Hypothetically Speaking: The John Danks Contract Extension

The White Sox tried to sign John Danks to a contract extension last year, but Danks wisely held off. Now Danks is looking for a long term deal and has put himself in a great position to land a significant contract should the White Sox try to extend Danks:

"It would be nice to have the security," said Danks, who has that security, even if he doesn't officially possess it in writing. "I'm very excited to sign a multi-year deal."

That excitement level for Danks doesn't quite carry over to signing any deal put in front of him by the White Sox. After presenting these same basic long-term contract thoughts during the offseason leading into 2009, Danks and Gavin Floyd, a pair of young rotation cornerstones, were offered four-year, $15.5 million extensions last March, with a $9.5 million option for 2013.

Floyd accepted the deal, but despite Danks' high level of loyalty to the franchise, he turned it down, with advice from Jeff Berry, his representative. Some eight months later and with a second straight season of starting success behind him, Danks looks back at this decision without regret but also looks forward to another multi-year opportunity.

"We are not talking yet," said Danks, when asked about renewed contract discussions with the team. "But [general manager] Kenny [Williams] and [assistant general manager] Rick [Hahn] are probably looking at the World Series to finish up and then go from there with this team.

So with that in mind, let's take a look at the goals each side should have moving forward:

The White Sox

1. Buyout arbitration years

2. If possible, buy out Danks first year of free agency and maybe even his second

The John Danks Camp

1. Guaranteed money

2. Try to keep the contract to 3 or 4 years so that Danks will hit free agency after 2012 or 2013

So how about this deal for Danks and the White Sox?

(4 years/$24 million) with a $12 million dollar option for 2014

Here is the contractual breakdown:

2010: $2 million
2011: $5 million
2012: $7 million
2013: $10 million
2014: $11 million (team option)

Why it works for the White Sox:

1. Buyout all of Danks's arbitration years

2. Buyout one (maybe 2) year of free agency

3. Very reasonable price

Why it works for Danks:

1. Long term security

2. Ability to become free agent after 2013 (age 28) or 2014 (age 29)

Danks can probably earn more through arbitration on a year to year basis, but this much guaranteed money would be very difficult to turn down.

Thoughts?

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What the Hell Were You Thinking? Travis Hafner Edition

*Over the next couple of weeks, Jorge Says No! will take an in depth look at some of the worst contracts in baseball. We'll evaluate why the player was signed, what went wrong, and future implications of the contract. Behind every bone head decision, there has to be a reason for it...right?*

Why Re-Sign Hafner: There are plenty of reasons why the Indians wanted to give Hafner a contract extension. From 2004-2006, Hafner was one of the best hitters in the AL and gave the Indians fantastic production in the middle of the order. At the time the extension was signed in 2007, Hafner was just 30 years old and seemed to have a number of very productive seasons ahead of him.

Furthermore, the Indians wanted to lock up Hafner because the feeling was that if Hafner hit the free agent market, then there was no chance the Indians would be able to compete for his services. The only chance the Indians had to retain Hafner was to sign him to an extension well before he hit free agency.

As GM Mark Shapiro noted in January 2007:

Beyond that, however, the Indians will have to shell out large sums of money if they're going to ensure that Sabathia and Hafner don't become the next wave of players to sign their first big contract with the Tribe and their second elsewhere.

"Those guys have become great players in the American League, so it would take a significant contract to extend those guys," Shapiro said. "I would imagine they're willing to listen. It still will be a challenge in light of what's happened this offseason in free agency.

"We'll see if there's enough common ground to extend them, recognizing there are multiple junctures ahead to look at extending these guys. There's Spring Training this year, there's next offseason and there's the following offseason before these guys are no longer Indians."

What Went Wrong: Injuries, injuries, injuries. Hafner's was actually declining statistically in the beginning of the 2007 season, but the Indians decided to sign him to a contract extension anyway. Hafner missed a majority of the 2008 season and a large chunk of the 2009 season because of injuries and he has not put up MVP type numbers since 2006.

Future Implications: There is no doubt that this contract will significantly limit the Indians financial flexibility over the next few seasons. Hafner is owed $37.5 million over the next three seasons, a figure that makes him almost impossible to move at this time. Luckily for the Indians, Hafner's contract expires the same season as Grady Sizemore's, which could help the Indians deliver a competitive offer to their superstar centerfielder.

Lesson Learned: Once again, we've found that the Indians getting unlucky with injuries. The Indians thought they had a franchise player in Hafner, but injuries have prevented him from putting up huge numbers. In my opinion, Hafner was a worthwhile risk for the Indians and even though the move has not panned out so far, the Indians aggressiveness has to be commended. However, it's hard for a team like the Indians to commit so much payroll to a DH, but clearly the Indians viewed Hafner has an exceptional talent, who they needed to keep.

Thoughts?

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What Team is Trading For Akinori Iwamura?

It looks like the Rays are on the verge of trading Akinori Iwamura, but no one seems to know the other team involved:

"Just got back to New York and heard from an industry source who's not with the Rays that they are on the verge of completing a trade of 2B Akinori Iwamura.

The Rays were looking to do some kind of deal since they weren't planning to pick up the $4.85-million option to bring him back. What's interesting is that the source indicated the deal wasn't with the Cubs or the Dodgers as has been speculated on but to an unexpected team. Hmmm."

If I was a betting man, I'd place these three teams at the top of my list for Iwamura:

1. Twins: he's a low cost option at 2B, who is only signed through 2010, and would be a great fit at the top of the lineup. Also, the Twins outrighted Brian Buscher today, so we'll find out if there is a correlation between these two moves.

2. Mariners: Iwamura would be a nice versatile option for the Mariners as he can play 2B and 3B. If the Mariners choose not to re-sign Adrian Beltre, Iwamura could play 3B.

3. Tigers: With the health of Scott Sizemore somewhat up in the air, Iwamura could be a back up plan should the Tigers not feel comfortable with Sizemore at 2B. Also, if Brandon Inge struggles at third, Iwamura could see time there as well.

Where do you think Iwamura will be traded?

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Joe Morgan on Coveted Free Agents

Classic Joe Morgan. Even when I agree with him, I get a good laugh. Simple, simple, simple:

AR(MN):

Who do you think will be the most coveted free agent this offseason?

Joe Morgan(11:14 AM):

There are a lot of free agents out there. Matt Holliday is one of the guys. A lot of teams looking for offense will be going after him. John Lackey is a free agent from the Angels. I would think those are two guys that teams would want. The ones looking for offense look for Holliday, the ones looking for pitching look for Lackey. But I also think there will be some trades too. The Blue Jays made Halladay available before, they might try to trade him again.

Where are the Fire Joe Morgan guys when you need them?

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John Grabow and the Market for Left Handed Relief Pitchers

It looks like the Cubs are getting closer to locking up John Grabow. Take it away Bruce Levine:

"Agent Paul Kinzer represents Grabow, who would be the team's left-handed set-up man and a possible back-up closer in the event Carlos Marmol is injured or needs a day off.

The two sides are talking about a two-year deal for anywhere between a total of $6.5 million and $7.5 million. Grabow's people would like a vesting option for a third year added to the contract.

Also, certain incentives will be built into the package that will include games finished."

Look, I have no problem with the years or the amount being talked about by Levine. Grabow is a above average left handed relief pitcher and in this day in age, that seems like a fair deal for both sides. And on the plus side, the deal is a whole lot better than the one the Yankees gave Damaso Marte last year (3 years/$12 million).

However, I absolutely hate this deal for the Cubs right now. Here is a team that has limited payroll flexibility headed into 2010 and they are all set to use a chunk of it early on in free agency to lock up a left handed set up man.

The big problem that I have with this is that if the Cubs play it cautious with Grabow, then I'd expect the market to drop for him and perhaps the Cubs could retain him at a more team friendly price. Grabow is a type A free agent, which is the Cubs offer him arbitration, should have teams shying away from Grabow, unwilling to give up draft picks for a mediocre left handed set up man.

Simply put, the Cubs have an opportunity to gain leverage in these negotiations, but instead they are looking to lock Grabow up immediately.

As for the left handed relief market, this could play out a lot like it did last year. There are many competent left handed bullpen arms on the market, which could benefit those who sign early and really hurt those who wait until late December or January to sign. Last year we saw Damaso Marte sign a 3 year deal with the Yankees and Jeremy Affledt signed a 2 year deal with the Giants very early in the offseason. At the same time, guys like Joe Beimel and Will Ohman were left taking one year contracts because there was no market.

Thoughts?

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What the Hell Were You Thinking? Jake Westbrook Edition

*Over the next couple of weeks, Jorge Says No! will take an in depth look at some of the worst contracts in baseball. We'll evaluate why the player was signed, what went wrong, and future implications of the contract. Behind every bone head decision, there has to be a reason for it...right?*

Before the 2007 season began, the Indians signed Jake Westbrook to a contract extension from 2008-2010. During that time period, Westbrook has made just 5 starts for the Indians as the team has plummeted in the standings and has been forced to deal away two of their star pitchers. So what the hell were you thinking, Cleveland?

Why Re-Sign Westbrook: Even though Westbrook was far from an ace, he was a consistent and steady presence in the Indians' rotation and could be counted on to give the team 200+ IP every season. The 2007 free agent class was horrifically weak with starting pitchers, which is important because Westbrook would have been highly sought after on the open market. Realistically, the Indians probably knew that their chances of resigning CC Sabathia after the 2008 season were slim to none and it was important for the team to lock up a member of their starting rotation. Furthermore, the Indians were impressed with Westbrook's leadership abilities and thought very highly of him.

As GM Mark Shapiro noted at the time:

"Given the market for quality starting pitching, it's reasonable to assume that a healthy Westbrook could command somewhere in the neighborhood of $10 million a year. Rather than approach Westbrook about an extension at the end of the season, before the market got out of whack, the Tribe picked up his '07 option worth $6.1 million.

"Jake is a guy we value and believe in," Shapiro said. "He's truly taken on a leadership role as well. He's a guy we'd like to have here beyond next year."

What Went Wrong: Westbrook made 25 starts in 2007 after signing the extension, but he went down early in 2008 with elbow pain. Initially, Westbrook thought that he would be able to pitch through the pain, but by June, Westbrook was forced to undergo Tommy John Surgery that knocked him out for the rest of the 2008 season and all of the 2009 season.

Future Implications: Westbrook's extension is set to expire after this year so the impact of the contract will probably be minimal from here on out, but make no mistake about it, this deal has hinder the Indians' financial flexibility. In 2008, the Indians were forced to trade free agent to be CC Sabathia because they could not afford to resign him. In 2009, the Indians decided to move Cliff Lee even though he was signed through 2010 because they were convinced that they could not sign him. Westbrook's annual salary ($11 million) takes up roughly 14% of the Indians total payroll, which is a crushing blow for GM Mark Shapiro over the past year and a half.

Lesson Learned: I dunno if there is a specific lesson that the Indians can take from the Westbrook extension because injuries have forced Westbrook to miss most of the last two seasons. The Indians took a gamble by signing Westbrook to a long term extension, but the results have not been pretty. At the same time, if a small market team is going to spend 1/7th of their total payroll on a pitcher, his ceiling should be higher than that of a middle of the rotation starting pitcher, don't cha think?


Thoughts?

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Freddy Sanchez, Felipe Lopez, and the Second Base Market

This past Friday, the Giants re-signed 2B Freddy Sanchez to a 2 year/$12 million dollar contract. The move was important for the Giants for two reasons:

1. They did not have to pick up Sanchez's $8.1 million dollar option in 2010
2. "validates" trading Tim Alderson (admittedly weak point to make)

Even though Sanchez hits for a high average and plays solid defense, I was surprised to see the Giants pony up $6 million annually for Sanchez considering his lack of power, speed, and low OBP.

Does the Freddy Sanchez contract bode well for the other free agent second basemen on the free agent market (namely Orlando Hudson and Felipe Lopez)?

Not necessarily.

Conventional wisdom would suggest that Felipe Lopez should earn a contract well north of the 2 years/$12 million the Giants gave Freddy Sanchez. Lopez is younger, was statistically better than Sanchez is almost every offense category in 2009, and was an effective defensive second baseman.

However, there are two glaring issues that could prevent a market from developing for Felipe Lopez:

1. Type A Free Agent

-If the Brewers decide to offer Lopez arbitration, are there any teams out there that will surrender two draft picks for him?

2. Where will the money come from?

-If you look at the number of teams out there, who will be searching for a second baseman this offseason, it's hard to see where the big bucks will come from. Here is my preliminary list:

• Dodgers (if they decide not to start Blake DeWitt/re-sign Orlando Hudson)
  
• Mets (if they trade Castillo)
• Twins (low cost)
• Tigers (depending on the health of Scott Sizemore)
• Cubs (if they can afford it?)

It's hard to foresee any of those teams opting to spend $8 million plus on a second baseman this offseason. That's not a good sign for Felipe Lopez early on.

As for Orlando Hudson, even though he was an all-star this past season, the market is not looking favorable for him either. Once again, Hudson is a Type A free agent, which is sure to scare teams away from signing him should the Dodgers offer him arbitration. The best thing that can happen to Orlando Hudson at this point is for the Dodgers to not offer him arbitration (which would increase his chances of a multi year contract) or to simply re-sign with the Dodgers (very unlikely) at a figure slightly higher than Sanchez's, this way he does not have to settle at a bargain basement price like last season.

So in the end, while I think the Giants got a fair deal for Freddy Sanchez, they might find that they actually overpaid for his services (a la Damaso Marte last season) simply because the free agent market is not looking promising for second basemen.

Thoughts?

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