Friday, October 22, 2010

Domo Arigoto, Mr. Joe Votto

I don't care what anyone says.  Joey Votto can, should, and will win the National League MVP.  Albert Pujols had an excellent season, but it was a little bit of a down year for him--at least in comparison to 2008 and 2009.  I know, I know.  Pujols put up a .420 wOBA, created 55.4 weighted runs above average (wRAA), and was worth 7.3 wins above replacement.  In a normal season, he'd be a shoe-in for MVP.  Unfortunately, for him, 2010 wasn't a normal season.  Joey Votto was just a little better.  He put up a .439 wOBA, created 61.3 wRAA, and was worth 7.4 wins above replacement.  When you consider the fact Votto led his team to the playoffs for the first time since 1995, it actually makes the choice simple.  Maybe I'm splitting hairs, but it's my blog.  I'm entitled to do so if I please.

This brings me to the reason I wanted to write about Votto.  As Craig Calcaterra of NBC's Hardball Talk blogged earlier today, the Reds are interested in signing their power hitting first baseman to a four year deal, thus allowing the team to avoid arbitration.  This shouldn't be a shocker.  Power hitting first basemen, while uncommon, are highly coveted.  Power hitting first baseman who can consistently hit .400-plus wOBA with above average defense, on the other hand, is comparable to striking oil in your backyard.  Votto is the total package.  Going into this age-27 season (a baseball player's most common prime season), he appears to have several productive years ahead of him, barring injuries.  If the Reds were to go year-to-year with Votto, it would likely cost the Reds a fortune by his third season of arbitration eligibility; thereby making it cost-ineffective for the Reds.

So why not sign him to a long term deal now?  Well, for the Reds, it's a no brainer.  Cincinnati is the smallest market in baseball, and the Reds are the epitome of a small market club.  To be successful, they need to focus on drafting well, building a productive farm system, making smart trades, and finding value on the free agent market.  When they sign a player to a big contract, they really need to make it count.  If they don't, it could hamper the franchise for years to come.  Barring some major unexpected population shift, they'll never be able to compete with the Yankees, Red Sox, Cubs, and Mets for big time free agents.

Signing Votto prior to the 2011 season is ideal for the Reds because it allows them to buy out all three of his arbitration years, thus creating a significantly lower base salary from which to start from.  Per Cot's Baseball Contracts, Votto's 2010 salary was $550,000.  His 2011 salary after arbitration will likely jump to somewhere between $6.5M and $7M.  Based on recent history for long term contracts that buy out all three years of salary arbitration, the Reds would likely be able to negotiate Votto's salary down to $4-5M for 2010 with larger salary escalations in 2011, 2012, and 2013.  By the end of the process, the team could end up signing Votto to an incredibly team friendly 4 year $36M contract with a fifth year option worth around $15M.   Between, 2008 and 2010, Votto has been worth 16.0 wins above replacement, and been produced approximately $70.7M based on Fangraph's assessment that a single win is worth approximately $4M on the free agent market.  That's a considerable amount of value.  Even if we were to see a regression of 0.5 WAR over each of the next four seasons (which is highly unlikely by the way), the Reds would easily recoup enough value (and then some) in this theoretical deal.  The Reds could probably go up to 4 years and $80M (adjusting for the inflation of a win on the free agent market over time) before breaking even.

So why should Votto wait to sign?  Well, for one, his stock has never been higher.  It seems likely he's going to win the MVP in his age-26 season, and he has at least three or four prime seasons ahead of him.  Plus, if he was to wait until after the 2011 season to sign his long term deal, he'd be able to use the contracts of Albert Pujols, Prince Fielder, and Adrian Gonzalez as benchmarks for his deal.  Of course, he won't be using those deals to get comparable deals because the two situations will be different.  The above three players, assuming they make it to free agency, will be offering their services on the open market.  Votto, on the other hand, is tied to one team until after 2013.  Votto will (and should) use those deals to squeeze every drop of additional money out of the Reds.  This would likely move his deal to somewhere closer to 4 years and $60M.  Over the life of that deal the Reds will still recoup more than enough value from Votto, but it won't be the slam dunk described in the first scenario.  If he can't, it would behoove him to go year-to-year, and sign his first big money deal as a first time free agent.

This offseason is a crucial time for Walt Jocketty and his front office staff.  He needs to find a way to sign his franchise player to a long term deal, while building off of 2010's run to the playoffs.  It's not an easy task, but it's clear that success in the latter is very much tied to the former.  It will be very interesting to see how this all plays out.

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