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Offseason of Overpayment — The Worst Contracts Thus Far

In any situation where there’s plenty of demand but little inventory, the cost of getting what you need will be sky-high.  The 2006-07 MLB offseason has been and will continue to be no different.  This free agent class is very thin in many positions and has offers almost no premium talent.  If you want great players, prepare to spend big-time, and take huge risks with your acquisitions; with all the teams needing to fill major holes, there’s no shortage of willingness to do so..  We’ve seen two contracts worth over 100Million dished-out in just the first few weeks of the offseason.  There have been numerous examples of overpayment and bad decision-making.  Finding a signing in which the team didn’t overpay or make a terrible judgment on the player is extremely difficult; in fact, one may not exist.  This post focuses on the 5 worst signings thus far, to determine which GM has made the biggest mistake thus far, and why his team will pay dearly for it. 

1.  Alfonso Soriano Cubs — 8 years for $136M

Financially, the largest contract signed so far (and probably the largest that will be signed this offseason) is Alfonso Soriano’s.  Soriano agreed to an 8-year deal worth a whopping $136M to join the Chicago Cubs.  As I pointed out in an earlier post (Alfonso Soriano will Make the Cubs Sorry-ano by 2014), the Soriano signing was a terrible decision by Cubs’ GM Jim Hendry. 

The fact that the Cubs will be paying $17Million per season to Soriano isn’t the most disturbing thing about this deal; the problem is the ridiculous duration of the contract.  Soriano is 30 years old right now, which means that he’ll be 38 when this mega-deal expires.  Soriano relies on speed, not only in his baserunning and defense, but also at the plate (bat-speed).  Speed is also the first part of a player’s game to decline, and most players begin to experience this decline by age 33-34 at the latest.  That means in 3 years, Soriano will go from a 5-tool player to a below-average, aging outfielder who swings at everything and doesn’t come close to making his contract worthwhile.  Sure, Soriano might buck this trend and a ton of others that suggest he won’t be worth his contract, but the chances of that are slim (especially considering the Cubs’ lack of luck). 

And there’s another problem with the Cubs’ logic in signing Soriano.  GM Jim Hendry says he wants his prized acquisition to hit leadoff.  Soriano may look like a good leadoff hitter because of his speed, but he K’s a lot, walks much less, and isn’t as great a base-stealer as you might think.  Look at it this way, Soriano stole 41 bases this season, but he was also caught 17 times (about 70% success).  A base-stealer who is successful on less than 70% of his attempts is actually hurting his team.  As Soriano’s speed begins to decline, his success rate at swiping-bases will do the same.  Meanwhile, as Soriano’s bat-speed declines, he will start to miss many of the balls that he is currently drilling for extra-base hits, and his strikeout rate will rise, as his walk rate remains steady at “well below-average” because he is notoriously free-swinging.  That’s a recipe for disaster if you’re a leadoff hitter. 

If the Cubs had signed Soriano to a 3-year deal worth $17M per season, I would have commended GM Jim Hendry for his decision.  Even 3-years for $60M wouldn’t have been so bad.  But an 8 year deal worth a whopping $136M for a player who will go from “very good” to “below-average” midway through the duration of the contract?  What are Jim Hendry and his front office assistants smoking?

2.  Carlos Lee Astros — 6 years for $100M

The Astros main goal this offseason was to add power, in order to give Lance Berkman some support in the lineup.  They accomplished their goal by signing Carlos Lee, who had a terrific 2006 season split between Milwaukee and Texas; unfortunately, this decision was far from brilliant. 

Carlos Lee is 30 years old and his only gift is his bat, which he uses admirably.  Lee has 221 career Homeruns, hits for a solid batting average, and has an excellent eye at the plate, striking-out just 65 times this season.  The problem is that Lee is below-average at just about everything else. 

A look at Carlos Lee’s defensive statistics reveals that he’s among the worst outfielders in baseball.  His fielding percentage for this season was .975, but that isn’t even half the problem.  Lee has awful range, terrible judgment, and an strong but inaccurate arm.  Watching Texas Rangers games was fun this season, especially when El Caballo was running around Ameriquest Field’s leftfield looking lost.  He was funnier to watch out there than a Blue Collar Comedy Tour DVD.  It’s a good thing that Minute Maid Park in Houston has a tiny leftfield, but the small amount of real estate he’ll have to cover still won’t do enough to prevent Carlos Lee from being a major liability to the Astros defensively. 

And that’s not all.  Carlos Lee has a little bit of speed, and surprisingly El Caballo even had enough giddy-up in his legs to steal 19 bases this season.  His baseball card says Lee weighs 240 pounds; the most likely explanation is that Topps forgot they took their measurements in kilograms and El Caballo actually weighs 529lbs.  I have no idea how Lee can motor his heavy frame around the baseball field, but there’s another aspect to this — the risk of knee injuries.  Barry Bonds, Manny Ramirez, Frank Thomas, etc… have all had knee issues due to their weight.  If history is a reliable way to predict the future, Carlos Lee will have knee ailments by the time he’s 33-34, and the Astros could be stuck with a lemon for half of the contract they just gave him.

Sure, Carlos Lee brings tremendous offensive potential to the Astros, but GM Tim Purpura either forgot to consider defensive ability (or lack thereof), or decided to overlook it.  Lee would have made a perfect designated-hitter for an American League team; with the Astros, he’s just a horrible outfielder with some power (which by the way will decline as he ages).  The contract he just signed will earn Carlos Lee $16M per season for 6 years.  A 3-year pact with the same, or even a slightly higher salary would’ve made some sense.  Six years, given Lee’s defensive liability and the likelihood that he’ll become injury-prone or will see his power decline?  No way.  And I return to the Blue Collar Comedy Tour — specifically Bill Engvall — to say to Astros’ GM Tim Purpura, “here’s your sign”. 

3.  Juan Pierre Dodgers — 5 years for $44M

Money-wise, Juan Pierre’s contract isn’t as rich as those of Alfonso Soriano and Carlos Lee.  Value-wise, it may be worse. 

Juan Pierre has been a leadoff hitter for almost all of his career, but he isn’t suited for that role.  Pierre’s only great asset is his speed, which has allowed him to steal 45+ bases in each of the past six seasons.  He doesn’t walk, he doesn’t hit for power, while Pierre plays a very solid centerfield, that is also wholly reliant on his speed.  Speed however, is far from a trustworthy tool.

Pierre is 29 years old right now, which means he’ll be 34 when his contract expires after the 2011 season.  The first asset players lose as they age is speed, which is the only gift Pierre has.  By the time he’s 32, Pierre’s steal percentage (currently about 74%) is likely to drop below the all-important 70% threshold, which means his speed will no longer be of great assistance to the Dodgers.  With an OPS of under .750, Pierre brings nothing else to the table, which means it’s very likely he’ll be a leadoff hitter better suited for the 8th spot in the lineup. 

Sure, three years of solid play isn’t bad, but that’s just 60% of the contract Pierre just received from the LA Dodgers.  By 2010, the Dodgers will be paying Pierre roughly $9M a season to do just about nothing offensively.  A purely defensive outfielder isn’t worth nearly that much money.  Signing Pierre was a horrible decision by GM Ned Colletti; the Dodgers have plenty of needs and throwing this much money at one of them was downright stupid, especially when you consider how sharply Pierre’s value will decline in a few seasons.  A 3-year deal worth the same money, maybe.  5 years for $9M per?  Bad idea.

4.  Gary Matthews Jr. Angels — 5 years for $50M

The Angels signed Gary Matthews Jr. to play a similar role that Juan Pierre will be asked to play with the Dodgers.  There are however, several significant differences between the two veteran outfielders. 

Gary Matthews Jr. is a multi-dimensional player, which makes him a better value than a completely speed-oriented player like Juan Pierre.  While Pierre will decline quickly as he gets older, Matthews Jr. is likely to be successful for awhile.  This season was by far the best of Matthews Jr.’s career thus far, which is surprising, because at 32 years of age, it would seem that Matthews Jr. should be past his prime. 

The risk with Gary Matthews Jr. is very different from the risk of a Pierre or Soriano type player.  While Matthews Jr. is fast, he’s slower than Pierre, and isn’t completely dependent on speed to be successful.  The skill that Matthews Jr. utilizes most is his great eye at the plate; a skill that declines more slowly (if at all) than speed.  If his .313/.371/.495 line from this season is to be trusted, Gary Matthews Jr. brings almost no risk, even though he will be 37 when his contract expires in 2011.  However, Matthews Jr. is a career .263/.336/.419 hitter, which certainly brings up concerns that 2006 was a fluke year and he’ll soon return to mediocrity and 4th-outfielder-ness. 

Also, Gary Matthews Jr. is only an average centerfielder.  His range isn’t especially great, and his fielding percentage was just .981.  Matthews Jr. does have a strong arm (8 assists, 2 double plays), but his throws are not always accurate.  As he grows older and enters the latter part of his contract, Matthews Jr. will likely lose whatever speed he had, and although that won’t hurt him offensively, his range in centerfield will certainly be hampered. 

While his 2006 season may suggest that Gary Matthews Jr. has finally developed into a premium player, the switch-hitter’s career numbers are a huge concern.  If only because of that, the 5 year deal GM Bill Stoneman and the Angels signed Matthews Jr. to is an enormous risk.  Determining whether Matthews Jr. will continue to be a good hitter or if he’ll regress back to his prior form is a crapshoot.  Therein lies the problem.  There’s no way Matthews Jr. was worth the 5-year, $50M pact he received unless he plays the way he played in 2006, through the duration of the contract.  The chances of that are slim, but perhaps Stoneman is hoping his team’s locale in Anaheim will inspire a Disneyland-style ending to this financially-inflated deal.

5.  Daisuke Matsuzaka Red Sox — $51.1M bid plus contract

I don’t think the Red Sox huge bid for the rights to negotiate with Daisuke Matsuzaka was a bad business decision; on the contrary, I think it was a smart move.  I broke down my view of the situation in a previous post, which you can find at  Daisuke Matsu-SOCK-a!.  While I don’t believe the Red Sox overspent egregiously for Matsuzaka, others do, so I decided to include it in my list of the 5 most dangerously overpriced contracts so far. 

And here’s my list of the 5, from most overpriced (or most risky) to least overpriced (or least risky)…

1.  Juan Pierre

2.  Alfonso Soriano

3.  Carlos Lee

4.  Gary Matthews Jr.

5.  Daisuke Matsuzaka

——————————————————————————————————————–

I actually do not believe that the biggest problem with the worst contracts of this offseason is the millions of dollars they’re worth per season.  The issue is the duration of the pacts, which stretch well past the player’s prime and create enormous risk for the team.  For example, I think that had the Cubs given Alfonso Soriano a 3-year deal worth $20M, it would’ve been a significantly better decision than they made by giving him 8-years for $17M per.  It’s not worth going crazy with contract length and the money involved just because the free agent class is thin in terms of premium talent.  There are plenty of other options.  But, I suppose, if you must go on a spending spree, it’s best to pay more money for fewer years, than the other way around. 

Good luck to all 5 of those players, the teams that signed them, and the GM’s that worked out the contracts.  It could get ugly (financially and otherwise) if the risks you took don’t pan-out in your favor.  With that, I suggest Jim Hendry, Bill Stoneman, Tim Purpura, Theo Epstein, and Ned Colletti keep their fingers crossed, because they’ll need all the luck in the world to get away with the risks they’ve chosen to take.

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2 Responses to “Offseason of Overpayment — The Worst Contracts Thus Far”

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