If you want to listen to something entertaining, PLEASE check out Mike Missanelli interviewing Keith Law about Howard's new contract. It's just hilarious. I might even go back and count how many times Mikey Miss says the phrase "preeminent power hitter".
I love your passion Mike, unfortunately you did a terrible job supporting your argument. The good thing is you were up against an inside-the-box thinking stat hack. I will not use the "preeminent power hitter" argument, but I will try to explain to the former Special Assistant to J.P. Ricciardi (where in his 4+ years saw the Blue Jays to a mediocre .486 winning percentage) what good business means.
Let's start with numbers so we can get this out of the way. You see, Mr. Law only wants to rely on numbers and projecting the market to determine Howard's worth. And those things are very relevant when considering how much to pay a player, but numbers aren't the definitive authority. They are important in they give you an on-the-field value of the player, but not the overall value.
Ok, Conballs, how can you claim Howard is worth the money?
On his current contract, Howard is making about $20 million a year and he got that contract during his arbitration period. So he wasn't even negotiating as a free agent. Traditional analysis will tell us he would have gotten at least $20M, but probably more on the free agent market (if he could have been a FA at the time of his 3-year deal). Since he's sustained his production and actually got in better physical shape, his value has increased from that. So to say he's a $25 million player would be a fair assessment in my opinion. Feel free to disagree in comments.
Ok, but wait Conballs, he's a $25 million player, but we're paying him until he's 36! That doesn't seem very smart, does it?
Yes, true, but check out the break down. Howard is making $19M and $20M this year and next respectively. He will then make $20M in 2012 and 2013. In 2014 he bumps up to $25M and stays there through the remainder of the contract. Don't be fooled by Rotowire's faulty analysis that claims the contract is for $135M - it's not true according to Cot's Contracts. We have to figure that through 2013 this is a fine deal. He will then make $25M (what we already thought he was worth) from the time he's 34 until he's 36. The Phillies hold an option of $23M in 2016 with a hefty $10M buyout which brings the total contract to a $25/year agreement.
With that said, if Howard maintains his production levels, could $25M be cheap in 2014? Absolutely. I know we're in this recession and all, but we're not seeing a discount for star players. See, Sabathia, Texeira, Holliday. Believe me, MLB is not hurting. The Phillies certainly aren't hurting. And we've seen salary increases every year except 2004 since the strike. Since 2005 salary increases have been as such: 5.9%, 8.9%, 2.7%, 7.1%, 2.7%, 1.8%. Let's stay conservative and say price increases will average 3% for the length of Howard's contract. With that increase, $25M today will be $28M+ in 2014, and just under $30M in 2016. So even if Howard's production falls off by 15% - just by the numbers - he will still be paid correctly.
Ok, Conballs we're paying him what we believe he's worth and not an inflated market value, but why did we sign him this year when he's under contract through next year?
Besides Law's belief that Howard would not receive this kind of money on the FA market, he also believes signing him early was a blunder. Now it's tough to disagree with a guy who was part of the camp that released Chris Carpenter, but I'm going to give Keith some advice they didn't teach him at those fancy schools. It's about understanding what motivates people. It's about what weighs on an athlete's mind. It's about the image you're trying to portray about your organization. And who better to do that than Ruben Amaro? A solid ballplayer who parlayed his invaluable playing experience with a long apprenticeship under the legendary Pat Gillick. I don't know of any other GM that has that sort of pedigree. Maybe Beane, whose career was much more lackluster, yet was groomed by Sandy Alderson.
You see, when you pay a player what he's worth and don't wait around until the last minute, you are showing your team and the rest of the league exactly how you treat your stars. I love Jayson Werth, but if he has to go, he has to go. You can't keep him at the expense of Howard. Actually, this deal could give the Phils enough cost assurance to make a solid run at Werth - but that's for another article. This could be a pattern forming for Amaro. He already picked up Rollins' option for 2011 before the season started. Didn't hear any hooplah over that, yet I rarely see other GMs pull off the move. But you know what? Now Rollins knows he's loved. He knows the Phillies are dedicated to him and are willing to risk paying him if he gets injured just to show him that.
This business sense goes unnoticed among the stat guys. These guys have never run an organization and obviously are just like our terrible economists who are great at explaining their rationale, but still miss the target as much as they hit it.
But the problem is, Howard will probably start declining in a few years just like similar players listed by Baseball Reference - so how do you account for that?
Let's look at these similar players through age 29:
Richie Sexson, Cecil Fielder, Mo Vaughn, Willie McCovey, David Ortiz, Tony Clark, Mark McGwire, Carlos Delgado, Fred McGriff, Norm Cash.
Sexson is laughable, so I'll skip him. Fielder is a nice comparison offensively, but Howard is in MUCH better shape and actually plays plus-defense. Oh, yeah that's right Keith, he's actually a plus-defender. And that's supported by the numbers and my eyes (UZR of 2.0 over 2008 and 2009). The guy has picked every ball in sight and is playing with much better range and more accurate throws.
Guys like Vaughn, McGwire and Ortiz are tough to compare because there could have been a PED issue. These guys could have gotten an artificial boost and then broke down later on (plus Ortiz and Vaughn are not noted for their defense). There is no reason for me to believe Howard is receiving this type of artificial boost. But he is extremely dedicated to his workout regimen. Right there that's worth a chunk of cash.
McGriff and Delgado are nice comparisons. Howard has more power, but less contact ability, and is playing defense that would make the Crime Dog proud. And you know how many home runs Carlos hit when he was 36? Try 38. In a non-hitters park. He also made $16M. If you take 3% off $25M from 2016 back to 2009 you find yourself at a hair above $20M. I think we can all agree Howard has more power and much better defense than Delgado. Add in his presence, baserunning, homegrown attachment, and good-guy image, and it's not unreasonable to believe he is worth a bit more than Delgy. Oh, and that Delgado contract actually turned out pretty good, but nobody talks about it.
Here's the thing, besides maybe McCovey, Howard is more coveted at his age than any of those guys listed above. People in Philly love him. He puts people in the seats. Even if his production tapers off he will put people in the seats. He actually worked with Bonds in the offseason to improve his eye at the plate. The kid is full of initiative. The makeup is tremendous, but again, something not found in the numbers.
Amaro even said this was a calculated risk. Of course it was, but that's what GMs are paid to do. They are not there to hope their team comes together one year. Right now Philadelphia has an amazing core of Utley, Rollins, Howard and Halladay. Each season, whether you agree with the Polanco and Ibanez contracts or not, Amaro goes out and gets the player he wants. He's not the GM who sits around and waits for what's left. People like Pat Burrell and Chan Ho Park found that out the hard way.
But how will the Phillies be able to keep Rollins, Utley and Hamels?
I'm not going to proclaim that I know what the Phillies' books look like, but I will tell you what signing a superstar long-term means. It's called branding and merchandise. You know how many Howard jerseys will be bought at Citizen's Bank Park? I would say a sizeable amount. Amaro has expanded the Phillies brand and made it more powerful. What kind of numbers represent such a value?
So Mr. Law, I know you don't watch Ryan Howard because you think he's a bad defender, but believe me, this contract makes sense beyond the numbers. The only number that really matters is 2. Because you need a pair to be a GM. Apparently you left yours in Toronto.
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