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What in the world did Billy Beane just do? by Dan Lependorf February 16, 2012. Sure, on the surface, the signing of Yoenis Cespedes by the Oakland A's seems absurd. Why would the rebuilding A's want an expensive import ...
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Sure, on the surface, the signing of Yoenis Cespedes by the Oakland A's seems absurd. Why would the rebuilding A's want an expensive import like Cespedes? How did the destitute A's even land him? But if you dig a bit deeper, it actually makes quite a bit of sense. Let's back up a few months.
12/09/11: Oakland Athletics traded cash, LHP Craig Breslow and RHP Trevor Cahill to Arizona Diamondbacks for RF Collin Cowgill, RHP Jarrod Parker and RHP Ryan Cook.
12/23/11: Oakland Athletics traded LHP Gio Gonzalez and RHP Robert Gilliam to Washington Nationals for RHP A.J. Cole, RHP Brad Peacock, C Derek Norris and LHP Tom Milone.
12/28/11: Oakland Athletics traded RHP Andrew Bailey and RF Ryan Sweeney to Boston Red Sox for RF Josh Reddick, 1B Miles Head and RHP Raul Alcantara.
Everything lines up. All three of those trades accomplished the same goal?trading away valuable established players for a larger quantity of younger and cheaper guys. Billy Beane took a look at his roster and realized that the franchise as-is didn't have a playoff contender in it. Tear down now, build for later.
Well, it doesn't, really. All indications by Billy Beane and owner Lew Wolff are that if a new ballpark is going to come at all, it will likely be sometime around 2015?or even the year after. Clearly, management would love to draw in new fans by having a good, exciting team when the new ballpark opens, so it makes sense that Beane is timing this rebuild to line up in that time frame, four or five years from now.
But, well... Cespedes was handed a four-year contract. It doesn't take a mathematician to see that, unless Cespedes is extended, he won't be able to play for the A's in the new ballpark for very long, if at all. So what was the point?
Let me put this line of questioning on hold for a second. I'll come back to it. Forget about the rebuilding cycle or a new ballpark or anything. In a vacuum, is $36 million over four years for Yoenis Cespedes a good financial investment?
Jim Callis of Baseball America estimated that Cespedes would "wind up just outside of the top 10" on his list of top overall prospects. Kevin Goldstein of Baseball Prospectus slotted Cespedes in at 20. John Sickels of Minor League Ball estimated that he'd be the ninth-best hitting prospect (not overall, but just among hitters). A few years back, Victor Wang did a lot of great work into prospect valuation, and he found that hitters ranked in the 11-25 overall bracket are worth an average of 1.32 Wins Above Bench (WAB) per year. After adjusting the baseline to replacement level and after assuming an average free agent rate of $5 million per win, I get an expected value of $36.3 million over the life of the contract. Cespedes' actual contract pays out $36 million over the four years. The expected value is a rough estimate, but it seems to be right in line with the ink on the page.
But is the market rate enough? The A's are a cash-strapped franchise, and to succeed, they need to get more wins than their payroll would purchase at the average market price. So, again, what was the point?
With most free agents, a team can fairly accurately guess what level of production it'll get. Sure, every once in a while you find a gem like Lance Berkman or a stinker like Adam Dunn, but for the most part, free agents are generally known quantities. Cespedes isn't that. The safe bet is that he could average two WAR per year. But he could easily bust and be worth nothing at all, or he could be a perennial All-Star.
No one really knows how he'll hit in professional baseball here in the U.S. Compared to most free agents in baseball, the variance on the set of his expected outcomes is enormous.
Which brings me back to the point I started with. Thanks to the rebuilding, the A's had a bit of cash to throw around. Last year, owner Wolff admitted that the team had a hilariously tiny $370,000 profit (not even one minimum salary player!). This was with a payroll that sat at $67 million to open the year. Before the Cespedes signing, the A's had pared their 2012 payroll down by $10 to $20 million. Beane made a calculated risk in a non-contending year?if Cespedes busts, the A's lose only money. That money would have either sat around as zeroes in a bank account or been used to pay cheap veterans in a non-contending year. If Cespedes hits well, the A's will have a valuable player on their hands. It's all of the upside of a wild card, with very little of the risk.
Sure, with this contract, Cespedes may not be around when the A's hit their new ballpark stride. But if Cespedes turns into the player the A's hope he can be, they'll have first dibs on extending him with the money from the new ballpark, should that come to pass. If not, hey, at least Billy Beane's made the A's more interesting?for the time being.
Dan can be contacted here (email) or here (twitter). He welcomes all comments, even offers for cheap male enhancement pills and winnings from lotteries he didn't realize he had entered.
Speaking strictly as an A?s fan, I hope Cespedes turns out to be a very good (I dare not say great) hitter that I can enjoy watching for the next four years. It?s been far too long since the A?s had a legitimate, middle-of-the-order hitter. Willingham was ok, and Holliday got hot right before he was traded that half a year, but really, not since 2006 Frank Thomas have the A?s had a guy you just wanted to watch hit.
I think Beane?s thinking if he is a success, he will be turned around before Year 3 for another couple of prospects who will be ready by 2015. And maybe they also have someone to put fannies in the seats this year.
This winter was a huge bummer for us A?s fans. Our 3 All-Stars and most popular players all traded away (not that we arent used to it by now but still), and still no sign of a new ballpark. But with this signing, Beane is at least doing SOMETHING to make the team competitive.
I think the A?s will come close to their win total of last year with the new players, and they?ll have more offensive upside, and a deeper farm. That?s better than treading water with all-star pitchers who were never going to have a decent offense behind them.
I think there?s also some pressure to meet some minimum payroll threshold, which is why the A?s spent a chunk of money on Ben Sheets a couple years ago, and a couple expensive free agent bullpen arms in Fuentes and Balfour last year.
The A?s have had a very difficult time attracting premium free agents to their ballpark - Beltre took less money and went to the Rangers. So they have to do something to augment their offense.
I don?t think anyone actually comes out and says ?hey, we?re tanking for the next few years?. It?s more of an accepted consequence of trades and rebuilds. But I do agree with you that I think between Parker, Peacock, and Milone, the A?s could surprise people and not be as crappy as others think. Those three young MLB-ready pitchers aren?t full replacements for the guys the A?s lost, but they?re not too far off.
And as far as Choice, I?d be shocked if he got any time in the Majors in 2012 aside from a few PAs in September. He?s yet to play in AA, and the step from A+ to AA is quite a jump, especially for someone with strikeout issues like Choice.
According to Forbes, the A?s had Operating Income (EBITDA) of $23.2M in 2010. That was among the highest in the majors in 2010, even though they were a small revenue team. They were 26th in revenues, but 11th in OI (EBITDA).
They have been running OI in the $15-25M range (roughly $20M) from 2005-2010, according to Forbes, so I would not be surprised if their 2011 numbers were also in that same range.
Even if he is a top 20 prospect that should not automatically be a starting job. Possibly they find it better to break him in AAA with Crisp in CF and trade Crisp if Cespedes is ready and can play CF. Commenters on other threads seem to forget the A?s were in on Chapman also, it may be a bit of a Pittsburgh situation where premium FA?s are not interested and they have to get the marginals like Matsui or foreign players like Cespedes (or the Japanese pitcher they posted but didnt? sign last year).
You make it seem so easy, but he?s risking $36M, not pocket payroll change, say, the $7M salary this season or average of $9M per season. Cespedes has to at least be roughly average or at worse just under, if he is to retain any value or at worse as a trading piece because no other team would take on his salary AND give the A?s a good prospect in a trade otherwise.