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March 5, 2009

Prospectus Today

The Manny Has Landed

by Joe Sheehan

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An e-mail exchange with a non-baseball friend:

Subject: MLB
So Manny is going to the Dodgers. Hmmmm... yeah, means nothing to me.

Subject: Re: MLB
It means I get to stop talking about it!

Inelegant, perhaps, but that was my reaction to the news that the Dodgers had re-signed Manny Ramirez to what amounts to a one-year deal with a player option for 2010, a contract that includes up to $25 million in deferred money. According to AP, Ramirez will receive $10 million up front this season, and $10 million next season if he doesn't void the deal, with the remainder of the money payable starting in 2010 or 2011.

This is an excellent signing for the Dodgers. With the backup options all off of the market, they absolutely needed Ramirez in order to sustain a spot as the co-favorites in the NL West. The focus on signing Ramirez had consumed much of their winter, and while they re-signed Rafael Furcal, a lack of attention paid to the pitching staff left them needing to make up wins elsewhere. Put simply, the gap between Ramirez and Juan Pierre is 2.6 projected WARP, or about 2 wins, and in a race like the NL West will be, those 2 wins are as highly-leveraged as any you'll find.

For a more visceral take on the effect, check out the projected standings. The Dodgers were projected at 85 wins and a second-place finish prior to Ramirez's return. Now, they project to 89 and the division title, with the D'backs dropping to 88 just a hair behind. That's why you pay $25 million for the left fielder, because he could put you into October.

The Dodgers were able to leverage the soft market for corner outfielders, impacted by the economy, to bring Ramirez back on a contract that doesn't expose them to significant risk. Every trend this offseason, in fact, worked in their favor. Teams hoarded cash over concern about 2009 local revenues; many teams have begun emphasizing defensive performance in their player evaluation, hurting Ramirez's relative value; there were a number of similar players in type available, many of whom stayed available deep into the offseason; and there may be a trend toward being overly concerned with personalities, a retro paternalism creeping into the game that caused teams to shy away from the controversial, high-maintenance slugger.

In any case, this is a good signing for the Dodgers both on and off the field. They get a significant on-field upgrade over Pierre, whose slappy speed game is actually almost an asset on the bench. They can stop diddling with Blake DeWitt at shortstop, send him back to Triple-A, and let him push Casey Blake out of his sinecure by July. Their lineup falls into place nicely, with OBP machines Furcal and Russell Martin in front of a core of Ramirez, Andre Ethier, and Matt Kemp. Follow that with James Loney, Blake, and an all-but-free Orlando Hudson, and you have what should be a top-five offense in the NL, maybe even better. Only Blake and Ramirez are defensive liabilities.

The Dodgers need to score a lot of runs, because they're likely to be below-average at preventing them. Chad Billingsley is a legitimate ace in the top slot, but after that you have Hiroki Kuroda in the second spot, and he's not quite that able. Clayton Kershaw will eventually be a star, but right now he's just 21 years old, has 22 appearances above Double-A, and he walks a lot of guys. And he's the third starter; bringing in Randy Wolf and Shawn Estes pushes the team away from, rather than toward, a championship. They need a surprise to bolster the rotation, whether it's an emergent James McDonald, or a recovered Jason Schmidt. The bullpen, similarly, is strong at the back with Jonathan Broxton and Hong-Chih Kuo, plus last year's surprise in Cory Wade. The Dodgers have half of a championship-caliber staff, which means that they needed Ramirez, who helps them win some games 7-5-a skill they'll need this season.

Off the field, the Dodgers get Ramirez for a reasonable price, and, more importantly, with just a two-year commitment. They're not exposed to his declining defense past 2010, a point at which Ramirez will almost certainly have to look for a job DH'ing in the AL. He'll hit until they peel the uniform off of his body, but he's unlikely to be a viable outfielder as he approaches the age of 40. Even now, his defense eats away at his overall value.

As for Ramirez... this whole thing looks like a mistake. One year ago, he had a contract that included $20 million options for 2009 and 2010. Now, after acting in a manner that has damaged his reputation and allowed the media to portray him as a problem child, he's guaranteed just $5 million more, much of that deferred. Whatever imbalance existed in reporting the story of Ramirez's last days in Boston, there was truth to the idea that Ramirez was acting badly. The payoff for that was to be a contract that made the options on his Red Sox deal look like tip money. That deal never materialized, so all of the controversy last July was essentially for nothing. It was cost for Ramirez, without benefit.

Scott Boras doesn't make many mistakes, but this was one. He envisioned a market for Ramirez's services that failed to materialize, and while he'll pocket some money for getting Ramirez out of his old contract and into a new one, there's no way to spin this other than as a failure. Boras, and he's not alone in this, did not see the stagnant market coming for free agents this season, and because of that, he found himself with a lack of bidders for Ramirez. It seems clear that Ramirez would have been no worse off had he played out 2008 with the Sox. Either he would have been paid $20 million for his 2009 services, or he would have hit the market without the various issues of that summer hanging over his head. Instead, he'll be no better off financially, and he'll carry the stigma of his departure with him for the rest of his career.

Boras' miscalculation is the Dodgers' gain, and perhaps enough of one to put them back into October.

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

Related Content:  Manny Ramirez

29 comments have been left for this article. (Click to hide comments)

BP Comment Quick Links

Richard Bergstrom

Is Boras really to blame, or did Manny being Manny kind of force this situation? Boras wasn't the one who choked that Red Sox employee...

Mar 05, 2009 08:47 AM
rating: 1
 
ncassino

Joe, you mention that the $25 million to sign Manny will be worth it if the Dodgers make the playoffs. Has there been a study on exactly how much a playoff appearance is worth to a team? Is there a difference depending on which team we're talking about (ie. making the playoffs in NY might be worth more than making the playoffs in Detroit)? Also, as a team advances, do we know how much each successive round is "worth"? Thank you.

Mar 05, 2009 08:57 AM
rating: 0
 
Kate Kirby
(93)

Yeah, pick up Baseball Between The Numbers, written by the Baseball Prospectus folks. There's exactly this study, and a number of other equally interesting ones! I was really pleased by the content, and timelessness, of the book.

Mar 05, 2009 09:12 AM
rating: 0
 
Aaron/YYZ

I believe there is something along these lines (including the marginal value of additional wins) in Baseball Between The Numbers...

Mar 05, 2009 09:56 AM
rating: 0
 
Richie

I believe the study says playoff appearances are actually worth more to the Detroits of the MLB world, does it not?

Mar 05, 2009 09:57 AM
rating: 0
 
M.A.D.

No need for the book, there's an article in the archives somewhere that covers this.

Mar 06, 2009 08:41 AM
rating: 0
 
ubrnoodle

I don't see how this is a failure for Scott Boras. Even after this he'll be regarded as the best agent, which he is. He is getting commission on the $45M, which I'm sure isn't chump change.

I believe if Manny played out his options in Boston, Boras wouldn't have gotten any commission for that, because it was a deal signed by another agent.

Mar 05, 2009 09:23 AM
rating: 2
 
Richie

Agreed here. And he once again got an owner to negotiate against himself. Whatever Manny's 2nd-best offer was (SF?), it was well below what Boras got from McCourt and the Dodgers.

Mar 05, 2009 10:00 AM
rating: 2
 
willsharp

I don't think McCourt absolutely negotiated against himself. The offer of around $45 million/2 years was pretty constant, plus or minus. The Dodgers' offer probably was well above any other possible offer, but I'd argue it's worth it to keep Manny feeling good, productive, and "not disrespected."

Mar 05, 2009 13:17 PM
rating: 1
 
Ragnhild

"he's guaranteed just $5 million more" yet "he'll be no better off financially"? Isn't $5M better off?

So what exactly is the "cost" to Ramirez? He prefers to play in LA, he pockets "just" an extra $5M, and he got to skip a bunch of spring workouts.

If you think Manny is going to fret about a damaged reputation you simply haven't been paying attention.

Mar 05, 2009 09:26 AM
rating: 2
 
dg

Just read the 4 words that follow your first quote. I'll put them here for you:


"he's guaranteed just $5 million more, much of that deferred"

Mar 05, 2009 09:41 AM
rating: 3
 
Ragnhild

I understand the time value of money...but we're only talking about portions being deferred for a max three years--hardly "without benefit"

Mar 05, 2009 10:22 AM
rating: 1
 
flirgendorf

Joe, I think it is a bit unfair to say Manny made a bad decision; I think it would be more accurate to say he was unlucky. The economy had a few issues in between the demands and the new contract that he signed. I think it would be reasonable to suggest that if the economy hadn't turned sour that Manny would have gotten a bigger contract.

Mar 05, 2009 09:42 AM
rating: 0
 
Richie

The economic hurricane was already clearly coming into view back last summer. Beguiled by MLB's increasing revenues, Boras just missed its importance.

Mar 05, 2009 10:03 AM
rating: 0
 
Richie

There isn't "truth to the idea that Ramirez was acting badly." That's weaselly. He was truly acting badly. Likewise weaselly that Manny's behavior "allowed the media to portray him as a problem child." He is a problem child.

Like you, I'm of the opinion that problem children aren't really all that problematical to put up with. Many of us tolerate such in our professional lives without it running us off the rails. But there is some cost to having a problem child around, and it's absolutely a part of renting the Manny package.

Mar 05, 2009 10:11 AM
rating: 1
 
djgx39

The money may be close to equal and Manny's reputation is forever damaged, but there's something else that Manny missed out on that wasn't mentioned. Yes, he appeared to make the difference in getting the Dodgers into the playoffs. But the Red Sox made the playoffs and got to within a couple of outs/one big hit from making it to the World Series without Manny.

If Manny is such a difference maker, there's a good chance that he'd have another championship ring to show for honoring his contract in Boston and then going out on the market. And, if he did, he really would have had a case for more money and years than he got.

And if he cares at all about playing and winning baseball games, he probably would have been happier too.

Mar 05, 2009 10:22 AM
rating: 1
 
Wharton93

Manny and Boras gambled, and lost. It happens.

If Manny didn't hit .396 blah blah blah for the Dodgers, we would have even gotten Ibanez money...

Mar 05, 2009 10:34 AM
rating: -2
 
Jack G

Between Varitek and Manny Boras has come off as the real loser of the offseason. Are there any other examples?

Mar 05, 2009 11:27 AM
rating: 0
 
ScottyB

Orlando Hudson and his agent? (esp. as compared with Edgar Renteria)

Mar 05, 2009 11:45 AM
rating: 1
 
ScottyB

actually meant to say cabrera, but Hudson's a big loser, too.

Mar 05, 2009 11:46 AM
rating: 0
 
juiced

I think this "Manny/Boras gambled and loss meme" is ridiculous. They got 45 million even though no other teams stepped up as serious suitors. Frankly if anyone is getting soaked here its LA, although their marginal win improvement and postseason revenue expectation makes this a truly win win situation. Manny gained 5 mil by forcing Boston's hand. Deferred or not, to say he lost is ridiculous.

Mar 05, 2009 11:53 AM
rating: 1
 
chriscaroy

agreed. manny is making $25M for his 2009 efforts. bobby abreu is making $5M. burrell is making $8M. i love manny, but he's not worth 5x as much money as abreu, or even 3x as much as burrell for the upcoming year.

given the state of the economy, isn't it a testament to boras that he got manny the roughly the same deal ($45/2) that the dodgers offered back before the markets tumbled and many above average players took much, much smaller contracts?

Mar 05, 2009 12:12 PM
rating: 6
 
Richie

Double-agreed. Boras got Manny more money than he would've from staying in Boston, and way, way more than worse but still comparable corner OFs on the market. Looks like another Boras triumph to me.

Mar 05, 2009 12:20 PM
rating: 2
 
Travis Leleu

How does Randy Wolf (as your 4th or 5th best starter) push LA away from the title? He projects to over 2 wins (assuming some bad health). I like where baseball is going with their "injury platoons" (aka "role platooning") -- if Wolf gives you 20 starts at his projected rates, you're doing OK if he's at the bottom of the rotation.

Of course, I understand that with LA he might be their 2-3 starter, which isn't good news for LA fans.

Mar 05, 2009 12:01 PM
rating: 0
 
Richie

Given LA's ability to take on salary, there likely wasn't 2 1/2 games between signing Manny and not signing Manny. Pretty good but overpaid corner OFs always become available by the All Star break, thanks to their teams not contending.

The Dodgers probably should've waited rather than commit 45 mill for assurance. If alotta things go right, then you don't need Manny. If alot go wrong, then you don't want and sure don't want to pay Manny. If you're in between, then you can pickup one of a couple of guys who will be available by mid-July.

Mar 05, 2009 12:15 PM
rating: 0
 
jcooney

Wait - he made $5 million, deferred over 3 years, but he owes it to Boras! In the securities business, this is called 'churning' - unnecessarily trading a client's account to generate commissions. And it's illegal.

Mar 05, 2009 12:20 PM
rating: 3
 
ncimon

You're the only one who actually nailed this. Manny hasn't made an additional $5 million over what he was going to get from the Sox. He has to pay his agent's commission and while I'm not privy to what that is it's probably not chump change. Factor in that the money is stretched out over three years and it's probably a wash. Churn indeed. Of course Manny has the intangibles of playing somewhere where he actually wants to be... right? ... right? ...

Mar 06, 2009 04:33 AM
rating: 1
 
fguttman

"It seems clear that Ramirez would have been no worse off had he played out 2008 with the Sox. Either he would have been paid $20 million for his 2009 services, or he would have hit the market without the various issues of that summer hanging over his head."

I disagree. His 2010 salary just went from a TEAM option to a PLAYER option. That's $20 million extra in guaranteed money. Not insignificant for a player about to turn 37.

The only reason the Dodgers were able to pony up this much cash and basically outbid themselves was because of Manny's amazing (and let's admit, also lucky) 2 months at the end of last season.

This is the same Manny who hit .296/.388/.493 in 2007. The Dodgers are paying at least double what Manny is worth because of two months of performance. If Manny gets injured and can't play in 2010, that's 45 million for one year or less of Manny.

Manny is making more than double Adam Dunn and somehow Boras screwed up?

Mar 05, 2009 13:08 PM
rating: 5
 
eighteen

Boras may have miscalculated about the number of bidders for Manny; but he was dead-bang right that he had the sucker he needed in Frank McCourt.

Mar 06, 2009 07:43 AM
rating: 1
 
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