The “long & short” of Pujols-type contracts

I told you the A’s were good.


You probably hadn’t heard, which is obviously why you come to The Conclave, but the Cardinals kicked off a three game set against the Los Angeles Albert Pujolses of Anaheim on Tuesday night.  As such, a lot has been made of the former Cardinals first baseman facing his former team for the first time since his December 2011 departure from St. Louis.  It had me thinking about that contract, and I started to wonder about some aspects of the deal that I didn’t give much thought to back when it all went down.

The legendary Branch Rickey once said, “Trade a player a year too early rather than a year too late.”  Presumably, Rickey’s philosophy would’ve applied to free agency and long-term contracts.

I’ll spare you going all the reasons I genuinely do believe this was a good contract for the Angels, from a business perspective.  If you & I haven’t had that conversation, here’s the reader’s digest version:

  • The Fox TV deal is basically paying his salary, the impact on Moreno’s net cash flow is minimal, if not positive.
  • 29 MLB clubs stood to benefit more from a Pujols extension than St. Louis.  A re-up with the Cardinals, and the fan base breathes a collective sigh of relief.  Everywhere else (and I think we can all assume those Marlins rumors were true), and right away season tickets start selling, merchandise, jerseys…etc start flowing in.
  • The deal came at a time with McCourt’s floundering Dodgers were a joke on AND off the field, and Moreno made a push to try and convert or capture soured Dodgers fans.

There’s more on that, but my plan for this post is to write more about some of the less-thought-about perspectives.

What do you guys think about this:  A long-term ridiculous deal is actually better for a club to have on the books than a shorter-term ridiculous deal.  I’m talking the Albert Pujols deal versus the Carlos Beltran deal.  (10 years, $240MM vs 2 years, $26MM)

Am I crazy?  Think about what the Marlins have done recently.  They signed big names to huge contracts and charged into the 2012 season with a new ballpark and a roster full of names like Hanley, Buehrle, Reyes, Stanton, Johnson, Sanchez…etc.  Can’t miss, right?  Well, we all know what happened, and that after an abysmal performance, several of these guys were shipped north of the border to play for the Jays.  Why in the world would Alex Anthopoulos take on that kind of burden?  Because Jeffrey Loria is paying for most of it, that’s why.  Otherwise, there’s zero chance those players ever get out of Miami.

The one thing that long-term deals, no matter how bad, afford a club is the ability to eat some of the salary and move a player when they feel it necessary.  Take the old, old A-Rod (Texas) deal.  The Rangers were able to move A-Rod, in part, because of the length of the deal and the flexibility afforded by the element of time.  No chance Loria (or the taxpayers) ends up paying those salaries…at least not 100% of the salaries.

Follow me on this little hypothetical for a minute.  Let’s say I’m Arte Moreno, and I’ve decided that Albert at the (stated) age of 40 needs to go.  I owe him something like $84MM for the last 3 years of production–if you want to call it that–on the playing portion of this contract.  The “production” I’m going to get out of him will be minimal, in terms of helping the club win games.  The gate I might get for approaching milestones (I admit, unless he picks up the production, he’ll fall well short) might offset some of that, however.  Remember how packed AT&T Park was while Bonds approached the all-time homerun record?  What do you think some of those tickets were going for on StubHub in the days & weeks leading up to the night he broke the record?  But if Albert continues to trail off production-wise, and don’t get me wrong, the numbers are still kind of “there”, they just aren’t eye-popping like they once were, then it’s reasonable to assume that by the time he’s 40, cracking the lineup (even as a DH) is not something easily done.

I could probably move him to another club, and pay most of the salary for those final years (A.J. Burnett is one recent example of the kind of thing I’m talking about.  The whole Red Sox/Dodgers deal last year is another) to save myself some money.  Even if I end up paying 80% of his salary, that’s $16MM in savings over what I would’ve paid–and the production he’d likely be putting up is something that actually benefits my team if he’s producing at “that level” for a competitor.

Now try to do that in a short-term deal.

Let’s say Beltran gets hurt or has a terrible year.  Like, terrible.  Nobody is going to take him off my hands if I’m Mo.  Deals like that just don’t come along.  A two year deal, and you’re stuck with him.  You’re basically eating the contract, and there’s no way you’re getting out of it.  Sure, the shorter deals have a lower total cost, but one could argue that they come with greater risk.  If things start to go south on a short deal, you’re just hosed.

Does it make sense to have a policy to only sign players to deals that are less than six years, or whatever?  Of course not.  No agent in their right mind would entertain discussions with you, if their client is under 37 years old.  (cough, cough, Scutaro — try moving HIM if something happens.  Good luck, Sabes!)  On the other hand, if you go out and sign deals like A-Rod, Pujols, Fielder…etc, you could find yourself wishing you hadn’t, at least in terms of the production on the field.  If you’re only concerned with the team’s bank account, that might be a different story.

Could it be that the ridiculous long-term deals really are better than the ridiculous short-term deals?

I don’t know.  Just a thought.

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