time more quickly than you would lose just sure handedness. Potentially, that's one possibility anyway. But yeah, the Dod Dodgers I was thinking about them because yes they signed Noah Syndergaard they traded for J.P. Fireison from the Rays

who sounds like he should have some sort of Game of Thrones related Song of Ice and Fire related nickname actually Noah Syndergaard was in Game of Thrones for that matter but and then it all went downhill after that you know yeah I'm sure for him and Game of Thrones for that matter. And then it all went downhill after that, you know? Yeah, I'm sure. For him and Game of Thrones for that matter. True. Yeah, but he's siding with LA because he's hoping that it can go back uphill for him, right? That he can be this year's Andrew Heaney

or Tyler Anderson, I suppose. Like this is an example maybe of the Dodgers advantage because it was reported, I think, by John Heyman that he received bigger offers and maybe multi-year offers. And he elected to take this one from the Dodgers, which you would think might have something to do with their track record of improving pitchers who then go on to cash in elsewhere. So maybe, maybe they will, quote unquote, fix Noah Zindergaard. He's not broken.

He's a serviceable starter as he is. He just doesn't throw as hard as he used to, and he's not as good as he used to. There are some changes that he could make. There's a good Fangraphs post about that by Alex Isard, and he talked about how he could adjust his pitch mix, and maybe he already was with the Phillies a little bit. So I'd look at that rotation, though, and I think the Fangraph's depth charts projections have the Dodgers at 13th now in starting pitcher projected war which is not where I'm accustomed

to seeing them they're typically at or toward the top and it's really just that everyone in that rotation has been great could be great but just real significant questions about all of them, especially health questions. You have Kershaw, of course, who is still great when he's pitching, but you can pretty much pencil him in for an IL stint or two.

You have Julio Urias, who is the most dependable member of this rotation now, though he has certainly had significant injury issues in the past. And then you have Tony Gonsolin, who ended the year barely pitching and with forearm issues. And then you have Sindergaard. And you have Dustin May, who, again, looked like he was going to come back 100% from Tommy John surgery. And then he had back problems. So just issues with everyone there and maybe a little less depth than there typically is in that rotation. So between that and losing Turner and some of the other uncertainty in the starting lineup. Turner and Turner. The message is Turner and Turner. Yeah. Turner, the other Turner, the elder Turner, still a free agent. Right.

So there's a little less of a lock, certainly, for Los Angeles winning this division than usual, especially given what the Padres and, to some extent, the Giants have done. So it's going to be quite a race. It's shaping up to be a really exciting one. The NL East and the NL West are really both looking pretty exciting, the top three teams. It should be a dogfight. Yeah. Also, this is unrelated, but because you brought up our depth chart rankings, man, it sure is nice to put a Jacob deGrom in your rotation. Yeah, that helps.

Change the complexion of our Rangers projection for their rotation pretty dramatically. Goodness. That will happen. Yeah, it'll happen. It's funny. Yep. And Michael Lorenzen, another ex-Angels starter, he signed with Detroit. Yeah.

And I have nothing to say about that other than that that happened. He did do that. He did. He did do that. That is a thing he did. And just lastly, I guess, on the Swanson front. So because the twins were ardently pursuing Correa, but not ardently enough. Because the twins were ardently pursuing Correa, but not ardently enough.

And I think it was reported that they offered him 10 years and $285 million, which Dan Saborski put that in his post, Minnesota was fighting the last war rather than the current one, offering a 2022 contract in 2023, which is true. I mean, that might have landed Carlos Correa long term last offseason when things didn't work out quite the way he wanted at the time. Although ultimately they worked out just great because he got to go to Minnesota, make a ton of money for one year, and then sign a really long term deal and have a good year in Minnesota and a nice little stay there. So things worked out just fine for him in the long term. It just took a couple turns, I guess, in the interim. But no mutant options, no opt-outs or anything in his deal. It's just a long-term no-trade clause. So he's going to be there for quite a while. And the Twins now have to figure out what they want to do.

And they may be in the running for Swanson as well as maybe the Braves, of course, and of course the Cubs, as you mentioned. And there is a lot of consternation among Cubs fans right now because, yeah, they got Bellinger in his mutant option. They got Jamison Tyone, but they have not landed the big fish yet. And they've caught the big game. How dare you insult Brad Boxberger like that? Apologies, Brad. But the owner of the Cubs, Tom Ricketts, he said

in the summer that they would be very active in free agency this offseason. And I think the previous fall had said, we commit to fielding a competitive team reflective of your unrivaled support. And that wasn't really the case in 2022. And I don't know that they're at the point where signing a Dansby Swanson would even get them to that level. I think it would make a lot of sense for them to get him. And his wife, he's married to Mallory Pugh, who is a professional soccer player who plays in Chicago. So it seems perfect. I didn't even know that.

Yeah. But I don't know. Yeah. Do a signing where the wives don't have to move, you know? Yeah. Right. Do a non-wife move signing. That'd be nice.

They always have to move those wives. Mm-hmm. So between that and the needs, again, like I don't know that he's a six-win shortstop again or even close to that. Probably not. But you could probably get him on not a 11-year, 13-year contract too. Right. So that's something. track too so that's something so i don't know if they do sign him they're they're still not good like especially having lost wilson contraris to a division rival right i mean you look at how the

cardinals stack up right now and and the brewers too and i don't know that there's a single signing that could catapult the cubs into that class this year, which is not to say that they shouldn't try and put a more respectable roster out there, but they're not quite at the point where I think they're a signing or two away necessarily, whereas the Twins potentially could be. Yeah, because that central, very much up for grabs, maybe even more so up for grabs. So if they were willing to extend that kind of offer to Correa, reportedly the Cubs did not make a formal offer to him. But if the Twins were willing to commit that much money to Correa, then maybe they would say, well, we won't just pocket that money. Maybe we'll put it toward Swanson and Rodon or something.

You got both of those guys and then you'd be sitting pretty in the central. So I don't know what will happen with either of those teams. then you'd be sitting pretty in the central. So I don't know what will happen with either of those teams. But definitely their fans are sorry that they missed out on Carlos Correa and hoping that there's some kind of consolation. Yeah, and I think that, you know, I agree with you, like, just in a vacuum. I don't think that Dansby Swanson is as good as either his 2022 suggests or certainly as good as Carlos Correa is.

I do think he's a good player, though. Like, he will be a good player for whichever team signs him, both this coming year and then into the future. And I think I imagine that part of the way that teams are approaching this stuff now is to think about the soon-to-be immediate scarcity of players they like versus, you know, just how far away do they think their next competitive roster is. And I think it's okay for there to be a little bit of a gap between your expectations of the current year and, you know, when you think you're going to be next competitive and to say, look, you know,

2023 probably isn't going to be our year, but there won't be a Dan Spieswanson in all likelihood available to sign next off season. So if you really like that player and think that he is going to be an important part of your next competitive core, whether you're the Cubs or anyone else, you can just decide to say, yeah, this is going to be an inefficient payroll year, but we know for a fact that we're going to have the guy that we want and think we need. And we'll eat one of the potentially good years of the contract to be able to have access to the rest of it, right? And we've seen, you know, like we've seen the Padres do this. Like they weren't quite ready when they signed Manny Machado,

but they knew there wasn't going to be Manny Machado the next year. So if they wanted him, they were going to have to do it when he was available and just like accept that they'd have a more exciting, you know, product for their fans, even if it wasn't a playoff ready roster in exactly the year that he came up. So I think that teams likely think about that, you know, how those timelines align with one another, in much the same way that they try to sort of think about how their competitive balance tax hits are going to line up with available free agents in future classes. Is this a year that we want to dip below so that we can reset and then really make a splash? And of all of the ways

that teams behave around money, that dip below so that you can then really go nuts i struggle to have a really hard time with that like i i get that it would be cool and fun if teams just like we're always you know metzing it wow ben a new a new definition i mean there can be multiple definitions for a word as we know so but we've added a new one maybe wow anyway so it's like you know i i wish the teams would metz it all the time sure but realistically they don't if the reason that they are you know being a little bit penny pinching in one year so that they can blow it out the next year for a really good player i don't have a lot of trouble with that, right? That doesn't, it isn't nutting. Right.

Made this episode very horny. Yep. Well, that was a stated goal recently, at least. Yeah. Yeah, take that. Yep. All right. So this deal was a continuation of the trend, of course, toward very long-term contracts. 13 years, barely bat an eye at that now. It's just

its old hat all of a sudden. But as Ken Rosenthal pointed out in one of his columns, Correa, Trey Turner, and Zinder Bogarts received three of the 13 highest guarantees in Major League history, but their respective average annual values for luxury tax purposes rank between 28th and 37th. That is not an accident. And we want to get into the implications of that and talk about why that is happening. We have talked about that a bit, but there are multiple layers to it. And Ben Clemens, the other Ben of Van Graaff's fame, he wrote about what this has to do with inflation and interest rates and business and finance.

He did some finance. Yeah. Yeah. I got to tease this somehow. Exciting. Yeah. Yeah. I got to tease this somehow. This is more exciting fashion. I had to remember how bond math works. And then you said, can you explain it as well as Ben can? And I was like, no, probably not. So we decided to ask the man himself. Yes. Yeah. So before we bring up Ben, one one question because we got this question from listener eric who said i'm curious about your thoughts about some of the long-term effects of the proliferation of lengthy contracts that can take a player past an age they otherwise would

be able to stay employed we've just watched pujols and cabrera hang on for years as shells of their former selves simply because they had contracts now just this offseason we have added judge cor added Judge Correa, Bogarts, and Turner to Harper, Trout, Betts, Seager, Lindor, Machado, and Stanton already on such deals. Looking at the writing on the wall, we will probably see more and more of these type of deals. I'm interested in hearing if you have thoughts about how this changes the game long term. One thing that occurred to me is that it seems like we would have an increase in players hitting certain milestones.

That is, Bogarts now seems like a decent bet for 3,000 hits. And I wouldn't have said that before this contract. Just one thought. What say you? I don't know that this will materially change how long these players actually play. Because as we're about to talk to Ben about, as we have discussed previously, these contracts are structured this way, not necessarily because these teams expect these players still to be good or even to be playing in the last years of those contracts, but just so they can lower the luxury tax hit. And also there are some interest rate and time value of money implications here.

So it's not like they suddenly expect them all to be good at 40 or whatever. If they are, that would be great and they'd be happy to play them. But I think we've gotten to the point where teams largely understand the concepts of sunk costs and with some exceptions, maybe they won't really give a ton of playing time to someone just because of the contract, you know, like Chris Davis will just retire or Albert Pujols will just be released, even though he's Albert Pujols and an absolute legend, like at a certain point, you just kind of have to cut that cord. So I don't know. And especially if there's inflation and if contracts keep going up, then these might not be enormous amounts of money by the time those science fictional years of 2030 whatever really roll around. So I don't know. Like, does it give them more roster security in those years than they would have otherwise

if they had no contract? I guess so. But unless they're still productive or they're still selling tickets because they're so beloved and they're still productive or they're still selling tickets because they're so beloved and they're such legends. And I guess, yeah, if they're right on the cusp of a milestone, maybe you'd be more likely to keep them on. Although if you're on the cusp of a major milestone, I think there are already teams that would be interested in bringing you around just for that pursuit. So yeah, I don't know that we will suddenly see like a wave of players getting

to 3,000 hits or whatever it is. You know, batting averages are so low pre-shift ban, at least that it's harder to do that. We'll see if that changes. But I don't know that there will be major ramifications because of that. Yeah, I tend to agree. I mean, I think that we will probably see like if, you know, thinking about at least some of the guys who we've seen get really long deals relative to, say, Cabrera and Pujols, a lot of those guys have further to tumble theoretical decline years in a baseball environment where both leagues have the designated hitter. And so maybe that changes things a little bit. And, you know, in much the same way that the players of today, including guys, you know, like like Bulls and Kerber are, you you know likely beneficiaries of better you know conditioning and nutrition and all kinds of stuff than like old-timey guys like i imagine we will continue to see at least some advancement and sort of maintaining and improving player health

and all of those things might combine to like marginally extend careers in much the same way that having a guaranteed deal like literally a decade from now they're all gonna be younger than me still and i'll be like firmly in the middle age almost you know like i mean depending on your definition of middle age i don't want to depress you or round up like your mom does yeah round it up to round it up to 40 no mom middle age might be generous unless you expect to live a very long time which i hope you do. Thank you. I'm glad that you are hoping that I live a long time and not at least.

I mean, like being indifferent to the question would be bad enough. But if you were actively rooting in the opposite direction, that would be a problem. I don't know if we could pod after that, Ben. No, I don't want to have to find another co-host when I'm 110. Yeah, you're like, inertia is a powerful force in podcasting. But yeah, so I think that like all of those things might combine to marginally lengthen careers. And then some of it is just going to come down

to like luck of the draw with any individual player. Some of these guys will have really good and fortunate health and maybe one of them blows out and then they're never the same after that. You notice I didn't even put a name to that because I don't want to put that kind of vibe out into the world.

It's terrible. But you're right. I don't think that we should interpret the sudden proliferation of very long deals as like an indication that teams like, oh, we're going to keep these guys healthy forever. They're going to play and be super good. It's like there's maybe some of that. And again, maybe they think that on the margins they can kind of help extend careers but i think that this is largely in response to

other forces all right so let's discuss some other considerations related to these long-term deals with ben clements who will be with us when we return in just a moment All right, so we want to continue a discussion that we started last week when we talked about the reason for all these extremely long-term contracts that we have seen this offseason, but we want to talk about it from the ever-exciting finance perspective. And so we have called up Effectively Wild's business of baseball correspondent, Ben Clemens. Hello, other Ben. How are you? I'm doing well.

How are you, Ben? Good. So this is going to be exciting. This is bonds and yields and inflation and interest rate, the good stuff that people come to baseball podcasts for. This is why we got into the sport, really. This is what we show up for year after year. I mean, that's probably actually true about some people who work in front offices,

but not so much. Anyway, the green of the grass, the crack of the bat, the rise of the interest rates. That's what we're discussing here. But just to review, so the obvious sort of surface level reason that we have already discussed for all of these extremely long-term contracts is that teams are trying to minimize the soft cap hit that they are taking from the signings. So you have a competitive balance tax threshold. You want to stay under that lest you incur penalties and taxes and extra costs. And that is assessed based on the average annual value of the contract. So you just take the total dollars, you divide it by the total years, and that's kind of your hit when it comes to the competitive balance tax threshold. And so if you

can string that out over more years, then it's a lower AAV and you have more room to maneuver while potentially staying under that threshold. So that is the very obvious reason. But I guess there's no obvious reason why teams would have suddenly realized that all at once, right? Like we were talking about the fact that we just had a CBA negotiation and the players succeeded in bargaining up the threshold to some extent, obviously not as much as they wanted to. And then immediately after that, at least these bigger spending teams are trying to get away with something here and get around what they agreed to and kind of collectively pushed for. But that could have been the case in prior seasons, right? I mean, there's nothing particular about this CBA as far as we know that would encourage teams to do that. I mean, they would have had the same sort of incentives to do the kind of Ilya Kovalchuk type contract

that we have talked about under previous CBAs also, right? Yeah, I think one difference is that this CBA is like actually getting back to increasing the CBT again. You know, like it didn't actually go up that much over the last two combined yeah and then this had a big opening gap and i feel like the precedent has kind of been set that it's going to keep going up but yeah i mean i don't think that's a huge difference yeah but that would make you less likely to need to do this right the fact that the cap the threshold actually rose means that you could hand out bigger contracts without exceeding those penalties, right? Yeah. But on the other hand,

the forward hits, like the 10-year forward hit is probably going to be much smaller. You don't need to worry as much about that because I think it's just going to keep going up. Whereas in 2019, you might've looked at that trajectory and been like, huh? Yeah. So we've seen 11-year contracts and we've seen 13-year contracts. And there was a report by John Heyman that the Padres had considered offering Aaron Judge a 14-year contract and that the league had sort of shot that down unofficially or let it be known that it would not allow that, that it would draw the line there. Now, there is a subsequent report by Buster Olney, and I will read this. It's from his TikTok of the erring judge signing at ESPN. He wrote, the talks with San Diego never progressed

to the degree that anything formal was presented to the league offices according to league sources, a report that MLB would have rejected one of the contractual structures the Padres had discussed is not accurate. So that refutes the John Heyman report about the 14-year deal. So another L for Heyman, potentially, when it comes to reporting Aaron Judge-related news. It hasn't been like his strongest, put it that way. Yeah, maybe you should just like sit out Aaron Judge, just the Aaron Judge rumor market. Anyway, competing reports there. And Ken Rosenthal wrote about it too. And he said as to whether MLB would strike something down, there is no answer, at least not yet. basis, the Turner, Bogarts, and Correa agreements expiring after their respective age 40 seasons all fall within the current line of reason. If teams start to push deals into players mid-40s,

it might be a different story, or maybe not. So the Judge 14-year deal, if that ever existed or actually was discussed, that would have taken him, I think, up through age 44 or something, and maybe that would have raised red flags I think, up through age 44 or something. And maybe that would have raised red flags that these contracts that are carrying players through age 40 or so would not have, especially if you tried to do the Kovalchuk and front load it, I guess, and just have those last few years just kind of be tacked on very transparently. Yeah, where they'll surely retire. Exactly, right.

It might be a different story, but maybe not is really, really a non-revelatory sentence there. Yeah, this baseball reporting business doesn't seem so hard. I could do that. But we may see teams continue to push the envelope for that reason. I will be curious to see if they do try to extend it to 14 or 15 or 16 or 17 or something. I mean, there were reports, I think, that Bryce Harper's contract, I think this was Rosenthal maybe also mentioned this too, that the 13-year deal that the Phillies gave to Harper originally, as Matt Gelb reported, they had talked about maybe making it a 20-year deal.

They never actually formally floated that. They were just trying to figure out how they could get him the money that he wanted without kind of impeding their other plans. And so they did apparently offer the same amount over 15 years. And then he said, how about 13? And they said, deal. So this sort of thinking has been happening for a while so will we see AJ Preller or someone else try to push it to 50 or 70 or 20 at some point and force Rob Manfred and the league to actually rule on whether this thing is allowed or not maybe I guess

if they're just kind of figuring out how far they can take it. Do you think that we will see someone try to do that just for that reason in a future winter, maybe? I guess we've kind of exhausted the options, the elite free agents who would get that kind of deal this winter. Yeah, I don't think it's happening again this winter. Like you said, it just doesn't really feel like Carlos Rodon or Dansby Swanson are candidates for this kind of deal. But I don't see why people wouldn't keep sticking with this structure. I mean, I honestly don't think that the difference between a 13 and 15 year deal is super meaningful. I think they're quite similar in that, I don't know, maybe people will try to creep up a

year, but I don't think we're going to see like a type change from here where they start doing 25, 26 year deals or something. Like they've kind of already gone, oh, we were doing these like short term deals. And yeah, a lot of them are for older players, but they weren't all like Correa's deal is short term. And now teams are saying, hey, let's do a longer deal for literally the same player, Carlos Correa, as last year. I think you're not going to see that type of type change anymore maybe just changes in degree right it seems like the place where a team would be

inclined to really like go all out from a duration perspective is going to be with like the pre-arb extensions but you have other mitigating factors that make it unlikely that even those seem like 20 or 25 year deals right on both the team side and the player side where they might be like no i'm i'm interested in touching free agency at least once and a team isn't going to be like no we're we're so confident in our you know evaluation of this player that we're comfortable signing them to a 25 year deal as a pre-arb extension like it just seems like if it's going to happen anywhere, it's going to be there because of the ages of the guys involved. And even in that instance, you have

other mitigating factors that make it unlikely. Yeah, I tend to agree. Yeah. As Rosenthal pointed out in his piece, the CBA says that neither players nor clubs shall enter into any agreement, quote, designed to defeat or circumvent the intention of the luxury tax, which is vague and subject to interpretation. I think you could certainly say if you wanted to be a strict interpreter of that, that these deals are designed to circumvent the intention because the intention is to stop teams from spending, essentially, stop players from making so much money. So I think technically you could say that they're already doing that, but maybe they just haven't gone far enough over the line or the perceived line.

And as Rosenthal notes, if MLB did do something, either step in and strike down the deal or order the parties to restructure it by making it shorter term, let's say, then the league would have a fight on its hands because the Players Association would certainly protest that and file a grievance, and then there would be a whole to-do. So they may just want to avoid that unless they view something as really egregious. But this is just one reason, the reason that we felt qualified to talk about that teams are doing this all of a sudden. But you have written about another.

So you wrote for Fangraphs, why are teams issuing extremely long contracts? And the first comment sort of sums it up. I must say my head was hurting through some parts, but this is a terrific article. So my business brain is not fully formed, and you and Meg have different business specialties. Though to be clear, I phrased it this way to Ben. It's time to do some finance. So like, you know. Yeah.

I don't need any excuse to talk about interest rates because no one ever wants to listen. So if I can make them listen, great. Well, you can't. People can actually pause the podcast or just stop listening. So we can't force them to listen, but we are putting it in their ears right now and they can do with it what they will. So why are teams issuing extremely long contracts and what does it have to do with interest rates and inflation?

All right. So I will lay it out to you in just kind of basic terms first, and then we'll apply it to contracts later. So everyone knows that you'd rather have $100 now than $100 in 10 years. That's pretty obvious, right? A, I'd rather have the money now if it was going to be the same amount. And B, one thing I could do is just invest it. And let's say I want to invest it in something that has a guaranteed return. You know, I'm not going to go buy shares in some startup. I'm just going to buy bonds, you know, like your grandmother bought you when you were a kid or something that guarantee you some money more than the amount you put in in 10 years. So it's

definitely true that a dollar today is worth more than a dollar tomorrow. Like that's always been the case with various small exceptions that aren't worth talking about. But how much more it's worth, you know, now than in the future changes. And I think it's pretty rational the way that it changes. If your bond pays you more interest, let's say you buy a bond today with $100. The more interest that bond pays, the more you'll have in 10 years. The less interest that bond pays, the more you'll have in 10 years. The less interest that bond pays, the less you'll have in 10 years. And so the time value of money, that's like the finance term for this, changes. So the lower interest rates are, the lower yield that bonds pay, the closer the $100

in 10 years is to being worth the same as today. I did an example in the article that I think is somewhat useful. Let's say that the Giants, after they issued Carlos Correa his deal, wanted to just buy a bunch of bonds today so they could give him his salary every year, right? They're like, I don't know what our payment, what our revenues will be like in 13 years. I just have no clue how we're going to pay that. Why don't we just invest enough money to pay him off every year now? That actually seems, I mean, teams don't do this, but you could imagine a billionaire doing that. Just saying like, all right, here's my Correa pool. I'm just going to write a note on it. Hey, this money's for Correa. Don't touch it. And then invest it. Okay. But like teams don't do it, but they easily could. These guys have the money.

So how much money would you need to put in? It's not $350 million, obviously, because there's time, you know, you can invest the money in the meantime. You don't have to pay them all of it up front. You pay them one 13th every year. So right now, interest rates are kind of high relative to the last 15 years. So the 10-year interest rate right now is like between three and a half and four percent. And what that works out to is that you could put down $285 million today, buy a one-year bond, a two-year bond, a three-year bond, a four-year bond, so on and so forth, all the way down the line, and just enough money that every year when Correa comes to you and says, hey, where's my salary? You go, okay, well, this bond just matured. Here's your money. You could just do that and lock the whole thing up and it would cost you $285 million. So that's, you know, $65 million less than the

headline number of the contract. It's meaningful money. Yeah. That's what the Twins offered, Carlos Correa. Yeah, there you go. So you're getting a big discount based on the fact that you pay them over a long period of time. And so you might say, wait a second, Ben, like, you know, people didn't discover the concept of time value of money in September. Like this has been known. It's not a new thing. Why are you writing about this? Some change in the way that teams are behaving.

Well, interest rates aren't the same as they always were. Right. So a year ago, roughly today, like December 11th, 2021, I used, interest rates were lower. They were 1.4%, not 3.6%. So they were much less than half the rate. And so if they had invested then, they would have had to put in $320 million. That's barely a discount. $320 million today or 350 over 13 years, those aren't really different. It's not a great savings. Right. It's a 15-year high, I think, interest rates now. It's like-

Yeah, exactly. savings. Right. It's a 15-year high, I think, interest rates now. It's like continuing to climb, right? It went up this week and there was a signal that it was going to continue to go up. So at risk of an annoying digression, so short-term interest rates are continuing to climb. Long-term interest rates, as in the expectation for what interest rates will be over 10 years, have stabilized a little bit just because people think, ah, they're not going to keep raising rates forever. And probably in a few years, they'll bring them back down. Yeah. There's a limit to how long and how much they're going to keep doing this. Yeah. But that's more involved than we need to get. And if you think like last year's was bad, $320 million to get this $350 million cash flow stream,

it was a lot worse in 2020. In 2020, the 10-year interest rate was 0.9%. So less than a percent every year. That's terrible. You would have had to invest $332 million to pay the contract. It's barely any savings versus the headline number. Yeah. That bugged me at the time because I was like, my $300 million just doesn't go as far as it used to go. go well it's just like the way that teams operate is not the way that you and i operate like i don't actually care as much about this because if you told me you were guaranteeing me 350 million dollars i'd say great and they'd say let's do it in this structure and i'd say sorry i was dreaming about my

lamborghini like explain the structure again But teams actually do have like much more in this kind of field. Like they issue debt. They, I mean, all teams have debt, right? I think all teams have debt, particularly after 2020. So they take out a lot of debt to cover payroll and so on. And teams have investments and teams have real estate and so on and so forth.

So they have a lot of their book in things with future cash flows. And those cash flows change a bunch when interest rates are higher. So if you wanted to issue somebody a long term contract two years ago, it would have to be because they wanted a long term contract or because you really thought you needed to do that to make it work. It would not be because, you know, the structure of the interest rate curve argues in favor of deferring payments way into the future. I add an example in here as well. Basically, if you wanted to either issue Korea a six-year deal or a 13-year deal, so a kind of old school

contract or a new school contract. I felt like a few years ago, those five, six, seven-year deals with high average annual values felt like they were in ascendance and maybe would be the order of the day going forward. Well, you could do that too. And obviously if it costs $330 million to make a $350 million commitment, it's going to be about one-to-one, right? Like shorter deals, you basically have to, the present value is basically a hundred percent of the deal. That's pretty easy. But the higher interest rates get, the more you're kind of getting a savings on the headline number by making a longer term deal, if that makes sense. Like if interest rates were zero, then there's no savings to be had by extending because

investing just doesn't return you anything. But the higher interest rates go, the more money you're quote unquote saving by extending out the length of the contract. Now, in theory, players could be like, hey, I've looked at these graphs, like inflation's higher. I would like to get more money as an offset, but they are. They are getting more money. Teams and players seem happy to do this. And as I mentioned, I think it makes more sense for players to just say, look, it's a higher absolute number. That's great.

Like, I don't want to deal with, like, discounting this cash flow over X years. Like, you're going to write me a check for $350 million? Let's just do it. And I think that is driving a lot of this. Teams are not dumb, right? They're incredibly smart. How many people do you think teams employ to, how did you say it, circumvent the intent of the competitive balance tax? It's not zero.

And I don't think it's single digits. Yeah. I think it's more than to a team probably. Well, I don't know if the Royals have a lot of people on there circumventing the CBT. They're not worried about it so much. I don't think the A's are either. Yeah. Basically, teams employ a lot of financial analysts thinking about this kind of stuff.

Yeah, basically teams employ a lot of financial analysts thinking about this kind of stuff. And if I'm a team, it's much more attractive to offer deferred payments and not deferred payments in the way the Nats do it, because those actually have interest rate riders attached to them. You know, to defer those, you actually have to have to pay a rate of interest. I'm talking about just making really long term deals to where some of the money in the contract happens in the future. I definitely don't think it's a coincidence that three of the four free agency deals of this length or longer have been signed this year. It just makes sense. Yeah. If I were an interest rate advisor to a team, I'd be like, hey, rates are really high right

now. If a guy is indifferent between a short-term contract and a long-term contract, do the long-term contract. It's a great time to, we'll hedge the interest rates or something, but this is a great time. That money costs you less than it ever has. Yeah. It's interesting because we're seeing these two kind of unconventional contract structures where, as you noted, you have sort of the Scherzer Verlander type deal, just like a really short-term, extremely high average annual value contract. And then there's also just at the other end of the spectrum,

there's this really, really, really, really long-term contract for a lower, though still high, average annual value. So it's almost like when we talk about pitching and you say that a pitcher doesn't want to kind of do what everyone else is doing or like be in the middle sort of stuff-wise, like when to let's say spin or something like that you know you can succeed with very low spit or very high spit like you want to be at the extremes somewhere because everyone is kind of prepared to hit people who are clustered in the middle and i don't know if it's a perfect analogy but it seems like that's what teams are kind of doing contract wise they like, they want to avoid the blend of those two things and either just compress it and not have to worry about the long-term and pay a premium in the short-term or just pay an anti-premium. I don't know what you

call that, but just sort of stretch it out for so long that it then doesn't become as big a deal in the short-term. So you want to to avoid the middle ground, I guess, where you're still handing out a fairly long-term contract and you still have to deal with aging and all of that, but also you're not really getting a discount in the immediate term. Yeah, I will say, even the next tier down, they're doing versions of this as well. Brandon Nimmo got eight years.

Wilson Contreras got five years, which is more than people projected. K as well brandon got eight years rosen contreras got five years which is more than people projected kodai senga got five years like the the average length of deals has been pretty uniformly longer than we projected and i think that just makes sense like i would prefer to generally lengthen deals right now and yeah like that's not the case for verlander and scherzer but i think a year ago degrom would have taken one of those deals he would have taken a uh a short high dollar deal and now he's taking a longer still extremely high dollar deal he's really good but i do think that yeah for the the real stars maybe it makes sense to go into double digit years but for everyone it kind of makes

sense to string things out a little bit longer. X, you know, guys who are 39 and probably don't want to have that long of a deal, but they'd like to get a lot of money. The only team that's made those very high short term deals to old pitchers has been the Mets. I mean, they've made it to two very good pitchers who I think you guys have talked about are kind of the same pitcher. Yeah. But like maybe other teams were offering those deals to those guys. But I don't think anyone's offering those to younger players anymore. It seems like it's exclusively the territory of old but still very effective players.

Imagine a 10-year deal for Verlander. I guess the trendsetter was sort of the Trevor Bauer contract was regrettable for multiple reasons. I worked very hard dancing around that, Ben. Yeah. So is there any scenario where this comes back to bite teams because by the time these bills come due, let's say the Fed has fixed inflation and we have avoided some protracted recession and these deals that were signed during this outlier time of high interest rates and kind of an economic downturn suddenly don't look so great in 10 or 11 or 13

years? Is that a possible outcome here? So I'm glad you asked this because I'm planning on writing about this next week. Ah, more finance. Yeah, this one's actually more abstract and hard to grasp so get ready uh but i will i will not go into the whole article of that yeah sorry john read this one too the a little behind the scenes ben was like i don't know this part of this article might be too abstract tell me what you think and like i am several steps removed from the finance at this point but you, you know, like it's still there lurking in the background. So then I was like, John, as someone, and I mean this entirely as a compliment, who is not in any way associated with the finance, will you read this and make sure it makes some amount of sense? Yeah. Yeah.

We did do that. So basically, in theory, yes. So you can imagine you put it on your books and you're like, awesome. Like this stuff's going to, you know, the time value money is really low right now. And then next year, interest rates are lower. And you're like, oh, man, it didn't work out well. The present value of these payments has gone way up. But in practice, teams should be hedging this. They should be making an offsetting bet that will pay them some money if interest rates go back down.

Right. And lose them some money if interest rates go back down and lose them some money if interest rates continue to go up. Because that just makes sense. So we can use my example from earlier. So today it's worth $280 million or $285 million of present value money. And last year it was worth $320. So the difference between those is $35 million of present value. So if you're a team, you could call up a bank and essentially say, I mean, this is not what you'd say, but this is what it would work out to. Hey, let's sign a contract between the two of us. And if interest rates go back to where they were a year ago, I want you to pay me $35 million. And hey, now I don't really care if they go down. And the bank's like, well, what? No, I'm not just going to pay you money.

Like you have to pay me money if it goes the other way. And the team says, oh, yeah, that's fine. Because if interest rates continue to go up, the contract would be even better of a deal for them. You know, deferring money is even better for them. So they can enter into a derivative. Oh, yeah. It's a. Oh, boy.

We're in the deep end of the pool now. They agree not to, you know, they don't have to put any money down up front, but they and the bank just agree, hey, like if interest rates go back down, the bank will pay the team. If interest rates continue to go up, the team will pay the bank. And it just turns that contract into a certainty. Like they know how much of a discount they're getting and they're going to get it at that interest rate no matter what. no matter what. So I don't know if teams for sure do this, but I am like 99% certain. I've never heard a team confirm it, but they almost certainly do. It would make very little sense not to in the context of these big business entities who are buying real estate developments up and stuff. It would be wild for them not to have some kind of hedging desk somewhere in there and some kind of finance team that does this. And you can understand why that's a good idea, right? Like if I go to, I don't know, Bill DeWitt, and I say, hey, Bill, I've got a plan to save you $35 million. And he's like, great, I love saving $35 million. But, you know, we can't frame Nolan

Arnotto for PEDs. Also, then we'd lose Nolan Arnotto. So is that it? And I'd be like, no, it's a contract deal. He'd be like, great. Well, what are the risks to it? And if I said, well, if interest rates just go back to where they've been for, I don't know what, like 16 of the past 17 years, you'll lose the money. He'd be like, no, this is a bad plan, Ben. You can't do this. But if I said, ah, don't worry, I have a hedge that guarantees you you'll make it, then maybe he'd promote me. I think that teams will very likely hedge their risk. And a bank doesn't care, right? If you make a symmetrical bet with them where they're going to make or lose this money, and they can just hedge it by doing some other trade

to someone else, it's great. They can charge some tiny amount to you. They charge $100,000. And you're like, well, that's small in the context of things. Great. They do it 100 times. It starts adding up. But they're happy to take that risk from you and just to lock you into certainty. And so teams can do that now. It wouldn't have made sense to lock in 0.9% interest rates two years ago. Like why? But now, if you can lock these rates in by, you know, exchanging further upside for further downside, I think it makes a lot of sense. And so I would expect that all three of the teams that have issued these 10 plus year deals are entering into some kind of hedging. So last question, this was something that was being discussed in the comment section of your article, but why not include something in the contract that accounts

for inflation, some kind of inflation clause so that you don't have to essentially bet on what things will look like a decade down the road, but you just build in something that would adjust the contract accordingly. Someone commented, why don't agents include inflation clauses in their superstars big contract? I live in Europe and here it is a common thing that long-term contracts include an inflation clause that adjusts the numbers in the contract yearly according to an index both parties agree on when signing. Someone else responded that maybe that's kind of analogous to the NBA where a max or super max salary is set as a percentage of the salary cap for that given year. And MLB, of course, doesn't have a salary

cap. But if you did something like that with CBT brackets or something, maybe that would work. And other people are responding that, well, because MLB contracts are guaranteed, maybe you don't have to do that. So you just agree on everything upfront. But I wonder whether we could get to a point where teams and players start pushing for this kind of thing, and then everything gets vastly more complicated for us. And we have to have you on every episode to explain the financial ramifications of every contract. Well, my understanding is that it has to do with the guaranteed contract necessity that, you know, inflation is not uniformly positive. And I don't know how you could structure this. There's a lot of things you can't structure into contracts that deal with variable payouts. And I do not know this for sure. But it is my guess that you just can't structure it that way. I also don't know that like players would be particularly interested in this. And I'm not entirely convinced that teams would be all that interested in this.

Like inflation is not the same thing as rates. It's not the same thing as what they can hedge at. Something called real yield, which is basically interest rates after stripping out inflation, jet, something called real yield, which is basically interest rates after stripping out inflation fluctuates. And CPI is not the same inflation that teams face and team revenues don't grow at the CPIU, which is the standard one we quote. These things all have a lot of noisiness around them. And I imagine if you're a team and you suddenly had to pay out 8% more on all your contracts this year, and you were like, wait, what? Why did we do this?

Our revenues didn't go up 8% this year. I think you might be unhappy. So indexing to something that does not match your cash flows creates some risk. So I think teams would kind of be hesitant to do it anyway, even if they could, but I also don't think they can. So kind of a double whammy. Okay. All right. to do it anyway, even if they could, but I also don't think they can. So kind of a double whammy. Okay. All right. And I guess if all of this looks different a decade down the road,

well, that might be another GM's problem. It might even be another owner's problem. So you might not be- That's an added benefit. Yeah. Right. All right. Well, I was going to ask you to explain this like I'm five, and I think you did a decent job. I don't know that you could explain these things to a five-year-old. Maybe like if you put it in terms of cookies and how many cookies you have and how many cookies you will one day have possibly. I don't know. Did you know the marshmallow problem is fake? Right.

Yeah. It seems challenging to explain this to lay people, and I am one. I had a friend in college who, whenever some kind of business discussion would come up, we would just both tune out totally and just turn to each other and solemnly say, bonds. And you did say bonds in a serious way multiple times, I think, during this discussion. But I think i mostly followed it so uh so this was a success our first ben explains interest rates segment on effectively wild hopefully last yeah but we will have you back in a couple weeks to draft minor league free agents which is maybe a bit more exciting for some people bonds yeah i'm excited to see who the this's Jose Iglesias is. Yes. Probably no one. No one comes immediately to mind.

He's a unicorn. Yeah. He's a special, it was a special circumstance. Perhaps the first time Jose Iglesias has been described as a unicorn. Sorry, Jose, if you're listening. Poor guy. All right. We'll talk to you then.

All right. So before we go, here is the past blast. As always, this is from 1942 because this is episode 1942. And it's also from Jacob Pomeranke, Sabre's director of editorial content and chair of the Black Sox Scandal Research Committee. And he writes 1942, the might be understandable if sports writers tried to help lighten the mood for fans who just wanted a distraction from all the dreary news of the world. President Franklin Roosevelt had started the year off on a positive note, writing his famous Green Light letter, encouraging baseball to continue for the good of the country's morale. However, Shirley Povich of the Washington Post was having none of that. Baseball, like war, was serious business. Or so it must have seemed from this column on September 3, 1942. He waxed poetic about baseball's charms in this description of

one dramatic at-bat during a game between the Browns and Senators. Quote, The folks who booed Don Gutteridge of the Browns the other night at Griffith Stadium were forgetting, perhaps, that getting one's base hits is a pretty grim business, and a fellow up there with a stick in his hand can't work up much compassion for a guy who is trying to strike him out. Dutch Leonard was making his first appearance on the mound since late April when he broke his leg. He had walked to the box with a decided limp. It was obvious that the big knuckleballer would have trouble fielding a bunt. Gutteridge bunted on the first pitch, a push bunt that would make a pitcher scamper fast toward first base, a tough play even for a pitcher with two legs. The fans booed. They

thought it was dirty baseball. But Leonard wasn't sharing the customer's great faith in human kindness. He threw Gutteridge out by a half step. It wasn't a case of sportsmanship. Up there at bat is no time to get sentimental. The guy who does winds up behind the eight ball. That's one of baseball's chief charms, the grimness of the game. Wow. I have not thought of it exactly that way. Yeah, geez. Perhaps it was just grim for Shirley Povich, Jacob concludes, to watch so many bad Washington Senators teams over the years.

They were on their way to their sixth straight losing season in 1942, never finishing higher than fifth place in that span. So yeah, I tend not to reflect that deeply on the grimness of the game. I tend to focus on the positives, I suppose, although every now and then you can't ignore the grimness. But if it's supposed to distract us from the slog to rigor mortis, then the grimness would seem to have the opposite effect. Yeah, you don't want to reinforce the slog. It's already sloggy enough. Right.

I don't want to know the answer to this question, and I hope that we never find out. But I do wonder if there were to be a World War III, let's say, if there were to be another total war of the type where Americans got drafted again. Again, really want this to remain in the realm of the hypothetical. But if that were to happen, I wonder whether we would get a green light letter for baseball at this point, because I think it would probably be a tougher sell to say that baseball, that MLB is essential to national morale the way that it may have been in 1942, you know? Like maybe they would keep the NFL going more so than MLB at this point. That might be one implication of what is the national pastime and when did baseball stop being the national pastime other than kind of in a traditional rosy way that we call

it that. I don't know that you could necessarily define baseball as an essential service or just cannot wage war without the people at home being able to play and distract themselves with baseball because, you know, a lower proportion of the population is doing that than was in the 1940s. So again, I hope we don't have to find out. And if we did find out, then I guess I would hope that there would still be baseball. But I don't know. It might be a different calculus than it was 80 years ago at this point.

Yeah. Yeah. I mean, yeah. But oof. Whoa. Well, that's a grimness of the game hypothetical. That's a grimness of the world one for you. So we can end on that uplifting note.

What occurs to me now that one problem with keeping football but not baseball going during wartime would be how martial football is in nature compared to baseball. We all know how the George Carlin bit goes. The objectives of the two games are totally different. In football, the object is for the quarterback, otherwise known as the field general, to be on target with his aerial assault, riddling the defense by hitting his receivers with deadly accuracy,

in spite of the blitz, even if he has to use the shotgun. With short bullet passes and long bombs, he marches his troops into enemy territory, balancing this aerial assault with a sustained ground attack, which punches holes in the forward wall of the enemy's defensive line. In baseball, the object is to go home and to be safe. I hope I'll be safe at home. Safe at home. Yeah, baseball seems like a better distraction from grimness.

Well, after we finished recording, the news broke that the Yankees had won the Carlos Rodon sweepstakes six years and $162 million. So the Twins and Cubs can cross another Carlos off their list, as can anyone who is in the market for pitching. If you still need starters, I hope you'll like Nathan Evaldi. If I had predicted two years ago that Carlos Rodon would get a six-year $162 million contract this winter, it's been quite a career progression, but we will discuss that next time. Hope you enjoyed our discussion with Ben, even if your interest rate in interest rates isn't typically high.

I thought he made it about as compelling as it could be. Also, I meant to mention when we talked about the Correa contract that it was a windfall for him. It was also a windfall in fake money for Meg in the free agent contracts over underdraft. She had fallen a good deal behind me, but she made up most of the deficit with that one move because she had taken the over on Carlos Correa at a predicted total of $288 million, according to MLB Trade Rumors. So with the gap between what he actually got and what he was predicted to get, plus the $10 million bonus for getting the directional difference right, that's a $72 million gain for her, which brings her total for the offseason up to $135.5 million, which is $30

million behind me at $165.35. We have three total picks whose contracts are still TBD. She took the under on Andrew Penitendi at $54 million. I took the over on Taylor Rodgers at $30 million and the over on Brandon Drury at $18 million. So we will see. I don't think I'm going to gain or lose a whole lot from my picks. And I don't think that Benintendi could be under by enough for her to make up the difference right now. But who knows? This offseason has been surprising in any number of ways. All right. Another reminder that you still have a chance to sign up for the Effectively Wild Secret Santa if you're interested. Signups are open until early next week. And again, you'll get matched up with the Effectively Wild Secret Santa if you're interested. Sign-ups are open until early next week.

And again, you'll get matched up with another Effectively Wild listener who has opted to participate. And you can exchange low dollar value baseball-related gifts. You don't have to worry about the time value of money here. $20 is sort of the suggested ceiling. It's a fun activity.

I participate every year. So if you sign up, you could give me a gift potentially or get a gift from me. Anyway, the link is on the show page and I hope people will sign up because our listener Zach Wenkos does a great job organizing this every year. You can also support Effectively Wild on Patreon by going to patreon.com slash effectively wild. The following five listeners have already signed up and pledged some monthly or yearly amount to help keep the podcast going. Help us stay ad-free and get themselves access to some perks. Trevor, Jack

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And you can check out the Effectively Wild subreddit at r slash effectively wild. Thanks to Dylan Higgins for his editing and production assistance. We will be back with one more episode before the end of the week. Talk to you soon. We delight and obsess When there once was a flame in my chest It's only a memory