Votto Contract Details

Well, if you (and if you by you, I mean Josh) hated the contract Joey Votto signed with the Reds the other day, you're really going to hate it now.  John Fay of the Cincinnati Inquirer has the details on the deal.

"First here are the numbers...$5.5 million salary in 2011, $9.5 million salary in 2012 and $17 million salary in 2013...Signing bonus of $6 million. He gets $2.5 million now, $1.5 million in 2012 and $2 million in 2014. Note the $17 million salary with the bonus of $2 million in 2014. That’s basically a $19 million salary for the 2013 season. So adding years would have likely cost at least $20 million per. That’s very frightening territory for the Reds.  I’ve had an insider tell me that they can’t afford a $20 million player."

Yes, you read that correctly.  The Reds will essentially be paying Joey Votto $19M in 2013, if you figure his compensation the way Fay does.  This explains why the Reds were fine with the idea of only buying out his arbitration seasons, and not his first few years of free agency.  The Reds simply could not afford to do so.  Unless the Reds see an unexpected influx of revenue, it looks like Joey Votto's days in Cincinnati are numbered. 

Reds Buy Out Votto's Arbitration Years

According to Mark Sheldon of mlb.com, the Reds and Joey Votto have come to terms on a three year $38M contract extension.  As with all contracts, the deal will be finalized on Monday or Tuesday pending the outcome of his physical.

The contract length surprises me a bit.  Typically in deals like these, the team tries to buyout not only the remaining arbitration seasons, but also the player's first two or three years of free agency.  Votto's contract only covers his arbitration seasons, which means he'll still become a free agent after the 2013 season.  So what's the upside for the Reds in this situation?  Well, by signing him for three years now, they can control his annual salary.  If they were to allow him to go year-to-year via the arbitration process, he would stand to make significantly more money, especially if his performance remains at his 2009 and 2010 levels.  Drew Silva of Hardball Talk compared Votto's situation Ryan Howard's in 2008.

"Ryan Howard was awarded a record $10 million in his first arbitration case back in 2008 and Votto might have topped that if the process went to a hearing this offseason."

I think there's a lot of truth to that statement.   Let's just pretend for a moment that Votto matched Howard's $10M contract in his first year of arbitration.  This would have a huge effect on his contracts for the 2012 and 2013 season.  I don't think it's irrational to think that Votto could have made as much as $45-50M over the next three seasons if he'd chosen that route.  While $7-12M over three years might not sound like a lot of money in baseball terms, for a small market team like the Reds, it's huge.  If this is the case, the Reds received a pretty solid bargain with this contract. 

So what's the upside for Votto?  Well, first of all, he gets a pretty sweet contract that will provide him with the security he desires.  Secondly, he still gets to become a free agent at age-30, which means that he'll be in a great position to negotiate a massive contract.  Assuming the recent contract trends for top end free agents holds, Votto should have no problem pulling down a contract for at least six or seven years with an average annual salary of $20-25M.   Obviously, a contract of that magnitude would price the Reds out of being serious contenders to retain his services. 

What would have happened if Votto's contract was for six years instead of three?  Well, for starters, he would probably earn substantially less during his three "free agent years" than he would have under his current scenario.  Typically, deals that buy out free agent seasons, tend to be team friendly, not player friendly.  Second of all, he wouldn't have become a free agent until after he'd turned 33 years old.  Assuming he followed a typical aging pattern, Votto would likely have already started his decline by the time he reached free agency.  This would limit his ability to maximize his value both in terms of contract length and average annual salary.  He'd still probably get a nice contract, but it would likely only be for three or four years at a somewhat reduced salary.  The Reds would likely allow him to leave as a free agent, with some other team signing him to a contract that covered his declining years.   

Votto's new deal looks like a real winner from his end, and decent (albeit imperfect) one from the Reds point of view.  Votto is the reigning NL MVP.  In 2010, he posted a .439 wOBA, 37 home runs, 1.6 UZR, and 7.4 wins above the replacement level in 2010.

Hot Stove Season Ends, Arbitration Season Begins

Mmmmmm...Donut

It's that time of year again.  The Hot Stove Season is quickly cooling down, and the arbitration season is starting heat up.  According to Ronald Blum of the Associated Press, 119 major league players filed for salary arbitration yesterday.  This list includes AL MVP Josh Hamilton, NL MVP Joey Votto, power hitting first baseman Prince Fielder, closer Jonathan Papelbon, and surprise power hitter Jose Bautista. 

The salary arbitration process is pretty archaic.  When players and teams exchange salary figures in mid-January, they are given the option to negotiate a contract.  In most cases, the negotiations are fairly simple, and contracts are finalized by the mid-February deadline.  In situations where both parties can not come to an agreement by the deadline, they're required to appear before an arbitration panel and plead their cases.  These situations are often ugly, partisan, and uncomfortable. 

The way the system is set up, nearly every player that files for arbitration ends up receiving a substantial raise. About half of the players are expected to agree to terms with their teams within the next week.  Only a handful of the cases will actually get heard by the arbitration panel. 

NL MVP Award

Tomorrow, the National League MVP Award will be announced.  When it is, one of two first basemen will likely be selected as the 2010 recipient:  Albert Pujols or Joey Votto.   Both players had incredibly similar years.   Both are more than deserving.  If I had an official vote, I know that I'd have a very difficult time deciding over who would be my choice with the award.  The voters of season-end awards hold a great responsibility, as these awards are used as supporting "proof" in Hall of Fame cases.  Perception of a particular player's performance in a given season (or seasons) can have a long lasting effect on our view of his career.  Sometimes it's positive, but others it's negative.   

Pujols is a modern day Joe DiMaggio.  He’s a three time MVP (and three second place finishes) who hits for average and power, gets on base, runs the bases well, and plays excellent defense at this position.  A model of consistency, Pujols has hit at least .300/.400/.500 with 30 home runs and 100 RBI ten consecutive seasons.  Pujols’s plate discipline is unheard of in our current era.  Where high strikeout totals , are the norm, Pujols controls the strike zone better than any hitter of the past 25 years not named Barry Bonds.  In every season since 2002, he’s accumulated more walks than strike outs.   While I don’t want to call his production routine, for him it almost was routine.  The man is a machine.   To put it simply, if Pujols were to retire today, he’d be a lock for the Hall of Fame.

In 2010, Pujols put together yet another solid season.  He put up a .420 wOBA (his tenth consecutive season above .400) and produced a 55.4 wRAA (second in the NL) while exhibiting his patented plate discipline and excellent defense at first base.   His production was so valuable, he put up 7.2 WAR, which was good for second in the NL and third in baseball.  Despite his tremendous 2010 achievements, he falls just short of MVP in my eyes.

My vote for the NL MVP Award (if I had one) would go to Cincinnati first baseman Joey Votto.  Votto had an outstanding season, outpacing Pujols in several key categories:  wOBA (.439 to .420), wRAA (61.3 to 55.4), OBP (.424 to .414), SLG (.600 to .596), wRC+ 177 to 169, UZR (1.6 to 1.5), and WAR (7.3 to 7.2).  Yes, I know.  Votto barely beat out Pujols in these categories, but the margin of victory isn't important.  He was slightly better, and that's what matters.

Even if we came to a consensus and called it a virtual statistical tie, I would still give my vote to Votto.  Why?  While Votto had a talented cast supporting him, it wasn't anywhere near the cast Pujols had.  Pujols was armed with a companion MVP quality candidate (Holliday), two top tier starting pitchers (Carpenter and Wainwright), and a Rookie of the Year candidate (Garcia).  The Cardinals should've coasted into the postseason--easily.  Instead, they wilted down the stretch.  While it's unfair to punish Pujols who carried the Cardinals in September, Votto's performance down the stretch is what set him apart.  He was just a little bit more valuable.  He had to be.  The Reds starting pitching rotation wasn't exactly playoff caliber.   Made up #3 and #4 quality starters of the Scott Baker/Ted Lilly variety, the Reds pitching staff finished eighth in ERA, eleventh in strikeouts, and twelfth in home runs allowed.  (Those pitchers are nice to have, but not when they are your front of the rotation starters.)  That's not exactly a recipe for success.  To win, the Reds needed to outscore their opponents, meaning Votto had to be on top of his game at the most crucial point in the season.  On top of his game, he was.  He hit .308/.429/.571 with five home runs, nine doubles, and 16 RBI.  By season's end, Votto led his team to the postseason for the first time since 1995, finishing five games ahead of Pujols's Cardinals.  

So there you have it.  I've chosen Joey Votto for the 2010 NL MVP by the narrowest of margins.  Like I said before, both players are more than deserving of the honor.  If the BBWAA announced tomorrow that Pujols had won his fourth MVP, I would neither be surprised nor disappointed.  That said, it'd be shame.  Votto put together what's likely to be his career season, and he deserves to be rewarded for it.  

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.