2018-19 Phillies Off-Season News/Notes/Discussion

[zambonir]

Kershaw just renegotiated his deal. Last year Tanaka and the Yankees did. A renegotiation is a renegotiation. Sure, they were both extensions that also reduced the annual value of the contracts, and that's what I'd expect the Phillies to do with Arrieta too.

Either way, they could end up with Arrieta for four or five years without having put all the risk on an up-front four or five year deal. The opt-out was something they happily gave and it didn't really cost them anything. What cost them was only giving him three guaranteed years.

[andyb]

The opt-out was something they happily gave and it didn't really cost them anything. What cost them was only giving him three guaranteed years.

And with Harper and Machado they can overpay in the first 3 years, and get a lower AAV with the next 7. If the player opts out then the Phillies will have gotten 3 really good years at a high price at a time the franchise can afford that. More money early (like with Santana and Arrieta) could also be a competitive advantage in that the franchise can afford it while at the same time the player gets more value (for the same AAV).

[Austinfan]

The problem comes not when the player performs and opts out, team comes out even, but when the player doesn't perform and doesn't opt out.
Now for players who are coming off injury or otherwise are highly variable, an opt protects both parties, since the player could significantly overperform his contract.
But for known quantities with a low probability of outperforming the contract (the opt out protects the player if his market value rises) most of the risk falls on the team.

The reason opt outs are dangerous is the GM is protected, not the team, that is, a good performance helps him keep his job, a bad performance sticks his successor with an awful contract - so his incentives aren't aligned with the team's optimal strategy. We've seen this problem in financial markets.

[EDmuch]

How do we opt out of the fact that our minor league teams are almost barren of quality position players at AA or higher?

[allentown]

The problem comes not when the player performs and opts out, team comes out even, but when the player doesn't perform and doesn't opt out.
Now for players who are coming off injury or otherwise are highly variable, an opt protects both parties, since the player could significantly overperform his contract.
But for known quantities with a low probability of outperforming the contract (the opt out protects the player if his market value rises) most of the risk falls on the team.

The reason opt outs are dangerous is the GM is protected, not the team, that is, a good performance helps him keep his job, a bad performance sticks his successor with an awful contract - so his incentives aren't aligned with the team's optimal strategy. We've seen this problem in financial markets.

No, there is no added risk because of the opt out. If you sign a guy for 10 years for $300 million with no opt out and he gets injured and stinks, even in the first 2-3 years, the team loses. That is the nature of a guaranteed long-term deal. The player has to give up something to get the opt out. So, lets say to have a 3-year opt out, the contract is only $290 million. In the above case, the team's loss is a little less. Now, let's say you front-load the contract and include an opt out clause after the 3rd season. You are inviting, strongly incentivizing the guy to opt out after the 3rd year because, since the annual salary drops, he is likelier to get a better FA deal if he opts out. He has this in mind from the day he signs the contract, so he is playing for a relatively soon next contract. This doesn't protect you from injury. It does protect you from sloth, to a certain extent. But, more importantly it does 2 things: 1) you don't own his contract when the inevitable age-related decline occurs in the back end of the deal and 2)you aren't paying out big $ to him at a time when your salary budget is crimped and you need to resign your own players or sign another FA. The downside for most teams is that you are over-paying for the first 3 years and that hurts your budget. You may be overpaying for the 10 years as a whole, which hurts your AAV and puts you over the lux cap. Here is where the Phillies have the advantage. They are WAAAY under the lux cap for those first 3 years. They are WAY under the salary budget which their revenue can support. AND, also unique to the Phillies, they have Trout sitting out there who would love to be a Phillie in two years and is a better fit than Harper. So, the 3 year out pinches you in year 3, perhaps we exceed the lux cap for one season, but in that season, with both Harper and Trout, we have the sort of enhanced chance to go to (and win?) a WS that we would have had if the Phillies ownership had been willing to go over budget for 1 year to have both Lee and Halladay. Monty wouldn't do that -- the budget was the budget. Middleton will do it. Next year, back under the lux cap, no harm done.

All things considered, the opt out decreases the risk to the team. Where it could hurt is if the guy turns out to be great for all 10 years of the deal and we only get the benefit of the first 3. In this case, Trout fixes that.

[julio]

How do we opt out of the fact that our minor league teams are almost barren of quality position players at AA or higher?

I suppose you could opt to become a Yankees fan...

[EDmuch]

OK, Julio, you really want me to take that large bottle of sleeping pills !!!!! ;

[julio]

OK, Julio, you really want me to take that large bottle of sleeping pills !!!!! ;

LOL.

Happy Thanksgiving!

[EDmuch]

Same to you my friend !!!

[andyb]

The problem comes not when the player performs and opts out, team comes out even, but when the player doesn't perform and doesn't opt out.

That is not exactly rocket science. It happens with any 10-year deal. The only way to get Harper and Machado (since they are so young) is with a deal like that. I choose to offer that to get the player. You choose not to. The opt out adds no additional risk to the contract offer if it happens to be 10 years anyway. The opt out might save you a bit of money and it might entice the player to leave when the next contract is worse. The opt out can be a win/win for both team and player. It is a fantasy that you will get Harper or Machado on a shorter deal. Might as well offer the opt out to them because it adds zero additional risk to the offer.

[zambonir]

Yeah AF I am pretty sure you are making an argument in favor of more expensive, lengthy deals without actually meaning to. Or you are just opposed to them regardless of whether they include an opt-out, which isn't exactly news. This isn't a debate between giving Harper a short deal, a longer deal or a longer deal with opt-outs. Everyone would be in favor of option 1 if it actually existed.

[Austinfan]

I haven't seen a lot of opt out deals with significantly lower out year salaries (though the cap hit is the same, it's averaged over the life of the contract) - probably because players don't want to make less overall money if they don't perform.

If the Phillies could pull that off, more power to Klentak, but I'll believe it when I see it.

[zambonir]

You haven't seen them because both opt-outs and teams getting wise to the age curve are fairly new. But Martinez and Arrieta's deals both slide downwards.

I doubt Harper is going to get a Stanton-like deal (he can opt-out in 2020 but his salary keeps rising for years after that, before dipping at the end).

There's not going to be a perfect contract for the Phillies when you're talking about two 26 year-old Hall of Famers. They will either risk losing them too soon (two-three years instead of five) or will have to commit to paying them for too long. Probably a little of both.

[andyb]

The Phillies seem to be mentioned in virtually every prominent rumor. The latest is Seattle for either Jean Segura (SS, favorable contract totalling $60 million for next 5 years) and Edwin Diaz (24 year old closer).

Segura is interesting if Machado falls through and the team is just not going to give Crawford a chance. Probably a medium-high price but one that would not need Sixto in a deal. Less interested in Diaz as I fear he would be pretty expensive with only 2+ years of service time. More than Giles for instance and that worked out poorly for Houston.

To me the tea leaves suggest the Phillies want to add an offensive bat in the outfield and ideally at SS. Machado and Harper are the first alternatives but we seem to be setting up 2nd choices (like Brantley) for either position. And we also want a closer which is the one area I might wait to address until midseason and whether a need materializes.

[zambonir]

Would you rather give up talent for a SS (and give up on Crawford) or just sign a FA 3B for a couple of years?

I think they are open to anything though. Technically they could also acquire Segura and then try to talk Machado into playing 3B. Or acquire Segura and Crawford/Santana is 3B? Unless they are more open to keeping Franco than we think.

The trade market is not going to wait for the high-end FA market though.

[andyb]

A big variable I assume is whether they find a landing spot for Santana. Assume we eat 25%-50% of the remaining money and get a second tier prospect or two. All these scenarios seem to start with moving Hoskins back to first base and I just have to think that the Santana at 3B scenarios are more about the team playing up the fact that they don't have to trade Santana. They don't need to of course. They want to because the defensive adjustments alone get them a win or two - which is kind of the value of picking up $10-$15 million of Santana's contract.

I will be impressed if Klentak pulls this off. A GM willing to admit a mistake that costs his owners millions of dollars has the potential to be a pretty good GM in the long term.

[EDmuch]

Segura is far more than Crawford will ever be and would be under control for 5 years or until a certain 17 year old shortstop gets here.

[schooldoc]

Segura would be a different kind of hitter for this lineup. A .300 hitter with some pop (maybe 50 XBH a year in CBP) and above average speed. Not a big walk guy though.

To get Segura and Diaz would be pretty expensive as mentioned above. I'm sure Crawford and a couple of significant arms (almost certainly Medina included) would be going back to Seattle.

[zambonir]

Well, we don't know that for sure because we don't know what Crawford is going to be, or what Segura will be two years from now (or, for that matter, if the 17 year-old will ever even play in AA). But he'd certainly make the team a lot better in the short-term, and including Crawford in the deal would seem logical.

But I don't think any of these rumors are serious yet. The same source as the Segura/Diaz rumor (Morosi) says we're in on Greinke, Corbin and Happ too (but it will obviously only be one of those, if any).

[andyb]

The same source as the Segura/Diaz rumor (Morosi) says we're in on Greinke, Corbin and Happ too (but it will obviously only be one of those, if any).

I guess my point was that the Phillies seem to want to add 3 or 4 major pieces to the team this offseason. Outfield bat. SS/3B bat. Starter (preferred left-handed). And Closer.

They are in the mix on options for all of the above. Harper and Brantley. Machado and Segura. Grienke, Corbin, Happ, and Kikuchi. Kimbrel and Diaz. Probably several more options in each category. We probably won't end up checking all 4 boxes with a major acquisition. Choices must be made. But I think we'll certainly check 2 or 3 of those boxes.

Myself I would be happy with either Machado or Harper. Then a left-handed starter. A secondary outfield bat if they do not get Harper. I'd prefer not to get a closer and really only want a right-handed starter if it costs no significant prospects. Machado, Kikuchi, and Brantley would be a way to get it all done and not give up any draft picks. Kimbrel, Corbin, and Pollack among the players we are interested in would cost a draft pick. Harper would too of course, but he is good enough to justify it of course.