Luxuries

While perusing the odds and ends on Aaron Gleeman's blog today, I came upon this comment:

"Keeping Nathan in Minnesota is a luxury that the Twins can't afford if it requires something like $50 million over four seasons, and they'd be better off cashing him in for prospects at the trading deadline or taking compensatory draft picks when he walks as a free agent."

Aaron is not the first person to say something like this during the off-season, but it's beginning to grate on me a bit. I will admit that:

1. Paying a relief pitcher $12 million/year is a luxury, and that
2. It is risky to give Nathan a contract that would pay him 8 figures until he's 37, and even that
3. The Twins have in-house candidates (such as Neshek) who could fill the closer role for much less.

I considered all of these things back in the fall, and concluded that this summer would be the perfect time to trade Nathan (or that it would be fine to let him walk during the off-season), provided that:

The Twins would find a way to keep Hunter or Santana.

Those two are all-stars, fan favorites, and, had they remained in MN for another 4-5 seasons, would have been locks to have their numbers retired. Knowing that Santana had trade value, my preference back in October was to have the Twins re-sign Hunter. When the Angels signed him on Thanksgiving, my thoughts were:

"Rats. Wow, that's way too much money. I guess we have to give Santana an extension now."

The Twins said they were going to spend between $77-$80 million on payroll this season, and when Hunter moved on, that suddenly became difficult to do. Trading Santana on top of that makes it all but impossible to reach the available payroll. This fact is a problem for the franchise, because:

1. While they say they couldn't afford to pay Santana and Hunter what they were asking, the money they're leaving unspent says otherwise, and
2. The ownership already has a reputation for being miserly, and
3. The taxpayers of MN are providing considerable money to a new stadium, which is supposed to make it possible to keep star players in town, and
4. All-Star players are the main reason attendance has been dramatically improving in recent seasons.

Not everyone believes #4, but they should. Despite earning 3 straight division titles in 2002-2004, the Twins weren't able to crack the 2 million mark in attendance until 2005 (when they were barely over .500). Why? One of their players won the Cy Young in 2004. The Twins drew more fans in 2007 (with a losing record) than in 2006. Why? They had the reigning Cy Young, MVP, and Batting Champ. It wasn't just because they won 96 games in a storybook season. In 2002, they won 94 games the year after surviving the threatened contraction (just as good a story). But only 20,000 more fans showed up the following season because, well, who were those guys?

Look at Oakland: they had 8 straight seasons with at least 87 wins, and made 5 post-season appearances, yet their attendance has been in decline over the past 5 seasons. Why? Because they've lost their MVPs and Cy Youngs to trades and free agency, and the fans won't pay to see an anonymous team, even if they win. Fans take pride in their team - it makes them feel special to have one of their own earning League honors. The Twins now run the risk of falling into decline as Oakland has, and that would make it even more difficult for them to retain the talent that remains on the team.

The Twins made an important symbolic move by signing Cuddyer and Morneau to long-term deals just before TwinsFest. Though those guys are, for their careers so far, only slightly above average for their positions, the fans know them, and believe in their abilities, and it's comforting to know that they'll be around for the next 3 or more seasons given all the other changes we've seen this off-season. Mauer belongs in that core group as well, and he is also securely locked up through 2010. The only other proven all-star remaining on the team is Joe Nathan.

If you look at some Fantasy Baseball Rankings, you'll find that Nathan is considered one of the elite performers at his position in the game right now. Twins fans know how good he is. They will be demoralized if yet another of the star players they take pride in is given up as unaffordable, even though there appears to be ample money available to pay him his market value.

The Twins should always attempt to put the best possible product on the field that their resources will allow. That means building a winner. But it's just as important to keep as many of their home-grown stars around as can fit into the payroll. And, now that Santana, and Hunter are off the books, Joe Nathan can fit into the payroll for the next few years.

Jim Crikket followed up one of my comments to Gleeman with this:

"A little creative contract work is what's called for. There's room in the payroll budget this year so a nice immediate bonus with more moderate annual salaries over the next 3-4 years would seem to make sense."
(Who is Jim Crikket? Every comment I've seen from him is concise and insightful. Where's his blog?)

That's exactly what they should try to do. Match the Cordero contract (4 years, $46 million) by offering Nathan a 3 year, $40 million extension, structured at $12 million/year + a $4 million signing bonus.

I have a spreadsheet on my laptop that totals the Twins' payroll commitments over the coming seasons, and I plugged Nathan in at $12 million per season through 2011. Assuming the Twins stick with the talent already in the organization, I've got the 2010 payroll at about $75 million. That's less than they said they could afford this season in the year the new stadium opens. My 2011 payroll is a little under $100 million (which will probably be more or less league average by then), and that's anticipating 8-figure salaries for Mauer, Morneau, Cuddyer, Kubel, and Liriano. I don't feel at this moment that it would be necessary to pick up Cuddyer's option for that season if there were more pressing payroll considerations. Who knows if Kubel will perform consistently enough to be worth it? Who knows if Liriano will prove durable enough to be worth it? But even if they're all worth it, it looks to me like the Twins could afford them, and Nathan too.

Let's look at it another way: what's a reasonable proportion of available payroll budget to spend on the pitching staff? 50%? I'll be conservative and say 40%. With Livan Hernandez, Juan Rincon, and Dennys Reyes all likely ending their time with the Twins after 2008, and a multitude of outstanding pitching rising throughout the minor-league system, the Twins project to have 50-75% of their rotation in serfdom or early arbitration for the next 4 seasons. Including $12 million/year for Joe Nathan, the total cost of the pitching staff should add up to no more than:

2008: $27 million
2009: $21 million
2010: $25 million
2011: $38 million

This assumes that average pitchers (like Silva and Lohse) will be dropped for a younger model before they become too pricey. Now here's the percentage of available payroll those totals represent:

2008: 35%
2009: 25%
2010: 28%
2011: 38%

This assumes that payroll will continue to increase by $6 million each season, a little less than the average amount the Twins payroll has increased over the last several seasons.

We just gave Joe Nathan $12 million/year for 4 years, and there's still going to be well over 60% of the budget available for the 13-14 position players on the team.

So, somebody explain to me, please, why is signing him not a luxury the Twins can afford?