Signing Teixeira and payroll flexibility
December 17th, 2008 by czar

I’ll never understand why fans give a rat’s ass about if a player is “worth it”. If John Henry wants to spend his money assembling championship baseball teams, why the hell would I care what the AAV of a contract is?

Because a payroll isn’t limitless and it’s money that could be spent on other players which would result in better production than said player.

Exhibit? The New York Yankees of the past few seasons. A team burdened by overpaid, aging, ex-superstars. A team’s payroll isn’t infinite, and such players whose contracts “weren’t worth it,” rendered them mid-pack in the AL East this past season.

I don’t care about throwing too much money at MT because I feel bad for JH’s wallet. I care about throwing too much money (what he’s worth plus a substantial excess in addition) at MT because it could (as an example) be the difference in locking up Papelbon longterm or not.

The Red Sox were a financially flexible team for a long time with a ~$20M contract on their books, 8 years to be exact. Paying Manny ~$20M per year didn’t stop them from paying J.D. Drew ~$14M, David Ortiz ~$13M, Mike Lowell ~$12M, Jason Varitek ~$10M, Josh Beckett ~$10M, Julio Lugo ~9M and all the money that went into the Matsuzaka signing (and that’s just the guys who were here last year). Signing Mark Teixeira is not an indication of the Red Sox having an”unlimited” payroll. It’s an indication of their payroll flexibility which they have exhibited for several years now.

No one says it’s an indication of an unlimited payroll. The Red Sox have to cap the payroll somewhere. Whether it be an actual “we can’t afford anyone else” cap or “the ownership wants more coin” cap is irrelevant. It’s simple economics.

The Sox set a value for MT. If they go over that value, he is worth less than what he is paid. For example (and I’m making up numbers here) MT is worth 5 wins; the Sox value these 5 wins at $4 m/yr each. The Sox therefore value Tex at $20m/yr. The Sox should not go above that value just to “lock up” Tex. If they pay him $24 m/yr, they are paying for 5 wins when they could be getting value for 4 wins.

Therefore, the argument “no fan should care what MT costs because it’s not their money” doesn’t hold water. Assuming the Red Sox have a figure in mind that they will set their payroll at, overpaying for Teixeira precludes the team from acquiring players who are worth more wins than him. This is overly simplistic, but it’s why the Sox have been so successful in this era. They have set values for players and refused to go over these values just to get them.

Just because the “Red Sox survived with Manny at $20m/yr” doesn’t mean it’s a perfectly acceptable idea to do it again.

None of this information is disputable. Will a long term/high dollars contract for Mark Teixeira prohibit them from filling other holes and signing other higher profile FA’s? It hasn’t stopped them in last several years.

It’s not really apples to apples, though. Lest we forget the Sox also were paying Dustin Pedroia, Jonathon Papelbon, Kevin Youkilis, Jacoby Ellsbury, Jon Lester, Bronson Arroyo, Manny Delcarmen, Jed Lowrie, etc. league minimum contracts through the end of Manny’s tenure here. While it’s not out of the question (especially given the current FO’s draft acumen), it’s unlikely that we’ll be seeing a team with such a significant fraction of key contributors in their pre-arb or arb years (thereby decreasing total payroll) for the next ten years.

Again, the real point is that I have faith in the front office to judge MT’s worth correctly. I’m just saying it doesn’t jive with this FO’s MO (nor with the results we’ve seen over the past few years due to said MO) to overpay (because someone else is also overpaying) Teixeira in a panic at all costs “because we can” or “because we did for Manny and it worked out.”

You’re wrong, when you are in the top 2-5 in payroll, you can have a few huge contracts and still have flexibility, as Theo has proven.

No one is grasping the point though. The argument is not that MT’s contract immediately bloats the Sox– is that when offering a contract of such magnitude; you need to be extremely careful not to overpay because for a 10% overpay can be a significant portion of the team’s value relative to the future FA market (wheras a 10% overpay for someone like Jason Varitek is a smaller $$ figure and hence a smaller potential value loss).

- Sox cap their payroll at X dollars (this figure doesn’t matter– all that matters is that it is ultimately fixed).
- Teixeira is worth 5 wins (for example, and overly simplified– I did NOT look up any value stats)
- They pay him like he is worth 7 wins
- The Sox then are forced to pass on two guys on the open market worth 4 and 3 wins respectively (whether it be they hit their cap, or they don’t have space on the roster, or whatever).
- The Sox lose.

I want Teixeira. But if the Nats step up and go 10 years at $22m/yr , Theo needs to walk away and say “sorry Boston fans, I know you’ll piss and moan, but we can surely find better value for that $220 million over the next ten years.” (Numbers likely (hopefully) overexaggerated for effect).

Posted in Message Board Ramblings


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About The Site

  • Traversing the land that is known as Red Sox Nation, The Czar Who Wears Red Sox is an attempt at compiling a repertoire of my ever-so-sexy forum posts (when I'm too lazy to write my own damn entry) and other random baseball thoughts that strike. For those whose posts serve as the inspiration of my epiphanies and rants, do not be angry, but merely, be honored that you have achieved such status. Names will never be revealed. Feedback appreciated, as this is a work in progress.

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