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Category: Hot Stove

Winter Meetings: Day 3

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Is it over yet?

Winter Meetings: Day 2

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More gossip.

Winter Meetings: Day First

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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]

Say It Ain’t So; Did Yankees Really Want Robbie Cano?

A $240 million smile. (Photo: AP)

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
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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
CanoPV

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.

Grief Therapy

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According to Mark Feinsand Carlos Beltran is coming to the Bronx for the next three years.

It’s 3/$45.

One year too long, you say? I hear you. Another old guy? Yeah, I can relate. Almost ten years too late for Beltran in Pinstripes? Hear you there, too.

But Carlos Beltran, who I once believed was heaven sent to replaceme Bernie Williams (Puerto Rican, switch-hitter, understated), is belatedly a Yankee.

And tell you what: I’m not going to think about it being too late, or about him being old, or about the contract. I’m excited we get to watch Carlos Beltran play every day. Sure makes the lineup look a whole better n it did a few hours ago, don’t it?

[Photo Credit: N.Y. Daily News]

Why Is This Man Smiling?

*Feb 21 - 00:05*

Because he’s going to sign a 10-year, $240 million deal with the Mariners.

Love watching Cano play but I’m glad the Yanks didn’t sign him to that deal.

Hope Is the Thing With Ducats

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Here’s a Friday baseball open thread fuh ya. While there is word that things aren’t going so smoothly for team Cano in Seattle Jon Heyman reports that the Yanks are close to signing our man Hiroki to a 1-year deal.

Boston to New York

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Here’s our pal Leigh Montville on Ellsbury as a Yankee:

Ellsbury’s departure fits somewhere in the middle between Boggs and Damon. Like Damon, he is a more than competent centerfielder, romanced directly off a character-driven, long-haired world championship team. Unlike Damon, he was not the favored face. That belonged to David Ortiz, no argument. Ellsbury was in the second line of stars, high on a long list. Little kids loved him because of his size. Purists loved him because of his speed, his ability to steal a base and track down fly balls. Girls loved him because of his good looks. He was good, good, good, but not break-the-bank good.

There was a curious, season-long disconnect to close out his time in Boston. Despite all the good things he did during the championship run, there always was the sense he was going to leave. He was in the last year of his contract. His agent was Scott Boras, the same no-prisoners negotiator Johnny Damon used. The centerfielder would want the big years and the big money and the Red Sox would not outbid the other bidders. He was good, but not break-the-bank good. Everybody understood.

Unlike Boggs, Ellsbury’s departure would not be without sadness. He would have looked good in a Red Sox uniform for his entire career. Unlike Damon, though, his departure would not be a surprise. He never had promised anything. Everyone knew he was going for the top dollar.

The surprise — ah — would be the destination.

Bright Lights Big City

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It’s less than 24 hours since the news broke–Jacoby Ellsbury is going to be a Yankee. So: Is this a good thing or not? He’s a fine player but he’s been hurt more than somewhat. Does this mean Cano is a goner or does it mean the Yanks know that Alex is in for a long suspension and hell with it, they’re going to sign Robbie as well?

We didn’t see this one coming, that’s for sure. But back to my pernt–it’s been less than a full day since we heard about this, which is more than enough time for people to weigh in on it.

Here’s the word from:

Ben Lindbergh

Dave Cameron

Albert Chen

Tyler Kepner

Jonathan Bernhardt

Mike Axisa

Michael Eder

I’ll update this as the reviews are filed today.

[Picture by Bags]

 

 

Houba

 Rockies Red Sox Baseball

Wow.

What’s Cookin’?

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According to Jeff Passan at Yahoo! the Yanks have no plans to give Robbie Cano a $200 million deal:

It’s not like Cano is the sort of marketing machine his team has portrayed him as in meetings with the Yankees and Mets. Beyond setting his price tag at more than $300 million in during-the-season negotiations, the biggest mistake thus far has been emphasizing the off-field exploits of Cano when reality says otherwise.

He didn’t stem hemorrhaging ticket sales or TV ratings during the Yankees’ down year. His jersey wasn’t exactly jumping off shelves; it ranked 19th in sales this season – and fifth in New York, behind Mariano Rivera, Matt Harvey, Derek Jeter and David Wright.

“We’re not the Brooklyn Nets,” one Yankees official said. “We don’t need Jay Z’s marketing expertise.”

The Yankees like to say that Dustin Pedroia re-signed with Boston for $110 million and Wright with the Mets for $138 million, but there is a difference: Cano is a free agent, and a premium exists with those free agents, even if New York is where he wants to be. And it is. Cano told friends in the Dominican Republic this season that he would re-sign with the Yankees, though perhaps he was expecting the dollar figure to be closer to the $200 million-plus that at one point the Yankees were believed to be willing to offer.

 

[Photo Credit: Marcus Haydock]

Yanks Ship Stewart to Pittsburgh

Chris Stewart

The Yanks have traded Chris Stewart to the Pirates for a player to be named later. Mike Axisa has the skinny.

Back-up catchers come and go and they tend to blur together in memory but Stewart was taut and hard–a prototype. Couldn’t hit but then again if he could he’d be a starting catcher. I enjoyed watching him work behind the plate. He has the GRRRRR that you want from a veteran catcher. Wish him well in Pittsburgh.

[Photo Credit: AP]

The Reviews Are In

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For the Brain McCann signing. Here’s the word from:

Fangraphs.

ESPN.

The New York Post. 

It’s About The Money, Stupid. 

River Ave. Blues. 

 

Risky Business?

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The Yanks agreed to a 5-year deal with free agent catcher Brian McCann today. A physical is pending.

McCann has pop and is an upgrade if an expensive one. And, as Jon Taylor writes at SI.com, he was worked hard behind the plate in Atlanta.

At least we know he’s got a good game face.

Hey, if he’s on the team, wearing the pinstripes, I’m happy to root for him. Just remind me what was wrong with Russell Martin again?

[Photo Credit: Kevin C. Cox/Getty Images]

Dare, Dare

 New York Yankees v Boston Red Sox

Do the Yanks dare to let Robbie Cano go? No, they don’t. They’ll sign him. But Tyler Kepner thinks it is a decent idea:

Losing a superstar is not always as devastating as people fear at the time. Two winters ago, the St. Louis Cardinals watched Albert Pujols leave for a 10-year, $240 million deal with the Los Angeles Angels. They responded by signing Carlos Beltran for two years, giving contract extensions to Yadier Molina and Adam Wainwright, and using their compensatory draft pick on Michael Wacha. Discipline sometimes works.

The Yankees are willing to give Cano $23 million or so for each of the next seven years, a $161 million package that is already too generous. That kind of deal has put the Yankees in their present state — decaying and injury-prone — and the team needs to break the cycle.

An influx of fresh talent from the farm system is the best way to start. The Yankees do not have those players, but that should not make them desperate. Desperate teams make the costliest mistakes.

[Image Via: Rob Tringali]

Comfortably Well Off

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That’s what Robbie Cano will be once he signs a contract this winter. His asking price?

Okay, I know you needed a laugh.

Meanwhile, the Yanks signed Brendan Ryan and according to this report may want a reunion with Raul Ibanez.

Have Glove, Will Travel

New York Yankees v Baltimore Orioles

I know he can’t hit a lick but I really enjoyed watching Brendan Ryan in the field late last season and hoped that he might return in 2014. According to Joel Sherman the Yanks are close to signing him. I can’t tell you if it is a good move or a dumb move but I can tell you that I will enjoy watching him play short again next year.

[Photo Credit: Patrick Smith/Getty Images]

Why Is This Man Smiling?

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From IATMS.

Too Late

Division Series - St Louis Cardinals v Pittsburgh Pirates - Game Three

After the Red Sox won the Serious in 2004 our man Cliff almost wore his fingers to the bone typing about how the Yanks needed to sign Carlos Beltran. Instead, they went out and got Tony Womack, Jared Wright and Carl Pavano and insisted that there wasn’t enough leftover to pay for Beltran, who reportedly offered to sign for less than he eventually accepted from the Mets.

The Yanks blew it, Cliff wrote all winter and we agreed.

Now, the Yanks have interest in Beltran who is still a useful player.

Let me say on Cliff’s behalf, though not in his words: Too late fuck-o’s.

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"This ain't football. We do this every day."
--Earl Weaver