Tuesday, February 06, 2007

Dotting Ts and Crossing Is

The Nats agreed to contracts with 12 more players, which is certainly more impressive than it sounds. These players were all under the team's control, and none of them were arbitration eligible since they lacked the three full years of major-league service time. (Here's where the pedants point out that Tim Redding has more than three, and here's where I point out that he was signed as a minor-league free agent, which trumps the arbitration process for this season)

That's not the interesting part though ("Duh," says you). There are four players left unsigned. Two are arbitration cases (Patterson and Cordero) and the other two are Nook Logan and Ryan Zimmerman. I'm not sure why they can't come to terms with Logan. He has barely over a year's worth of service time and, as a result, the team can basically tell him what they're going to pay him.

Zimmerman's is a slightly different case. As a rookie, Zimmerman made the league minimum. The Nats are within their rights to offer a token raise, telling him to stick it. But, for obvious reasons, the cheapest solution might not be the smartest. The Nats did that with Chad Cordero, for example, paying him $525K last year, even though that was way above the minimum they needed to pay him. You want to keep your star guys happy, and if that makes you pay a few extra K, so be it.

The interesting question for me, though, is what to do about Zimmerman's future? He's clearly part of "The PLAN!" and is going to be the centerpiece of the franchise for years to come. So why not lock him up long-term like they did with Kearns?

Kearns has over three more years of service time and was already arbitration eligible. Zimmerman, on the other hand, won't even be eligible for arbitration until the 2009 season, and he won't be a free agent until 2012. So there's no pressing need to lock him up. But, if the Nats were to do it, they could likely do it at a lower price now than if they waited until 2009.

What would it take? First, the Nats would probably want to buy out all three arbitration years. They'd be guaranteeing themselves cost certainty. Under the arb process, salaries climb, climb, climb. And if Zimmerman ever turns some of those doubles into homers, he'll go through the roof. At a minimum, the Nats would want a 5-year deal -- 6, if they want to try to buy out one of those free agent years.

The dollar value would be a bit trickier. They'd have to figure out what he'd be likely to make if they let the arb process play out, then make adjustments for the value of inflation on contracts and money, as well as try to assign some value for the risk of the length of the deal. For that risk, though, they'd likely be able to get Zimmerman at a lower value because he'd be gaining long-term security, so if he had his leg gnawed off by a rogue shark while surfing off the coast, he'd still be set for life.

Just for sake of argument, let's assume that Zimmerman makes the following amounts:
'07: $400K
'08: $500K
'09: $4MM (first year of arb -- compare to the inferior Aramis Ramirez and his $3MM arb deal in 2003)
'10: $7MM
'11: $12MM

That gives us a rough estimate of about $24 million for those five years, with a reasonable chance that it could actually be higher than that. How much of a discount from that do you think the Nats could get? 5 for $18?

The nearest comparison of this I could find is what Tampa Bay did with its two young outfielders, Rocco Baldelli and Carl Crawford. Crawford, after his second full year (so the equivalent of Zimmerman at the end of this season) signed a 4-year, $15MM contract with club options that could buy out his first two free agent years. After his third season (with one missed to injury), Baldelli signed a three-year deal for $9 million with a 2-year, $17MM option for his first two free agency years. They sound more complicated than they are.

I'm confident the Nats have their contracts people considering this sort of thing, and it would certainly fit into the long-term vision of what they're trying to do. It's probably a bit much to read into the delay in renewing Zimmerman's contract, but it'd sure be nice if it happened.


  • While I wouldn't raise a snit fir if they locked him up, I worry that it may be a year premature to do so. For every Nomar, Jeter, Bay, and Howard that produces value following their RoY (or near-RoY in Zimm's case) season, I could point to a Todd Hollandswoth, Bobby Crosby, Angel Berroa, or Ben Grieve that hasn't.

    My bottom-line point is that perhaps the Nats should wait to see if Zimm's success continues in his sophomore season before assuming the risk of buying out his arb years at potentially inflated cost.

    By Blogger JammingEcono, at 2/06/2007 11:22 PM  

  • I would think the team should certainly consider by the end of ’07 or ’08 to buy out Zman’s arb years and maybe 2 or 3 FA years. I think the team would be so ecstatic at your 5/24 number that you couldn’t wipe the grin off of Kasten’s face for years though I know you were including Zman’s pre arb years which lowered the number. But I wouldn’t think Zman’s agent will be using Kearns, Baldelli, or Crawford as comparable players if it comes to signing a longer term contract with the team. I would think 3B like Wright at 6/55, Chavez 6/66, Ramirez 5/75 would be more of the target range for Zman’s agent. Of course at the high end in this overheated market a guy like Cabrera thinks he’s going to get 200 mil. Other 3B with more experience would be Rolen at 8/90, Jones 6/90, and Glaus at 4/45. That’s the economic reality the team will be facing to sign Zman if continues to perform at this level. Given Zman’s total package of defense, the offense he showed in his 1st year , and personality the guy is completely Ripkenlike and it’s gonna cost the team to retain this guy and he certainly looks like he will deserve it.

    Tulsa Fan

    By Anonymous Anonymous, at 2/07/2007 9:01 AM  

  • Wright's and Chavez' deals aren't quite comparable because they were both older than Zimmerman (in terms of service time) and they both bought out FA years, which are more expensive, obviously, than the $400/$500 figures the Nats would buy out on the front end of the contract.

    Ramirez' contract is completely incomparable because he was a free agent. That's the kind of contract Zimmerman will be looking at getting when he has the service time requirements.

    By Blogger Chris Needham, at 2/07/2007 11:39 AM  

  • I think that Wright's contract is actually a pretty good comparison for Zimmerman - Wright was only 1 service year ahead of Zimmerman when he signed, and signed for $1M in his last pre-arb year, followed by $5M-$7.5M-$10M through the arbitration seasons, then $14M-$15M-$16M for the first 3 FA years. That comes out to about $24M to lock up Zimmerman through his arb years, and given the salary inflation we saw this past winter I think that 5 years, $24M is a MINIMUM for Zimmerman.

    BTW, Crawford signed a deal that paid him $12.5M total through his last pre-arb season and his arbitration years - the bigger money kicks in for what would have been his first FA seasons.


    By Anonymous Anonymous, at 2/07/2007 11:59 AM  

  • It's not a correct comparison in that it's buying out a bunch of FA years. If you do just look at it in the three arb years, it's interesting that Wright's contract is so close to what I was throwing out there from the back of an envelope calculation: ~$24 million.

    Under an ideal situation, they'd want to buy out a few of those FA years on the back end, but that would require them, at this point, to go to a 7-year deal, which seems insane.

    It's a tough balance. The longer they wait, the larger the overall deal is going to be. But, as JE points out in the first comment, there's a bit more risk of flaming out if they commit to so long this early in his career.

    I think I'd rather have him locked up. He's no Ben Grieve! :)

    By Blogger Chris Needham, at 2/07/2007 12:06 PM  

  • Well we’re talking about various contract strategies and not really disagreeing much. Years 1-3 are pretty much meaningless in terms of cash outlay for a team when talking about a player the caliber of Zman and it’s really not necessary to have to lock them up. The goal of any team who wants to retain a player like Zman is to never let him get near the market and a bidding war by buying out the first 2 or 3 years of free agency in combination with arbitration years 4, 5, or 6. I means big dough like these contracts I mentioned. But no team who takes itself seriously can let a guy like Zman hit the market and create a bidding war because someone is going to cough up big bucks to get him. Buying out years 2-6 doesn’t prevent that from happening. By going through the year to year type deals for another year or 2 and then locking him up for 5 or more years keeps him off the market and away from the Yankees, Red Sox, etc.

    Tulsa Fan

    By Anonymous Anonymous, at 2/07/2007 12:34 PM  

  • I think your estimate of $4 mil for the first arb year is a bit low -- it will be 6 years of salary escalation since the A. Ramirez deal. But let's say his salary progression might be:

    07 - 0.4
    08 - 0.6
    09 - 5.0 arb1
    10 - 8.0 arb2
    11 -12.0 arb3
    12 -15.0 fa1

    That's 5 for $41 mil. Throw in another FA year or 2 as club options at another 15 per for 7 for 71. I think it's worth it.

    Furthermore, this might be an instance where front-loading the contract would make sense for both the player and the team. Make the offer something like:

    07- 2.0
    08- 2.0
    09- 4.0
    10- 6.0
    11- 10.0
    12- 14.0
    13- 16.0 (option)
    14- 18.0 (option)

    Gives the player more money right now, and gives the team a little more spending flexibility to pick up needed pieces for when THE PLAN(tm) comes together.

    By Anonymous Anonymous, at 2/07/2007 2:34 PM  

  • JE provides some needed caution, but the difference between Zimm and most of his examples is age. Hollandsworth, Crosby, and Berroa were all a few years older during their RoY campaigns. Furthermore, Hollandsworth was sort of RoY by default -- his season wasn't that great.

    In Grieve's case there's the factor that he had "old player's skills" and thus didn't have a lot of room to develop. If Zimm could change 5-10 doubles into HRs, we could be comparing the 3b Trinity (Zimm, Wright, Cabrera) of the late 00's to the SS Trinity of the late 90s.

    By Anonymous Anonymous, at 2/07/2007 2:41 PM  

  • I am all for Zimmerman being locked up--if its works for him. I truly believe he has all the mental makeup to be everyway as good or better, than he showed in 2006, for years to come. And, I think he is not ignoring that fact, and may be listening. Just a hunch, though.

    By Blogger Screech's Best Friend, at 2/07/2007 4:11 PM  

  • ...when THE PLAN(tm) comes together.

    I love it when that happens.

    By Anonymous Anonymous, at 2/07/2007 9:01 PM  

  • Chris,

    Just a great series of posts. Congratulations on the WaPo article, and in getting Don Kasten's attention (I think). Be sure to tell him that not only did you not renew your partial season tickets, but that you talked other folks into not buying them, because single-game seats would be better. =)

    Great Redding profile, too, by the way.

    By Anonymous Anonymous, at 2/07/2007 9:05 PM  

  • Do you get the feeling from talking with Kasten and the Nats (now that they understand the Team Website and Bill Ladson reporting completely lame) that they are willing to be honest about the 'PLAN'.

    The 'plan' really has fallen apart for 2007. They did not get any starting pitching that can help now in any deals before the trading deadline in 2006. They misread the market for 'cheap' starting pitching in this off season. Now we are starting 2007 with a rotation that had less than 5 wins in 2006.

    Is Stan K a stand up enough man to admit we are in real trouble for 2007 and it is not the Plan but the execution of the plan that is to blame, and he should be held accountable and at least be honest that all is not well with the PLAN

    By Anonymous Anonymous, at 2/08/2007 6:41 PM  

  • If Ryan is not the real deal this fanchise is in for a long 5-10 years.

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