Archive for December, 2009
It appears that the White Sox have acquired Juan Pierre for two minor league players, to be named later. The deal includes $10 million to cover the remainder of Pierre’s $18.5 million contract over the next two years. I have Pierre pegged at $11 million over the next two years, so with the cash and prospects the deal comes out about right.
So, it seems that the Blue Jays, Phillies, and Mariners have arranged a blockbuster deal where Roy Halladay will go to Philadelphia and Cliff Lee will end up in Seattle. The Phillies also get Mariners prospects Phillippe Aumont, Tyson Gillies, and Juan Ramirez, plus $6 million in cash from the Blue Jays. The Blue Jays get Phillies prospects Kyle Drabek, Michael Taylor, and Travis D’Arnaud (thanks to MLBTradeRumors.com for gathering the details from all the circulating reports).
This is quite a deal to break down, but I’ll try. There are only two major-league players involved, and both have one year left on their current deals before becoming free agents. Halladay will make almost $16 million and I have being worth around $17 million. Lee will make $8 million, and I estimate him being worth $15 million. Straight-up the Phillies don’t look so good here, but this is where the cash and prospects come in. I have recently developed a system for valuing prospects based on their minor-league performance. It’s complicated, and I will be explaining it in my forthcoming book (details on that to come), but it involves projecting the expected worth of minor-league players based on their performance. So, below, I have the expected value of the rights to all the players in the deal in millions of dollars. These values are crude, but they should get the job done.
Team In Out Phillies Halladay (1+) Lee (7) Aumont (4) Taylor (4) Gillies (2.5) D'Arnaud (+) Ramirez (1.5) Drabek (4) CASH (6) Total 15 15 Blue Jays Drabek (4) Halladay (1) Taylor (4) CASH (6) D'Arnaud (+) Total 8 7 Mariners Lee (7) Aumont (4) Gillies (2.5) Ramirez (1.5) Total 7 8 Grand Total 30++ 30
The pluses indicate that there is some unquantified value. For D’Audard, he is so low in the minors that I cannot adequately project his worth. He’s worth something positive, but it’s hard to say how much. For Halladay, the + reflects the value to the Phillies to being able to lock up Halladay before he hits the free agent market. This may net them a small discount as well as offers stability. Note that Toronto doesn’t loose this value, because he was not going to sign with the team. John Heyman is reporting that the Phillies and Halladay have agreed to a three-year $60 million deal, plus some vesting options. I have Halladay worth $55 million over that span to the average team—close to the actual contract—and because the Phillies are a good team he ought to be worth more. So, he seems to be getting a good deal and the Phillies may be getting a small discount.
In the end, all the teams are coming out about even, and of course all the GMs believe they are coming out ahead with a new group of players. I’m kind of surprised it worked out so neatly, especially with so much cash involved.
UPDATE: I just realized that I was estimating the discounted present values of the prospects and major-leaguers in different years’ dollars. I’ve corrected the error.
I have Matsui worth around $6 million a year and Cameron worth about $20 million over two years. However, they are being added to already-good teams, therefore their marginal revenue contributions are higher than these estimates. Good deals for both clubs.
The Red Sox have supposedly inked John Lackey to a five-year, $85 million deal. Is he worth it? Well, that’s a tough question. From 2005–2007, Lackey was a dominant starting pitcher averaging 217 innings per year. But, during the past two seasons, he’s pitched well, but averaged about 170 innings a year thanks to injury. So, the first question is which pitcher will show up? The former, the latter, somewhere in between, or Carl Pavano (2005–2008).
And then we have a second question: what is he worth to the Red Sox. Most of the values I present are based on adding the player’s performance to an average team. There are increasing returns to winning (i.e., each win is worth more than the preceding win) and the Red Sox are a very good team, even after subtracting out Jason Bay. But, will the Red Sox remain this good during his entire contract? Overall, I expect his marginal value to the team will decline over the term of the contract, but the team will likely remain above average.
I have Lackey at $45 million at the low end and up to $115 million at the high end. Obviously, it’s probably best to assume he’s at neither extreme, so $85 million is in that big fat gooey middle. Not much of a projection here, but I’m not claiming anything spectacular. A guy like Lackey is hard to value. Given his injury history, I think it’s about the best that he could do.
I should add, that I have long been a Lackey fan, and I’m happy to see a guy who has been under-appreciated cash in on a nice deal.
I have Lowell valued at around $5 million. Max Ramirez has been treated like prison cigarettes during his career: traded but rarely used. This is the third time that he’s been traded in his career. While he’s generally been considered a prospect, he’s yet to play well in Triple-A. He’s a valuable but highly risky asset. I estimate a Triple-A player of his caliber to be worth around $2.5 million. Thus, the total amount the Rangers are giving up is close to what they are getting. The Red Sox clear some payroll and open up a slot for a replacement at third base, and may have a back-up catcher in waiting. Seems like a win-win deal.
Commission Chairman Charles Bannister said the budget will provide for maintaining and bolstering core services but will maintain cuts in other departments imposed earlier this year.
The budget includes $974 million in operating funds and $349 million in capital funds.
Revenues are expected to increase by $72.8 million, primarily due to the county’s move last week to increase its portion of the property tax rate by 21 percent. Because billing for the tax increase — about $160 for the owner of a $200,000 house — will not occur until March, the county will receive revenue from the 2009 tax hike in 2010….
Capital improvements — buildings, land purchases and renovation — will take the biggest hits next year. Special purpose sales tax expenditures will be cut in half from $384 million in 2009 to $181 million in 2010.
County officials have said they want to delay new construction projects during the economic downturn, especially those projects that require staffing. Salaries and other operating costs are classified as operating expenses and cannot be paid through sales tax dollars.
The Gwinnett County Elections Office has issued applications to recall three county commissioners. The move comes one week after the five-member board voted 4-1 to increase the property tax rate by almost 21 percent.
Recall applications were filed for Commission Chairman Charles Bannister, District 1 Commissioner Shirley Lasseter and District 3 Commissioner Mike Beaudreau. Commissioners Kevin Kenerly and Bert Nasuti, who both voted in favor of the tax hike, are not seeking reelection in 2010. Beaudreau was the commission’s lone dissenter on the vote.
The Houston Astros have signed reliever Brandon Lyon to a three-year, $15 million deal. That may seem like a lot for a reliever who doesn’t rack up a lot of saves, but Lyon is good enough to be getting more opportunities in important situations.
Over the past three seasons he’s had a 2.11 K/BB and given up 0.7 HRs per game. He’s not a stud, but he’s a dependable pitcher who can handle late inning opportunities when the game is close. I’ve got him valued at $17.5 million over the next three seasons, so the deal seems about right to me.
Well, it looks like Rafael Soriano found a way to have his cake and eat it too. He’s going to get his arbitration-governed wage after an excellent season and possibly sign a long-run contract with another team without having his value affected by draft-pick compensation. As I suggested the other day, accepting arbitration was a cunning strategy to detach his services from the draft-pick required by his Type-A status. The Braves have traded Soriano to the Tampa Bay Rays in return for Jesse Chavez, whom the Rays recently acquired from the Pirates in a trade for Akinori Iwamura.
Here is what I had to say about Chavez the last month.
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.
For his 2009 season, I have Soriano worth between $9–$10 million, and he’ll probably get between $7–$9 million in arbitration. So, it looks like the Braves got close to the maximum value that they could have expected to get out of him. If Chavez can get his home runs under control, he could blossom into a valuable reliever; of course, he could also regress and become a non-tender candidate. For those Rays fans who were upset that they couldn’t get more for Iwamura, I think you have to be pretty happy now.
The Brewers have reportedly signed Randy Wolf to a three-year, $29.75 million contract. I can’t say that I like this deal. Wolf is coming off two strong seasons, but he has a history of injuries. If I assume he’s as healthy as he has been recently, I estimate he’s worth $23.5 million over the term of the contract. While that’s in the ballpark of what he’s getting, the difference in getting to the neighborhood where I begin to think the team overpaid. And after factoring in his injury risk, it’s not a move that I would have advise.
The team also added reliever LaTroy Hawkins with a two-year, $7.5 million deal. This deal, I like. I have Hawkins worth about $9 million over the next two years; although, when you hit his age (37) estimating aging effects gets tricky.
The Braves have designated Ryan Church for assignment. I find it interesting that last season the Braves offered an inferior Jeff Francoeur exactly what Church made last season—he would ultimately end up settling for $3.375 million.
Francoeur Church Career .268/.312/.434 .272/.345/.441 Previous .239/.294/.359 .273/.338/.384 Arb. Offer $2.8 million DFA
Church probably wasn’t going to get much of a raise after his poor 2010. He’s a good defender, who will likely bounce back with the bat. Though he did have some injury issues, he appeared to have been benched by Cox at the end of the year. For whatever reason, Church does not endear himself to managers. Maybe he’s not worth tendering a contract, but it reveals the Braves double-standard towards its golden boy that infuriated fans. Of course, the Braves could still get something of value in a trade, but we’ll have to see what happens.