Thursday, December 6, 2007

Plan B

It seems that a lot of folks are disappointed at the offers for Santana at the Winter Meetings. Bill Smith is right to hold out for the package that would bring us 3 quality players for opening day (Ellsbury, Lester, Lowrie or Hughes, Cabrera, Kennedy). Whether it’s the cost in young talent, or the impending extension to clear the no-trade clause, not even the free spenders of the league want to go there.

Meanwhile, the Tigers/Marlins deal has shifted my thinking. The Tigers blew out their payroll a bit, but made a huge splash, created a thoroughly dominant lineup, and will surely reap the benefits in season-ticket sales. The Marlins, having dumped their two most marketable players, may turn a profit in ’08 with their miniscule payroll, but will surely play to an empty stadium every night. I doubt the tax-payers of Miami will be excited about ponying up hundreds of millions of dollars on a stadium for a team nobody watches.

While I don’t recommend that the Twins overstretch their projected 2008 payroll (about $78 million), they would benefit from mimicking some of the Tigers assertiveness this week. Neither should the Twins clean out Santana and Nathan for a series of prospects who won’t begin to make a name for themselves for a few years – the franchise would lose the ticket-office momentum they’ve been building the last couple of years.

In light of those conclusions, I propose bold action:

Spend what we have to spend, but sign Santana.

The 4-year extension we’ve offered him would work out to $18.6 million/year through 2012. He was reportedly asking for $25 million/year through 2013 to waive his no-trade clause. I don’t believe the Twins could reach that, but I also think it’s something his agent threw out there knowing he was dealing with the Red Sox and Yankees, two teams that spend money like it was water. For the Twins, I suspect they’d come down a bit.

Santana is still young enough, and has shown sufficient durability, to be a worthwhile risk in 2013 (when he’ll be 34). So I’d come back to him with a package that pays him $19 million/year for 6 years. From there, I’d hope to meet somewhere in the middle, maybe at 6 years, $126 million (a figure I heard he was looking for prior to the Winter Meetings). That would make him the highest-paid pitcher by more than 10%, and make him the second-highest paid player overall, behind only A-Rod. Nothing to sneeze at. It would be great to have some insurance on the latter years of the deal, in case he gets hurt. Maybe a clause where if he pitches fewer than 150 innings in either 2011 or 2012, the Twins would have the option to buy him out. But if he’s healthy, he gets paid.

Why do this? Is anyone worth that much money?

Well, if anyone is, Santana’s the guy.

But the value of extending Santana goes beyond his performance on the field. It would let the fans know that the Twins are not in rebuilding mode, and are not just a farm team for rich, East-coast clubs. It lets everyone know who they can expect to see on opening day in the new stadium. And, it shows that the Twins are at least willing to out-spend the Royals.

Can the Twins succeed long-term with so much of the payroll tied up in one player?

Certainly. With Hunter in Anaheim, there is ample space to pay Santana extra in 2008. The 2009 payroll, if it follows the recent pattern, will increase to about $84 million. $21 million for Santana would represent 25% of the total – unprecedented, right? Well…

In 2004, Radke’s salary represented almost 23% of the payroll (on a playoff team), so that’s the benchmark so far. Surely, Santana is even more valuable to us than Radke was! My goal would be to keep Santana’s proportion as close to that as possible in each year of the deal (estimated payrolls are hopefully on the conservative side – new ballpark!):

2008: $13.25 million (17% of $78 million)
2009: $20 million (23.8% of $84 million)
2010: $21.25 million (22.1% of $96 million)
2011: $22.5 million (22% of $102 million)
2012: $24 million (21.8% of $110 million)
2013: $25 million (20.8% of $120 million)
Total: $126 million (21.5% of $590 million)

The year in which things get stretched is 2009, but the Twins can probably absorb that. Look at the combined salaries of the Twins’ 6 highest paid players each year since 2002, and the proportion of that total to the overall payroll (numbers from

2002: (Radke, Reed, Milton, Hawkins, Hunter, Mays) $26.25 million = 65%
2003: (Radke, Reed, Stewart, Milton, Hunter, Mays) $37.85 million = 61%
2004: (Radke, Hunter, Stewart, Koskie, Jones, Guzman) $31.33 million = 67%
2005: (Radke, Hunter, Mays, Stewart, Jones, Santana) $40 million = 71%
2006: (Hunter, Radke, Santana, Stewart, Castillo, Lohse) $44.5 million = 70%
2007: (Santana, Hunter, Castillo, Nathan, Morneau, Silva) $45 million = 63%
6-year total: $224.93 = 66%

As you can see, it’s quite common for 63-70% of the total payroll to wind up in the wallets of just the top 6 guys. Only one losing season in those 6 years, and not by much. Clearly, a successful model, so why not keep it up? If we set aside 66% of payroll for the top 6 for the next six years, they would get:

2008: $52 million
2009: $56 million
2010: $64 million
2011: $68 million
2012: $72 million
2013: $80 million

It’s not feasible to project who these players might be 5-6 years from now (in 2002, could anyone have guessed that Luis Castillo, Joe Nathan and Carlos Silva would be among that group in 2007?). But let’s project possibilities for the next three years:

Santana ($13.25 million)
Mauer ($6.25 million)
Nathan ($6 million)
Cuddyer (about $6 million)
Morneau (about $7 million)
Nick Punto(!) ($2.4 million)
Total ($41-ish million)

Santana ($20 million)
Mauer ($10.5 million)
Morneau (about $10 million)
Cuddyer (about $8 million)
Kubel (about $3 million)
Liriano (about $3 million)
Total ($55-ish million)

Santana ($21.25 million)
Mauer ($12.5 million)
Morneau (about $13 million)
Cuddyer (about $9 million)
Liriano (about $6 million)
Kubel (about $5 million)
Total ($67-ish million)

I'm projecting 4 years/$33 million for Cuddyer. Morneau's numbers are similar to David Wright. Hopefully the salary estimates are a little high, and the payroll guesses are a little low.

There's no reason the Twins can't keep 3-4 big stars around at approximately market value while capably filling out the remainder of the roster with $30 million. That's where the small-market moxy will continue to pay off. Eventually, many productive players will have to move on - Silva, Nathan, eventually Cuddyer and Kubel will follow in the footsteps of Koskie, Guardado, Jones. They'll be replaced by younger players who can produce about as well for a fraction of the cost. But as long as the team retains the couple of players the fans consider to be truly exceptional, the tickets will continue to sell, and the Twins will have an opportunity to succeed.

Next: How to fill the roster holes without trading Santana.

No comments: