Saturday, January 2, 2010

What's Aroldis Chapman worth to the Jays?

Or to any team, for that matter.

Perhaps more than you think.

first, let me be clear - I predicate my thoughts here on the concept that Chapman is in fact worthy of the praise he draws in some circles.

Chapman, a 22 year old, 6'4" left-hander, is the possessor of one of those arms Crash Davis referred to as "touched by the gods" capable of touching, by some reports, over 102 MPH on the radar gun. But his secondary pitches are said to be raw (he has at least a slider and a change-up since he's thrown those in workouts for major league scouts) and the expectation is that he'll need some time in the minors to refine his abilities. Still, many scouts consider him the best left-handed prospect in the world.

He's also said to be a bit of an egomaniac who might present maturity and behavioral issues. The team who signs him would have to be both confident they could refine his abilities (which should be the Jays' forte) and also confident they can develop him as a person into the sort of player, teammate and clubhouse presence that matches his abilities.

I have no way of knowing the answer to these questions so I say what I am about to say concerning contractual value based on the theoretical possibility that the Blue Jays can be confident on both counts. Let's further stipulate for the purpose of this discussion, that the Jays do indeed have this kind of money, per Beeston's constant claims. Otherwise this is a futile exercise.

Chapman has reportedly already declined a $15 million offer from the Red Sox. That's hardly surprising since the current holder of the Cuban defector record for a contract is Jose Contrares who signed a four year, $32 million contract with the Yankees way back in 2003. To assume that Chapaman would want to at least get into that neighborhood is pretty much a given.

So let us say, for the purpose of discussion, that it takes $30 million to sign Chapman for five years. It might take more because that's still a smaller Average Annual Value than Contrares got. But we have to have some sort of working figure.

First, you need some basis for comparison. Since Contrares is so far back, and since he changed teams a couple of times, I've chosen another, more current (and obvious) comparison - recently signed mega-prospect Stephen Strasburg.

Now, the comparison is imperfect because Strasburg wasn't an unrestricted free agent. on the other hand, most reports suggest he's better than Chapman so that will hopefully balance things out enough to make the comparison reasonable. There's really no one else that makes an ideal comparison because of other factors (for instance, Dice-K being a major-league-ready veteran makes him a poor comparison).

Strasburg's four year, $15.1 million deal pays him a $7.5 million signing bonus, and and salaries of $400K in 2009 (pro-rated), $2, $2.5, and $3 million in the following years. If Strasburg broke camp with the Nats, he'd be arbitration eligible at the end of the contract. He possibly won't do that but for the sake of this comparison I'll assume that happens. Note that this is an AAV of almost $3.8 million.

You have to start with that deal, because there's always a premium for free agency that doesn't apply to draft picks. Then you consider that you have to pay Chapman for what might well be two seasons in the minors. So assume you are looking at a five-year deal. Assuming an AAV of $4 million over 5 years, that's $20 million.

So, it seems to me that if you want to even talk about Chapman, $20 million over five years is where you START. It's the price of admission to the discussion. If you REALLY think he's a #1 pick talent, and that you can develop him as described above, then that is a no-brainer decision if you are among the teams who have the money.

Now, the question before the house is - how far north of $20 million can you or do you go?

Here's how I answer that question: The premium you pay over and above the figure he's worth absent free agency (as if he were the #1 pick like Strasburg) is the premium you pay for the rights to that mythological #1 pick - for the right to try to develop him. And if you succeed, then you get six years of major league service for your investment.

So then, you ask yourself, for instance, "Is it worth an extra $2 million a year on top of what he 'should' cost to add that kind of talent to my team?"

If so, that's $12 million more total you are willing to spend on Chapman. At the point where you say "is it worth it?" and the answer is "no" - that's where you get out of the bidding.

So what we have before us is a Jays team which is already committed to investing money now for a payoff 3-4 years hence (in a number of different player procurement and development investments) and also a team which has reduced it's major league payroll commitment several million dollars (and likely there's still another couple of deals to come which will save a good deal more) so they are in a unique position to redirect money if they think the cause is worthy.

In such a situation, the Jays are certainly going to "pay forward" a lot of money to make future teams better. The only question is how much and on what. If we assume Chapman is in fact a potential #1 ace starter and will have a good chance of reaching that potential, then that's an asset the Jays (or any team) will under normal circumstance find almost impossible to acquire by other means, short of landing a top five draft pick. So "on what?" will seldom have a better answer than "on a potential Ace pitcher."

"How much?" then, becomes the operative question.

I propose that if you consider that you are giving Chapman something similar to Strasburg's deal - 1.e. $20 million over five years - and then "paying forward" an amount in addition to that necessary to secure six years of major league service from a pitcher of that quality. then you evaluate what those six years are worth to you on average. That amount is what you pay now in order to have him on your team then. if that's $2 million a season then be willing to go to $32 in all to sign him, if it's $3 million then be willing to go to $38 million - you get the picture.

The Jays have the ability to give the guy something like $12 million as a signing bonus out of the money they have saved or will save this year. Then what you have left is a #1 pick contract with an AAV of $4 million a year, which is perfectly in line with other comparable highly regarded prospects. At the risk of re-repeating myself, you look at the $12 million as money you spend now, in a rebuilding year, in order to improve your chances during the 2012-2018 window.

I'd argue that is money well spent, and a wise way to take advantage of the peculiarities of the Jays current situation money wise.

IF you believe you can develop Chapman into That Guy.

2 comments:

Mylegacy said...

Assuming - for instance - the year he is ready to "come up to the bigs" we bring him up on the second day of that season - we would own him for SIX full seasons + 99% of his first season. Seven years - WE'D OWN HIM FOR SEVEN YEARS - IN THE BIGS - he'll be 22 in 2010 - IF he comes up in 2012 (one day in) we'd have him till the end of the 2018 season.

The only real snag in the idea is that he's a good friend of Kendry Morales of the Angels and unless we paid a fair bit more he'd be more comfortable in the Latin atmosphere of Southern California.

However, we are allowed to dream.

Tom Dakers said...

I don't know how much month the Cardinals have left to sign Albert Pujols, you'd have to think the Cards wouldn't pay this much for Holliday if it meant they wouldn't have enough money for Pujols.