Cliff Lee, A-Rod, And The Budget
Joey MatschulatAs usually seems to be the case whenever the hot topic of discussion is a player seeking approximately $25 million per season over an extended number of years, the Alex Rodriguez contract is being invoked as evidence of the dangers of assuming such enormous payroll obligations if you're not a top-spending team, with ESPN.com's Buster Olney being the latest to join in the media fracas: "If the Rangers intend to include Lee in a payroll of $80 million to $100 million in the years ahead, then no, it makes no sense whatsoever. It's A-Rod all over again: Tom Hicks gave Rodriguez $252 million and within three years he figured out the situation was completely unworkable, because one player, as good as he was, tied up too much money."
The implication here is that this marriage couldn't possibly work if Texas maintained even a mid-range payroll ($90-110 million) over the next 3-4 seasons, which is exactly the sort of absolute statement that tends to miss the point in the realm of baseball analysis. It can work, but there's also a decent chance that it won't work without the right pieces surrounding Lee signed at the right amounts. Holding up the oft-criticized A-Rod deal as justification for steering clear of Lee isn't the correct way to go about things, but there are a few insights to be gleaned from that signing (and its unfortunate ending).
One of the things you'll hear from time to time is a solitary, plaintive wail about how A-Rod didn't help put the Rangers over the top, or -- taken a step further down the road of irrationality -- didn't help them win. Sometimes, the origin is Tom Hicks, but let the record show that A-Rod, as a nine-win-per-season player from 2001-03, banked a market-level salary commensurate with his performance at a time when the average price of one win above replacement acquired in the free market was still around $2.7 million. At that time, a team, given an infinite supply of free agents available at market-level prices, could have built a 90-91 win team with only $110-115 million. In 2010, it would require something more along the lines of $180-190 million. As I've written before, it was the inefficient spending (e.g. blowing big money on little value) and terrible pitching and discombobulated organizational plan that marred the A-Rod era, rather than A-Rod himself.
Like with the A-Rod signing, the hope with a Cliff Lee signing is that he can generate value commensurate with his salary and at least stand tall as a market-level signing (as A-Rod was), but the challenge now is the diminished number of dollars available to add the necessary number of wins to reach the playoffs. A major league team needs about 42 wins above replacement per season to fight into the 90-91 win range and have a good shot at reaching the playoffs; during the A-Rod era, and given those $100-105 million payrolls, the Rangers needed to spend about $2.4 million for each additional win to build such a team (against the going market rate of $2.7 million, or thereabouts). In 2010, assuming an identical $105 million payroll (which is a fairly aggressive projection), the Rangers need to spend something closer to $2.2 million for each additional win, whereas the going market rate is more like $4.5 million.
Put another way, this scenario would have the Rangers with the same amount of payroll space after signing Lee as they had after signing A-Rod ($80 million), but, at the same time, in need of a greater number of total wins above replacement, in a market where that $80 million buys quite a bit less value in the open market than it did 8-9 years prior. The Rangers would need to be able to create more total value with far less money -- and therein lies the danger, and the arguments that Texas will have a much smaller margin for error with a $24-25 million commitment towards Lee.
All of which serves to highlight the importance of cost-controlled talent, and particularly the pre-arbitration talent that's still banking league-minimum salaries -- only the very highest-spending teams could contend for the post-season without some sub-$1 million salaries sprinkled around the roster. It also highlights the obvious fact that the Rangers would be in substantial trouble if Lee underperformed and/or succumbed to injury, or if they overpaid for poor value-generating mediocrity (spending a grand total of $13.5 million for 0.6 wins above replacement from Frank Catalanotto stands out in this regard) ... and the thing about it is that even subsequent market-level signings push Texas further away from the $2.2 million per win target number, should they land Lee.
Trying to use the A-Rod contract as a basis for shooting down the notion of Texas being able to support Lee's contract is, of course, lazy, and downright misleading at worst -- but then again, trying to paint the A-Rod signing as a mistake in and of itself fits those same conditions. The Rangers can pull this off, but just understand that this isn't analogous to the A-Rod situation, and that without a substantial payroll bounce far beyond $100 million, this at least has the potential to be the financial quagmire for Texas that the A-Rod situation -- despite the media's and ex-ownership's perception -- never really was.
Reader Comments (36)
...not to mention that team with A-Rod had absolutely ZERO pitching and could only hit HR's. Welcome to the new Rangers era where all facets of their game are looking pretty damn good. Here's to hoping Lee stays in Texas.
Can't we all chip in and buy a cliff lee shirt if he decides to sign here? About $20.00 x some combination of total attendance and average attendance (2,505,171 and 30,928). If a million people bought lee shirts (very high estimate, i know) we take care of that dreaded 7th year!
Joey, you are 100% correct. I upset at the time that it all fell apart for many reasons, but most of all because I knew the lazy narrative would triumph forever over the truth. All these years later and it still bothers me. The A-Rod deal was a decent deal. It was the Chan-Ho deal, and broke down Rusty Greer deal, and so many others just like them that provided no return on investment that doomed everything else around the club.
"The Rangers would need to be able to create more total value with far less money -- and therein lies the danger, and the arguments that Texas will have a much smaller margin for error with a $24-25 million commitment towards Lee."
No kidding. The problem with big deals is the Ranger's inability to walk away from one without being killed financially. can they really tie up 25% of a $100m payroll for seven year on one player who had back issues lastseason, pitched 4-6 in the regular season, and lost two game sin the WS? Also, quite a few of the Rangers previously minimum wage guys are now enetering arb and in the next few years will hit FA status. It strikes me that the Lee bucks are going to be needed just to keep the present core together.
This is rapidly spiriling out of control.
Let's tie up all the financial resources on one pitcher and then trade off the farnm club for another. We better win the next two WS because it will quite a while before the Rangers reload again after that.
Of course, if the billionares are comfortable with consistently losing money so be it, but I bet not.
@secondbaser- Yep, I'll buy a shirt. Heck, I'll buy a blue AND red if he stays.
Sounds like ol' Buster Olney doesn't want the Rangers taking some thunder from the AL East big dogs...the Worldwide Leader has attention for only two teams come March. The recent deals make me remember how much I despise the Red Sox (Nation). Still hoping the offers from Greenberg are enough to stave off the Yankers.
this really sounds like a no win situation,
Lee is good, and will be good, but will he be THAT good for 7 years?
I dont think so,
I would pass and take our chances.....
It's not about comparing the Lee deal to the Arod deal it's about comparing a 7 year 150 million dollar contract to other similar long term deals for pitchers. History says they don't. Giving this kind of money at this length to a 32 year old is insanity at it's finest. It's also sets a precedent for other contracts that will be coming due soon. It seems to be bad business to do this right out of the starting gate.
"... substantial roster upgrades aren't accomplished in this market by lingering in the safety zone."
As much as we would be acting dangerously outside the safety zone, wouldn't you rather do it with someone pitching every fifth day than someone who can hit homeruns in a 9 man mediocre lineup? As in all sports there is offensive side and a defensive side. Our defensive side depends most strongly on the pitcher pitching that night considering our position players are pretty strong in comparison to the league average. Right now we have a chance to lock up > 1/5th of our games. If we sign Lee we could still budget in our strong offensive players who most of our still in pre/arbitration years.
Counting on winning via well timed home runs is analogous to planning your retirement through winning the lottery.
In addition to the comments above in the long run devoting primary attention to the starting rotation counts far more than signing any one position player no matter what that position player does every day.
Position player can create a positive outcome in 4 ABs and potentially 3 plays on defense. That's 7 event contributions. The SP who pitches a quality start contributes to many as 18 positive events in 3 fewer innings. This is why good pitching in a short series always overcomes good hitting. The numbers just aren't there for position players to provide the same level of contribution.
Strange way to compare pitchers and position players. What about a 1b that bats lead off? He has a chance for say 5 ABs and maybe 12 throws from IF for put-outs. That's 17.
@JFitz ... sure... a 1bman could have 5ABs ... and take 12 IF thows for put outs. Name one ... and would he do that every game.
By the way ... if the 1bman took 12 IF throws for put outs ... who was the pitcher that was pitching that well to generate all those IF grounders? For every one of those put outs the 1bman logged ... the pitcher logs what amounts to an assist if it were hockey.
Also ... I don't think you can equate taking a routine throw from the SS for a put out to the pitcher's contribution that generated that ground ball.
Teams have to score runs to win ... that's a given ... but there are 9 run generators in the AL charged with that task while there is only one pitcher. Sterling plays in the field can't be too common or else the pitcher will fail over time. But a pitcher who logs a quality start sets the bar very high ... if 3 of the 5 SP log a high number of quality starts ... that team will win close to 3/5 of their games ... that's .600 WPCT ... and that WPCT not only wins divisions ... it wins pennants too.
It's all about pitching. Not just a single pitcher ... but the core of the rotation is key.
This is such a tricky debate. There are crucial points to both sides of the argument, and I honestly don't see a glaring point that directs me
one way or another.
So I'm going to go 50-50 here. If Lee stays, and we get to handle the mega-contract, so be
it. I think JD can make things happen that other GM's can't, and we do have the luxury of having a
fairly stacked farm. In 4 years when Lee's contract begins to exceed his value, who is to say there won't be a Martin Perez who is in his second major league season posting #2 quality numbers? When it gets too expensive to hang on to a guy like say David Murphy, or Nelson Cruz, or (gulp) Josh Hamilton, there are going to be several guys coming up with potential to be major contributors. Engel Beltre, while it's extremely premature, is projecting to have a Griffey Jr.-esque skill set. We have several capable bats coming into the fold, and when they do arrive, they will be on the cheap.
The point is, if Lee gets locked up here, you can guarantee that some of the key pieces of our championship team are going to be lost within a couple years. I trust JD and the front office to replenish these contributors. I feel that Lee is a very important piece for the future, but without him, we still have a team capable of winning our division for a couple years to come. That big-time TORP is the reason we played in November last season though. Without his games against Tampa Bay and NYY, we would have sat and watched the fall classic. Nobody can deny that.
Howdy; Im convinced he 's going back to ya'll.. But Remember,
" Becarefull what ya'll Wish for, cuz you just may get it" lol
@TheNatural, I bet part of the case being made by the Rangers is how they will be able to afford keeping their core players if Lee stays. Tricky indeed.
This has taken on the appearance of a contest among men to see who can hit the highest place on the wall with their stream. That doesn't work and the splash can harm innocent bystanders. It is time to abandon ship. Anyone, still sane, head for the life boats. Discretion is the better part of valor. Bail-Out!!!
What do you do when your core players are a: Josh Hamilton, who in a contract year could draw 10 million and command 18-22 through free agency, b: Nelson Cruz, who should be extended now to enhance his value because in two years, you are looking at another possible 14-18 million a year player, c: CJ Wilson who is Lee's age, and could presavly command significant dollars with another big season, d: Michael Young whose play is beginning to diminish while he makes 16 million a year for the next three???
There is no way to keep all these guys and Lee with a payroll south of 120 million a year. Bank on it, if the Lee deal happens, Josh is as good as gone in two years, and likely Young by next year.
I noticed some of the local columnists are starting to go negative on this thing... This needs to wrap up today.
Points out, yet again, how laughable it is for Bud to claim that baseball's current economic structure doesn't preclude competitive parity.
I don't see anything wrong with getting market value for Lee. There are only two alternatives to that:
(1) The money that Lee would make could be spent on multiple player's whose WAR adds up to what Lee is projected to provide based on the past few years (plus a discount).
(2) The money spent on Lee is invested in finding "value" FA or restocking the farm system in all and every way.
The trouble with (1) is that it doesn't help the team any more than signing Lee; it's the fundamental problem of needing $160M to get to 42 WAR on the FA market. The same amount of money is spent for the same WAR.
Plus, with (1), there is the risk that the Rangers can't actually find the FA whose performance would add up to Lee's WAR. What positions do the Rangers need to improve their WAR aside from pitching -- 1B, 3B, C. Victor Martinez would've been a big step toward reaching 42 WAR. There's nothing out there at 1B, however. Beltre introduces high variance at 3B, so that the idea of moving Face to DH and Beltre to 3B doesn't provide much guarantee the Rangers improve their WAR.
Dunn, Werth, Crawford -- well, sure, Crawford is an upgrade in LF and that would move Cruz/Hamilton to a DH/RF rotation. Apparently, there was little interest in Crawford coming to Texas. JD is on record that the Rangers were his third choice at best. Werth again would let the Rangers move Hamilton to DH. I have no idea whether there was any interest in Werth from Rangers. Adam Dunn probably gives the Rangers a chance to increase WAR at DH/1B over last year, but not as significantly as signing either Victor Martinez, Crawford, or Werth.
So, the most bang for the Rangers buck in getting WAR above last year from the FA market appears to be Lee and Victor Martinez.
(2) is a crapshoot approach. It has a relatively high level of risk of not working out compared to signing Lee (or Victor Martinez). I wouldn't want this to be the Rangers' FO Plan A. And, (2) is going to happen regardless of whether the Rangers sign Lee. What we don't know, because no one has analyzed it, is what might be the return on investment in doing this. Does the $23M put into development/scouting/value FA return the same expectation for WAR as it does if put into Lee?
It would be informative to analyze the value of dollar's spent on scouting/development compared to FA acquisition, but I intuitively think it would make me depressed because if the return on investment was infinitely high for all resources put toward those activities, well the big dollar clubs would already be doing it.
I'm ready for this to end, one way or another.
Me too... I really want JD to spin his magic and trade for Greinke. If they could Lee AND Greinke, OMG... we'd have a dynasty on our hands.
Another way to look at the Lee scenario is what our pitching staff will look like 2 years from now. CJ and Colby could very well end up on different teams and guys like Holland may never come to what we've been hoping for... SOOOOO, it's imperative the Rangers start the 2011 season with either Lee or Grainke. If JD figures out a way to land both, that would be totally awesome...
> i dont understand why the rest of you Ranger fans are concerned about money situations. The A-Rod deal did not put the Texas Rangers in bankruptcy court, multitudes of bad financial choices by Hicks put us in bankruptcy court. Pitching is the key to winning, and whatever price this new ownership group is willing to pay is fine by me, from a rangers fan point of view, because I'm sure they've calculated every variable (injuries, risk/reward, rest of payroll) involved in signing a free agent, especially one such as Cliff.
> Lets say Texas hands over 25mil/year to Cliff Lee, and they expect they're payroll to be around 105 Million. That leaves 80 million for JD and crew to work with, as opposed to the 55mil. the team started off the year with, and that was a WS /AL Champ year. We all remember the tricks and trades JD and Co. pulled with no money, can you imagine what they'll be able to do with +25mil. while already having Cliff Lee?
> Plus we still have that other baseball currency, prospects, and a bunch of them.
> There lies the difference in the A-Rod deal and the Cliff Lee deal, the talent on the teams, both major and minor league.
Rangers will be bankrupted again within another 4-5 years!
What I REALLY hope happens is that the Yankees throw out a huge maximum overbid, maybe 200 mil, in an attempt to make the Rangers give up...and then Texas stands pat and Lee accepts the Texas offer of 20 mil less....allowing the NY loudmouth fans to suffer big time rejection once again.
...oh yeah, and then Tampa Bay wins the AL East with their decimated personnel.
As you say, it takes a team capable of producing about 42 WAR, give or take just a few, to make the playoffs. On the open market, at this yr's prices (now up to $5M per WAR, it seems) that would take a $215M payroll. Only the Yankees the Red Sox can put that much money into a roster. Everybody else has to squeeze wins out of their pre-FA players. But the thing is, even the Yankees have to hit on some of those guys also. Brett Gardener was the 2nd-best WAR producer in their lineup, while only receiving $452K this season. Nobody makes the playoffs without having 20 or more productive players, and many of those will be near league-minimum earners.
Still, a key missing ingredient in the 90's was the stud #1 pitcher. It's not the only thing that was wrong with those teams, but to win a WS ring, the Rangers will need the talent to produce 42 WAR from their roster in the regular season, and Cliff Lee taking the ball in Game 1 in October. I trust JD and his team to figure out how to make it happen.
What I find funny is how Ranger fans and players think Cliff Lee owes them something from only being there for little over 2 months.
Cliff lee please save us from ourselves. Sign with the Yankees now!
@Pabloesque.
Honestly, Greinke only makes sense if you also get Lee, unless you can manage not to completely empty the farm system. Lee+Greinke+C.J.+Lewis is a pitching juggernaut, but just Greinke alone is not enough if you've got a depleted farm system.
I have wondered this though. Am I crazy for wondering if the solution to the 3rd base problem is to trade Kinsler for some quality prospects. move Michael Young back to his natural position, and then signing Beltre to handle 3rd? I unfortunately wasn't able to watch many of the games this year, so I can't tell if Young's decline specifically relates to 3B duties or would he still be a liability at 2nd?
There was an interesting brief this evening that said essentially Toronto is like OH HELL NO on giving up both Snider and Drabek for Greinke. That's good news for Texas, since they're asking way more than that from us. If Toronto is saying no way, then JD can just point to them and tell KC - "what they said."
No one is going to pay the price they are asking for Greinke, which is more than what Halladay's price was when he was traded. The question becomes whether KC will back down a bit, or if they are going to just hold onto Greinke and trade him in July. So all you guys who are counting on JD getting Greinke - I think you're going to be disappointed.
If Lee goes to NY, I expect JD to sign relievers, not starters, and let the young talent duke it out for spots in ST.
The fans will end up paying for these contracts with higher ticket prices, concessions, and parking. The ownership is in this to make money--not lower their incomes!
The Yankees are a declining veteran team with a shallow farm system. I like the Rangers' chances with Hamilton, Wilson, and Lewis locked up the next five years versus a Cliff Lee-led Yankee team. Trade Holland and Scheppers for Greinke and dominate.
Signing a 24 year old infielder who (at the time) had a very good injury history has very little to do with signing a 32 year old pitcher with a fucked up back.
I think the overall problem in baseball is that salaries have escalated as much as they have so quickly. NO ONE is worth $20m or more a year for anything. Baseball should save itself and institute a hard salary cap as well as a floor - so $120m cap, $60m floor, and also possibly a player cap. Eventually there will be a few teams that can compete and the rest of the teams will be essentially farm systems for those wealthy teams.
But Rich - at least in the current system, the players are getting as much of the pie as the owners. If you put in a "hard" salary cap, all you do is help the owners and the teams to get more rich. The money is there, it's just a question of what portion goes to whom.
The only team that can afford Cliff Lee in their 2011 (and beyond) budget is the team without an actual budget. And that my friends, is why baseball is broken. The running of the MLB as a subset of the Yankees is borderline criminal. Isn't that why the Evil Empire Yankees wear pinstripes?
come-on Lee, sign with the Phillies.. your contract will hurt us, but stay away from NY