hit the Street?
by dougald1 on Jan 6, 2008 7:36 AM PST
23 comments
With Beane starting to clean house with the A's, and looking to 2009 and beyond. There is a different idea than just trading Street for one or two more prospects. How about signing Street to a long term deal, but weight the money on the early years, thus the A's closer will be cheap two years from today.
Say that Beane can sign Street for 4 years at 28 million with an option of say 5 million. Not sure if that more or less than what A's would have to pay, but work with me.
If the A's paid Street 10 million in 2008, 8 million in 2009 and 6 million in 2010 and then only 4 million in 2011 (2012 option at 5 million)it does a few things for them. First, when all the other players start hitting Arbitration years (Buck, Barton, Suzuki) the A's closer is at cheap money. Street at 24 is young and would not even be 30 at the end of this deal.
The A's have cut so much off the payroll that they can eat Street's high pay over the next 2 years. With no Bradley, Piazza, Kendall, Swisher, Haren, Stewart that must cut some 30 million off the books. And by half way through 2008 Kotsay and Blanton are gone and maybe Chavez.
One could do the same kind of deal with Blanton.
Street would sign this kind of contract because he is getting the same amount of money over the life of the deal, and in fact gets it sooner.
Another spin on this deal is if you need or want to trade Street in two years he is so cheap as a closer that other teams would pay a ton for the bargin.
MLB teams never seem to make these type of contract with the players, but to me it seems like a good plan. And the A's fan get to keep one old face from being traded.
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Interesting idea to front-load the contract.
Street might like it because of the early money (health risk shifts to the A's) and because he may see himself as the Logical Successor to Mariano Rivera in a few years (can you imagine a kid that engaging on the East Coast media stage? Unlimited financial potential.)
by The Dogfather on Jan 6, 2008 7:56 AM PST reply actions 0 recs
On the other hand....
aren't the A's assuming all the risk for a couple of seasons that they really don't care about? They may do just as well in 2010 by relying on the draft to cough up another closer with no financial risk at all.
Agree with Huston on the east coast media machine. They would eat him up, but in a good way. Much like his female admirers on AN.
by alox on Jan 6, 2008 8:35 AM PST up reply actions 0 recs
A reason why MLB teams don't frontload contracts
NO salary cap.
Paying $30M in the future is nearly always better than paying $30M now in baseball.
With no salary cap, it's better to backload contracts and to pay the money as far in the future as possible for 2 reasons:
Inflation. With salaries consistently inflating, $10M 5 years from now is much less than $10M now.
Also, the money that a team is not paying to a player can be invested.
by rfloh on Jan 6, 2008 9:20 AM PST reply actions 0 recs
good points
I had not thought of the inflation idea. It is much like winning the lottery and they say you get the money over 20 years or you can get a lump sum that a nice bit less. Maybe you do not need to pay Street all that 10 million in 2008, it might be 8.5 million because he gets it today.
The idea that the team takes the money and invested it for three years later does not make me fee good about the 2010 payroll. Think of when Florida has a 10 million dollar payroll one year because they trade all their stars, it is no sure thing that they will hop up to 100 million when the go for it. I wonder if the A's payroll gets to 20 million for the 2008 season, at a savings of 60 million over last season. Does that 60 million go back to the owners to be never seen again?
2007 80 million
2008 20 million
2009 30 million
2010 35 million
2012 80 million
2013 90 million
Not sure, but it will be interesting.
Thanks
by dougald1 on Jan 6, 2008 12:52 PM PST up reply actions 0 recs
Don't worry
It won't. The current payroll is going to be over $50 million, and there's no chance that Kotsay and Chavez ($19 million in and of themselves) will be dealt without the A's eating most of their salaries.
by PaulThomas on Jan 6, 2008 3:22 PM PST up reply actions 0 recs
No offense, man
but this displays a lack of understanding of how salaries work in MLB.
Street is only just entering his first year of salary arbitration this season. As such, he can expect something like $2.5 million in salary, because his pay is being compared to other people at his own level of experience, NOT to closers on the free agent market. I'm guessing it would increase in rough sequence to about $10 million by the time he reaches the free agent market.
So Oakland doesn't have to pay him $10 million now. There are two very good reasons why they shouldn't. The more minor reason is fiscal-- a dollar now is worth more than a dollar 5 years from now. When you count in the ability to invest the money, it's probably worth on the order of 35% more, which is pretty significant.
But the even bigger reason is that the absolute last thing a small-market team wants to do is give arbitrators a data point which says "a 4th-year closer is worth $10 million a season." That's going to jack up the price of other players at the same level of experience, because the arbitrators are allowed to consider it when they're granting awards to players at that level of experience or higher.
I've actually felt that it might be in the interests of the Yankees to deliberately overpay their own arbitration-eligible players so as to inflate the salary awards to players on smaller market teams. Conversely, this is something small-market teams need to avoid like the plague.
by PaulThomas on Jan 6, 2008 11:04 AM PST reply actions 0 recs
Arbitration point is good
The arbitration point you make is a valid one.
I would have two qustions about that idea.
The first being,how much would one players contract effect the arbitration prosses. If I am the owners in an arbitration case I would point out that it was a 5 year deal that the last three years are way below market, thus the Street contract is a bad example to be used for arbitration cases. And at the same time if Street is getting, say 4 million in his 7th season as a closer the Player's rep would not want to have the contract as an example for the same reason. Look at Dice-K's contract, I would find it had to believe that anyone will try to use his 4th year in the big at 8 million (something like that) as a arbitration example for players that came out of the minors.
The 2nd question is if it was a signing bonus, as in 4 million a year for 5 years, a 6 million signing bonus in year one and a 4 million bonus in year two. Would this impact the arbitration 10 million for a 4 year player?
As for the good point you made about 10 million today is better than 10 million in 5 years, maybe you can pay Street less than 10 million just because he is getting it today.
What Street gets if normal deal
'08 2.5
'09 4.5
'10 8.0
'11 10
'02 10 = 35 million
If do ass backwards
'08 8.5
'09 7
'10 6
'11 5
'12 4 =30.5
Which way does Street want it?
Thanks
by dougald1 on Jan 6, 2008 1:16 PM PST up reply actions 0 recs
re
I personally love the idea and have suggested similar things in the past. However, I believe the CBA prohibits decreasing annual salary
by blee1134 on Jan 6, 2008 1:38 PM PST up reply actions 0 recs
Nope
Look at A-Rod's most recent contract. It pays out significantly less in the final 3-odd seasons. There's no rule against it-- it's just poor strategy for the teams in most cases.
by PaulThomas on Jan 6, 2008 3:25 PM PST up reply actions 0 recs
That's completely pointless
The real value of the first contract is likely to be the same or lower than the second.
Additionally, if a team has a bunch of extra cash sitting around, there's nothing to say they can't invest it somehow, generate a return, and use it for player salaries down the road. If you're thinking th second contract is more tradable, you're mistaken there too. A team can just as easily offer to eat a portion of a player's salary using the money saved in earlier years.
Finally, teams carry insurance on contracts. If a player signs contract #2 and has a career ending injury, the team has already payed out a majority of the contract.
There are very good reasons teams want to backload contracts, defer signing bonuses, etc.
by MrIncognito on Jan 6, 2008 2:08 PM PST up reply actions 0 recs
Contract Insurance
Not all contracts are or can be insured. Pitchers contracts are difficult to insure if the contract is over 3 years or the player has an injury history (insurance typically kicks in if a player can not play for X amount of time). I don't believe the Phillies were able to get insurance for all of Jim Thome's contract and I seriously doubt Colorado was able to get insurance on Mike Hampton's contract. I also doubt the Yankees will be able to get insurance on all of Arod's contract, too many things can go wrong to make an insurance company have to pay the final few years of the contract.
Note that any contract could be insured, the premiums would be prohibitive though.
by skwid on Jan 7, 2008 9:36 AM PST up reply actions 0 recs
Lloyd's of London
will insure pretty much anything, if the price is right.
Won't come cheap, though.
by PaulThomas on Jan 7, 2008 11:43 AM PST up reply actions 0 recs
Can anyone confirm a Gammons tidbit on ESPN...
by Miggy on Jan 7, 2008 10:56 AM PST reply actions 0 recs
Crisp
He's a bit on the old side for a rebuilding team, isn't he? Makes me wonder how much speculation this is on Gammon's part.
(Although I do like the idea of getting Lowrie to play SS)
by Threepwood XX on Jan 7, 2008 11:25 AM PST up reply actions 0 recs
I think Lowrie is more likely ...
to replace Ellis than Crosby.
There are a lot of people who really believe in Coco. Give him a year or a year and a half to reestablish his value as one of the top few true CFers in the game and he could be a very valuable trading chip.
They might also think it worthwhile to have a premium defensive CFer out there to help the young pitchers develop with confidence in the guys behind them.
by devo on Jan 7, 2008 11:34 AM PST up reply actions 0 recs
Even if Crisp is worthless,
that's a jaw-dropping package for Huston.
Masterson's a good (if not great) starting prospect, Lowrie is a top middle infield prospect, and Crisp is a valuable deadline trading chip, if nothing else.
If the A's got that package, I think it would improve the team both short and long-term.
by PaulThomas on Jan 7, 2008 11:42 AM PST up reply actions 0 recs
if Coco is worthless...
I wonder what Kotsay would be considered, lol.
by Miggy on Jan 7, 2008 12:03 PM PST up reply actions 0 recs
Kotsay has literally negative value at this point
i.e. in some sense worse than worthless.
His contract is like a mortgage-- it has to be paid back at some point, but you're not going to get anything more for it than you already have.
by PaulThomas on Jan 7, 2008 12:13 PM PST up reply actions 0 recs
That'd be a heck of a package ...
by devo on Jan 7, 2008 11:34 AM PST up reply actions 0 recs
God, please let it be true.
by jeepers on Jan 7, 2008 1:29 PM PST up reply actions 0 recs
OK, this hasn't been confirmed anywhere
on ESPN.com, so I'm forced to conclude that it is ridonkulous, albeit fun to think about.
by PaulThomas on Jan 7, 2008 3:45 PM PST up reply actions 0 recs
thanks...
that was my feeling as well. I figured someone here would have been all over this if they were watching to ESPN and heard the alleged piece from Gammons.
by Miggy on Jan 7, 2008 4:07 PM PST up reply actions 0 recs
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