November 17, 2014

Transaction Analysis

When $325 Million Is An Easy Decision

by Sam Miller

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MIAMI MARLINS Team Audit | Player Cards | Depth Chart

Reportedly nearing an extension with RF-R Giancarlo Stanton. [11/16]

He won’t do it—it seems like these guys never do it—but if this 13-year, $325 million deal between the Marlins and Giancarlo Stanton gets finalized, and Marlins GM Dan Jennings comes out for the press conference to formally announce it, he ought to just open up his copy of The Anti-Christ or Thus Spoke Zarathustra and start reading. Nietzsche had some things to say about free will that seem relevant here—namely, that it’s an illusion. “We laugh at him who steps out of his room at the very moment when the sun steps out, and says: ‘I will the sun to rise’; and at him who cannot stop the wheel, and says: ‘I will it to roll’; and at him who is taken down in a wrestling match, and says: ‘I lie here, but I will that I lie here!’ And yet, all laughter aside, do we ever do anything other than one of these three things when we use the expression, ‘I will’? So okay, I'll take some questions now. Joe, i see your hand up in the back…"

We can debate the terms of this deal, but at its simplest the Marlins had no other option. This is a franchise teetering on the brink of cultural insolvency. Its third-most valuable asset is a dude who wears a Marlins jersey to other teams’ postseason games. “F--- the Marlins” is an actual category tag on Deadspin. The players union has chewed on their sun-bleached bones. You assume they are seen as toxic to a substantial portion of free agents, having demonstrated none of the good will that is an underrated aspect of convincing rich people to relocate. Even the Marlins’ own players haven’t been shy about suggesting a certain despicableness running through the franchise’s decisions. Their own players like, for instance, Giancarlo Stanton, three months ago:

The question was whether the events of this season had altered his top-down view of the organization. He'd raised his eyes, thinking.

"Five months," he said, "doesn't change five years."

Think about a choice as weighing two concerns: What do we lose if we don’t do this, and what do we lose if we do? For the Marlins, more than any team, the questions are intertwined because of the team’s previous failure—or, at least, publicly perceived failure—to act like normal, friendly humans. If they don’t sign Stanton, it becomes increasingly difficult to imagine the Marlins convincing any 25 men that, as the cliché goes, the name on the front is more important than the name on the back. (Plus, they would lose Giancarlo Stanton, the best player this front office will ever employ again.) So that’s the answer to the first question. But to the second, it’s not clear that they lose much of anything by committing $25 million per year to Stanton for infinity. Where else are they going to spend that $25 million? On free agents who despise the way the team treats free agents? Attracting players to an empty ballpark that hosts a historically bad team led by a revolving door of short-time coaches employed by a punchline owner? The Marlins have no soft power. All the money in the world might be enough to overcome a lack of soft power, but the Marlins don’t have all the money in the world, and they never will.

A smart person’s email to me Friday afternoon: “Stanton at 13/325 is insane, right?”

Nah. It’s neither insane nor sane; sanity is a measure of a person’s ability to make rational choices. This was not a choice at all, but a set of circumstances delivered to the Marlins and accepted with the resignation with which we accept weather, aging, and the occasional batch of limp French fries at In-N-Out. To borrow another person’s paraphrasing of Nietzsche, “Nothing is (or can be) fully resistant to stimula, for that would mean it is immutable: whereas nothing in this world is or can be immutable.” The Marlins bent to stimula. There was no other option. Human free will is a tautology. The Marlins are not Gods.

***

One reads a Transaction Analysis for one of three reasons: To find out whether the club was smart or dumb; to find out whether the move itself helps or hurts the club's chances; or to find out who in the hell Jose De Paula is. The first we’ve addressed. The third is irrelevant here. As to the second…

Ignore years 13, 12, and 11. Or don’t ignore them, but don’t fixate on them. Think of this as a 10-year, $300 million deal—the kind that Robinson Cano was trying to get from the Yankees when he hit free agency, when he was six years older than Stanton. PECOTA”s long-range projection for Stanton before the 2014 season—before he finished first in MVP voting among NL position players—was about 55 wins between 2015 and 2024. It’ll be slightly higher when we rerun the system this winter, I’d imagine. The same system projected about 30 wins for Cano’s next 10 years (including 2014); it had projected about 29 wins for the next 10 years of Albert Pujols back when he was asking for 10 years and $300 million (before he signed for 10 years and ~$255 million); it had projected about 36 wins for Clayton Kershaw when he was reportedly discussing a 10-year, $300 millionish deal last offseason (before signing for seven and $215 million).

Stanton is roughly comparable in the short term to what each of those players was; but (putting aside for a moment the season-ending hit-by-pitch he took in September) he is spectacularly more reliable, in PECOTA’s assessment, because he’s so much younger in some cases and because he throws so many fewer pitches in the other. Ten years and $300 million can be a shock to the system, but it shouldn’t be.

Stanton context: Adjusted even conservatively for inflation, the first A-Rod contract was worth well over $400 million in today's dollars.

— Brian MacPherson (@brianmacp) November 15, 2014

It’s simply a contract tier, one that elite players aspire to, that elite players lately have nearly reached, and that elite players will eventually blow past. Stanton, more than the others who’ve asked for the 10 And 300, merits it. He has been worth that sort of salary in his career thus far; he is coming off his best season; he has become better at using the whole field, and his line drive rate has been doing this

and the weird spike in his 2012 o-swing rate is now pretty conclusively a blip and he’s nine months younger than Travis d’Arnaud. You can talk yourself into worrying about tall hitters’ aging curve or into getting too hung up on that Darryl Strawberry comp that’s been bugging you all weekend, but at the end of it you have to really, really walk back those PECOTA projections to dislike this move.

So assume we’ve accepted 10 and $300 million. Put those in a box on the side; that’s settled. Now that we’ve done that, the 11^th, 12^th and 13^th seasons are gimmes. I might even wonder if those were added at the club’s request, as an upside addendum to the 10/$300M they’d already mentally consented to. The increase in total commitment is minimal, and plenty of very good major-leaguers have remained very good at ages 35, 36, 37: In the past decade, 20 players have produced at least one 4-WAR season between ages 35 and 37, eight have produced at least two 3-WAR seasons, and six have been above average (2+ WAR) in all three. Adding three years of a possible productive Stanton for very little additional money is great. All upside for the club.

If it were that simple, then we could easily say that the Marlins did what they had no choice but to do and been blessed that it was to their benefit—oh sunny, sunny day. It’s more complicated for three reasons:

1. The Marlins do throw away their right to wait two years before committing. Clubs control no asset so valuable as the right to wait, and if we’re willing to ding (or hammer) clubs for jumping too soon to re-sign Miguel Cabrera, Justin Verlander, Ryan Howard, Travis Hafner—in each case almost immediately regretting it—then we can acknowledge that the Marlins added to the unavoidable risk of signing a great player forever a couple additional measures of avoidable risk. Unlike those other moves mentioned, though, it’s more believable that the Marlins are getting a discount on market rate here. Let’s, for the moment, keep calling this a 10-year, $300 million deal. Now, it’s unlikely that Stanton as a free agent—or, negotiating an extension with the Marlins on the cusp of free agency—would get much more than 10 years and $300 million. But he quite possibly would have received exactly 10 years and $300 million, and those 10 years would have started later and been on top of the two arbitration years that the Marlins had already paid $35M-$40M for. So think of it like this: By starting the clock earlier, the Marlins are essentially committing only to eight years and $260 million, starting in 2017. If they had waited, and convinced Stanton to sign with them, and nothing dramatic had changed in Stanton’s profile, they would have had to commit to 10 years and $300 million, starting in 2017. Committing earlier, in other words, means committing for not as long. (Also: Who thinks Stanton the free agent is likely to actually sign with the Marlins?)

2. The reported opt-out. Opt-outs are a pain. Without knowing yet how the salaries progress throughout the course of the deal, it’s hard to know how much upside the Marlins might hope for in the deal; we know only their liabilities. But the overall liability--the amount the Marlins are on the hook for--is the same whether he has that opt-out or not, and the theoretical upside in most cases comes in the early years of the deal. (Hat-tip to Joe Sheehan for first making this point years ago regarding—I think—CC Sabathia. It took me a long time to appreciate the sense it makes.) Again, without knowing how the salary breakdown will go, we can’t say how much of the upside the Marlins are guaranteed. But I think it’s probably fair to say that if the Marlins signed Stanton to a five-year, $125 million deal today (a wild guess at what they’ll pay him in the years before the opt-out) it would strike nobody as “insane, right?”

3. The fastball-to-the-face factor. Salaries go inevitably up; contracts that seemed immovable inevitably get moved; players inevitably go through peaks and valleys; players inevitably get hurt but then almost inevitably come back; there will be good days and bad days for this contract. But ultimately, if Stanton simply declines or gets hurt a bit more than expected, he’ll probably still opt out, or the Marlins will still find a competing team to take the contract on one of the days he’s healthy, or he’ll bounce back and still provide some value. The real threat is that something traumatic changes everything, makes him unplayable or unmovable. As Jeff Passan leads his piece with on Sunday,

Over the next 13 years, if Giancarlo Stanton breaks his leg or falls victim to a voodoo curse or develops a crippling case of sesquipedalophobia or happens upon any other sort of unfathomable malady, the Miami Marlins still will owe him that $325 million, a sum greater than any franchise has owed any individual in the history of organized sports.

Those things hardly ever happen to position players. (Hence: “voodoo curse” and “sesquipedalophobia.”) Mostly players just degrade a little bit at a time. The chance of the one-time career-changing event turning him into paper weight are, what… 1 in 100? Maybe 1 in 10? All depending on your definitions? From 1960 to 2005, there were 50 players who produced 10 WAR in their ages 23 and 24 seasons. Forty-nine were still playing at 31. All but eight (Lloyd Moseby, Carlos Baerga, Eric Chavez, Jim Ray Hart, Bobby Tolan, Andruw Jones, Tommie Agee, Jim Fregosi) were basically full-timers and above average at age 31, and even some of those eight still had perceived value at that point in their careers. So the odds of something happening that dramatically change Stanton’s value are fairly low. If he degrades a little bit at a time—well, that’s what happens. Teams survive.

But one of those dramatic things that could happen might have already happened! Stanton took a fastball to the face and hasn’t faced a major-league pitcher since. The list of MLB players who took a pitch to the face and were never the same is short, but it exists. This deal becomes so, so much easier to love three weeks into next April, when he’s already hit seven home runs and his dental damage is something only he and his oral care surgeon remember.

Which leads us back around to the matter of free will. Why did Stanton agree to this deal? What does he get, besides money? He’s with a franchise that he has seen treat its highest paid players with no loyalty. He knows the chamberous acoustics of Marlins Park in August. He knows that park will hurt his offensive stats, could very reasonably cost him the chance to challenge any all-time hitting records. He certainly knows that the Marlins, even though they’re better, on the upswing even, will basically never be the best bet—or among the 15 best bets—to win the World Series in any given five-year stretch. He knows they likely won’t sign the stars to put around him. He knows it’s only a narrow range of circumstances that would keep Jose Fernandez from being traded before 2018. He knows that playing for the Marlins will cost him MVP awards. Playoff shares. National endorsement deals. He has had six batting coaches in the past five years, four different managers and four different bench coaches and five different cleanup hitters. There is essentially nothing that the Marlins can offer him that every other team in baseball can’t offer a better version of.

Except for $325 million now, instead of two years from now. You can’t help but wonder how much a fastball to the face changes the way a man thinks about security. Three months ago it seemed impossible that Stanton would choose to sign his career over to the Marlins—what could possibly be on the “pros” side of that piece of paper—but then a fastball hit him in the face. Nobody is (or can be) fully resistant to stimula. Maybe Stanton’s choice was made for him. Lucky Marlins.

Sam Miller is an author of Baseball Prospectus. Follow @SamMillerBB
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