== We Do the Algebra So You Don’t Have To ==
Shannon Drayer’s position as the reporter for the Official Radio Station can be a double-edged sword. True, she’s not going to be a swashbuckling investigative muckraker (but, frankly, most “beat” reporters aren’t that anyway). On the other hand, her ability to judge the temperature inside the Front Office is very good. (Which, of course, is not the same thing as saying she just parrots what she hears; you’ve still got to filter out what matters.)
For example,when she started saying “watch for Kyle Seager to get a lot of time at third base” (at a time when he was pretty much viewed as “Ackley-lite”), that was a better tip-off of what the brass was thinking than anyone else had.
So … Drayer’s theme over the last couple of months has been pretty constant: with Felix Hernandez and Robinson Cano on the payroll, don’t expect a third high-priced star. Be it Shin-Soo Choo, Masahiro Tanaka, taking on a Cliff Lee contract, or anyone else.
Don’t even think about it.
And, of course, the reaction is foreseeable. Same old Mariners.
But let’s get laser-focused here, and zero in on the premise, so that we can point the right fingers at the right folks.
- Can it ever be bad for a team to add an additional mega-star whose contract reflects mega-star status?
In other words, is the premise of the baseball people flawed? Does it ever make sense to say that one more Full-Price Mega Star just can’t be done?
As it turns out, the answer is pretty clear — assuming that your team payroll is not infinitely flexible.
But it’s going to take some deep-drill exercises here.
Maybe it helps to view a team’s payroll as a “portfolio” of investments. Maybe it doesn’t. Either way, I’m probably going to oversimplify everything.
1) For purposes of this thought experiment, let’s establish that there are three types of players:
- Full-Priced Mega Stars (big impact, but paid accordingly);
- Solid Citizens (open-market or arb-eligible guys with a price tag that is based on an MLB track record); and
- Spec Players (young guys without an established track record, or players coming off injuries) (and that’s “speculative” not “Spectator” obviously).
2) We will set arbitrary price tags, but not totally divorced from reality:
- Full-Priced Mega Stars cost $20M/year;
- Solid Citizens run from $2M for a utility guy or bullpenner to $15M for a strong everyday player or No. 2 starter, but on average we’ll assume $5M/year just for the round numbers; and
- Spec Players (pre-arb or coming off major injury) we’ll assume $1M/year.
3) Baseball operations folks work within an Anticipated Payroll. We’ll assume that there will be “player inflation,” but that every Anticipated Payroll will increase at least enough to accommodate the inflation. So we’re just sort of assuming away the issue of inflation.
4) Every baseball operation will wish to:
- Maximize the value of its Spec Players (more Kyle Seager-s, fewer Matt Tuiasosopo-s).
- Avoid paying Solid Citizens as if they were Mega Stars (no Mike Hampton-s).
- Avoid paying Solid Citizens who are about to lose their solidity (no Chone Figgins-es or Carlos Silva-s).
But, for our purposes, we will assume away the impact of those micro-decisions (which is not to say that they won’t have a huge impact on who wins the World Series). Instead, we look from the macro-level of 35,000 feet:
- Spec Players are cheaper because they are more speculative; and
- Solid Citizens cost more because they have an established MLB track record on which to base their value.
Therefore: the more a team relies on Spec Players, the greater risk it is taking on. It may have the ability to “draw the inside straight” (ending up with Seagers and Millers and Walkers), but there is a difference between hoping to draw an inside straight and counting on it.
That’s a lot of ground rules! And we haven’t even gotten to the math!
So, let’s go to the math.
Let’s start with an assumption that a team has two Full-Priced Mega-Stars (as in: Felix and Cano).
Then, based on our Ground Rules, the mix of Solid Citizens to Spec Players is determined by Anticipated Payroll (it’s just algebra):
|Anticipated Payroll||2 Mega-Stars||Remaining Salary||Solid Citizens||Spec Players|
To clarify, the team is not limited to that number of Spec Players, but, based on the assumption that the Solid Citizens cost an average of $5M each, it will need at least that number of Spec Players at an average of $1M in order to make budget.
Now, let’s see the effect of adding a third Full-Priced Mega-Star:
|Anticipated Payroll||3 Mega-Stars||Remaining Salary||Solid Citizens||Spec Players|
Now, we assume that the Anticipated Payroll is not set by the baseball operations people, but that the baseball operations people have a very good idea of what that Anticipated Payroll is likely to be.
So … it is reasonable for a baseball operations person to conclude — based on the knowledge that Anticipated Payroll is at a given level and is not likely to witness non-inflation increases — that adding a Full-Priced Mega-Star will reduce the overall likelihood of success by putting too much burden on the success of Spec Players?
Yes. That is a reasonable conclusion. It is not a “not-trying-to-win” conclusion. It is a “this-forces-us-to-draw-an-inside-straight-and-chances-are-we-ain’t-gonna” conclusion.
And note: it is a reasonable conclusion, even with a $135M Anticipated Payroll. In that case, it forces a shift from an 18-5 mix of Solid Citizens to Spec Players to a 13-9 mix (again, assuming no non-inflation increases in budget). That shift might overcome the value of the additional Mega-Star. It might not, but it’s not unreasonable to conclude that it might.
Of course a team can overcome the macro-level model with excellent micro-level decisions. Of course it can. But no one wants to choose a macro-level model that requires virtually every micro-level risk-taking decision to pan out. And no team with Jesus Montero off the radar, Danny Hultzen in long-term limbo and Dustin Ackley hardly looking like a long-term fixture needs to be reminded about decisions that don’t pan out.
So what can we conclude?
- It is the lack of perceived upside to the Anticipated Payroll that drives the decision not to go 20-20-20.
- The baseball people are reacting in a rational way to the lack of perceived payroll.
At the same time … it does appear that, as the Spec Players (Seager, Miller, Zunino, Walker) graduate into Solid Citizens (or Mega-Star in the case of Walker), the Anticipated Payroll will go up more than just for inflation.
Why? Because it would not have been rational to sign Cano unless this was anticipated. Even with just two Full-Priced Mega-Stars, the big picture doesn’t really add up at the $120M level. So I think that they are anticipating moving to a higher level, just not a level where three $20M players make sense.
That being said, if you’re going to complain, the complaint goes to the folks setting the budget, not those complying with it.