Archive for November, 2009

Jon Garland’s Option, Sunk Costs, and the Divorce.

The Los Angeles Dodgers have declined their one-year $10 million option on Jon Garland. I estimate he’s worth around $7.5 million. Seems like the decision is a no-brainer, but it’s not.

The Dodgers have to pay $2.5 million to buy out the option; thus, they could have had him for $7.5 million, because the $2.5 million is a sunk cost (he gets that whether he plays for the Dodgers or not). Sure, the Dodgers may wish they hadn’t agreed to the option in the first place, but now that it is in place, all that matters is whether or not he’s worth the additional $7.5 million they would have to pay to retain his services. It appears that he is, without even taking into account Garland’s added value to a winning team.

Maybe the Dodgers have other plans for pitching, but I have to believe the McCourts’s divorce is playing a role here. This is an organization that has been willing to spend in the past, and now they’re clamming up over an awfully small amount of money.

Teahen for Fields and Getz

Congratulations to the New York Yankees for winning the Worlds Series, and thanks to the Phillies for making it a competitive series. It was one of the most enjoyable World Series that I have seen in a while.

Though I’m disappointed to see the season end, the end of the World Series marks the beginning of baseball’s second season: the hot stove league. And I have to admit that I enjoy following baseball transactions almost as much as I enjoy watching the games on the field. Teams are wasting no time in preparing for next year. It is my plan to spend significant time evaluating the trades and free-agent signings here this offseason.

I kick off the hot stove season by discussing a trade between the Kansas City Royals and Chicago White Sox that sends Mark Teahen to the White Sox for Josh Fields and Chris Getz. With the hype surrounding Mark Teahen, I thought he might garner a bit more in return. Earlier this season—when he was posting a respectable .800 OPS—many pundits laughed as rumors circulated of a Teahen-for-Francoeur swap. Even though Teahen hasn’t blossomed into a star, most analysts thought Jeff Francoeur wasn’t enough to get Teahen. Well, if Francoeur was ever on the table for Teahen, then Moore should have taken that deal. But that ship has sailed, and I doubt that you could pry the Natural from the Jeff Wilpon’s cold, dead hand.

I estimate that Teahen to be worth about $6.5 — $7 million. Like Francoeur, he’s probably played too much, which bumps his value down to $3.5 — $5 million. Last year, Teahen earned $3.6 million in arbitration, and I expect he’ll probably get a small raise for his final year of arbitration. He’s probably worth about what he is making, which explains why the Royals are getting so little in return.

Fields and Getz have almost no redeeming qualities. They can’t hit or field, nor are they young enough to be considered decent prospects. I won’t be shocked if either turns into an adequate major-league player—because players sometimes do this—but, I don’t expect it to happen. Though they make little money, they’ve played so poorly that they’re really not worth much more than what they’re making. Maybe Moore’s scouting eye sees something in these players that indicates a brighter future. I don’t blame him dumping Teahen to take this chance; but, I have to think there’s a higher probability of Teahen having a decent 2010 that would allow Moore to trade Teahen mid-season for a better package. It’s possible that tying up cash in Teahen’s salary for even half a season is not something that the Royals want to do. In the grand scheme of things, it’s difficult to be critical of any move when such small potatoes are involved.

In summary, it’s a pretty even swap (Surprise! Trade is mutually beneficial). The White Sox give up some players who weren’t that useful to get a player who’s not too expensive and might be able to help them immediately. The Royals free up some salary for more pressing needs, and there is a chance that the players could develop in to useful players. It might even be a good idea to stash them in the minors for a year to hold down service time. It may be frustrating to think of what Teahen might have brought, but it’s too late to worry about that now.

Iwamura and Chavez

Yesterday, the Tampa Bay Rays traded Akinori Iwamura to the Pittsburgh Pirates for relief pitcher Jesse Chavez. The Rays were motivated by the fact that they would have to pay a $650,000 buyout if they did not pick up Iwamura’s $4.25 million option.

Iwamura missed much of last season with an injury, but returned to form at the end of the year. Based on his 2007 and 2008 performances, I anticipate him being worth a little more than $7 million in 2009. Thus, even if the injury offers some risk, Iwamura appears to be worth a bit more than his salary. Why would the Rays trade him? They have Ben Zobrist at second and Evan Longoria at third, so there isn’t any room. It’s better to capture some of the value the team would be giving up by having him ride the bench.

In return, the Rays get Jesse Chavez, a young and decent-but-not-spectacular reliever. He’s difficult to value because he doesn’t have a long record of performance, and as a reliever his career sample size is small. As an average reliever who pitches 80ish innings, he’s worth around $2 million/year. He’s got two more years before he hits arbitration when he’ll be making a little over $400K a season. Thus, he provides about $3 million in total surplus (marginal revenue product — salary) over the next two years. This doesn’t even take into account his arbitration years, when he’ll make a little less than half of what he’s generating in revenue (He’ll also be improving and league revenues will be growing). Though, I’m reluctant to put much value on this time period given the difficulty in predicting what he’ll become from his short career. There is a lot of uncertainty here.

In summary, it looks like a pretty even deal; but, definitely mutually beneficial.


The Phillies have received a fair amount of criticism for their reluctance to promote Chase Utley and Ryan Howard until they were older. The end result is that the team has two quite valuable players locked in through their peak years (29-30). It’s difficult to discuss this topic without selective anecdotes—and maybe the Phillies would have been better in the past with earlier promotions—but, it appears that everything has worked out just fine. Score this one as a win in the “leave ’em in the oven” school of development camp.

Question of the Day

If the Yankees end up losing the World Series because they can’t get good production out of a starter for the final three games, how will this affect the machismo argument regarding pitcher rest?

Even if the Phillies come up short, Charlie Manuel made the right call to give his pitchers four days of rest. It’s an issue of physiology: the body needs time to recover from strenuous activity.