Monthly Archives: December 2013

Hazelnut Cream Sandwich Cookies.  Please.

Dig Kottke’s holiday gift guide. 

I hurt my knee on November 10th and it took me a month to schedule a doctor’s visit. Partly because I hoped I would just heal on my own and partly because I’m intimidated by the prospect of finding the “right” doctor. More than seeing this as a chance to solve a problem and improve my life, I saw it as an opportunity to expose my ignorance.

When I finally navigated the insurance web site (no, not THE insurance web site) to find an in-network doctor close to my office, I called them to schedule an appointment and carefully combed over the details of my policy with the receptionist. I still somehow ended up with an appointment with his partner who does not take my insurance. I regretted the decision while making it. Still, I went ahead with the visit just so I would not have to call, again, and reveal my stupidity.

How I long to be the smartest guy in the room and that’s rarely true unless that room is the bathroom and it’s cockroach-free at that moment. I think that’s a universal feeling and it influences the way we talk about the Yankees. But should it? I don’t really care if the Robinson Cano contract is a laughing stock or the Yankees are perceived as stupid for giving it to him. All I care about: is Robinson Cano the best guy they can get to play second base? Yes? Then why isn’t he a Yankee?

In the run-up to Robinson Cano signing with the Seattle Mariners for $240 million over ten years, many Yankee fans thought a contract for seven years for $175 million was OK, but ten years was prohibitive – because they didn’t want to pay him for the very end of his career. The difference ended up being three years, $65 million for Cano’s 38-40 year-old seasons. A similar amount, after accounting for inflation, to what they just gave Carlos Beltran for his 37-39 year-old seasons.

Between the McCann deal, the Ellsbury deal and the Beltran deal we have seen all of the facets of the Cano deal play out over three different players. I observed the following general reactions to these deals:

Brian McCann (C, 5 years, $85 million – with an easy vesting option for a 6th year at $15 million more) – A premium price to be sure, but offense at catcher is so rare that it’s worth it. Also, McCann may not be catching by the end of the deal, but the near-term upgrade is so attractive that we’ll deal with the end of the contract when we get there. There’s always first base and DH, right?

Jacoby Ellsbury (CF, 7 years, $153 million or 8 years, $169 million) – WTF? That’s a lot of money for a guy who’s had two really good seasons. But he’s a solid player and evidently can be an important cog on a championship team, so I’m glad to have him around. Still, that seems like too much money – $22 million a year. Does this mean the Yankees are planning to shoot past the $189 million limit? I sure hope so.

Carlos Beltran (OF/DH, 3 years, $45 million) – Excellent hitter, too bad the Yankees didn’t get him when he could also field and run the bases! Oh well, he’s a one dimensional player now, but will be a nice solution for the middle of the lineup. Three years is at least one year too many since he’s so goddamned old, but that’s the price of doing business I guess.

So that’s the premium price for positional scarcity, the scary high average annual value, and the overpay for the mega-decline years that we’re mocking Seattle for giving Cano. The Yankees are guilty of as much stupidity as the Mariners, the only difference is the Mariners ended up with the best player. Oh yeah, in addition to the oppportunity to pay a 37 year old in 2014 instead of in 2022, the Yankees still don’t have a second baseman for next year.

We can compare projected WAR totals and stab at how badly the Yankees have allocated resources here, but regardless of the metric, wouldn’t the 2014 (15, 16, 17 etc) Yankees have been a better team with Robinson Cano plus the quality outfielders they could acquire with this cash they are throwing around than they will be with Ellsbury and a crappy second baseman? And if they plan to blow past the salary cap, then wouldn’t they be much better with both of them?

I don’t see as much hand-wringing about these three deals. They just represent run-of-the-mill stupidity. Yankee fans will likely never hear another word about them even if they fail spectacularly. The Robinson Cano deal has the potential to resonate for a decade and I think Yankee fans no longer want to see their team top the list of “worst contracts.”  We’ve been hearing about how stupid the Yankees are ever since the winter of 2007, when they gave Arod all the moons of Saturn, and they’ve won 3 Division titles, played in 3 ALCS and even a World Series during these dark days.

Did you know a strain of Yankee fan exists that is mad that Robinson Cano didn’t accept fewer years from the Yankees just so he could finish his career reflecting the glory of the franchise? This is a logical fallacy, because the Yankees did not offer Robinson Cano a contract that would take him to the end of his career! And the same fans applauded their restraint. In fact, it was this tail end of his career that scared so many Yankee fans away from the ten-year deal. “Yes, we want you to be a Yankee forever, right up until you are no longer great.”

How can we ask Robinson Cano to invest in the idea of being a career-Yankee when the Yankees were not willing to do the same? The Mariners showed more faith and loyalty to Cano than the team that profited (heavily) off of him for the last nine years.

I’m open to engaging any baseball argument about why keeping Cano is a bad idea. Is his durability a mirage? Is his less-than-max-effort running the bases a big deal? Has he stopped hitting lefties? Is he a PED bust and precipitous decline waiting to happen? But this is where the debate has to be for me because the accounting angle doesn’t work. I cannot prioritize the possibility that 1/25th of the roster (and what, 8% of the payroll?) might be a bad contract in 2022 over winning in the here and now.

Because if we agree that Cano is the best player available, I find it hard to fathom how the Yankees could have spent all this money and still whiffed on the most vital acquisition. It would be like buying the most expensive cranberry sauce for Christmas dinner but refusing to pony up for a goose.

For those of you who have celebrated the Yankees’ intelligence for not matching Seattle’s offer, please consider this question: When will this decision pay dividends for the Yankees? I am a fan who wants to see the Yankees win the World Series as soon and as often as possible. I think that employing the best second baseman in baseball is a step towards making that happen. Will letting him go get the Yankees to the World Series any faster? Any more often? If the answers lie in 2022, then the questions are moot.

The Yankees famously refuse to hang banners for pennants and division titles. I wonder if they’ll alter that philosophy when their fans proudly declare them “smartest team in the league” because that’s the only title they figure to win.

Is it over yet?

Love this post-credits bit from Married to the Mob (ah, Michelle):

[Photo Via: This Isn’t Happiness]

For to keep warm on a chilly winter day.

Painting by Richard Diebenkorn.

Our boy Jon Weisman has been hired by the Dodgers as the director of digital and print content.

Fuggin’ sellout.

Could not be happier, man. Jon is one of the great baseball bloggers so it’s cool to see an organization like the Dodgers recognize.

Best news of the week.

It’s snowing. Not like this but still, I love this picture and this gives me the chance to tell you to head on over to  Dirty Old 1970’s New York City.

More gossip.

Sichuan-Spiced Pumpkin Seeds.

Lubitsch’s classic comedy.

Yentas start your engines.

The Yanks have already made moves. More to come, of course. My favorite spot for all of the latest is MLB Trade Rumors.

Enjoy this open schmooze to chat about all things baseball.

[Photo Credit: Bruce T Brown/Getty Images]

It snowed yesterday. There’s freezing rain this morning. This picture by Bags is a reminder of sunnier times.

Dive in…

Good ol’ Bags.

Cry Baby–Janis

[Photo Via: Lushlight]

Hello again, welcome back to the Monday edition of Where & When.  The hot stove is burning up everything in sight, which is a good thing because it’s getting harder to find challenges (as I always say); but I think I have a pretty good one for you this time.  I’ve been telling a few people I know about the game and how the regulars keep coming up with the answers in good time, so keep up the good work and before you know it, we might be the next coming of Hollywood Squares (if we aren’t already, who knows? >;)

So let’s take a look yonder and take a good look at this photo:

I’m almost afraid to say anything about this photo so I don’t give anything away.  But to be fair, I will give you a decent clue: that cowboy is actually working, and his work is rather important.  Doing what you ask? Hmm… so the Naked Cowboy was not the first one to have a regular job up here, go figure.

So, get the location and the year correct and you get the prize: a cold chalice of  J.C. Gray, and the rest of us can sip on a tumbler of Barrel Brothers.  You should know how this works by now; leave your answer and your process of finding the answer in the comments section, and for kicks you can share some trivia with the rest of us. For a bonus, you can figure out the nickname the thorough-way in the photo had at the time and why.  If the game should be overshadowed by more baseball news, not to worry; it’s good to have activity in the Banter and we’ll be here for a while.  Have fun and I’ll try to get back to you in the late afternoon or evening.  >;)

Soul Strut.

Stein’s soul record

[Photo Credit: Frank Horvat]

A $240 million smile. (Photo: AP)

When Brian Cashman said “everyone is replaceable”, he wasn’t kidding. Less than 12 hours after Robinson Cano spurned the pinstripes for the “greener” pasture of Seattle, the Bronx Bombers welcomed Carlos Beltran into the fold. Easy come, easy go.

Yankee fans may have been floored by Cano’s decision to accept a 10-year, $240 million “partnership” with the Seattle Mariners, but the organization certainly wasn’t. Judging by the alacrity to replace him, it seems as if the Bronx Bombers knew what was coming. In fact, their inflexibility with Cano pretty much dictated the sequence of events. Was it a case of the Yankees prudently devising and implementing a contingency plan, or did the franchise actually prefer Plan B from the outset?

Did the Yankees really want Cano? There are 160 million reasons why that might seem like a silly question, but the organization’s posture toward Cano suggests they may have made him an offer he had to refuse. From day one of the off season, the Yankees saturated the media with statements about how much the team would not  pay Cano. By drawing a line in the sand, the organization appeared more interested in backing into an exit strategy than moving forward with productive negotiations. And, if any went on behind the scenes, no one was telling, which seems doubtful considering how public the process became.

Even before the Mariners jumped into the fray, the Yankees jeopardized their own offer to Cano by giving the same deal to Jacoby Ellsbury. Did the Yankees really think the Red Sox All Star was an equal to the homegrown Cano? It’s hard to imagine so, but even if their internal projections bucked the conventional wisdom, they had to know Cano would think otherwise. Either way, by announcing the Ellsbury deal before at least attempting an aggressive push for Cano, the Yankees were effectively sandbagging their offer. What’s more, by outbidding the Mariners for Ellsbury, the Yankees were creating a rival for Cano. In a sense, the signing of Ellsbury all but marked the end of Cano’s time in pinstripes. So, when the Mariners came calling, it’s no surprise the second baseman was eager to listen.

When you consider the $80 million difference between the two offers (which doesn’t take into account the tax advantage of playing in Washington state), it’s impossible to argue that the Yankees were competitive in the process. Ironically, Cano will likely be branded a greedy trader for taking the extra money, when it reality that exorbitant sum should be regarded as a symbol of his loyalty. After all, the Mariners would not have blown the Yankees’ offer out of the water if they didn’t have to. Seattle paid a very high price to lure Cano away from his obvious preference, and, for some reason, the Bronx Bombers made little effort to discourage him. By all accounts, Cano was willing to give the Yankees a discount, but the team didn’t seem interested in finding out exactly what it was.

Yankees’ Payroll as a Percentage of Team Revenue

Source: Cots Contracts (opening day payroll) and Forbes (estimated revenue)

Regardless of the Yankees eagerness to retain Cano, there’s still the question of whether they made the right decision to let him go. A surprising number of Yankee fans have looked past Cano’s production and legacy and instead celebrated the move as a sound financial decision. Who knew so many of the team’s followers had so much concern for Hal Steinbrenner’s profit margin? Chalk that up to the Yankees’ constant talk about cost cutting. Instead of holding the franchise up to standards of the past, fans have begun to think of the team’s payroll as a zero sum game. As a result, Beltran is being accepted as a suitable, cheaper alternative to Cano, instead of a complement, as would normally have been the case. Incredibly, the Yankees have created an environment in which payroll reductions are viewed as increases, and the team’s profit margin is viewed by some fans as being more important than its winning percentage. And yet, the Yankees’ ability to spend doesn’t justify every big contract, especially one as large as Cano’s.

Conventional wisdom now dictates that all long-term deals are bad, especially for players already on the north side of 30. In the case of the 31-year old Cano, a 10-year deal looks particularly onerous. There’s no way the All Star second baseman will come close to earning his $24 million salary in the 2020s, the argument goes, so how can a team make such a short-sighted commitment? This logic seems reasonable, but it is mitigated by three factors routinely overlooked: (1) excess return at the beginning of a contract can offset deficits at the end; (2) money has time value; and (3) player costs are subject to inflation.

Can Cano maintain his production for three more years? If so, according to fangraphs.com, he will be worth $90 million, or $18 million above is annual salary. If he has seasons similar to 2012, the surplus would rise to $33 million. There’s no guarantee the second baseman won’t begin an immediate decline, but chances are he’ll provide excess value over the first half of his contract that would offset at least some of the likely drain toward the end of the deal.

Another important consideration of any long-term deal is present value. It’s natural to look at Cano’s $24 million salary in today’s dollars, but money has time value. More specifically, under typical economic conditions, a dollar in hand is worth more than at any point in the future. How does that impact Cano’s contract? The chart below provides a full picture, but in 2023, for example, the second baseman’s salary will be equivalent to about $15.5 million in current terms.

Present Value Depiction of Robinson Cano’s New Contract

Note: Present Value is based on AAV of contract discounted back by 5% (1% + 30 Year Treasury Rate), with payments assumed as a lump sum on first day of each year  and discount rate compounded annually (this actually overstates the present value). Inflation adjustment is a further 3.55% discount based on average annual salary increase between 2003 and 2012. For example, the chart says that in 2013, Cano’s $24 million salary is worth $15.5 million in today’s dollars, and that based on rising cost structure, paying someone $15.5 million current dollars in 2023 would be like a $11.3 million payment today. 

Between 2003 and 2012, the average salary in major league baseball rose from $2.3 million to $3.2 million. If similar growth is applied to Cano’s contract, his $15.5 million present value salary in 2023 would be similar to paying a player $11.3 million today. If Cano only has to be worth around $11 million in 2023, not $24 million, and you consider the surplus he may provide in the early years of the deal, all of a sudden what seems like a burdensome arrangement becomes fair value.

But, what about the luxury cap? Inflation and time value mean nothing to baseball’s tax man. Even though Cano’s outer years may be worth less in today’s dollars, a team will still be on the hook for a $24 million AAV in 2014. For the Yankees, that’s particularly onerous because, even with an Arod suspension, the team is all but assured of paying the luxury tax once again. However, it’s hard to say the team was motivated by this factor when their top offer had an AAV just below the $24 million figure that will be assigned to the Mariners. And, if Cano had accepted a $10-20 million discount to return to the Bronx, the AAV of a 10-year deal would actually be worth less than the $160 million offer made by the Yankees (the difference becomes greater if the team’s reported willingness to go as high as $175 million over seven years is true).

At the risk of getting bogged down with financial minutia, the math illustrates that long-term deals are not as burdensome as often portrayed. This realization leads back to the original question. Did the Yankees really want Cano? If the financial implications are not so prohibitive, shouldn’t the team have been more aggressive? And, if so, what explains the team’s lukewarm courtship?

Do the Yankees believe Cano is a candidate for a rapid decline? Did they infer from his relationship with Jay Z that baseball was no longer a priority? Was a lack of hustle and work ethic an underlying concern? What about Cano’s close friendship with Alex Rodriguez and Melky Cabrera? Perhaps a PED undercurrent made the Yankees more cautious. It’s easy to throw out conspiracy theories, but a more logical explanation might actually come back to finances.

Instead of being concerned about how much Cano was going to cost, it could be the team was worried about how money they could make off his star power. In an ironic twist, the Yankees may not have been scared away by the prospect of Cano becoming Arod. Their greater concern may have been Cano’s inability to match Rodriguez as a drawing card. Winning is the ultimate lure, and Cano helps in that regard more than most, but the Yankees’ brand also relies heavily on big names. So, without the extra bang for their buck, the organization may have decided Cano wasn’t worth the price. And, if the Yankees were acting from a financial standpoint, their motivation may have been governed more by marketing than payroll reduction, although the latter was certainly a bonus.

Life goes on for the Yankees. Just as Cano isn’t greedy, they aren’t cheap. However, Yankee fans have every right to question whether the team’s commitment to winning has taken a step back in favor of profit maximization. It’s one thing to build an occasional winner on a more defined budget, but when the mandate is perennial success, a lot more risks have to be taken. The Yankees passed up on a big one yesterday, and, it could turn out that they dodged a bullet. What is certain, however, is they have forfeited any chance at a big reward.

One final note is a personal one, but I hope it’s a consideration shared by many Yankee fans. Cano’s departure transcends win-loss rates and profit margin. It also impacts the team’s legacy. There will be no tearful goodbye to Cano in 10 years. By then, his time as a Yankee will have faded into distant memory. Instead of being the heir apparent to Derek Jeter, that royal line will now lay dormant. That might not seem important to some (including Cano), but having the opportunity to watch great players over their entire careers has been an important part of being a Yankee fan and integral to the franchise’s lore. It could be that the organization perceived a lack of connection between Cano and the fans, but nonetheless, the second baseman would have added to the franchise’s pantheon of all-time greats. Now, they’ll have to share Cano with Seattle.

Crimson And Clover–Joan Jett

[Photo Via: This Isn’t Happiness]