Wayne Krivsky hit the the ground running in Cincinnati by taking care of a piece of business the previous regime left unresolved. Yesterday, he signed Adam Dunn to a two-year contract worth $18 million, with an option for 2008 that would pay Dunn $13 million if picked up.

Given that the Reds blew their chance to make a big investment in Dunn after his shaky 2003 season–when he hit .215/.354/.465–this is a pretty decent save. Dunn was a good player even at that point, but his high strikeout rate and terrible batting average kept his perceived value down. It would have been a good gamble to try and lock him up through his arbitration seasons while he was coming off a .215 BA. He still projected well, but that poor ’03 performance might have provided some cost savings over the next few years. After making $445,000 in ’04, his salary jumped to $4.6 million in ’05 and will be $7.5 million in ’06 and $10.5 million in ’07. Some foresight could have saved the Reds, conservatively, as much as six million dollars over those four years.

Still, the new deal is a pretty good one for the team. They’ll get Dunn’s theoretical peak seasons, ages 26 through 28, for a total of $31 million, with no obligation to keep him as he moves past his peak to the wrong side of the compensation/productivity matrix. The deal illustrates the power of the rules that govern player movement; consider the contract signed by the older, less productive Paul Konerko this winter, worth $12 million a year for five years. Konerko was a free agent able to solicit work anywhere in the game, and as such, commanded a higher salary and a longer commitment than the more valuable Dunn. The ability to prevent competitive bidding for a player’s services for the first six years of his career is the single most valuable weapon in a team’s arsenal.

Running at this from another angle, take a look at Dunn’s PECOTA card. Nate Silver has developed a metric he calls Marginal Value Over Replacement Player (MORP). The number is the value a player will return, expressed as a dollar figure. Dunn is projected to return $38 million over the next three seasons, while making $31 million. The investment in him should be worth $7 million to the Reds in terms of his impact on their on-field performance. Konerko, on the other hand, is projected to return just $17.6 million over the life of his deal, making the investment a loss to the tune of more than $40 million. (White Sox fans will argue that signing Konerko was based on considerations other than performance. Those may be valid, but they’re not $40 million worth of valid.)

The Reds have done a good job of locking up their best player for below-market rates through his peak. Of course, one good move isn’t going to be enough, and signing Dunn doesn’t do anything about their real problem: run prevention. The Reds led the NL in runs scored and Equivalent Average last season, making them legitimately the best offense in the league. They got there thanks to having virtually no lineup holes–no player getting at least 200 PAs had worse than a .257 EqA–and surprisingly strong production up the middle. While Dunn is a legitimate star, a pass through the Reds’ roster reveals more players who seem likely to decline in ’06–Ken Griffey Jr., Felipe Lopez, the wildly productive catchers (Jason LaRue and Javier Valentin)–than improve. This team won’t lead the league in runs scored again, although it should still be comfortably above 800 tallies.

The problem, though, is that they seem likely to again approach 900 runs allowed (889 last year). They have a flyball pitching staff in a park that turns fly balls into home runs at an alarming rate. That same staff was 15th in the NL in strikeouts last season in front of a defense that was arguably the worst in the game (28th in Defensive Efficiency). Over the winter, they did virtually nothing to change any of this. The lineup that ended last year returns, with Dunn moving to first base, creating space for both Austin Kearns and Wily Mo Pena on the outfield corners. That’s a small upgrade, but with Griffey still in the center, it’s a suboptimal alignment. The infield defense is porous, and might get worse if Tony Womack or Ryan Freel pick up any significant time at second base.

The staff isn’t going to strike out many more batters, either. The additions of Dave Williams and Rick White don’t change the profile, and not one of the holdover starters is likely to see a spike in his number of bats missed. The bullpen could improve if Ryan Wagner‘s shoulder is healthy and they get lucky with a Grant Balfour, but these are small changes. It’s going to be the same basic staff it was last year, and that means at least 800 runs allowed, and probably a lot more.

Krivsky did well to lock up Dunn for three years, but the deal doesn’t materially change the Reds’ chances to contend in that time. What they need is an overhaul of the pitching and defense, and there are very few tools available for that task. It’s unlikely that Dunn will find himself playing into October until he leaves Cincinnati, most likely via trade before this deal expires.