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Alex Rodriguez‘s signing isn’t all that interesting, even though it
has generated all the headlines. He’s an exceptional package: a power
hitter who hasn’t reached his power peak; a seven-skill talent with great
plate discipline and an improving defensive profile; a generally classy guy
with no interest in recording rap albums; and he plays one of the two most
difficult positions to fill in baseball. Add to that baseball’s shrewdest
agent and a couple of frustrated, rich owners who want to make a big
splash, and you get an enormous contract.

No, Manny Ramirez‘s contract is the most interesting of the large
ones signed this offseason. It marked the first major free-agent signing in
the history of the Boston Red Sox (sorry, Matt Young and Jack
Clark
don’t count). It meant that instead of placating the fans and
signing Mike Mussina to be the #2 starter everyone in Boston is
convinced the team needs, the Red Sox were trying to fix what was broken:
the offense.

Even without Pedro Martinez, the remainder of the Red Sox pitchers
would have ranked third in the American League in ERA last season. That’s
light-years better than the team’s hitters, who ranked 11th in runs scored,
on-base percentage and slugging average. The Red Sox had gotten far too
little production from their outfield in the past 324 games; now, a Trot
Nixon
/Carl Everett/Ramirez outfield will rank as one of the AL’s
two or three most productive. With a healthy Jose Offerman leading
off and no Wilton Veras sightings, the Sox will pick up 50 runs or
so from their moves and are at least the equal of the Yankees at the moment.

However, not enough observers have bothered to quit wagging their tongues
long enough to look at the ridiculous contracts handed to some of
baseball’s less-talented free agents this offseason. David Segui got $28
million over four years from Baltimore, despite the presence of aging
prospect Chris Richard, Rule 5 draft pick Jay Gibbons and
forgotten man-beast Calvin Pickering, any of whom could produce 85%
of what Segui will produce at 5% of the salary.

Derek Bell was the worst regular outfielder in the National League
for the last two seasons. The allegedly cash-strapped Pirates gave him $9
million for two years despite the presence of Adrian Brown, Emil
Brown
, John Vander Wal and forgotten hacker/prospect Chad
Hermansen
. The Mets coughed up a four-year, $40-million contract for
Kevin Appier, who has not pitched well since shoulder surgery in
early 1998 and who isn’t likely to be demonstrably better than teammate
Steve Trachsel, who signed for half the length and one-fourth the
cost of Appier’s deal.

These deals are created entirely by the unwillingness of owners to execute
the cost-saving maneuvers one sees in successful businesses of all stripes.
The fact is that outside of the superstars–supply of whom sits below
demand despite the expanded reach of scouting in the past 15 years–the
supply of ballplayers far exceeds the demand for them. First basemen who
can post OPSs above 800 are a dime a dozen. Heck, you can find one who can
post a 900 OPS in the Frontier League (Morgan Burkhart), Japan
(Roberto Petagine), Mexico (Erubiel Durazo), Triple-A
(Julio Zuleta, Ivan Cruz) or on the Orioles’ bench (Chris
Richard). Need a catcher who can slug .500 with a few walks and adequate
defense? Try Creighton Gubanich or Tom Wilson before you
waste money on Joe Oliver, Chris Widger or Carlos
Hernandez
. Need a left-handed reliever? The Red Sox just cut Tim
Young
, who has a career minor-league ERA of 2.34, while the Phillies
wasted $9 million on Rheal Cormier, whose shoulder probably has one
full strand of muscle left without a tear in it.

The problem is that owners, GMs and many fans don’t see it this way. They
don’t see that Mark Grace and Roberto Petagine are, at worst, equals
at the plate and on the field. They ascribe a significant value–and thus,
money–to players who have performed in the major leagues.

There are two fundamental problems with this approach. First of all, a
player who has an above-average year in the major leagues may not have any
realistic chance of repeating the performance. He may have a major injury
(Dustin Hermanson, in all likelihood), he may be too old (Mark
Grace
) or his good performance may have been a fluke (Garrett
Stephenson
). There are reasonable ways of figuring this into the valuation
of a player, but if just one owner decides to take the optimistic route and
ignore all the warning signs, the player will get too much money.

Second, most baseball officials refuse to accept what Bill James
demonstrated 25 years ago, that past minor-league performances, properly
translated, are as predictive of future major-league performance as are
past major-league performances. This is a primary reason why Baseball
Prospectus
exists, and accepting the premise is a major driver of why
the Oakland A’s are the successful organization that they are.

The A’s are the only team that understands the concept of disposable
talent. They signed Matt Stairs and Geronimo Berroa and
acquired Randy Velarde and Kevin Appier, then threw them away
when they became expensive. They signed Tom Wilson and traded for Jeremy
Giambi
and Chad Bradford when those players became available
because they could fill holes cheaply and as effectively as major-league
options. It’s when teams refuse to believe that Billy McMillon can
outproduce Derek Bell they’ll pour money down a toilet.

Agents are complicit in this process, because it has put millions of
dollars in their pockets. If all 30 GMs suddenly decided to opt for
minor-league talent instead of major-league mediocrity, salaries would
decline because the supply of such talent exceeds demand. Alex Rodriguez
and other players in the ether wouldn’t be affected, which is why his
contract was so uninteresting to me. Agents need to see salaries continue
to escalate for mediocre talents like Segui and Bell, so they do nothing
that would erode the conventional wisdom, even if it would help other
players in their stables.

Revenue sharing will be meaningless until enough owners recognize that the
imbalance between supply and demand for the bottom 95% of ballplayers is
leaning in the wrong direction. You can hand millions to Pittsburgh, but
they’ll just sign Derek Bell instead of Billy McMillon. Revenue sharing and
a salary cap won’t do anything to help increase parity until that changes.

Keith Law can be reached at klaw@baseballprospectus.com.