2 for $45M - Disposable Income?

$22.5M for Manny? Well, sure, if he's worth 40-50 runs ...

JedC, after THT's fine article, pointed out a critical factor in the free-agent signing process:

There is a great article over at The Hardball Times by Dave Studeman that includes some analysis on Replacement Level Players, why RLP analysis isn’t appropriate for evaluating Free Agents, $ value per win, looking at the $ value based on how a player was acquired, and more. I’ve pasted the key findings below and hopefully the link actually work. By the way, I’m going to post the link at USSM to see what their thoughts on the article are.

http://www.hardballtimes.com/main/article/net-win-shares-value-2006/

For every win above a bench player from a player making the minimum (essentially, first- and second-year players) teams pay essentially nothing (because the system assumes that an average bench player makes the minimum salary. Yes, definite flaw in the system).

For every extra win from an arbitration-eligible player, teams pay $2.4 million.

For every extra win from a free agent, teams pay $4.4 million.

The next argument -- in Blog-land, but certainly NOT among GM's -- will be, *should* you stratify your spendable dollars into (1) available non-FA dollars and (2) available FA dollars.

GM's won't argue it because they understand this principle explicitly or intuitively.  Their FA dollars are devalued, compared to dollars they spend on club-controlled players.  There isn't much they can do about this.  If the Mariners or Red Sox or White Sox simply "get the deuce out of the market," every market, except for a few Rodrigo Lopezes ... their payrolls will go down.  That's not a viable option, for many reasons, previously listed.

=== Apples to Apples ===

Blogs argue, in most offseasons, that we should "get the deuce out of this market" (at least as it pertains to the stars left at a given time), and this argument is made year after year.   The FA's just aren't worth it, this year...

D-O-V has always argued that it isn't IF you buy in this year's (whatever year's) market.  It's only a question of WHO.

Jed and THT help bring an important point into focus that we were only vaguely aware of:  you have to compare apples to apples.  Manny Ramriez' cost can be compared only to the cost of other FA's who are peers of his, or other freely-available players.

.

=== If I Don't Like It, I'll Take My Ball and Go Home ==

Not if you're a GM, you won't.

So can we shift FA money to, say, developmental funds?  You absolutely cannot do it. at least not as a GM.  See the $260 Roto article for an explanation why.

For a CEO (not a GM) to decide to massively shift payroll dollars into developmental dollars, that would be a creative idea.  But Dr. Naka has pointed out before, that we have absolutely no figures as to what our ROI is on developmental dollars.  We'd be operating blind.  (That might not prevent us from doing so.)

But be careful you don't smear the Seattle Mariners for not being the FIRST team to try a wildly risky and creative strategy -- shifting $25m/year from payroll into development.

And be extra careful that you do not blame the GM for this strategic financial decision.  An executive has to use the full resources he is given, and return the best possible result.  He is there to produce outcomes, not to save money.

.

=== Exploiting the Situation ===

What you can do, is make sure your good arb-eligible players are paid, before you spend on pricey FA's. MLB teams in fact do this!  Bavasi in particular was famous for it, in Anaheim, but "rewarding" young players is not nearly so popular with the Committee.

And you can put a thumb on the scale towards paying a little more internationally, and in the ammy draft, such as by selecting and paying Andrew Miller or Luke Hochevar (the first time).   Lo and behold, the M's have been slamming the international pool for all it's worth...

You can be aware of the $0.0 / $2.4 / $4.4 distinctions, but you can't do much about it -- that MLB teams are not already doing.

Once again, sabermetricians climb the craggy mountain, pull themselves over the peak -- to find a group of crotchety old GM's already sitting there.  :- ) Cracks me up.

.............................

$4.4m to $5.1m per FA win above RLP?  Is that the right figure?

Are the $2.4m and $4.4m figures correct?  Probably close ... but it doesn't matter much.  What matters is that we be aware that we have to judge a Manny Ramirez, or Raul Ibanez, or C.C. Sabathia contract, in view of "FA wins per dollar."

Cheers,

Dr D