Friday, 9 December 2011

Re-stating the case for Darvish

I find myself compelled to address again the Yu Darvish speculation. Based on a number of comments and observations, particularly over the last week, several prominent members of the local Toronto media and apparently most fans have concluded that the team will not be serious players for Darvish, while national (American) media figures persist in listing the Jays among the obvious fits.

With typical Jays related negativism on full display, seemingly thousands of voices reacted to some off-the-cuff comments from Alex Anthopoulos about having "payroll parameters" to jump to the conclusion that the Jays were - as long expected! - defaulting back to the "Tampa Bay Model" (the clock is ticking until someone, likely Richard Griffin, invokes the word "Montreal") which is, in my estimation, a wild over-reaction. The logical implication, of course, of that reaction is to assume Darvish is too expensive for the poor pitiful Jays and their tightwad skinflint owners.

Nonsense I say.

Let's examine some of the things we've been told since Paul Beeston returned to leadership with the team:

1. The Jays are a major market team and can be expected to act like one
2. When the time is right, the Jays will be perfectly able to play in the same salary nieghborhood as the Red Sox (Say the $120-150 mil neighborhood).
3. Alex doesn't have a set payroll figure and if he thinks a specific signing or trade makes sense value-wise for the team, he can approach Beeston and make his case. If he succeeds the money will be there.

More recently we were told, from several sources:
1. the Blue Jays believe they need to add a front of the rotation starter to take the next step
2. the Jays believe they need to get more innings from their rotation
3. the Jays believe the cost of such a player as a free agent is far too high given you are getting a guy past his peak and in decline
4. the Jays believe obtaining such a player via trade is almost impossible (since such players are seldom traded) and the cost to the farm system would be exorbinant (Just today he mentioned the cost to deal for a 2B would be higher than he liked).

Still more recently we heard Alex comment, in the context of a rumor mill that had the jays as serious players for Prince Fielder and several others, that he did not have an unlimited budget and he had to work within "parameters" - a comment easily understood when he explained later that he was faced with agents coming to him and basically saying "since you have all this money, why are you not giving us some?"

There is no logical reason, when everything that's been said this week (not only by AA but by Beeston) is considered in it's logical context to assume the Jays have - as many have theorized - reacted to the new CBA by going into small-market mode. Nothing they said implies that, and it's out of touch with reality. A CBA which severely hamstrings the amount of money a team can spend on acquisition of amateur talent has pretty much nothing to do with how much a team spends on the major league payroll, if anything it makes it more likely that figure will go UP, not down.

It's true that the CBA phases out the revenue sharing money the Jays had been receiving, which if published estimates of the Jays cut of that pie are correct, mean a drop in that revenue stream of ~$7-8 million each year starting in 2013 through 2016. This is not a crushing loss and if the team wins, would easily be offset by increased revenues from other streams. It's most assuredly not enough to take a team which had anticipated spending $120m plus down into the $50m range (i.e. the Tampa Model).

It is upon this falicy that everyone from Mike Wilner to Shi Davidi to Gregor Chisholm and a host of anonymous commenters across the interwebs have concluded the Blue Jays will probably cheap out on Darvish. Now, with due respect to the possibility that these gentlemen are privy to off-the-record insider knowledge which supports this conclusion, I dissent.

I've made the case for Darvish before, now let me do it again with enthusiasm. Consider these points in relationship to what we know from what we've been told before (as listed above)

1. Darvish is a potentially transformative player. Both on the field, where he is unanimously considered to be better than the best of the free agent market for pitchers (and the best North American FA pitcher, CJ Wilson, just signed for almost $80 mil) and off the field where he brings pretty much every last one of the intangibles which mark a player as a "rock star" presence.
2. He's a full six years younger than the aforementioned Wilson. the team who get's Darvish gets his prime years, not his post-prime years. that essentially NEVER happens with a pitcher, and really has only happened in recent memory with two other players - A-Rod and Ichiro.
3. Darvish regularly delivers 200+ innings and is ready now to step into a major league rotation.
4. Darvish will cost nothing in prospects as a trade for, say, King Felix would.
5. There is no other player known to be available by any means out there which the Jays could attempt to obtain (except arguably Prince Fielder - whom the Jays have said they will not go beyond five years on) who could have even half the impact on the teams fortunes that Darvish could have.

In short, if you were to sit down and create an imaginary player would would perfectly meet the parameters of the kind of player the Blue Jays management has specifically said they need, that guy would still not suit the description as well as Darvish does.

"But," you say, "he will cost $100 million, maybe more! how can a team like the Blue Jays invest $20+ million a year in an untried pitcher? It's madness!!"

I'll tell you how - because you have misunderstood the nature of the cost. Do you remember that the CBA has severely limited the amount of money teams can spend on international free agents (except those from Japan!)? and also but a pretty harsh limit on draft spending? what happens to that money for a team like Toronto which had been investing a ton of money in both markets? Back into ownership's pockets? Keep in mind that this money did not and does not count against the major league payroll. Beeston was specifically ask if his talk of $120m or more included the cost of amateur talent acquisition and he said no, that it was a description of major league payroll.

So where does it go? I mean sure you can do some things around the margins like provide better food and medical staff to the minor leaguers but nothing very expensive. I submit to you that Alex understands that he now has several million dollars in-hand to re-direct, and has to decide where it will best be used. Several million non-payroll dollars.

So, let's break it down. We'll assume for the purpose of this exercise that bidders for Darvish will expect to bid more than the Red Sox paid in posting for Dice-K. A team which acquires Darvish will hold his rights for six years, so if you amortize the posting fee, that's the term - so if we assume the winning post fee is $54 million (Matsuzaka was a bit over $51m) then that works out to $9 million per year over the six years you control him. Then of course, you have to sign him. Let us assume that it's a point of pride for him to be the highest paid pitcher this offseason, that means in round figures you have to pay him ~$80m over five years.

For a total of $134 million in all. Or an AAV (IF it were all payroll) - discounting the $9m we've accounted to the sixth year - of $25 million a year. And it's THAT figure everyone blanches at. But that $25 million is NOT accounted against the major league payroll. the posting fee is the equivalent of the bonus paid to someone like Adonys Cardona, or indeed, Daniel Norris - it's a different budget item than the major league payroll. That $9m a year will be made up in large part of the money that the CBA forces the team to not spend on other players. Again, the posting fee does NOT count against the major league payroll. whatever amount it is, it is spread over six years of player control for accounting purposes and is an entirely reasonable cost for the value received. In short, Darvish sets you back $9 mil a year over the next six years (in amortized posting fee). laying aside the benefits of interest and so forth as too complex for the discussion, the fact remains that a very great deal of that amount in any given year - possibly all of it - can be covered by the money the team would have otherwise spent in amateur player acquisition.

That leaves you with a five year deal which would probably look something like 12-14-16-18-20 in terms of how it's structured. An easily affordable deal for a team which projects right now to have a 2012 payroll of !$70 million.

Even if you insist on looking at the total cost, the Jays would be on the hook for a cost that, were it all salary, would rank 17th on the list of all time biggest contracts. Yes, admittedly he's a less proven player than those who have bigger contracts, but he's also only 25 and most of those deals were signed with players in their 30's. We know that the Jays can afford it (easily), we know they are willing to go big on the right guy (or else we just assume everything is a lie) and we know all it takes is for Alex to see the value and make his case.

Look, if you want to argue that the Blue Jays should never take big money risks - that they should consider the "Tampa Bay Model" the ideal to be emulated - fine, I respect your right to that view. But if you are one of the folks who goes into every off-season insisting the Blue Jays chase Prince Fielder or whoever his equivalent is in that year, I defy you to argue against signing Darvish. This sort of opportunity comes along once a decade, if that.

More to the point, I don't believe for one second that Alex Anthopoulos doesn't see it. the Jays might not end up outbidding the Rangers (I'm convinced they are the main competition) but I think it is utterly foolish to assume they will not be among the 2-3 highest bidders.

Time will tell if I'm wrong.


Joel said...

Awesome breakdown/synopsis. This is the best I've read yet.

Another pitching note: I remember a few months ago you were quite keen on the jays getting their mitts on RP Mike Gonzalez.

Do you still have these feelings, perhaps not as a closer but certainly as a link in the bullpen chain?

The Southpaw said...

well, there' have ben some better options discussed as possibly available via trade - Jeremy Affeldt for instance - so I'd now rate Gonzalez behind a few of those but he's still on the list.

To me the first thing they need in the pen is an 8th inning LHP (with respect to Janssen's record at getting lefties out which is quite good)

Mylegacy said...

Tammy - I'd go 67 million on the bid. Something like you suggested on another site 12-14-16-18-20 with a five year contract for Yu.

However, I'm sure I read (somewhere) that Darvish wants 20 million a year - from the get go. IF so -That may well be a deal breaker.

I wouldn't trade any "real" prospects for Gio - despite the fact that in Bill James book before the 2011 season he said Gio might become an ace...I just don't see it.

Time to see what Hutch can do.

dbenson1399 said...

I'm sure the Jays will make a bid for him. I'm sure AA has decided what Yu is worth to him and will bid accordingly. If he gets him, great, if not he won't overpay for Darvish anymore than he will for Fielder. Let's hope the busts of Japan past will lower the posting fee enough to let Toronto take the prize ... or at least negotiate with him.

Anonymous said...

It's a fair point - if you want the Jays to make a big splash, this is probably the route with the biggest payoff, compared to a Fielder or what not. I personally think they should build the core before upping the spending, but if there's a splash to be made, I think this is the one

tommyguard3 said...

BUILD THE CORE??? What do you think they've done???

Colby Rasmus in CF back to back HR Champ and MVP candidate Jose Bautista in RF Brett Lawrie at 3B Escobar at SS. Arencibia and D'Arnaud battling for C.

Sounds like a good Core to me, time to make a few splashes and make a run for a title.