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Contract wisdom

Bret Sabermetric Dec 14 2005 11:09 AM

Here's a negotiating strategy that I've been giving some thought to: Instead of an agent fielding the best offers he receives, the agent sets a reasonable but high market value on his client for a one-year deal. Say the client is named Delgado, and the market value for his services for the next year would be worth 16 million dollars. The agent announces that 16 mil will get you Delgado, BUT he's willing to sign a multi-year deal at that rate. The highest bidder, in effect, is the team that willing to go for the most years. Contract length, in other words, becomes the only issue under discussion. I think Delgado would be pleased because he's getting a very good rate for his services, and I think the clubs would go for this since it would allow them to bid for only the length that they feel they require Delgado's services.

metirish Dec 14 2005 11:12 AM

Not a bad idea, would these years be guaranteed?

Elster88 Dec 14 2005 11:17 AM

As a sidenote, I heard an interesting reasoning on the Mets' move for LoDuca. I always hate it when a player/agent announces each offer he gets, and then runs to another team...they trump it...the original team goes a little higher...the new team adds another year....and you end up with a bloated contract (see: Rodriguez, Alex). The Mets completely avoided that with their catcher situation. They offered reasonable deals that were basically ignored for a week. It was pretty obvious that both Molina and Hernandez were hoping someone else would make an offer and then the "free-spending" Omar would go even higher. (Strangely enough, when owners do something similar to keep contracts low, it's illegal and called collusion.) But they didn't count on what Omar did. He basically said, "All right, fuck you guys. If you're not going to respond one way or the other, I'll go trade for this guy." He avoided the escalating offers dilemma. I am really liking that. And then idiot-Molina turns around after the LoDuca deal and says he was counting on coming to the Mets, conveniently ignoring the fact that there was an offer on the table for a week and a half.

Bret Sabermetric Dec 14 2005 11:27 AM

You're right, Elster. Omar deserves some credit for avoiding that bidding war.

sharpie Dec 14 2005 11:34 AM

Then Molina was non-tendered by the Angels, another move he didn't expect.

Vic Sage Dec 14 2005 11:34 AM

yes, he avoided the bidding war by trading valued prospects for an older, inferior catcher, when he could've signed one of 2 younger, better catchers for slightly more money and a draftpick. BRILLIANT! He deserves a gold star.

Centerfield Dec 14 2005 11:38 AM

I don't think it would have hurt to go to Molina and say "Hey, we're about to pull the trigger on a deal for Lo Duca, you want to come here, sign this contract now."

Bret Sabermetric Dec 14 2005 11:41 AM Edited 1 time(s), most recently on Dec 14 2005 11:49 AM

Vic Sage wrote: yes, he avoided the bidding war by trading valued prospects for an older, inferior catcher, when he could've signed one of 2 younger, better catchers for slightly more money and a draftpick. BRILLIANT! He deserves a gold star. I thought older, inferior catchers were what you like, Vic. The unstated difference here (getting the thread back on track) may be in the length of LoDuca's remaining contract as opposed to what Hernandez or Molina were asking for.

sharpie Dec 14 2005 11:49 AM

In Molina's case I would hazard a guess that he's due for a big decline in production. Hernandez, OTOH, would've been nice to have.

Elster88 Dec 14 2005 11:52 AM

Vic Sage wrote: yes, he avoided the bidding war by trading valued prospects for an older, inferior catcher, when he could've signed one of 2 younger, better catchers for slightly more money and a draftpick. BRILLIANT! He deserves a gold star. That's one way to look at it. I'm wearing my blue and orange glasses and arguing that the word slightly becomes "a lot" if the bidding war had ensued.

Frayed Knot Dec 14 2005 11:57 AM

]Delgado would be pleased because he's getting a very good rate for his services This assumes that he'd prefer $16 for 1 year over say $14 for 2, or $13 for 3 -- which I doubt would be the case. Playing it one year at a time brings the possibility that your next injury means this is your last fat paycheck. These guys have a short shelf-life and are generally more interested in security. Ask Mo Vaughn how that strategy would have worked out for him. Or Jim Thome ... Albert Belle ... Juan Gonzalez ... Kaz Matsui .. Jason Giambi ... Mike Lowell ... Bobby Bonilla Or hell, even Manny & ARod wouldn't get the same per/year deals they have now and neither of them have ever been disabled. They'd be making less money now AND not have the security.

Bret Sabermetric Dec 14 2005 12:03 PM Edited 1 time(s), most recently on Dec 14 2005 12:10 PM

That argument, Elster, and the flaw Vic makes in this thread http://cybermessageboard.ehost.com/getalife/viewtopic.php?t=1949 is that the Mets are much more flexible by acquiring LoDuca's current two-year deal. In mid-summer of 2007, they can plan to dump LoDuca if, say, they have a AAA catcher who looks ready, or if there appears to be a bumper crop of quality FA catchers out there, or there's a quality FA catcher available from a non-contender, but if they had Hernandez or Molina signed to a four-year deal (and sucking), they're pretty well stuck with him. You want to show a little restraint in choosing only to sign players to long terms deals who give you something that you can't acquire easily. As we've seen, mediocre catchers are abundant now and probably will be for some time.

Bret Sabermetric Dec 14 2005 12:09 PM

Frayed Knot wrote: ]Delgado would be pleased because he's getting a very good rate for his services This assumes that he'd prefer $16 for 1 year over say $14 for 2, or $13 for 3 -- which I doubt would be the case. Playing it one year at a time brings the possibility that your next injury means this is your last fat paycheck. These guys have a short shelf-life and are generally more interested in security. Ask Mo Vaughn how that strategy would have worked out for him. Or Jim Thome ... Albert Belle ... Juan Gonzalez ... Kaz Matsui .. Jason Giambi ... Mike Lowell ... Bobby Bonilla Or hell, even Manny & ARod wouldn't get the same per/year deals they have now and neither of them have ever been disabled. They'd be making less money now AND not have the security. Of course. But one-year deals, assuming 16 mil is a fair rate, would be rare. There would be some bids for 2 years, and for three, I'd think. The upside for the player would be that he would be free to get a new deal in three years assuming he doesn't get injured or doesn't decline. This could well be worth more money to some players, and 48 mil buys you a lot of security.

MFS62 Dec 14 2005 12:10 PM

="Bret Sabermetric"] As we've seen, mediocre catchers are abundant now and probably will be for some time. Not to mention the catch and thorw guys like Charlie O'Brien, his heir Brad Asmus, and Alberto Castillo (O'Brien Lite). Those guys hang around forever. Later

Johnny Dickshot Dec 14 2005 12:19 PM

Typically the guys we see signing 1-year deals are those who have had recent health problems, and/or those who are gambling on better market conditions the next year -- Pudge Rodriguez with the Marlins, for example. Pretty rare for the reasons FK explained.

Bret Sabermetric Dec 14 2005 12:26 PM

Let's try this once more. You're Omar. I'm Delgago's agent. "Yo, Omar. Here's a deal. I want a 16 mil deal for my client. How many years are you willing to go at that rate?" You go: "16 mil? I'll give you a year." "Okay, but I'm pretty sure I'll get some offers for at least two years." [checks IMs] "Yep, here's an offer--no, two offers--for two years at 16 mil. No, three offers. I'm holding out for three years at this point. You willing to go three at 16 mil?" What's your answer?

metirish Dec 14 2005 12:28 PM

Omar - " I'll go four years David(sloane) at $16 million" his reason for four years is that you have to give these guys a bigger incentive to come to Shea.

Frayed Knot Dec 14 2005 01:53 PM

="Bret Sabermetric"]Let's try this once more. You're Omar. I'm Delgago's agent. "Yo, Omar. Here's a deal. I want a 16 mil deal for my client. How many years are you willing to go at that rate?" You go: "16 mil? I'll give you a year." "Okay, but I'm pretty sure I'll get some offers for at least two years." [checks IMs] "Yep, here's an offer--no, two offers--for two years at 16 mil. No, three offers. I'm holding out for three years at this point. You willing to go three at 16 mil?" What's your answer? My answer is that if I like that price (and believed the agent's claim) I'd match the offer. Or I could say that I could give you even more years but at a lower rate ... and at this point we're back regular bargaining where both years & dollars are negotiable. Your whole premise assumes that an agent can simply pick a number and dictate that negotiations never deviate from it, plus it assumes that it's in his client's interest to do so. For the most part both players and clubs LIKE longer deals (at least up to a point) and will negotiate any aspect of the deal to get the terms to their liking. It takes two to dance and the scenario you've concocted starts out with an artificial constraint which makes no sense in the real world.

MFS62 Dec 14 2005 01:55 PM

Bret, I don't see your "set a fixed price, then negotiate the years" approach as anything radical or novel. In my Contract Negotiating course I learned that there are over 30 different negotiating ploys. That was one of them. I wouldn't be surprised if agents have tried that before now. After last year's contract for Benson was announced, there was rreported "outcry" from other GMs that the Mets had "set the price" for #3 starters. I have no doubt that agents took a look at that number and said something like "if Benson is worth $7 million per year, my guy is worth X" and then offered their player on the market at that X price. Why do you feel your idea is so novel? Later

Bret Sabermetric Dec 14 2005 02:02 PM

Say, could you two fellas discuss whether I've raised a topic that's loopy and radical and unrealistic or old hat and standard and ho-hum? I'll rejoin when you've settled this burning question.

MFS62 Dec 14 2005 02:09 PM

Well, since the technique was already being taught in B-schools, I'd say it is rather old hat and standard and ho- hum. Later