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On Tuesday, Liam Hendriks signed a contract with the Chicago White Sox that will pay him $54 million. Craig Edwards covered the signing, and Tony Wolfe took a look at the South Siders’ new bullpen, which is now one of the best in baseball. But there was something confusing about Hendriks’ contract. It will pay him $54 million, but how many years he’ll play to earn that money isn’t yet set.

A quick overview: over the first three years of his deal, Hendriks will receive $39 million. After that third year, the White Sox have a team option to bring him back for a fourth year with a $15 million salary. If they don’t want to pay him for that year, they can pay him a buyout instead, a common structure in contracts with team options. Here’s the rub: that buyout is for $15 million, the same amount as the option salary. It’s deferred over multiple years, so it isn’t exactly the same, but Hendriks will get $54 million in cash, and he’ll do so whether he plays for the Sox for three or four years.

Why design such a strange tax structure? It’s in pursuit of one of the oldest American pastimes — tax avoidance. Let’s quickly walk through how Hendriks’ contract works in Chicago’s favor, and take a quick jaunt through other contract structures while we’re at it.

When the league came up with the CBT, they put some thought into working around loopholes. Consider, for example, a team who has plenty of room under the tax level in 2021 but projects to go near it in 2022. Now imagine that they sign Trevor Bauer to a two-year, $80 million deal. If they paid him $40 million in each year, it would look like this:

Assuming a tax threshold of $210 million, they’d be $30 million under the line in ‘21 and $20 million over in ‘22. Why not, then, pay Bauer $60 million in year one and $20 million the next year?

Why not? Because the league doesn’t fall for that nonsense. For the purposes of the CBT, salaries are spread out evenly across the term of the deal. Design wild roller-coasters all you want; a two-year deal for $80 million will count for $40 million each year, no matter when the actual checks go out.

Next, let’s consider a different way around the tax, and a different way the league closed that loophole. Consider a team going for it this year. They’re right up against the tax in this hypothetical world, and they’d prefer not to pay it. Instead, they offer a different deal, this time to a hypothetical closer. In year one, he’ll receive $10 million. Year two is a team option with a salary of $30 million. Should the team decline the option, they’ll pay a $10 million buyout.

One of two things will happen: either our closer will make $40 million for two years of service, or he’ll make $20 million for one year. That feels like a reasonable contract for both sides — and if the league didn’t look too hard at it, they might give the team a tax number of only $10 million in year one.

Let’s make it more absurd, though. What about a one-year deal for $5 million, with a team option for a second year at $60 million and a $15 million buyout. Now the team will certainly pay the buyout. Our pitcher still gets his $20 million over one year. Would anyone think that’s really only a $5 million salary in year one, though?

The league doesn’t. Buyouts of team options are treated as part of the total salary paid in guaranteed years. What does that mean? Let’s take a look at Ronald Acuña Jr.’s contract to explain it. His contract looks like this:

That’s $90 million over eight years. After that, there are two team options, the second of which we’ll ignore (given that it only kicks in if the team exercises the first one, CBT math ignores it). The first team option is for $17 million, with a $10 million buyout. That brings the total guaranteed money in the deal to $100 million over eight years — $90 million in salary plus the buyout. What’s Acuña’s CBT number in each year? $12.5 million, or $100 million split evenly over eight years.

Should the Braves exercise Acuña’s option, they’ll pay him $17 million in 2027, but $10 million of that will already have counted against their tax numbers in previous years. How does that hit the salary cap? The league has left it purposely ambiguous, but one interpretation is that the tax number will be lower to account for that previous hit. In Acuña’s case, he has another $10 million buyout the next year, so it’s hardly a lock, but we’re just using him as an example. Again, we don’t know exactly how the league accounts for buyouts — but in my mind, there’s a decent chance that having the cost of the buyout on previous years’ CBT numbers decreases the number the league uses in the option year.

With that explanation out of the way, let’s get back to Hendriks. He’s due $39 million over three years, an average of $13 million per year. After that, there’s his buyout, which also counts against the tax. It’s for $15 million deferred over time. The league discounts deferrals slightly, and without getting into the exact math there, let’s assume that they treat Hendriks’ buyout as worth $13 million in present-day terms. That means he’s due $52 million over three years for the purposes of the tax.

Should he remain with the team for a fourth year, the deal has only $2 million in “new money” — the difference in value between a deferred and present-day $15 million. That makes for big tax numbers in the first three years — roughly $17 million per year — and a minuscule $2 million hit in the fourth year. Again, I’m not certain that this is how options are treated — but it’s a reasonable guess, at the very least, and one of the best reasons I can see for structuring a contract in such a strange way.

Why would a team want to do this? The Sox are no dummies. They’re nowhere near the CBT threshold in 2021 — they check in around $160 million even after Hendriks’ contract. Will they be so far below the threshold in three years? It’s far less clear! Lucas Giolito will need a new contract by then. Nick Madrigal, Dylan Cease, Michael Kopech, and Codi Heuer, just to name a few, will be in their arbitration years. If they’re planning on keeping Lance Lynn, he’ll surely earn more than this year’s $9.3 million salary.

By taking a bigger tax hit now, the White Sox are setting themselves up to avoid paying taxes in the future. Are they actually considering declining the option? Almost certainly not. Why would they? Short of Hendriks being out for the season with an injury, they’ll keep him, because the difference between $15 million now and $15 million over 10 years simply isn’t much in the grand scope of things.

One thing worth monitoring: I’m not actually sure if the league is going to allow this nonsense. I feel reasonably confident that they wouldn’t have allowed a $15 million team option with a $15 million buyout if there were no deferrals involved. Even including that fig leaf, I don’t think there’s much confusion about what’s going on here. The league can treat vesting options that are very likely to be triggered as guaranteed, and it wouldn’t shock me if they did that here. For now, though, it sounds like Hendriks’ contract counts as $54 million over three years in the eyes of the tax man.

In other words, Hendriks signed a four-year, $54 million dollar contract this week. It won’t be reported the same way everywhere — it’s a complex contract, after all. At the end of the day, however, the White Sox wanted to pay Hendriks $54 million to secure his services for the next four years. They did just that — with a little financial chicanery thrown in for good measure.

It’s impressive that Pedro Báez stuck around the Dodgers for as long as he did. Think about how long the organization has been overflowing with arms — all the pitchers like Kenta Maeda, Ross Stripling and Julio Urías who would have been mid-rotation starters on plenty of good teams but often got relegated to the bullpen in Los Angeles, or the ones like Victor Gonzalez who are always sprouting from their minor leagues, or guys like Tony Cingrani and Dylan Floro whom they would trade for and then make great. Even when injuries are ravaging the team, as has been the case the last few seasons, a job pitching for the Dodgers is never earned easily. Yet for seven years, Báez did.

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Last week, the Mariners Player Development twitter account posted a graphic of Julio Rodriguez.

Hang it in the Louvre. ? pic.twitter.com/uIhzPuWppz

— Mariners Player Development (@MsPlayerDev) January 8, 2021

Adorned in a full uniform and sunglasses, Rodriguez’s bat is cocked just beyond his head as he begins his stride toward the mound; the #SeaUsRise hashtag in the lower left corner suggests a metaphor is at work. “Hang it in the Louvre,” the Mariners tweeted approvingly.

Compliments to artist Trevor Milless aside, this tweet stuck with me, mostly because it’s kind of odd. There aren’t many teams that retweet artwork posted on the club’s player development account, in part because most franchises don’t even have a player development account.

This is part of a pattern in Seattle. The Mariners have been rebuilding for a couple seasons and they’re not shy about promoting their good work. The major league broadcasts feature regular updates on the farm system, and the club’s TV network has aired a few minor league games. Jerry Dipoto even joined one of the broadcasts. All teams are proud of their minor leaguers, of course, but as far as I know, the Mariners are the only team to give one of them a YouTube show.

In a vacuum, there’s nothing wrong with this. Vibin’ With JRod isn’t for me, but hey, he’s a good prospect and I’m no marketer. Read the rest of this entry »

Clarke Schmidt is more than a talented, 24-year-old right-hander who made his major league debut with the New York Yankees in 2020. He’s also a bona fide pitching nerd. Selected 18th overall in the 2017 draft out of the University of South Carolina, Schmidt leans heavily on analytics as he strives to further develop an already formidable four-pitch arsenal.

His top two offerings — per Eric Longenhagen, “a power-sweeping, mid-80s breaking ball” and a two-seamer with “nasty tailing action” — have each been honed with the help of data. A third pitch, his four-seamer, is currently on that same path, while his changeup has likewise been undergoing nuanced tweaks. Big-league hitters have barely gotten a glimpse of Schmidt’s smart weaponry — last year’s cup of coffee comprised just six-and-a-third innings — but they can expect to see a lot more of him in the future. Clarke heads into the 2021 season as a strong candidate to capture a spot in New York’s starting rotation.

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David Laurila: You have a plus breaking ball. What is the story behind it?

Clarke Schmidt: “In college, I was a slider and curveball guy — mainly a slider guy — and my sophomore year, I think I led the SEC in strikeouts. I had [129] strikeouts, and if I had to guess, I got 90 of them on sliders. That was like my go-to pitch. It wasn’t very hard, but it was hard for hitters to see the spin. It was an interesting-spinning slider, and it had a good movement profile, but it wasn’t a sharp-breaking slider.”

Laurila: What made the spin interesting?

Schmidt: “It was very depth-y. Normally, when you see sliders from guys who throw mid-90s [fastballs], it’s like a Gerrit Cole slider, or more of a sharpness with it staying on the plate longer. Mine was more of a sweepy slider, kind of like Chris Sale has. It was a low-80s slider. Read the rest of this entry »

The White Sox don’t need an elite bullpen to compete. They had the most valuable position player group in baseball in 2020, and that was without two stars, Yoán Moncada and Luis Robert, playing to their full potential. They also have a rotation that boasts two aces and a fair amount of rotation depth. Give them last year’s Phillies bullpen, and they’d still likely be able to fight for a playoff spot, especially in their division. Fit them with an average ‘pen, and their postseason expectations begin to look like more of a certainty.

Much to the chagrin of the other AL Central teams, Chicago’s bullpen doesn’t look like it’s going to be average, and it definitely doesn’t look like it will be awful. That much was made clear when the White Sox signed Liam Hendriks — the best reliever in this year’s free-agent class and at worst a top-three-or-four reliever in baseball — on Monday. Since the start of 2019, he has been nearly two wins more valuable than any other relief arm in baseball, posting a 1.79 ERA and 1.70 FIP in 110.1 innings. Our Depth Charts have Hendriks forecast for 1.6 WAR in 2021, tying him with Aroldis Chapman and Edwin Diaz for the highest relief WAR projection in baseball. With that considerable boost, the White Sox’ bullpen now projects to be the second-best in the majors, albeit with loads of free-agent talent still unsigned.

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Planning a starting rotation for 2021 carries innumerable pitfalls. Nearly every pitcher in the league saw a reduced workload last year, and they did it in strange circumstances to boot. It’s not merely that the short season set everyone’s innings back — though that’s a huge component. A large number of cancelations and postponements also meant more doubleheaders and more cobbled-together games, another way to throw pitchers off their rhythm.

Put it all together, and protecting arms sounds like an appealing plan for 2021. The Mariners announced that they’ll use a six-man rotation next year, a continuation of the plan they leaned on for all of 2020. The Red Sox are talking workload management. Since initially publishing this piece, Jeff Zimmerman pointed out that the Tigers will use a six-man rotation as well. Is an embiggened rotation the solution to this universal problem? Let’s do the math.

It depends, first of all, on what you give up. The innings tradeoff of a six-man rotation is straightforward. Giving your pitchers an extra day off limits their workloads, naturally enough. The math on that is straightforward if you assume it doesn’t affect their in-game workload. Take a pitcher who averages six innings per start. In a five-man rotation, that’s 192 innings of work. Adding a sixth pitcher to the rotation cuts that down to 162 innings.

How much do those 30 innings of work matter when it comes to health? I’ll level with you — I’m not sure. We simply don’t have the data to say with any amount of certainty, because the number of comparable situations is so small. Pitchers have light workloads all the time, but in most cases it’s due to age or injury. Looking at what a 21-year-old pitcher did in first building up stamina probably can’t tell us much about how many innings Jake Odorizzi, to pick a random example, should throw in 2021. Likewise, a pitcher’s workload in his first year back from Tommy John surgery can’t tell us how many innings Trevor Bauer can be effective for. Read the rest of this entry »

With the White Sox signing Liam Hendriks, the top option for teams looking to upgrade their bullpen is now off the market. Perhaps that will open up the floodgates for the other free-agent relievers, as nearly every would-be playoff squad is in the market for relief help. But whether it’s financially motivated or a matter of roster construction philosophy, there are a few contending teams who simply won’t be making a splashy addition to their bullpen. The Twins fall into that category.

In 2020, Minnesota’s bullpen was the unheralded strength of a division-winning team. The Twins’ relief corps was fifth in the majors by park- and league-adjusted FIP and ERA, and their relievers posted the majors’ third-best strikeout-to-walk ratio. But two of their best relievers from last year — Trevor May and Matt Wisler — have left via free agency. With their starting lineup and rotation mostly carrying over from last year, replacing them both should be a high priority.

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While there were plenty of good options in this year’s free-agent reliever class, with Trevor May, Brad Hand, Archie Bradley, and Blake Treinen representing the near-top tier, there was just one ace available: Liam Hendriks. That elite reliever is now off the board, with the White Sox continuing their aggressive offseason by signing the former A’s closer to a four-year deal worth $54 million. Yahoo Sports’ Tim Brown was the first with the news of the signing, and ESPN’s Jeff Passan was the first to report the unusual structure of the deal: Hendriks will be paid $39 million in the first three years, with the remaining $15 million coming either as a fourth-year team option or as a deferred buyout if the option is declined.

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On the heels of a year in which a record seven Hall of Famers died, the baseball world couldn’t get a full week into 2021 without losing another. Tommy Lasorda, the charismatic and voluble manager who piloted the Dodgers to four National League pennants and two championships during a run of 19 full seasons (1977-95) and two partial ones, died of cardiopulmonary arrest on January 7.

The 93-year-old Lasorda had returned home earlier in the week after being hospitalized since mid-November due to a heart condition. He had been the oldest living Hall of Famer since Red Schoendienst passed away on June 6, 2018; that title now belongs to 89-year-old Willie Mays.

For over 60 years, as stars and even Hall of Famers come and went from the Dodgers, Lasorda remained a constant. Including the final years of his professional career as a pitcher, he had been continuously employed by the team in one capacity or another since 1957, their final year in Brooklyn. He spent the past 14 years as special advisor to the chairman during the ownership tenures of Frank McCourt and Guggenheim Baseball Management. He professed a loyalty to the franchise that transcended his own mortality, a subject on which he spoke with frequency. “I bleed Dodger blue and when I die, I’m going to the big Dodger in the sky,” he often said.

As the manager of the Dodgers from September 29, 1976, when he replaced Walter Alston with four games remaining in the season, to June 24, 1996, when he suffered a heart attack and left the team in the hands of Bill Russell, Lasorda won 1,599 games, the 22nd-highest total in major league history; he’s 21st in losses (1,439, for a .526 winning percentage), and he’s the runaway leader in both categories among managers who were primarily pitchers during their playing careers. The Dodgers won seven NL West titles during his run, in 1977, ’78, ’81 (via the split-season format necessitated by the players’ strike), ’83, ’85, ’88, and ’95. They won pennants in the first three of those years, losing to the Yankees in the World Series in 1977 and ’78 before beating them in ’81; those teams were powered by the legendary Longest-Running Infield of first baseman Steve Garvey, second baseman Davey Lopes, shortstop Russell, and third baseman Ron Cey, all of whom Lasorda managed in the minors. In 1988, with an already-meager offense hamstrung by the limited availability of MVP Kirk Gibson, they upset the heavily-favored Mets in the NLCS and then the A’s in the World Series, a victory that is widely considered Lasorda’s greatest triumph.

Stylistically, Lasorda was less a tactician than an emotional leader, one who broke down the traditional walls that separated a skipper from his crew. He hugged his players, ate dinner with them, pulled pranks with them. “I brought a whole new philosophy of managing into the major leagues,” he told Steve Delsohn, author of True Blue, an oral history of the Dodgers published in 2001. “I wanted my players to know that I appreciated them. I wanted them to know that they were responsible for whether I’d even stick around or not.” Read the rest of this entry »