Wednesday, September 15, 2010

Looking ahead: Offseason Contract Decisions

The Red Sox came into this season with a whopping $161 million worth of salaries. Combined with shared expenses and other costs, this puts them well above the luxury tax threshold. Fortunately, they do have a lot of money coming off the books this season, however, many of these players are at key positions and have been the Red Sox best performers.

Mike Lowell is the only name that is sure to go. At $12.5 million this year, Lowell obviously didn't earn his salary. However, I would guess that the Red Sox knew this was a risk signing an older third baseman to a three year deal. Lowell has already announced that he will retire, a\s he doesn't enjoy being a part time player. Lowell was a key contributor in the 2007 championship, perhaps even more important than Josh Beckett was that year. Congratulations, Mike, for a nice career and for knowing when to call it quits.

The other key decisions are for David Ortiz, Victor Martinez, and Adrian Beltre. The Red Sox hold a team option for Ortiz in 2011 at $12.5 million, just under his salary of $13 million this year. In April, it seemed inconceivable that Ortiz' option would get picked up, but since his April struggles he's been one of the most consistent offensive players on the tea, with an .897 OPS, his highest since 2007 and is the second best OPS by an AL DH, behind Baltimore's Luke Scott. The nice thing about Ortiz' option is it is only a one year commitment. While a similar offensive player such as Adam Dunn might be available for approximately the same amount of money annually, it would probably take a 3 year commitment to sign any of the DH types hitting the free agent market this year. According to several sources, the Red Sox have decided to pick up Ortiz' 2011 option. However, Jon Heyman of Sports Illustrated had discussions with other executives who speculated that the Red Sox might try and work out a two year, $20 million extension with Ortiz instead. That wouldn't shock me, although I'm not sure if Ortiz would be willing to sign a two year deal. Going with a big, left handed slugger in his 30s is a risky proposition, as I showed following Ryan Howard's big extension, so I don't think the Red Sox would consider going to three years.

As an aside, the decline of the DH really has been remarkable. Six teams have DHs hitting .250 or below, including the Mariners' incredible line of .190/.266/.342. This is for a position whose only job is hitting and the Mariners managed to put players in the lineup whose contribution was 26 runs BELOW replacement level. For those who are unfamiliar with the concept, replacement level is essentially how well you'd expect freely available talent, such as minor league free agents, to hit. Of course, the Mariners are not alone - the Tigers, Royals, Rays, White Sox, Angels, and Blue Jays also had their DHs produce at replacement level or worse.

The next big decision for the Red Sox is for Victor Martinez. Martinez currently has the second best OPS for a catcher in the AL and has been a big contributor on offense. Playing a premium defensive position, Martinez still is able to put up an .800 OPS and provides a lot of lineup protection against left handed pitchers (1.159 OPS vs lefties). Martinez expressed interest in signing an extension coming into this season, but also recently turned down the Red Sox two year offer. Reports say that the Sox are a little hesitant to go to a three or four year deal as they're unsure how long Martinez can stay behind the plate. Interestingly, Mike Napoli, the player who the Red Sox claimed on waivers this summer but were unable to work out a deal for, would serve a similar role. He's a switch hitting, offense first catcher who also mashes lefties. Because of his defensive struggles, Napoli seems to have lost favor with manager Mike Scioscia and could be trade bait over the winter. Napoli would be under team control for 2011 and 2012, but would be fairly expensive as he's entering his third arbitration year, as he was a super 2* player. Martinez could be looking at a three year, $40-45 million dollar deal, potentially eating up a lot of the money freed up by Lowell's expiring contract.

Adrian Beltre is also a free agent this winter, and also has been one of the most important position players for the Red Sox. According to FanGraphs's valuations, Beltre has been worth an incredible 6.9 wins for $27.7 million worth of value. He has played his usual excellent defense, saving more than 10 runs over the average third baseman for the third year in a row and the fourth time in five years. His bat has also woken up, after moving away from cavernous Safeco field for the more friendly confines of Fenway, upping his OPS from .750 in his four years as a Mariner to .935, the ninth best OPS in all of baseball. That isn't to say that Beltre will repeat his 7 win season, but he certainly looks like a star player again. While he'll never have a great batting eye, his hand eye coordination is preposterous. I've seen him hit at least two different homeruns, essentially from one knee. Scott Boras looks like a genius now for getting Beltre to sign for a one year, $10 million deal now. An awful lot of teams, particularly in the AL West, have big holes at third base and could be willing to spend lots of money to fill them.

I don't think the Red Sox will be able to keep all three of these players without extending their budget. Their salary coming into this year was an already record $168 million, $25 million than there previous high. I believe that Theo Epstein and the Red Sox were trying to "bridge the gap" to the new prospects by signing older, more expensive players to shorter term deals. I don't think the Red Sox want to be in a position where they're over the luxury tax threshold in 2011 as well, as the penalties increase with successive years over the threshold. Despite getting Lowell off the books, shedding salary will be very difficult without letting one of these three players go, as players such as Josh Beckett, Kevin Youkilis, and Daisuke Matsuzaka will all be receiving raises of $1 million or more and Papelbon will be going into arbitration for the third and final time.

Keeping Ortiz seems like a fait accompli at this point, but if I had to pick between Martinez and Beltre, I would go with Beltre. I think the two will end up with similar contracts this offseason, and Beltre has the upside to be a super star. It seems weird that a 7 win player in New York or Boston gets overlooked, but Beltre's combination of defense and hitting doesn't get enough credit. Beltre ought to be a legitimate MVP candidate and his WAR (wins above replacement) trails only Josh Hamilton in the AL.

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