Lottery or Hedge Fund?

The moves by Boston prompted a rival executive to say, “It’s like the Red Sox are collecting lottery tickets — figuring that one of them is bound to pay off.’ ” – Buster Olney

The Red Sox have to spend some money this winter … but on what, exactly? If you think Jed Lowrie is good enough to play every day, the Sox entered the offseason set at every position. Sure, they could have wedged Tex in somehow. But they didn’t need him. They just needed to spend some money. With Teixeira gone, Theo Epstein was left to spend John Henry’s money on something else the Red Sox don’t need, and a future Hall of Famer and the next Joe DiMaggio fit the bill nicely.” – Rob Neyer

I’m not quite sure I agree with either assessment. While it’s true that we had roster holes to fill and thus were inevitably going to spend money, I’m not sure that the Teixeira signing is related. Theo and the gang have done an excellent job of not trying to answer that move by spending big dollars on a player that doesn’t deserve the contract.

Instead, we’ve purchased a number complementary parts whose risk and upside both range from minimal to substantial.

Are they all “lottery tickets?” Perhaps. But I think it might be more accurate to view them as small investments that are intended to serve as a hedge against injuries and fatigue. Penny and Smoltz in particular, I believe, are intended in part to keep Lester’s innings manageable considering that he jumped from 72.1 major league innings (postseason included) in ’07 to 236.2 in ’08.

And back to the subject of the money: how small are these investments, collectively? The base contractual commitments ($15.7M) – and I’m including Bard’s value though it’s reportedly non-guaranteed – amount to less than the Yankees will pay A.J. Burnett next year ($16.5).

Which is not to argue that Burnett is not a good signing; for a club with their resources, he’s a very high upside play. But for a club with greater financial limitations, such as ours, our spending indicates a diversification of risk on multiple assets with reasonable upside.

In other words, I like what our guys are doing.

In Case You Haven't Been Keeping Up With Current Events

Or, the inaugural edition of a recurring series.

The Beckett Update

Meant to mention this last week but, well, you know how it goes. If you haven’t seen it yet, Peter Gammons spoke with one member of the Red Sox front office who’s of the opinion that after Beckett’s current deal expires in 2010, we’ll be unable to sign the righthander.

“We’d better enjoy [Josh] Beckett the next three years,” one Boston Red Sox official said, “Because we won’t be able to sign him after his deal is up after 2010.”

Which is a grim prospect, not only because the Yankees will presumably have interest, but also because that’s just about the time that Tampa will be getting good (but more on that later).

Now even I can acknowledge that a problem three years away is a problem for another day, and I won’t get in a twist about it. At least, no more than usual.

But I think it’s worth noting that the $30M deal Beckett signed – much lamented by the Sports Guy during Beckett’s rough introduction to the AL – was in retrospect a masterstroke. Even if Beckett is hurt for a significant portion of it.

The Catching Update

In celebration of Truck Day, I treated myself to a copy of the Baseball America Prospect Handbook for 2008. It’s mildly alarming just how excited I was to get home and crack it, but that’s a subject for another day. Of greater interest was the catching depth chart, which BA lists as follows:

  1. Mark Wagner
  2. George Kottaras
  3. Dusty Brown
  4. Tyler Weeden
  5. Jon Egan

The good news is that – as previously discussed – Wagner owns the #20 spot on Boston’s Top 30 prospects list. The bad news is that Kottaras was last year’s #12, and Egan was last year’s #24, and both failed to make this year’s list. It would be inaccurate to say that it’s entirely a reflection on their respective seasons, as the overall depth of our system took a step forward last year, but neither did they progress as anticipated.

BA shares my concern about our catching depth, saying:

“the only unsettled long-term position on the Red Sox is catcher, where there’s no clear heir apparent to Jason Varitek. Wagner is the leading candidate to fill that role, as he has the most well-rounded game among a group of catching prospects that also includes Dusty Brown, Jon Egan, George Kottaras, Jon Still, and Tyler Weeden.”

Their prediction is that Wagner will be up in Portland this year, so I’ll try and get down to see him.

While it’s nice that BA shares my concern, the Red Sox front office is a bit more important in the overall equation. Since they’re in a position to do something about it, and so on. Anyhow it appears that they are applying the same shotgun approach to catching that it does to the bullpen: the more candidates you have, the better the chance that one proves viable. Back in October, we signed 24 year old Dennis Blackmon out of the independent leagues, and three days ago there was word we were close to bringing in Hayato Doue (see above video), a 25 year old Japanese catcher from the independent leagues over there.

Personally, I like these deals. True, the odds of Blackmon or Doue contributing in the long term are thin. But catching is in short supply, and I’d prefer to at least make the effort at finding a diamond in the rough. If we end up discovering nothing, and are forced to trade a Gold Glove caliber CF for a mediocre backstop like Gerald Laird (lifetime OBP of .297) so be it. But let’s at least look around first.

The Schilling Update

Generally, when someone medically trained characterizes a tendon in your shoulder as “irreversibly diseased” and “separate[d] into these bands of spaghetti” it’s not good news, but bad news. Which is what the news on Schilling is, quite obviously. It’s worth noting, as Buster Olney writes, that given the fact that Morgan is legally prevented from speaking without Schilling’s go ahead the aforementioned interview is essentially PR by proxy. Schilling apparently wants Red Sox fans to know that he does not agree with the diagnosis, but is unwilling to do more than hint at said disagreement on his blog, preferring to leave the direct messaging to an authorized mouthpiece. Ok.

Given everything Schilling has pitched through in his career, no one can ever question his ability to pitch with pain: the procedure that resulted in the bloody sock, after all, was first practiced on a cadaver. Seriously. So I have to believe that the big righthander honestly trusts Morgan that surgery offers him a legitimate chance at pitching this year.

Irrespective of what Morgan – and presumably Schilling – would prefer to do to address the current condition, however, the club and the player are apparently going ahead with a cortisone powered rehab.

When asked when Schilling would be able to pitch again using this approach, Morgan’s optimistic answer was: “never.” A real sunbeam, that guy. The guess here is that the two surgeons recommending this course of action are only slightly more hopeful than Morgan when it comes to rehab, but it’s obvious that they are spectacularly less positive about the prospects of a return this season if surgey is pursued. Ergo, the last ditch attempt at rehab.

Don’t know about you guys, but it sounds like it’s time for Plan B here.

The Yankee Update

Leave it to Peter Gammons to explain why it is my fondest wish that Brian Cashman and the Yankees part company, the sooner the better:

As he has done his entire tenure as general manager of the Yankees, Brian Cashman has spent the offseason doing what he believed was in the best long-term interests of the Yankees. Because he eschewed the Santana trade, Cashman’s job now is likely tied to Phil Hughes, Chamberlain, Ian Kennedy, et al. But Cashman wants to build a long-term pitching staff, then take money and fill where he needs to build as the Yankees see a number of big contracts go away in the next two offseasons. With close to a half-dozen pitchers making less than $500,000 in 2009, Cashman next winter will be able to go get Mark Teixeira, C.C. Sabathia and even Joe Nathan, if he so chooses.

I much preferred a Yankee club that spent and spent in a vain effort to solve more fundamental underlying problems. You know, just like our country does.

Can We Drop the Whole "The Red Sox Are the New Yankees" Thing Now?

Following the $100M+ the Red Sox shelled out for Daisuke Matsuzaka last offseason, I – like many Red Sox fans – was besieged with claims from (jilted) Yankees fans that “we were just like them.” That by virtue of that single capital expenditure, we were at once on equal financial footing with the Evil Empire. The media, true to form, picked up on this theme, debating such brain teasers as “would it be as fun to win now,” or “have we sold our souls?” Which obviously, I’ll ignore.

Herculean as my efforts were, however, I was entirely unsuccessful in persuading Yankees fans and good people alike that the two clubs remained quite distinct, in fact, in financial terms.

For while it’s convenient for fans of small market clubs like the A’s and Twins to lump all of the big market teams into a single bucket, the fact remains that we weren’t within hailing distance of the Yankees in terms of payroll numbers (the Matsuzaka posting fee aside, which I’ll get to in a moment). This inclination is understandable, given the respective payroll deltas. According to an AP report today, the gap between our roster and Tampa’s last year, for example, was $123.6, against the $62.9 million the Yankees spent above and beyond our costs.

So how are we different, in light of those numbers? Well, fortunately Allan Wood over at the Joy of Sox answered that question for you this past August:

Meaning you could take the Red Sox’s current payroll, add the salaries of

Ichiro Suzuki
Miguel Tejada
Kevin Millwood
Barry Zito
Albert Pujols
Dontrelle Willis

and still be about $1 million shy of the Yankees’ current payroll.

And that was with a payroll differential of $66M, not $62M.

We spend more than most every other club, it’s true. But please, can we drop the fiction that we’re the same as the Yankees?

Oh, and that monster posting fee which doesn’t get counted against officially reported payroll? Well, amortizing the fee over the 6 year life of the deal, I come out with a figure of $8.5 million per season. A hefty chunk of change for you and me, but not one that alters the above argument meaningfully.