Effectively Wild: A FanGraphs Baseball Podcast - Effectively Wild Episode 257: Reevaluating Extensions/The Cubs’ Creative International Spending Strategy

Episode Date: August 2, 2013

Ben and Sam discuss whether several extensions would still be signed today, then talk about the Cubs’ decision to exceed their international spending allowance.

we talked about the euphemism they have in baseball and they say Chris Stewart is one of the better ones at framing pitches and framing is the euphemism for trying to fool the umpire trying to take a pitch just off the corner and make it look like it was a strike Jose Molina the catcher for Tampa Bay they tell me is absolutely the best at framing and of course we'll see Tampa Bay

when they come here on the 9th the first pitch to Stewart he takes low off the plate ball one 1-0 they are so what would be the word so studious about the activities of the major league player they even have statistics on framing and when I said that What would be the word? So studious about the activities of the Major League player.

They even have statistics on framing. And when I said that Jose Molina is the best at it, they say he has framed 13 point something for strikes, a percentage. Good morning and welcome to episode 257 of Effectively Wild, the daily podcast from Baseball Perspectives. I'm Sam Miller with Ben Lindberg. Ben, you know what I just learned about 10 seconds ago? What? Jonathan Papelbon's fastball is three miles an hour slower than it was two years ago. Yeah, I think I wrote something about that recently. He's, yeah, kind of scary. But he's having such a good year. Yeah.

I mean, he's having a worse year now than he was a month ago. But he's basically having a really good year. Yeah, weren't his strikeouts down by... Yeah, they're down quite a bit, I think. They are. They're way down. Yeah, so that's worrisome. He is having a low BABIP year. You don't hear about relievers' velocity going down as much.

I'm sure it happens just as much, but it seems like we focus more on the starters. And I think you should hear about it more because I think it was in a Mike Fast article he showed, should hear about it more because i think it was in a mike fast article he showed and i think we may have discussed this at some point that uh velocity loss hurts relievers more than starters all else being equal which makes sense because there makes a lot of sense yeah they're more reliant on their fastball or they they throw two pitches and they don't have as much to to mix in there so if they lose some velo then that hurts them so yeah pebble bun sort of scary velo yes

not velo you say velo in my head I think I've always said velo because it's velocity yeah it's not velocity I don't know so in my head but you're right I mean I think those in the know say velo and I also say it.

I would say that I would approve of velo just based on the word itself, so I'm not surprised. What do you want to talk about? I wanted to talk about international spending and the Cubs. Okay. And I want to talk about extensions, some extensions from the past. Okay. Sort of. By the way, when we talked about suspensions the other day and who gets the money,

so the teams just keep it, right? They can just keep it. That is the answer. So I was having a very macabre Gchat conversation with somebody not that long ago. And I'm kind of hesitant about bringing this up, but we were just talking about the fact that if somebody could profit $100 million from your death, for instance, you would be kind of worried about a hit being taken out on you, right? Sure. I mean, you're not allowed to, for instance, you're not allowed to buy a $100 million life insurance policy on me, presumably in part because you might murder me, right? Yeah. Uh-huh.

And so, clearly I'm not, I don't worry about teams doing this, but it is such a massive amount of money. And now that I know this, now that it has been confirmed, thanks to Deadspin, now that it has been confirmed, it really does,in, now that it's been confirmed, it really does get you in a conspiratorial mindset where you wonder how much of this A-Rod business is, or I guess you wonder whether the A-Rod business is being driven by basically the clubs wanting to take care of their financial interests or one of the 30 owners' financial interests. I would say that I don't really feel that way probably, but it does make your

conspiratorial part of your brain start worrying. Worrying, not worrying, but worrying. It's an odd thing to do. I don't not sure why. I don't know if the clubs have a right to it, to be honest. I don't know if the clubs have a right to the money. I don't know if anybody has a right to the money. But the clubs have committed that money to a player. I don't know. I don't know. It's hard to say. I don't see why a club should be bailed out just because the player they signed cheated. I mean, the point of, in fact, part of the point of a suspension of a player, part of the point I would say is to punish the team as well. That the discipline is twofold.

It disciplines the player, but it also disciplines his entire team. And when you have players who are worth less than their contracts, it's no discipline at all. It's a reward. You're rewarding teams for having steroids users. And presumably, if a team has a choice of whether to report the player or not, you create a strange incentive for them. And the situation would be different if this were A-Rod five years ago. Then they might want him to be playing. But yeah. Yeah, yeah, yeah. I don't like it. So Buck Showalter got in some trouble for saying the same thing. Did you see that?

I saw he said the same thing. I didn't see that he got in trouble. their luxury tax thing and they'll be able to spend tons of money and Matt Wieders will be a Yankee in two years. So he did not intend for that to be reported in USA Today, but it was anyway. Have you, have you ever had any, any moments as a writer slash reporter when you weren't sure whether something was on or off the record or you, you thought something was on when it wasn't?

I don't believe I've ever reported anything that I was later told was supposed to be off the record. And to some degree, that's because I'm not a very good reporter. And so if somebody tells me something, in my head, I'm constantly filtering through, like, why is this person telling me this and how does it benefit them? And if they tell me something that doesn't benefit them, I think I must've made a mistake. And I'm, I'm, I mean,

admittedly this is because I'm a bad reporter, right? I don't have that killer instinct. Uh, but, uh, so, so I'm likely to in the,

in such cases, I'm likely to really clarify and say, just making sure we're on the record at this point. Right. Um, so hopefully my sources trust me more because of that um but i've it's never been an issue and you know i've covered some sensitive things when i was a real reporter those were the days um okay and the other thing that a bunch of people emailed us

about or tweeted us about was the the bruce ch Did you see that? Can you summarize that? Yeah, and I can't believe neither of us remembered this at the time because I was so caught up in the idea at the time. But the Red Sox, when there was a... It was... Was it game 162 or 163? I think it was 162 because wasn't...

Yeah, yeah. They didn't have a 163. It would have been a 163 if they'd won that game. So for 162 two years ago, they had to go with some subpar starter and there was a lot of talk about them getting Bruce Chen who would have been pitching on normal rest and who was a free agent for the Royals. And so the idea was kicked around that they would get him as a one-day rental. And so the idea was kicked around that they would get him as a one-day rental. And somebody, I don't remember who, but somebody pointed out that there is a real question about whether you would be getting the guy's best work. And we were thinking about it from the perspective of the team's chemistry or how the fans would react or how baseball in general would react and all that. But you do wonder like if a guy is being brought in for one start on a team that,

you know, he has really no emotional ties to, and he knows that he's not going to get to pitch the next game with them. You wonder what it'll be like for him if you'll get his, his best work. But, and also he's going to be pitching to a catcher who's not familiar with him. There's probably some sort of framing demerits involved in that. um you know that just the communication with his catch the communication with his defense

so it's there you probably if the the question at the time was felix versus a typical number three starter on short rest bruce chen is not not quite the same bruce chen is not quite the same thing but even if you even if you consider that we decided a two-run per game difference, or one and a half to two runs per game, you probably would want to knock Felix maybe a half a run, too, in that instance. And so it's probably even a smaller margin. Okay, good banter. Now on to the real stuff. Why don't I start? Okay.

So I have a piece that you haven't read yet but is going to run tomorrow, Friday, in Prospectus. We'll see. If I like it. It's about extensions. And what I did is I looked at now that some of the early extensions that have been signed during the extension era have a few years of history, I look to see whether they're still as club friendly as we assume all of these are. And so there were from, I looked at a 13 month period from December 1st basically of 2010 until the end of 2011. basically, of 2010 until the end of 2011. So basically we've got a couple years since then,

and I looked at those 14 contracts that were 14 extensions that were signed at least three years before their teams had to act. So players with three or fewer years of service time or players who had already signed extensions that were at least three years away from expiring. So 14 of those, right? There were 14 times where a club went three years into the future in order to sign an extension for a player. And I wanted to see whether those 14 turned out to be overwhelmingly club favorable, or just sort of, or not favorable at all.

So I'm not going to give away the ending probably unless you ask me but um there were a few uh there were a few cases that i think it was debatable whether the the last question in each in each uh player case was would they sign him today for what he's still owed right which is pretty simple enough way of determining whether it turned out club friendly or not right and so would they sign him today for what he's still owed, right? Which is a pretty simple enough way of determining whether it turned out club-friendly or not, right? And so would they sign him today for what he's owed? Like Jay Bruce is, well, I don't even have that number in front of me. Johnny Cueto, for instance, is owed $10 million next year, and he has a $10 million option for the year after that clearly the reds would sign him for one year 10 million dollars with a cheap option after that i think that's a pretty obvious they would sign him today for what he is owed so an easy yes jay bruce is

10 12 12.5 with a yeah and there's a 13 million option yeah yeah so three years basically 35 million with a reasonable option at the end of it. They would clearly sign Jay Bruce for that today, like no question whatsoever. So there were a few, though, that I had to go back and forth on or that, you know, I picked a side and have an opinion, but I feel like maybe other people would have other opinions. So I just wanted to run these by you and see what you thought. All right. Is that okay? Is that a good topic? Sure.

Topic for a show. Here we go. All right, Alexi Ramirez. Alexi Ramirez is about to turn 32 years old. He is coming off a, well, he's in the middle of a very poor offensive year. He has one home run, but he's generally been graded out as a very good defender and and he's still above replacement for sure, and was good not that long ago. So that's Alexi Ramirez. He is currently owed $29.5 million over the next three years

if the White Sox pick up a $10 million option. So basically two years, $20 million with a $10 million option. Would the White Sox sign him today for two years, $20 million with a club option at $10 million? I guess I would say he's probably not likely to be a great deal in just a dollars per win sense, I would think, with that. I mean, he'd have to be an average player, I guess, right? Yeah, he'd have to be an average player. He basically was that last year, or we have him as that last year, mostly based on his glove.

And this year, he's on pace not to be that. I guess, yeah, that is pretty close. He's going to be 32 and 33 those seasons. I guess I'll say yes. Just, I don't know, shortstop and there aren't a lot of those. There are. There are not a lot of shortstops. Yeah, it's tough to say.

This is a case where you look at his stats and you see the trajectory yeah you either see the trajectory or you see the you know the mean and if you see the trajectory you go oh well he's going to be out of the league in two years and he very well might be if you look at the average over the last four years and you wait it then he's been pretty good. And Pocota basically sees him as roughly a two-win player over the course of a full season, just slightly below that, which is about what he needs to be worth $10 million this year with a little bit of inflation next year. That puts him right on pace. And the White Sox get that club option, so they have a little bit of embedded upside without any risk on that third year.

I concluded that they would not. I concluded they would not. What was the trade that we said that they rejected yesterday or was reported? The trade that they reportedly rejected was for Carlos Martinez, the Cardinals' excellent prospect. So if they actually rejected that, then that suggests that they would probably value him as worthy of that contract, I would think. That's fair logic. Yeah. That's true. Yes.

Unless they think Carlos Martinez has bedbugs. Right. All right. Wade Davis. Wade Davis, of course, signed a kind of absurdly early deal. This is actually, there's a couple of them, Davis is one of them, that were signed so early that it's actually hard to say if they would sign him because he would still be arbitration eligible this year. But I guess what the question is, is he, so in that case, I guess the question is, is he, you know, is the club control still valuable at this point? Right now,

Wade Davis will make $4 million next year. And then there are three, I believe three options, progressively more expensive coming up after that. Something like $7.810. Okay, so $4 million next year guaranteed, and then $7.810 after that. And he would otherwise be how many years of service time does he have? 3.032. Okay, so he would otherwise be going into his second year of arbitration, and then he'd have one more year of arbitration, and then he'd be a free agent. So club control of Wade Davis right now, valuable or not valuable?

I'm going to say not so much. I'm going to say not so much. When they signed that extension, it wasn't clear whether he would be a reliever or a starter, I guess. Now it seems pretty clear that he is not at least going to be a good starter. And so, I mean, 4.8 for what could potentially be a pretty good reliever is not terrible. But for a reliever in arbitration. Yeah. So I'll say no.

Yeah, I'll say no too. So we agree. Wade Davis is a no. All right. Clay Buchholz. And the Rays traded the guy who wasn't a great deal. Shocker. Yeah.

Although they also signed him to it. It was never quite clear to me whether Wade Davis was a valuable asset in that deal or not. It was never clear to me whether the Royals wanted Ray Davis or whether the Rays wanted to get rid of Wade Davis. It's still not clear to me. Yeah. Cause people, people always cited, they said shields was only there for like one more year,

but then you had Wade Davis for like three more years. Uh, lots of team control there, which supposedly sweetened that, that return. But yeah, I think shields was there for three years and Davis was there for five. Okay.

All right. Clay Buckholtz. So Clay Buckholtz has pitched something like 70 innings this year. But, you know, they were really amazing innings. He was a Cy Young candidate before he went down. And basically, Pocota projects him to be a three to three point five win player over 200 innings but you know he doesn't ever do that and he's only really come close twice so he is owed according to the numbers i saw 20 million over the next two years with

13 million dollar options the two seasons after that uh if Clay Buchholz were a free agent right now, would he get more or less than $20 million over the next two years with $13 million options? I'm going to guess more. Oh, sorry. I have to clarify. This would be his final year of arbitration. So he would actually have one year where he probably would get slightly less than his free agent. And then, you know, so the Red Sox could just wait and see how he recovers and then, you know, go.

Yeah. Or maybe they would want to sign him now when he's hurt, although he often is. I guess I would say yes. Yeah. I guess I would say yes. Yeah, I think that he's going to get $7.7 million next year. And I would guess that he would get less than that in arbitration. So the Red Sox are going to be paying him more next year than they otherwise would. And I kind of think they would wait. I think they'd wait it out.

And my guess is that they would not sign him for that right now i just don't know i mean it's hard to he's had he's basically had two good stretches in his career one of them was very recent right so i can see why they'd be attracted to him because it was very recent he was great for like two and a half months but he's had two good stretches in his entire career he's got five years of service time two good stretches had two good stretches in his entire career. He's got five years of service time, two good stretches and two healthy stretches. And otherwise, he's been mostly injured, mostly not great, and a lot of times both of those things. I don't know, man. I don't know that right now he's a guy that I'd want to commit $20 million to, although the upside of those options is enticing. Yeah. Yeah, I'm tempted. Yeah. I could, I think that I, I'm not surprised that you would go yes. And I, I think I came down on the side of no. Um, and so then the last one is Trevor Cahill. Uh, so Trevor Cahill signed basically the same

deal that Buckholz did. Um, and he's also on the deal, but he's going to be back probably in about, I don't know, two weeks or something like that. He was traded shortly after the extension was signed. He has produced 1.6 warp in the two and a half seasons since, but I think he is generally perceived as being better than that. He's also durable. Yes. And he's consistent.

And he's got exactly the same deal as Buckholz, it looks like, or just about 7.7, 12. Yeah, well, the same going forward, yeah. Yeah, right. I think he got a slightly bigger signing bonus or something. So, yeah, so Pocota projects him to be about two wins a year when healthy and he's basically the opposite of Buchholz right he's

reasonably certain to be on the field and not nearly as likely to be great when he's there so 7.7 wait what is it? 7.7 12 and then 13 million yeah yeah I'll say yes again.

I think teams would value the 200-inning guy, although he's not going to be that this year, but has been the last couple of years and almost the last three years. So, yeah, I'll say yes. Yeah, I agree. I'm on the fence, but I say yes as well. Okay. All right.

So then go read the thing and find out whether these guys are, well, go find out whether these are good signings or not. Yes. Because there are bad ones too. Good teaser. Subscribe to Baseball Perspectives and read Sam's article about extensions today. Okay. So my topic is about the Cubs international spending strategy. And I guess it could be any team's international spending strategy.

So the Cubs, just before we started recording, announced that they had signed Eloy Jimenez, who was kind of the consensus top international J2 pick this year. And it's a big deal. It's $2.8 million plus a college scholarship. And the Cubs have really... Wait.

He's going to... Oh, yeah. In the offseason, he'll go to college. In my head, I had this idea that he was going to go to college and then they were going to... Yeah, like four years from now, he'd join the team. I don't know. I don't know why that, nevermind. Go ahead. Okay. Uh, so the Cubs have really gone big internationally. They, they signed him for 2.8. Uh, they signed someone else for 1.7, someone else for 1.63 and two other guys for close to a million. So their total for international spending is almost $8 million.

Oh, my word. Yeah. That's crazy. When Ben Badler did the thing about trading slots, I believe that he said the Astros would be a team that would be interested in trading, not because they were going cheap, but because it was impossible to spend $5.5 million or whatever they had. Right. Yeah. So the Cubs, they started out with the second biggest bonus pool after the Astros. It was like 4.56 or so. And then they acquired some extra money in the Scott Feldman

trade and the Torres trade and Carlos Marmel. So that brought them up almost another million. So their total bonus pool after those trades was like five and a half. So they've exceeded that by quite a bit, by over two million. And so the penalties for doing this are steep. this are steep. If you go over your pool, over your allotment by 15% or more, which they have, you get 100% tax on anything over the pool allotment. So you have to pay double on that extra $2 million that they spent. And then there are the penalties for for next season signing period which is that they won't be allowed to sign a player for more than 250 000 even if they if they so they even if they paid a penalty yeah they like they couldn't they just can't do it i think yeah um so uh and and they've signed several guys for more than that this year i mean mean, for $250K, you're not going to get one of the top guys available, really.

So I guess it was before the Futures game, maybe, before this latest bonus was announced, I was talking to a, I guess you could say, talent evaluator, who said that his theory about what the Cubs were doing was that they were going to go really big this year, go over their allotment, sign all the top guys. And then next year when they're not allowed to spend anyone, the thing, yeah, the thing is you can still trade your slots. I think you can trade up to 50% of your, of your allotment. So they could trade something like, I don't know, 2 million or so in slots.

So that seems like it could be a decent strategy, just kind of going boom and bust one year to the next, just signing all the top guys one year, paying that overage. And then the next year when you're top guys one year paying that overage and then the next year when you're not allowed to spend any money you trade all your slots to teams that can um and i don't i don't know before this signing period we we talked about what those slots would be worth and what teams would would give up for them and so we saw some of those trades and i feel like i don't have the greatest handle really on how teams valued that money in terms of prospects.

But that's a lot of money that they could potentially trade next year and reinforce their farm system that way. And then the next year, maybe they go back to this same strategy. And it seems like the benefit to doing that would be biggest when you're the only team doing that. If every team is doing that, then you're not going to get the top guys because there'll be a bidding war and you won't be able to just get the cream of the crop one year. You'll have to share it with the other teams. If the Cubs are the only one doing this now, they can just kind of skim all the top talent off the top this year and then sort of take next year off and restock in another way. So it feels to me like there are – I'm not sure I see how this works. Like I think I might see how it works, but I'm not sure I see how this works. I think I might see how it works, but I'm not sure I see how it works. I understand the mechanics of what they're doing,

but I'm not sure I see the benefits. So let me just talk it through for a second. I'm always out of my depth when we discuss international spending, and we feel like we both are. Presumably, let's just say, for the sake of this conversation, that there's just as many good players next year as there are this year. Okay. So it's not a year where there's a particularly strong class.

And actually, I asked the guy that I was speaking to, can you even tell whether one year's crop will be good a year in advance? Because in the amateur draft, you can kind of tell, or people think they can tell at least, that the next year's crop will be especially good or bad. But these guys are so young that apparently not. You can't really forecast even a year in advance to say that this J2 crop will be better than average or worse. Right. Yeah. Okay.

Yeah. It's like trying to predict who the hot boy band is going to be in a year. Right. It's teenagers. What are you going to do? So let's say they have four million they spent eight million dollars this year they had four million dollars in you know in cap space originally it's not cap space what's the word slots yeah a pool a lot so

they had like four million or so originally they traded they traded for some more. They got up to like $6 or something like that, right? $5.5-ish. So $5.5-ish. So then presumably next year they'll also have, let's say $2.5. They're a bad team, so maybe $3. So they're going to have $8.5 total between this year and next year. So this year they spent $8.5 and next year they're going to spend basically none. They'll spend a little on low-end guys, but not really much.

And so they're going to trade some slots for prospect types, low-end prospect types. But they had to trade low-end prospect types this year to beef up their pool. And they're going to pay $3 million extra because they went $3 million over their slots this year. So, it seems like they're hurting themselves on both ends. It feels like an inefficient way to get guys because they're paying twice as much next year. And yes, they're trading their slots. Sorry, they're paying twice as much this year. And they're trading their slots next year, but they are... I mean, they could trade them if those slots are valuable enough to... I don't know. Ben, I'm getting confused. This is what I think. When I think about selling a house and buying a new house, which I don't want to do, but if I

ever think about that, it feels like a bad idea because you end up spending so much money on paperwork and getting all these- Taxes. Exactly. There's all this stuff that you pay the realtor 6%. You pay the notary to stamp the paper or whatever. You got to pay somebody to clean the house. And it's just like if you have a drug dealer who is like – if your drug dealer is the drug dealer, you get pure drugs. But if there's nine drug dealers between you and the main guy, every drug dealer steps on that product and

puts a little bit of baking soda in, right? And so you don't want to have too many transactions. Like the goal should be fewer transactions in life because each transaction has transaction fees. And so like you just, it seems to me that ideally you just want to simplify and make it as simple as possible and just sign your guys and not have like too clever of a plan. So that's why it's hard for me to, to see how this works. Now, like you noted at the beginning, we're not the experts on this and you know who the experts are. Like if we had to know like how to do this, we would go to the Cubs and we would ask them how to do this.

So I'm not saying in any way that they're wrong. I'm saying I'm lost. I've gotten a little bit lost in this. Yeah. Yeah, the person I spoke to who guessed that this would be their plan was like scared of them doing this. And so it felt to me like a smart thing because of that and because presumably the Cubs are smart.

And then again, a lot of other teams are smart and are not doing this. It feels like maybe being an early adopter of this strategy could potentially be a bigger payoff. Because if you wait and five other teams are doing this, then you're going to have to be in a bidding war with those five other teams for the top prospects on the market. Whereas right now, no one else is doing this. They're just abiding by their slots for the most part. Yeah, it feels like what they're doing is sort of gambling that they can set off a run on J2 prospects. That by doing this, that next year, teams will be trying to spend more on J2 prospects and teams will be paying more for slot space to do it.

It feels to me like they're gambling that everybody was conservative this year and so they're striking while everybody is conservative. And that next year it might be kind of a wilder market and they aren't going to have as much interest or their dollars aren't going to go as far next year. So if that's what they're gambling. They might get more back for trading their slots. Exactly. So if that's what they're gambling, that seems, I can follow that. I could, you know, it all might make sense, but I mean, at least I can follow that. I don't, that's a gamble though.

Who knows? Maybe that won't happen. Yeah. Maybe everybody will say, oh, look, we had these slots and we ended up getting guys we wanted. So we'll just do it how we did it. Well, it's an interesting thing that they're doing that no one else seems to be doing. So we'll see what happens next year, I guess. And if the ramifications and implications of this are clearer to you listening to us talk about it than they are to us talking about it,

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