The three year deal the Royals gave Jeremy Guthrie wasn't surprising. Not surprising at all. It's the classic Dayton Moore overplay... In both terms of the deal and the timing.
Here are some quick thoughts.
-- The structure of the contract is interesting. Here's the breakdown:
2013: $5 million
2014: $11 million
2015: $9 million
Yes, it's a backloaded deal. But with the acquisition of Ervin Santana, the Royals apparently didn't have a lot of payroll flexibility remaining. Let's imagine the ideal scenario where the Royals dump Luke Hochevar and the money he would make in arbitration in an even deal for the first year of the Guthrie contract. I'm for that. Hochevar isn't "turning the corner" as much as he's pitching in circles. The best case scenario I see for Hochevar would be a round a 2 fWAR in 2013. I think Guthrie can beat that, but not by much. We're talking a slim advantage. Still, you have to spend money wisely and since I think that Guthrie will be marginally better than Hochevar in 2013 for about the same cost, this is a move that makes sense. Besides, he's Not Hochevar. Apparently, for some of us, that's kind of a big deal.
So for the short-term this isn't a bad piece of business. Short-term.
Moving to 2014, the $11 million due Guthrie basically replaces the Santana contract in the rotation. By then, the Royals should have Felipe Paulino and Danny Duffy back at full strength. (I'm not counting on them for meaningful contributions in 2013. Their job is to work back to where they can peak. Which won't be next season.) Chen will be gone as well, and we will assume Hochevar won't be around either. That leaves a rotation of Guthrie, Duffy, Paulino, a minor league arm (hopefully) and one external addition.
They will be paying Guthrie like he's a 2.5 fWAR pitcher, which he's not. He reached that in his best seasons. It's not likely he's going to have his best season at age 35. Possible? Yeah. It's also possible Ned Yost thinks I can be an astronaut. Likely? No.
However, I think the Royals will be looking at the total amount spent on their starting pitchers to justify this contract. Paulino will get a Tommy John arbitration raise, Duffy could qualify as a Super Two, but will be in the same situation. Throw in a cost controlled starter from the prospect ranks (hopefully) and you're looking at a total payroll of around $17 million for four parts of the rotation. It's not the correct way to look at the situation, but it's one that makes it seem less dire. Until they overpay for another 2 fWAR starter on the trade or free agent market.
And if Guthrie is worth $9 million in 2015, I'll blog an apology post while eating a Hot Pocket and Pop Tart wrap as I sit in my mom's basement. And post pics.
-- That said, the average annual value of the deal is $8.33 million. That's paying Guthrie for about 6 fWAR for the duration of the contract. Since pitching is the currency of baseball, we can expect that number to drop over the next couple of winters due to inflation. Still, it will be close to 6 fWAR.
If you look at his rolling three year averages starting in 2007 and ending last year, he's been fairly consistent around the 2 fWAR mark. Which is where he will need to be if the Royals are going to get fair value for his deal.
All well and good, except Guthrie will be 34 years old next year. He strikes out around 5 batters per 9 innings. He does not miss bats. He will be 36 for his final year.
You do not give pitchers of his ilk a three year deal.
-- This seems a good place to remind you the Royals defense was the worst in the AL last year.
-- When Guthrie tells the beat writers that there were two or three other teams willing to go three years for him, that vibes as the poker player, who pushes all his chips in on a bluff to convince his opponent to fold.
Player 1: All in.
Player 2 looks at his cards and sees a flush. He fidgets and squirms. He is conflicted.
Player 2: Fold.
Player 1 rakes in the pot.
Player 2: You had a full house, didn't you?
Player 1 looks at his card and sees a pair of fours.
Player 1: Sure I did... A full house.
-- The Royals now have $51.13 million in salary committed to the 2013 season. Santana, Guthrie, Jeff Francoeur and Bruce Chen account for over 55 percent of that salary obligation.
Rough guesstimates of fWAR:
Santana - 2.5
Guthrie - 2.0
Chen - 1.0
Francoeur - 1.0
I get the feeling I'm being optimistic (other than what you may hear about me on Twitter) so let's round down and call it around 6.0 fWAR for $28 million. So that best-case scenario works out to around $4.6 million per fWAR. That's below last year's market rate established by FanGraphs.
That doesn't look so horrible.
I suppose the Quartet of Pain could exceed 6 fWAR, but it's extremely difficult to see that scenario unfold without wearing Royal colored glasses. So in what feels to me like the best case, the Royals would be getting a little bit of value. Best case... Little bit... That edge? Razor thin.
But I don't think you can look at the situation as a whole. These were individual moves made by Dayton Moore and his team of evaluators. They thought it was a good idea to bring Francoeur back at almost $7 million for 2013. They thought Chen was worth $4.5 million in his second year. And so on.
Basically, these are marginal major league ballplayers. They will have good games and they will have bad ones. (Except Francoeur.) But in most of these cases, it seems safe to say the bad will outweigh the good. And these aren't the types of players the Royals can afford to spend money on to fill out the roster. The Process isn't going to be perfect. The Royals will need to look to trades and free agency to take care of shortcomings that will crop up from time to time. Yet the most recent moves don't exactly inspire confidence in the ability of this administration to identify player who can help the team at a cost that is friendly to the club. (Hell, the last seven years read like a failure of major league talent evaluation.)
This is a problem. It's not getting better.
-- Speaking of salaries, GMDM dropped this nugget:
"The truth of the matter," he said "is if we add another pitcher through free agency, which we're still contemplating - still looking and pursuing - there wouldn't be room to add that individual unless we got rid of somebody else.
"I think it's safe to say we would be able to create some flexibility by making a deal or two to open up a spot not only in the rotation but also financially as well. We'll still look to massage that in a way that works for us."
Wow. That's... unbelievably discouraging. This is perhaps the most important development to come out of this signing. The Royals aren't done. But they are at the ceiling of their budget. Which figures to be around $68 to $70 million.
The Glass family wants to win, but I think their number one priority is to make a profit.
In the past, the Royals have banked around $7 to $9 million for the Glass family. According to Forbes, for the year 2011, the team made a total of $28.5 million. That was thanks to the largesse of Meche and the influx of youth that kept the payroll low.
The payroll is going to increase, but it's not stretching the family budget at all.
-- Again Moore makes a major move before the winter meetings. Seriously, what's with this?
My theory is he gets out in front of the market in an effort to move ahead of inflation. If the top free agent pitchers set the bar when they sign (usually around the Winter Meetings) then it's worth moving on the mid-tier starters before the market fully adjusts. There is a method to this madness, but I think it's ultimately a flawed strategy. The second-tier free agents know their bank roll is tied to what the top guys obtain in the open market. They should be willing to bide their time. In turn, if someone bites at an early offer, that signals a pretty good idea that they (or more likely, their agents) feel that the current offer is so out of whack with the market (after inflation) that they will take that deal. It goes back to my poker scenario above. The minute the GM makes an above market value, it's over.
Dayton Moore is so intent on beating the system, he moves first. The failure comes when he overestimates the inflation or when he misjudges the market for the player he's after.
He allowed the market to evolve when he signed Gil Meche to the five year, $55 million contract. We remember he had to tack on the extra year to convince Meche that Kansas City was the place for him. In other words, he knew the market and felt he had to go above and beyond to land his free agent. It worked in that Meche put the pen to paper.
For some reason, GMDM is loathe to go this route again. Maybe because he feels he can save some cash by getting out in front. The problem here is, it's not working. For the reasons I stated above. Now, instead of potentially landing a strong free agent candidate, Moore is working on the periphery. This is not the place where you will find a division championship or a wild card. This is a place where you will find the unwanted. Or the players who will find suitors only once the dust settles.
Free agency is, by it's own construction, a flawed system. You are paying a guy (mostly) based on past performance, with the (unlikely) hope he is not on the downward slope of his career. Is Albert Pujols going to be worth the money at the end of his contract? Alex Rodriguez? Nope. By signing those guys you are selling short. Hoping for an immediate return in exchange for what will be a tough contract down the line. However, when you give three years to a 34 year old starting pitcher who was only ever mediocre at best, you are further complicating the system against your team.
If Dayton Moore survives this season, he needs to check himself next winter and let the market gain a semblance of balance before he jumps in and starts throwing around offers. Again, this is just my theory.
-- In a nutshell, this isn't a good deal. It's why Moore will never lead this team to the postseason. It's not the fatal blow to our hopes in 2013 and beyond, but it's just another move to place in the dossier of Dayton Moore Misjudgements. It's a move that ensures the Royals will be treading water in the shallow end of the pool for the next three years. Mediocrity neither sinks or swims. It just kind of floats along aimlessly.