4 replies to this topic

[T C]

I wrote this somewhere else, but thought Id share with you all as well:



By signing Michael Bourn, the Indians have added a high quality top-of-the-order bat, turned Drew Stubbs and Michael Brantley into a good platoon partnership (or trade bait), and opened up the ability to occasionally play Nick Swisher at 1B and Mark Reynolds where he belongs - DH. The Bourn Signing should also somewhat help their dismal pitching staff if Francona starts an OF of Stubbs-Bourn-Brantley, which could track down pretty much any fly ball.

However, the Indians pitching staff is still very poor. Unless you're counting on Ubaldo and Masterson to completely turn it around, the Indians have a clear need for a good SP at the top of the rotation. The Indians could easily fill this hole by signing a desperate Kyle Lohse to a very cheap 2 or 3 year deal. Kyle Lohse provides something of an anchor at the top of a rotation filled with 4s and 5s and Trevor Bauer, even after docking him for the switch to the AL. The Indians NEED a quality starting pitcher, and do not have the prospects to acquire one, nor is there a quality starter left available this season. And the (presumably very cheap at this point) deal Lohse would require would not handcuff them heading into next offseason, when Lincecum, Wainwright, Garza, Halladay, and Josh Johnson become available (there is also no guarantee any of those names hit FA).

The Indians also have a great advantage when it comes to signing Kyle Lohse, and this is where a potentially innovative rebuilding strategy can be implemented. Because the Indians have already signed two players tied to draft pick compensation, the pick they would forfeit to sign Lohse is not a particularly high one. It would be a pick at the top of the third round, which is not likely to be a great player, nor does it carry a sizable pool allotment (whereas other teams who might want to sign Lohse would have to forfeit their 1st round pick). Even if it carries ~ $300k in pool allotment, that does not give them much extra for their top pick. The Indians lose very little in the draft by signing Kyle Lohse at this point. Each consecutive compensation-tagged player signed results in an increasingly marginal draft penalty, and immediately improves the team, which makes the original sacrifice more acceptable.

Any team with a protected first round pick could easily follow the example set forth here by the Indians, who have pioneered what I think is an intelligent rebuilding strategy:

If a team with a protected 1st round pick is able to sign one player who is worth forfeiting their second round pick, it is advisable to sign as many compensation-tagged players they can fit on the field and in their budget.

Considering that compensation-tagged players will likely to continue to come at a steep salary discount, that picks beyond the second round have dubious MLB futures and carry little pool money, there isn't a whole ton of downside. The team retains what is likely its most valuable pick in the draft, and forgoes one year of stocking their system with future role 4 players for immediate and drastic improvement on the major league field. Such a move turns ancillary pieces (like Drew Stubbs or Michael Brantley) into trade chips that can be used to further improve holes in the MLB team. And the loss of the 2nd round pick is made less painful by surrounding that player with the pieces needed to win in the immediate future.

I am interested to see if any team tries to emulate this strategy in the coming off seasons, assuming the free agent compensation structure does not change too drastically. I think the Cubs could make good use of this next year. If a player like Cano or Granderson or Choo reaches free agency, the Cubs (and their likely protected 1st round pick) wouldn't mind forfeiting a 2nd round pick for any of them, after which they could easily find the money to sign a few more good FAs (Johnson, Lincecum, Pence as well as any of those mentioned above). What becomes of the good farm system? It can be saved for later, crossing that bridge when you the players are ready, or sold off in a trade for, say, a David Price type player.

Thoughts?

[fromthemitten]

Does losing a compensation pick also have an effect on international signings?

The only concern about Lohse is that he might be one of the beneficiaries of Dave Duncan's witchcraft. His numbers made him a 4-5 starter in the AL (4.88 ERA 93 ERA+) and his numbers with the Phils and Reds weren't much better either. If he can be had for maybe 3 years $18 mil it's a good deal for Cleveland, but I think he really regrets turning down that $13 mil offer from St. Louis.

[Stinky Pete]

I think this compensation deal works both ways. Yes Lohse is desperate to sign, but he and his agent know they have extra value to a team like Cleveland who will lose only a 3rd round pick.

[Brett]

It's a great theoretical strategy, but it requires a whole lot of coordination and a whole lot of money. The Cubs, next year, are certainly a team that could pull it off. But you don't want to lock yourself into a bunch of ill-fitting long-term pieces (and these guys will generally require long-term deals) just because the marginal cost to you is less than other teams. Because even the best free agents in 2014 might become untradable by 2015 - maybe Cano breaks his leg, or Granderson tears his hammy, or Lincecum gets TJS. There's still a whole lot of risk involved in the strategy if your team is not ready to compete in the near-term.

(However, I tend to think the Cubs will be ready by then, so I remain intrigued by the approach for the Cubs next year.)

[T C]

It's a great theoretical strategy, but it requires a whole lot of coordination and a whole lot of money. The Cubs, next year, are certainly a team that could pull it off. But you don't want to lock yourself into a bunch of ill-fitting long-term pieces (and these guys will generally require long-term deals) just because the marginal cost to you is less than other teams. Because even the best free agents in 2014 might become untradable by 2015 - maybe Cano breaks his leg, or Granderson tears his hammy, or Lincecum gets TJS. There's still a whole lot of risk involved in the strategy if your team is not ready to compete in the near-term.

(However, I tend to think the Cubs will be ready by then, so I remain intrigued by the approach for the Cubs next year.)

Agreed, it requires a lot of coordination and a bit of luck, and the Cubs (should) be able to escape the pitfalls of an untradeable contract or two (especially if their new deal with CSN is favorable).

And if your team is ready to compete in the near term, it has the potential to reap massive benefits. The Indians are roughly an 83-86 win team right now. If they think they're on the high end of that, the 2-3 wins Kyle Lohse represents are very valuable. Using FanGraphs' Marginal Win Value Curve (http://www.fangraphs...bability-curve/) a 3 win player would increase the Indians' play-in game chances from about 30% to about 80%.

For any team that thinks they're close to contention, the addition of the 10-11 wins through 3-4 FAs becomes more valuable with each added win, and the overall sacrifice becomes more acceptable with addtional win, too. And because of the type of players you're targeting, you have a distinct advantage over the best 20 teams in the league (who would forfeit their first round pick) and most other bottom-10 teams aren't trying for an immediate rebuild.

Also, and this is kind of dubious math because I don't have the exact numbers, but if a late is valued at 1st round pick at $15 million in value to an org., and a 3rd round pick as $3 milllion to an org., that's $12 million extra the team forfeiting the 3rd round pick can throw at a FA over a team forfeiting the 1st round pick to end up at equivalent losses to their org's value. And that descrepency just increases with every protected player you sign (though, obviously, the risk is increasing as well, but you're building for the next 2-3 year peroid in this case).

Sorry for the ramble here, just basically thinking aloud