December 6, 2013

Transaction Analysis

A Need Cano Basis

by Sam Miller and Bret Sayre

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SEATTLE MARINERS Team Audit | Player Cards | Depth Chart

Reportedly agreed to a 10-year, $240 million deal with 2B-L Robinson Cano [12/6]

Let’s get the part out of the way where I pretend to know something that’s totally unknowable—the future:

Yearly WAR breakdown of Cano projection - 5.5, 5.2, 5.0, 4.6, 4.0, 3.3, 2.8, 2.2, 1.6, 1.1

— Dan Szymborski (@DSzymborski) December 6, 2013

That’s about 36 wins, for $240 million, $6.7 million per win. Among the many, many things that can’t be known with much certainty: What the rate of inflation will be, how good Cano will actually be this year, how good Cano will actually be in 10 years, how healthy he is, how healthy his teammates are, what the Mariners’ needs will be, whether the Mariners will be good, who will own them, who will run them, how their park will play, how competitive their division will be, how their next half-dozen first-round picks will develop, whether Macklemore will have no more hits or two dozen. Ten years ago Mark Prior was the most valuable property in major-league baseball, and Robinson Cano was in the minors, where he was never considered bright enough to make a top 100 prospects ranking.

But $6.7 million per year; let’s assume something like that, so we can agree that this isn’t the overpay our sticker-shocked brains instinctively make it out to be. Robinson Cano is somewhere between the second and fourth best player in baseball, and he just signed for (adjusted for baseball inflation) what Mike Hampton got in 2000. Salaries go up.

So now we can talk about the Mariners.

***

In Ben’s review of the Jacoby Ellsbury signing, he argues that it’s wrong to use the typical $/win measures to assess the Yankees. This is fair in one sense, but not the way I figured it.

Imagine you’re a GM who wakes up the day after the World Series with $5 million to spend, for the whole winter. You could almost certainly spend that $5 million very efficiently, waiting for just the right move and just the right undervalued player who is in just the right situation that gets you just the right below-market signing. Actually, screw it, let’s switch from a hypothetical to a straight-up analogy:

If you walk into the Strand to buy one book, you’re going to end up with a book you absolutely love. Your average Love Per Book Purchase is maxed the ef out. Or else you’re a dope.

But if you go into the Strand to buy two books, you’re going to get one you absolutely love, and another one you love (by rule) slightly less. Your Average Love Per Book Purchase is (by rule) slightly less than maxed the ef out, because you just bought a second-best book. Three books: Absolutely love, slightly less, and slightly less. If you go into the Strand to buy 700 books, the 700th one is going to dramatically lower your average, but that doesn’t mean you don’t also want it. Books are great!

So go back to the hypothetical. The Yankees buy 700 books, and it makes it very hard for us to measure these 700 moves on the same scale that we would measure the Rays' moves. It's not they they can afford to overpay because they have more money; after all, we've seen just this very morning that the Yankees reach their limit, just like everybody else, and are therefore vulnerable to the same cost-per-win pressures that 29 other teams are. But, yes, every dollar they spend will produce slightly diminished returns, on a dollar-per-win basis. That's a far cry from saying that the dollars are spent poorly. That’s where Ben’s argument makes sense, and that’s why I don’t cry for the Yankees.

The Mariners are not a team that buys 700 books, but there is more than one analogy by which to oversimplify a baseball team. What, exactly, are the Mariners?

***

In 2008, the Mariners’ team payroll was $118 million, which was the ninth highest in baseball. (A year before that they were seventh highest.)

Then it dropped to $98 million, then $87 million for two seasons, then $82 million. Last year, they might have been as low as 24th in baseball, at just $72 million.

Teams that have the 24th-highest payroll in baseball can’t afford to spend this much on a free agent, but the Mariners have no business being the 24th-highest payroll in baseball. When they were winning, a decade ago, they drew 3.5 million fans in a season. Over an eight-year period, the Mariners led all of baseball in TV ratings every year. They’re a mid-market team with an upmarket population and an enviable fanbase. Even if we think that $118 million figure was a blip, it’s probably conservative to say they were capable of carrying a $100 million payroll comfortably, and with four percent inflation that would put them around $127 million this year. The Mariners presumably have a lot more money to spend than, say, the Reds or the Padres or the Royals.

With two caveats: One is that they have to win. Attendance is half of what it was a decade ago. They’ve finished in last place seven of the past 10 years, and dropped from the highest attendance in the AL to 11th. Ratings are presumably down, and the Mariners own their regional sports network now, so that quite possibly actually matters to them. Anything that makes the Mariners better will make them more money, and to the extent that Cano could do that or could (in an albatross situation) do the opposite of that, he is a sort of self-fulfilling prophecy. If he’s good, the Mariners can afford him. If he’s bad, they can’t. Spend money well to make money.

The other caveat is that they’ve had a very hard time spending money. In recent years they’ve tried to give too much money to Josh Hamilton and failed, to Prince Fielder and failed, to Mike Napoli and failed. They traded for Justin Upton and he invoked a no-trade clause. Giving away money turns out to be not simply a matter of will. The Mariners suck at it.

So let’s put those two things together, and you see how the Not Measuring Teams On a Strict $/WAR Mindset applies in the other direction, too. Some teams don’t qualify because they have such an easy time spending. And some, like the Mariners (and an increasing number of other teams), don’t qualify because they have such a difficult time spending. They’re in a book store with one book. And they got to get their read on.

***

Now to the question of whether this makes them win. As we've agreed, Cano will produce wins, but are they the right wins at the right time?

The Mariners aren’t where we’d like to see a team be when they make that push for 90. They won 71 games last year, and while some team will improve by 20 games this year, it’s probably not going to be yours. (And it’s probably not going to be the team that overperformed Pythagoras.)

But when is the Mariners’ window? It seems reasonable to say 2015, certainly 2016, and frankly if you can’t say 2015 or 2016 just shut the whole thing down; there’s very, very rarely a situation where a GM shouldn’t consider three years away to be a competitive window. The Mariners have an elite farm system, a young lineup that has made strides, the second-best pitcher in franchise history approaching 30, and money to spend. They have essentially no money committed beyond 2014, other than to Felix Hernandez. So maybe not 2014—almost definitely not 2014—but certainly 2015.

So should the Mariners have waited a year to make a move like this? That doesn’t seem to be where the league is going. Consider the Cubs’ signing of Edwin Jackson last year, a different kind of signing but relevant. The Cubs weren’t competitive; they weren’t even, like the Mariners seem to be, deluding themselves into thinking they’re competitive. But they signed Jackson for four years knowing that, when they were competitive, they would need pitchers, and pitchers aren’t easy to get on demand. (Note that we don't actually know what the Cubs' mindset was, and that the math is always complex.) The Twins signing Phil Hughes seems to be explicitly a move for 2015 and 2016, with the 2014 year being the sacrifice the Twins had to make. The A’s signing Yoenis Cespedes for four years before 2012 when, if we take them at their word, they didn’t consider themselves yet competitive.

The best analogy, on a smaller scale, might be the Angels’ trade for Dan Haren in 2010. The Angels had virtually no chance of winning the division that year. But Haren was signed for three more, so acquiring him at the wrong time acquired him for the right time. They did what amounted to free agent shopping when the buying was good. (Note that trading for David Price, with only two seasons of club control left, makes much less sense under this rationale.)

We’ve long treated these big contracts as front-loaded value, where a team gets some good years for a good rate but know they have to write off the last couple years. In a league where nobody hits free agency anymore and everybody’s a buyer, teams like the Mariners might simply have to write off the first year, too. It’s too risky to wait until you’re at 86 wins to go shopping for the player who’ll push you to 91.

***

Finally, there’s the downside: Cano will eventually be bad, and too expensive, and the Mariners are not a team like the Yankees that can afford to carry terrible contracts. But if we vastly overestimate the value of these eight-figure free agents, we also probably underestimate the ease of moving them.

Remember: Nobody good hits free agency, everybody’s buying all the time, and the league is in a TV bubble that may or may not pop but will, in the meantime, infuse ever more cash into the game. In this league, the Red Sox couldn’t just get out of an absuuuuurdly bad Carl Crawford deal (and an arguably bad Adrian Gonzalez deal, and Josh Beckett deal); they got prospects back. The Tigers sign Prince Fielder to a Cano-sized deal that looks (to me) far, far worse than this one, Fielder declines practically immediately, and two years later they trade him for a better, cheaper player. Vernon Wells’ entire contract (basically) got traded. For value. Results may vary, but that trade will never stop having happened.

There are ways this goes terribly for Seattle. That’s the game. You take a chance. If the chance gets you a Hall of Famer and MVP candidate who has shown absolutely no decline, no physical problems, and the first five years of his deal line up with your team’s ideal competitive window, then you take it. You take it, and you pray. —Sam Miller

Fantasy

Robinson Cano

We know what happens in fantasy circles when a hitter moves to Seattle—it's not that different from when a pitcher moves to Denver—but this move for Cano will suppress his value a bit and potentially even make him slightly underrated. He was sneaking in as a top-five pick in recent years, but the knee-jerk reaction is to take him out of the top-20 entirely. Don't be that person. That person will scare you with numbers like telling you that he's not even going to hit 20 homers in Safeco, but we know that the park (while still below-average), is not nearly as deflating to lefties as it is to righties. That person may also tell you that his counting stats will fall off a cliff, and that the no. 3 spot in the Mariners' lineup (where Cano is likely to reside) accumulated only 68 runs and 69 RBI in 2013. Then again, that ragtag bunch combined to hit .229/.312/.384—a far cry from Cano's five-year average of .314/.369/.530. A drop in fantasy value is to be expected, but this is still a likely. 300 hitter with 20-25 homers and strong counting stats who will be the top producer at his position. That's a viable first-rounder in all but the shallowest of leagues.

Nick Franklin

This may be the first time I've ever put an arrow up next to a player who was just completely blocked by a signing, but I don't expect Franklin to remain blocked for very long. Franklin is not strong enough defensively to overtake Brad Miller for the shortstop job or offensively to overtake Kyle Seager for the third base job, so as a utility player in a brutal home park for his skill set, his value would deflate faster than a Macy's Thanksgiving Day Parade balloon in a machete factory. With the Mariners looking to deal (and potentially aiming very high), he could be on the move in short order—and his outlook would go up as a result, even if he relocates to a team that plays in an offensively depressed home park like Tampa Bay.

Kelly Johnson

The biggest winner of this transaction, however, is another left-handed hitter who's now looking at a whole lot of at-bats in New York (even more so than when he signed earlier this week). Johnson is not a pure pull hitter, which will reduce his new home park's effect slightly, but if he can pick up 450 at-bats (which seems more likely with Cano gone), he could be a 20-plus homer, 10-steal middle infielder. Even with an average south of .250, that's a nice proposition, even before taking into account his additional eligibility at 3B and OF. I'd be drafting Johnson among the top 15 second basemen if the offseason ended today. —Bret Sayre

Sam Miller is an author of Baseball Prospectus. Follow @SamMillerBB
Click here to see Sam's other articles. You can contact Sam by clicking here
Bret Sayre is an author of Baseball Prospectus. Follow @BretSayreBP
Click here to see Bret's other articles. You can contact Bret by clicking here