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March 28, 2013

Skewed Left

The Future Cost of Present Improvement

by Zachary Levine

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Are you better off than you were four months ago?

According to the arbiters of all that is correct in Las Vegas, er, offshore, most of you are not. Bovada.lv released its odds for the 2013 World Series in the immediate aftermath of the 2012 World Series, and only eight teams have shorter prices now than they did then. Part of that was a noticeable drop in the house edge, as the bookmakers had to be conservative at the start, lest bettors guess right on who was going to make the big moves. (More on that phenomenon at the end of this piece from November.) Some of it is accurate, though, as accounting for the drop in house edge makes only one other team a gainer (the Cubs, whose odds stayed flat at 75/1).

For some of the improved eight, this growth came at a price. Even if you’re better off than you were in the immediate aftermath of the World Series when looking at 2013 alone, you might not be for the middle of this decade.

In light of that thought, here’s a look at the eight teams whose odds have shortened since the Nov. 2 release, and what the future cost of their short-term gains will be.

(Percentage chance increase is figured by 1/(1+odds) at the beginning minus 1/(1+odds) at the end after both figures have been adjusted for house edge.)

Toronto Blue Jays
From 35/1 to 8/1 second choice, +6.5%
Why the jump: Added SS Jose Reyes, INF Emilio Bonifacio, SP Josh Johnson and SP Mark Buehrle in a trade from the Marlins. Added RHP R.A. Dickey and C Josh Thole in a trade from the Mets.
Cost in future talent: High. After getting rid of a caseload to the Marlins, they traded their top two remaining prospects in Travis d’Arnaud and Noah Syndergaard, but this was what they had prepared for in hoarding talent (pitching talent, especially). They could have waited to see what that prospect group would look like coming up together, but they recognized a window here.
Cost in future payroll: While the Blue Jays significantly increased their payroll with these moves, there is little crippling about any of this. It’s all about now. With Buehrle only under contract for two more years and historically durable, the only acquisition that has a real chance of looking disastrous at any point is Reyes, who has four more guaranteed years and $86 million left starting in 2014. Not only are there no shortstops on Jason Parks’ Blue Jays top 10 prospects list, there were no infielders at all. Reyes shouldn’t be a huge issue.
Overall cost, 2014 and beyond: High, but understandable given the franchise-altering return.

Washington Nationals
From 12/1 to 7/1 favorites, +4.1%
Why the jump: Added Denard Span in a trade with the Twins, signed Rafael Soriano to a two-year deal.
Cost in future talent: Alex Meyer, whom they traded for Span, may have looked good in the Nationals rotation in a couple years. They even got a prospect back for Michael Morse, as they had no pressing major-league needs. They did surrender a 2013 first rounder for signing Soriano, but they had the 31st pick.
Cost in future payroll: If Soriano has a bad year, which closers can always do, that $14 million next year will be much tougher to tolerate. (There’s also a vesting option for 2015 at $14 million if he finishes 120 games in two years.) And we should add Adam LaRoche’s $12 million for next year, because the original odds didn’t figure him in. Span is a bargain, though, at $6.5 million next year with a $9 million club option in 2015 that should be exercised if the deal isn’t torn up and extended before that.
Overall cost, 2014 and beyond: Low-to-moderate.

Los Angeles Dodgers
From 18/1 to 9/1, +3.9%
Why the jump: Signed SP Zack Greinke to a six-year deal
Cost in future talent: Nothing, not even a draft pick, delightfully, and this may be a producer of future talent if they can use Greinke to trade another starter for prospects.
Cost in future payroll: The number itself is a high number. Greinke is owed $118 million plus incentives for the five years after a lower-cost ($17M) 2013. But there is little opportunity cost when they’ve shown the willingness and the ability to do things like give Brandon League $22.5 million on top of an already steep payroll.
Overall cost, 2014 and beyond: Low

Los Angeles Angels
From 12/1 to 17/2, +2.6%
Why the jump: Signed Josh Hamilton to a five-year deal. (Unless Vegas knows something about Joe Blanton or Tommy Hanson that we can’t see.)
Cost in future talent: Nothing but a draft pick.
Cost in future payroll: Of the contracts signed this offseason, this one is among the most likely to look bad at the end of it. Hamilton is owed $100 million in the four years after this one. That means in 2016, the Angels will be paying Hamilton, a declining Albert Pujols, Jered Weaver and C.J. Wilson a combined $95 million. Where they’ll be as a franchise in three years is a bit unclear, but this sort of obligation is a bad thing to combine with a barren farm system. Unless the cash spigot is always on, it may lead to some holes rather than an ability to go sign free agents to compensate when there are no prospects coming up.
Overall cost, 2014 and beyond: Moderate

Cincinnati Reds
From 14/1 to 12/1, +1.1%
Why the jump: Added OF Shin-Soo Choo in a trade from the Indians
Cost in future talent: Don’t count Drew Stubbs because we’re talking about beyond 2013, so it’s just Didi Gregorius, who would not have been a huge upgrade over Zack Cozart.
Cost in future payroll: Nothing beyond this year.
Overall cost, 2014 and beyond: Low

Tampa Bay Rays
From 20/1 to 16/1, +1.1%
Why the jump: The Yankees got worse.

Kansas City Royals
From 75/1 to 50/1, +0.6%
Why the jump: Acquired SP Ervin Santana in a trade from the Angels. Acquired SP James Shields and SP/RP Wade Davis in a trade from the Rays.
Cost in future talent: Potentially the largest on this list, since the Royals gave up a top-five prospect in all of baseball in Wil Myers, their top pitching prospect, Jake Odorizzi, plus Mike Montgomery and Patrick Leonard. Under the right service-time-preserving scenario to start 2013, Myers could have been under cost control through the end of 2019.
Cost in future payroll: Nothing for Santana, and $14.5 million next year for the final, final guaranteed season of Shields’ thrice-extended contract, which should be fine. Davis has one more year at $4.8 million and then three options of $7 million, $8 million and $10 million, which would be better values if he starts.
Overall cost, 2014 and beyond: High

Cleveland Indians
From 75/1 to 66/1, +0.6%
Why the jump: Signed OF Nick Swisher to a four-year deal. Signed OF Michael Bourn to a four-year deal. Signed SP Brett Myers to a one-year deal. Added SP Trevor Bauer in a trade from the Diamondbacks.
Cost in future talent: Nothing but draft picks, as OF Shin-Soo Choo was going to hit free agency after 2013.
Cost in future payroll: It’s not terrible, but it’s higher than one might think beyond 2013. The Indians backloaded the deals of both 30-somethings Bourn and Swisher. The two of them together will be making the following in the four years:
2013 – $18 million
2014 - $28.5 million
2015 - $28.5 million
2016 - $29 million
2017 - $26 million in vesting options
With a tight-payroll team like the Indians, this could come into play.
Overall cost, 2014 and beyond: Moderate

And in case you’re curious, here are the odds for all the teams both on November 2 and this week.

Team

Nov. 2 odds

Current odds

Nationals

12/1

7/1

Blue Jays

35/1

8/1

Tigers

6/1

8/1

Angels

12/1

17/2

Dodgers

18/1

9/1

Reds

14/1

12/1

Giants

10/1

12/1

Rays

20/1

16/1

Phillies

14/1

16/1

Braves

14/1

16/1

Rangers

12/1

16/1

Cardinals

14/1

20/1

Yankees

7/1

20/1

Athletics

25/1

30/1

Red Sox

22/1

30/1

Orioles

25/1

35/1

White Sox

28/1

40/1

Royals

75/1

50/1

Brewers

25/1

50/1

Diamondbacks

25/1

60/1

Indians

75/1

66/1

Pirates

30/1

66/1

Cubs

75/1

75/1

Padres

60/1

75/1

Twins

66/1

100/1

Mariners

40/1

100/1

Mets

40/1

100/1

Rockies

75/1

150/1

Marlins

40/1

200/1

Astros

150/1

250/1

All odds from Bovada.lv and all contract data from Cot’s Baseball Contracts at BP.

Zachary Levine is an author of Baseball Prospectus. 
Click here to see Zachary's other articles. You can contact Zachary by clicking here

Related Content:  Offseason,  Odds,  World Series Odds

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