Orioles,11 others interested in Adrian Beltre

[MrOrange82]

Well, I'll put it this way. 17 MM in 2005 would have been worth about ~18.5 MM in 2009. Spending the 17 MM in 2009 would have given you a value of ~15 MM in 2005.

Let's look at Bluedog's proposed contract had the deal been given in 2005. First listed will be the actual dollar amount of the salary and in parentheses will be the 2005 "value" of the salary.

2005: 17 MM (17 MM)

2006: 15 MM (~14.5 MM)

2007: 10 MM (~9.43 MM)

2008: 10 MM (~9.17 MM)

2009: 10 MM (~8.84 MM)

For a grand total of 58.94 MM in 2005 value over 5 years.

Here's how the deal would like while back-loaded:

2005: 10 MM (10 MM)

2006: 10 MM (~9.67 MM)

2007: 10 MM (~9.43 MM)

2008: 15 MM (~13.76 MM)

2009: 17 MM (~15 MM)

For a grand total of 57.86 MM in 2005 value over 5 years.

Hmm, that wasn't even close to the discrepancy I was expecting, so I'm glad I did the math.

Still, if you know you can save yourself 1+ MM in value by back-loading, and you can eat money if you need to make a trade in the later years, I don't see a compelling reason to front-load.

I will concede that the difference was not as much as I was led to believe, though. Thanks for asking the question and not letting me rest on my assumptions.

Here's the link I used for the calculations.

Already repped you for a different post, but thanks!

I had a feeling the difference wouldn't be huge...though I couldn't justify the assumption at-all. Extremely interesting to see how the differences play out.

[RVAbird]

Why would you do that? Just to get him to take the more lucrative offer? I mean, to get the 5th year, essentially for free, I would think that is the best way to go.

That being said, you are right, it is going to take a 4/68-5/75 deal, at a minimum, to now get him if this offer is true.

Also, can you imagine if Beltre goes there? He will have played in some major pitchers parks in his career.

Oh, obviously a 5/64 deal is better. I was really just saying what my ceiling would be in the negotiations. I'd match a 5/64 deal, and probably go up to 70 MM, but not higher than that. I already don't want to commit to a 5th year, but I guess if I'm content with a 4/60-64 deal, I could stomach adding 5-10 MM for that fifth year. I'd be signing the contract with one eye closed, though.

And yeah, if he plays the next 5 years in Oakland it's going to be a shame that most people will look back on what could be a borderline HOF player and see nothing special.

[Scrat1]

Oakland offering 5/64...

Uncle! Uncle!

5/64 from a west coast team. You got to know when to step away.

[Stan P]

A 4/60 deal should already be on the table from us and that should be our starting offer.

[Can_of_corn]

Uncle! Uncle!

5/64 from a west coast team. You got to know when to step away.

So Oakland wins a posting for 15 million, now they are offering 64 million for Beltre... Seems a bit odd that they are suddenly throwing money around like this.

[Pedro Cerrano]

Heyman tweets:

"it appears the comp being used by adrian beltre is torii hunter ($90 mil, 5 yrs). gulp."

[NATTYBO's]

Heyman tweets:

"it appears the comp being used by adrian beltre is torii hunter ($90 mil, 5 yrs). gulp."

I guess if he signed here for 4/60 he'd be giving us a hometown discount:beerchug1:

[JTrea81]

Uncle! Uncle!

5/64 from a west coast team. You got to know when to step away.

4/68 is better than 5/64.

[JTrea81]

Heyman tweets:

"it appears the comp being used by adrian beltre is torii hunter ($90 mil, 5 yrs). gulp."

He isn't getting 5/90 from anybody.

[sbauer]

Heyman tweets:

"it appears the comp being used by adrian beltre is torii hunter ($90 mil, 5 yrs). gulp."

Haha. Gotta love Heyman.

[LookinUp]

Haha. Gotta love Heyman.

He should hyphenate his name to Heyman-Boras.

[NCRaven]

To be fair, Heyman isn't saying that Beltre is worth $90M or that he'll get that much, just that this is the comp Boras is using in negotiations. According to Boras, the Hall of Fame was going to waive the wait five years after retirement rule and induct Matt Wieters while he was still in Bowie.

[bluedog]

This is the third post I've seen in which you advocate a front-loaded contract. While I understand the attraction, it's not efficient. Because of inflation, it becomes much easier for the organization to absorb the big money at the end, even if it might seem to make the player harder to dump. 17 MM in 2011 is worth more than it will be in 2015. You can pretty much guarantee that.

So, in terms of value, a front-loaded contract might cost the team 10-20% "more" than a back-loaded contract of the same USD. If you're trying to dump a player who is making 17 MM but a team is only interested in absorbing 10 MM in payroll, you eat 7. In the end, the front-loading doesn't really provide much benefit and it increases the value of the money you spent.

I understand the efficiencies of back loading a contract if its taken and analyzed individually, out of context of the rest of the payroll. But the reason I am a proponent of front loaded contracts right now has to do more with the O's overall payroll situation and less to do with saving money on a single contract over time.

To whit - lets assume the O's have the following max payroll numbers over the next 5 years:

2011 - $90,000,000

2012 - $100,000,000

2013 - $110,000,000

2014 - $120,000,000

2015 - $130,000,000

The O's were at 73 M in 2010, but they've shed quite a number of significant contracts, so I'm assuming we'll be at around 45 to retain our existing players leaving us 45 more to spend assuming payroll increases to 90 M. That should be enough to land Beltre and fill the need at 1b and address some other issues.

But then lets fast forward to 2012 and beyond. We'll be at a point where we'll need to start considering extensions for players like Adam Jones, Wieters, Guthrie, etc. and to attempt to woo some marquee free agents like Gonzalez or Fielder, assuming we are closer to contention. Even if the team adds 10M a year in contract space (as proposed above) that won't be enough to support pay raises for all of our current young players, escalating contracts from guys like Beltre and new contracts from top name free agents.

If we back load Beltre's contract, the team may end up saving a million bucks or so, but find itself in a position in two or three years where it doesn't actually have the payroll flexibility required to sign and re-sign all the players we need to compete. By front loading Beltre's contract, we use the payroll flexibility the team has today to improve the team's payroll flexibility in the future.

Just look at Nick Markakis and his contract which jumps to 15 M a year in 2013 / 2014. His contract will become increasingly more burdensome right at the point that most people expect the team to (finally) be a contender. If we aren't careful, the O's will end up in the same situation as the Ravens did a few years back where they simply couldn't afford to keep all of their core players because of poor contract management.

That's why I advocate front loaded contracts for the O's in the current environment. The fact that players and agents like them better as well can't hurt us in negotiations.

[bluedog]

Uncle! Uncle!

5/64 from a west coast team. You got to know when to step away.

Not sure why 12.8 M a season is cause to step away. It's rich, but I'd consider going higher if I'm the O's. Maybe 5 / 70.

[RVAbird]

I understand the efficiencies of back loading a contract if its taken and analyzed individually, out of context of the rest of the payroll. But the reason I am a proponent of front loaded contracts right now has to do more with the O's overall payroll situation and less to do with saving money on a single contract over time.

To whit - lets assume the O's have the following max payroll numbers over the next 5 years:

2011 - $90,000,000

2012 - $100,000,000

2013 - $110,000,000

2014 - $120,000,000

2015 - $130,000,000

The O's were at 73 M in 2010, but they've shed quite a number of significant contracts, so I'm assuming we'll be at around 45 to retain our existing players leaving us 45 more to spend assuming payroll increases to 90 M. That should be enough to land Beltre and fill the need at 1b and address some other issues.

But then lets fast forward to 2012 and beyond. We'll be at a point where we'll need to start considering extensions for players like Adam Jones, Wieters, Guthrie, etc. and to attempt to woo some marquee free agents like Gonzalez or Fielder, assuming we are closer to contention. Even if the team adds 10M a year in contract space (as proposed above) that won't be enough to support pay raises for all of our current young players, escalating contracts from guys like Beltre and new contracts from top name free agents.

If we back load Beltre's contract, the team may end up saving a million bucks or so, but find itself in a position in two or three years where it doesn't actually have the payroll flexibility required to sign and re-sign all the players we need to compete. By front loading Beltre's contract, we use the payroll flexibility the team has today to improve the team's payroll flexibility in the future.

Just look at Nick Markakis and his contract which jumps to 15 M a year in 2013 / 2014. His contract will become increasingly more burdensome right at the point that most people expect the team to (finally) be a contender. If we aren't careful, the O's will end up in the same situation as the Ravens did a few years back where they simply couldn't afford to keep all of their core players because of poor contract management.

That's why I advocate front loaded contracts for the O's in the current environment. The fact that players and agents like them better as well can't hurt us in negotiations.

Yeah, I understand the argument and I think you articulated it well.

I still think it's unlikely for a couple of reasons, namely that absorbing the 17 MM at a time when operating revenue is less than it will be when the Orioles are winning more (presumably some time over the life of Beltre's contract) is not in Baltimore's best financial interests. Combined with the relative value discount for back-loading, I still think the cons outweigh the pros for front-loading in our case.

I think the Orioles would prefer to gradually increase payroll as inflation occurs and the Baltimore (hopefully) starts to win more games and generate more revenue than to bump up the payroll right now and stay close to static over the next 5 years.