It was bound to happen once the odds shifted in favor of baseball starting on time, but the offseason has ramped up quickly over the last week. Some of the top free agents have come off the board, and a five-player trade, some smaller signings and all sorts of 40-man roster shuffling took place. Buried among it all was a quick move by the Cardinals on Thursday, as they sent outfielder Dexter Fowler to the Angels per Jon Heyman, with St. Louis picking up all but $1.75 million of his 2021 salary.

It’s not a transaction that really moves the needle for either team in terms of the standings. And it’s not a transaction that creates any kind of real financial flexibility for future moves. Instead, this is a deal that illustrates how one player may fall on different points on the insurance vs. opportunity spectrum depending on which uniform he’s suiting up in.

I’m not here to argue that Dexter Fowler is that good now. He wasn’t a star necessarily, but he spent a nice-sized chunk of the last decade firmly in the “very good” category. He got on base and had some sneaky pop, and from 2011-17 averaged a .370 OBP with an .800-plus OPS and a 116 wRC+. And while he was certainly athletic enough to be a good center fielder, but he’s never been a good defender. His jumps and routes have always been substandard, and his habit of catching the ball at his chest has driven fundamentals-focused coaches insane for 13 years now, though he at least does tend to catch it. I remember Fowler’s 2014 campaign with the Astros and how I’d wince every time the ball was hit his way. I’d hoped to find a video to illustrate this tendency, and it didn’t take long. I thought I might need to go through a few videos from MLB’s vault to uncover a good example, but it was right there in the first video provided, his last putout of the 2020 season.

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Hey everyone, and welcome to the convergence of two recurring segments. It’s the highly awaited crossover between “Can You Believe the Cardinals Got Nolan Arenado for That?” and “Let’s Value Gimmicky Contracts,” two columns I almost assuredly enjoy writing more than you enjoy reading.

Let’s get the deferred money part out of the way first, because while it’s obviously very important to the Rockies and Cardinals, it has nothing to do with Arenado’s decision-making. He’s getting his cash, and whether the check says Monfort or DeWitt, the cash still spends the same. It won’t affect his decision on whether to rip the whole contract up.

As Jeff Jones reported, Arenado agreed to modify his contract as part of the trade. In 2021, he was due $35 million. Now, he’ll receive $15 million this year, paid directly by the Rockies. He’ll also receive $20 million in deferred compensation, regardless of whether or not he opts out. If he’s still under this contract, that money will be sent to the Cardinals, who will then pay it to Arenado. If he opts out, the Rockies will pay him the $20 million directly.

Finally, if Arenado doesn’t opt out, the Rockies will be on the hook for the $16 million he’s due in 2027. That’s the new year that the Cardinals agreed to as part of the trade, and while it’s unclear exactly why the Rockies chose to pay that part rather than some pro-rated portion of earlier salaries, here we are.

For the Cardinals, this is a great fit. They’d been acting as though cash was a key constraint this year, and getting a year of Arenado at no cost (literally, no monetary cost!) does a good job of making the short-term books work. In the long run, they’re paying him nothing for one year (if he opts out after 2021), $35 million over two years (if he opts out after 2022), or $164 million over seven years.

With that covered, let’s talk about Arenado’s options. The structure is as straightforward as it gets for these kinds of things. After 2021, Arenado will have the option to walk away from the entire deal and become a free agent. If he opts to remain in St. Louis, he’ll get another chance to wash his hands of the deal after 2022. If he still wants to stay, then he’ll be under contract until after the 2027 season.

When Arenado signed his extension two years ago, I covered a probabilistic way of thinking about the value. In the interim, a few things have happened. First, Arenado had a down 2020. Second, Dan “Dr. ZiPS” Szymborski gave me a long-term forecast for Arenado that beats my generic aging expectations. Finally, I’ve added a few bells and whistles to the option model in the interim. For the most part, though, we’re just running it back.

To calculate the value of an opt out, we need a few things. First, a central projection for how good a player will be in the future. ZiPS is all over that. Here’s the next five years of Arenado’s projections:

I’ll assume a standard aging curve after that, which gets us a central tendency for how his career will go.

Next, we need to apply variance. I’ve found in previous studies that projections for players who fit Arenado’s mold — mid-career and projections above 2 WAR — vary with a standard deviation of roughly 1.4 WAR from year to year. We’ll start with projections as a baseline, but to figure out the value of an option — the right but not obligation to do something — we’ll have to simulate 10 million or so different futures, then work out what happens on average.

Finally, we need to figure out how to translate Arenado’s projections into a potential new contract. Converting WAR to dollars misses some team-building effects, and as Craig Edwards showed last year, it’s not as simple as applying a linear conversion. Still, it’s my model, and it’s just for Arenado, not for the dang league as a whole. Let’s start with $8 million per win.

While we’re varying projections, we also need to vary the cost of a win. I assumed that the cost of 1 WAR will increase by an average of $250,000 per year, but with a standard deviation of $800,000. In plenty of years, the cost of a win will go down, even if the overall cost increases over time. There might be, say, a global pandemic, or a shortened season with no fans… wild nonsense like that.

Finally, we get down to brass tacks. When the player reaches his opt out, there’s a simple calculation. Take his new median projection, age it down as appropriate, and come up with a WAR projection for the remaining years of the contract. Multiply that number by the cost per win that we simultaneously calculated, and you have the contract that Arenado would sign, in a perfectly efficient market, if he opted out. I added one quick sanity check: if it’s within $10 million dollars of breaking even, Arenado won’t leave. That represents the uncertainty of finding a new contract, as well as the benefits of familiarity.

If there were only one opt out, our calculation would be simple. After one year, we simply apply an aging penalty and a random change in projection. Then, we use that to price out a new contract. With only one year before an opt out, things are simple like that.

In Arenado’s case, the odds are stacked in favor of him declining the opt out. The average situation (no change in projection) sees him with a $101.5 million contract after this year. He’d need to raise his 2022 projection by roughly 1.5 WAR to merit a contract that would be worth opting out for. How often does that happen? Roughly 14% of the time.

Let’s look at it more thoroughly. Here’s how much he projects to make in each scenario, including the $35 million he’s making in 2021 regardless:

In that sense, the opt out already in Arenado’s contract is “worth” $6 million. It could be worth more, though. Replace our forecasts with the ZiPS forecasts that ignore 2020 (they used 2019’s rate stats again), and instead things get a little spicy:

Hey, look! If Arenado were projected to be a bit better — and again, injury has at least something to do with why he’s not — then his option would be worth more. Neat stuff!

That’s not why you’re here, though. Or, maybe it is, but that’s not what Arenado’s contract looks like anymore. In agreeing to head to St. Louis, Arenado gained an extra opt out after the 2022 season.

It’s slightly tricky to model nested opt outs like this, where the second one can only be exercised if the first isn’t. In practice, the decision won’t be overly complex. After 2021, Arenado and his agents will model something that looks a lot like the calculations I did above, valuing his existing contract based on his current projections and including a 2022 opt out. That number will come out to something higher than $180 million, because some amount of the time, he’ll opt out after 2022 and get a raise.

With that number in hand, they’ll approximate what he could get on the open market and compare the two. If he thinks he can get more now, on the open market, than the value of his existing contract inclusive of the opt out, he should leave. Otherwise, he should stay and wait the extra year to see what happens.

Unfortunately, that doesn’t work well in my framework. In each of my 10 million simulations, computer Arenado would need to run 10 million simulations to work out the value of his option using this Monte Carlo method. That comes out to one hundred trillion simulations, and it doesn’t even add much precision for our trouble. Instead, I’m just setting the cutoff higher; Arenado will need $15 million in prospective gains to pull the trigger on opting out after year one.

How does this change things? Less than you’d think. I previously calculated that Arenado would opt out 14% of the time; he now opts out 12.4% of the time in year one. With more time to vary, and thus a higher percent chance of improving enough to opt out, he also has an 8.2% chance of opting out after 2022. All together, that looks like this:

In the scenarios where Arenado opts out after 2022, he is, on average, quite good. This makes sense, because he’s only opting out in the best 8% of scenarios. If he muddles along, he’s staying. If he has a late-career renaissance, it only stands to reason that he’ll be more valuable. All told, the two opt outs add a projected $13 million to the value of the deal — not bad!

Once more, let’s plug in a more optimistic view of Arenado and see what shakes out. This is Dan’s pre-2020 version, where he’s projected for 5 WAR in 2021:

Again, the better Arenado is now, the higher the chance he opts out, and the more the second opt out is worth to him. In the base case ZiPS projections, a second opt out added roughly $6 million to Arenado’s expected earnings. In this pre-injury case, a second opt out would add more than $17 million.

That’s the gory math of the way this complex contract works. In practice, however, Arenado seems likely to take the Clayton Kershaw route. Kershaw, too, had the choice of opting out of his contract early and becoming a free agent. He used that leverage to get the Dodgers to offer him a new contract, avoiding free agency but monetizing his ability to leave. Even if Arenado improves this year and next, that seems like the most likely eventuality.

What’s an opt out worth? In Arenado’s case, it’s real money in expectation. Add that to the extra contract year that he snagged as part of the deal, and it’s easy to see why the player’s union was okay with him taking deferrals in 2021. Remember, though: even in the scenario where he’s at his best, he still leaves less than half the time. It’s valuable despite being unlikely, and that’s the magic of options.

For years, there’s been one refrain in Anaheim: get Mike Trout some pitching help. The last time an Angels pitcher accrued 4 or more WAR was Garrett Richards in 2014, and there’s been a carousel of arms in the half-decade since. Yesterday, the Angels wholly misunderstood that refrain, sending Jahmai Jones to Baltimore in exchange for professionally cromulent starter Alex Cobb.

Cobb, who is in the last year of a four-year, $57 million contract, reached free agency after years of quiet competence. In the three intervening years, he’s alternated between being competent or hurt. He gets to it in a strange way — few strikeouts, fewer walks, and enough grounders to blot out the sun — but it adds up to something a little worse than average but significantly better than replacement level.

For the Angels, that may or may not be a meaningful upgrade to start the season. Shohei Ohtani will return in 2021, but certainly not for the whole season. When he does, he’ll likely be part of a six-man rotation. The top three starters will be Andrew Heaney, Dylan Bundy, and new acquisition José Quintana. That leaves two spots for other pitchers. Before the acquisition of Cobb, that meant Griffin Canning and Patrick Sandoval. Both are interesting, albeit unproven, options. Read the rest of this entry »

It was never going to be enough for one of the more electrifying players in the world, but allow me to sing one part of the harmony panning the Rockies’ return for Nolan Arenado. As I was on the phone working on prospects lists in the days before the trade’s prospect details were finalized, casual conversation with scouts and front office folks indicated that both Arenado’s public request for a trade as well as Rockies ownership’s supposedly mediocre financial situation made it so that teams pursuing the third baseman were really leveraging Colorado into taking an underwhelming prospect package, knowing that the front office (which is different than ownership) would have no choice but to trade him, and soon. While I can’t know what other offers the Rockies received or how those prospect packages compared to the one they got, which we’d really need to know to truly evaluate this or any trade, it certainly isn’t an exciting group. They’re 40 FV prospects who I think can be big league role players, but none are potential stars, and there may not even be a regular among them. I think you could argue this group does better to mitigate risk through quantity than, say, the prospects in the Joe Musgrove trade, but the best piece in the Musgrove trade (Hudson Head, a 45 FV) is two full FV grades better than anyone in this deal. And St. Louis got Nolan Arenado.

But let’s talk about these players — Austin Gomber, Elehuris Montero, Mateo Gil, Tony Locey, Jake Sommers — and then the future of this bizarre Rockies organization. The player in this deal with the most obvious physical talent is 22-year-old 3B/1B Elehuris Montero, who spent the year at the Cardinals’ alternate site. He peaked as a 40+ FV prospect after his 2018 performance (.322/.381/.529 at Low-A) but I backed off of him after spending an extended period watching him in the 2019 Arizona Fall League. His approach is a problem. During some of his Fall League starts, Montero saw five pitches over the course of an entire game. During the regular season, he averaged just shy of 2.5 pitches per plate appearance. For comparison’s sake, among big league hitters with at least 200 PAs in 2019, Willians Astudillo ranked last in pitches per PA with 2.9; no other big leaguer was under three. From a hitting talent perspective — the bat speed, primarily — Montero has everyday upside, but corner bats with approach issues are terrifying prospects. Read the rest of this entry »

For years, rumors have connected Nolan Arenado and the St. Louis Cardinals. Some of it was wishcasting — Cardinals fans have spent the last 25 years expecting (and often seeing) trades for unhappy superstars, and Arenado sure seemed unhappy. Some of it was actual interest — the Cardinals have been in the superstar trade market and the Rockies have been in the move-Arenado market at various points. Today, it’s happening: per The Athletic’s Ken Rosenthal, Arenado has been traded to the Cardinals for five players: Austin Gomber, Mateo Gil, Tony Locey, Elehuris Montero, and Jake Sommers.

The sticking point in any Arenado trade was always going to be capitalism. That’s painting with a broad brush, so let’s rephrase: there’s no doubt that Arenado is one of the best players in the game, but the vagaries of his contract and the math of surplus value combined to limit a potential return. Remember when Giancarlo Stanton got traded to the Yankees for essentially nothing? This would be like that, only potentially even worse.

Arenado is due $199 million over the next six years. That’s a large contract, as befits a player of his stature. If you value one win above replacement at around $8 million (my best estimate at present, though the error bars are huge given the pandemic), Arenado would need to produce roughly 25 WAR over the next six years to break even. We’ve got ZiPS forecasts for the next five of those years:

The numbers fall a little short, which is why finding a trading partner for Arenado has proved so elusive even as rumors of his availability persisted. That doesn’t even take into account a player option that would allow him to become a free agent after the 2021 season; it’s hard to trade a lot for a player who might not be on your team in a year’s time.

Those are the reasons that Arenado was a strange piece to fit in a trade. The counter? Arenado is an awesome player! He’s Nolan Arenado, for crying out loud. Over the last five years, he’s been the seventh-best position player in the game. At 29, he’s not a spring chicken anymore, but he’s still one of the best third basemen out there. Every single team in baseball would be improved by adding him, even if they had to shift a few pieces around to fit him in.

This weird dichotomy — excellent player, middling trade chip — explains the strangeness of this deal. Though the terms of the deal aren’t final, the Rockies are reportedly sending roughly $50 million to the Cardinals as part of the trade, and Arenado has agreed to defer some of his compensation to further sweeten the financial pot for St. Louis. The Cardinals gave Arenado an extra opt-out and an extra year reported at $15 million in exchange. There are all kinds of wild financial things going on in this deal, but let’s skip all that for now and focus on what St. Louis is getting on the field.

The highlight of this trade is pretty clear: the Cardinals just got a new best player on their team. The NL Central is up for grabs this year, and the four teams with a realistic shot at it have spent the offseason doing a whole lot of nothing. Adam Wainwright, who signed earlier this week, was the first player the Cardinals inked to a major league contract all offseason. Read the rest of this entry »

Just two years ago, the Blue Jays used an MLB-record 21 different starters over the course of a season, most of whom were either years past their prime or pitching in the majors for the very first time. Unsurprisingly, that didn’t go so well. Toronto tried to fix that last winter by adding nearly enough pitchers to build a whole new rotation, then acquired three more starters at the August trade deadline. Even after all that movement, though, the Jays still finished 24th in the majors in pitching WAR.

The Blue Jays don’t have an arm quantity problem; they have an arm quality problem. But between a free-agent market lacking in top-end starting pitching and an apparent unwillingness to compete with the Padres and White Sox in making trades for aces, Toronto has been unable to address that need. Instead, it has directed its financial resources elsewhere, adding two of the best free-agent hitters of this winter’s class and the best reliever of the 2019 season. The Blue Jays have improved their offense and their bullpen. As for their starting pitchers, well, there sure are a lot of them.

You can add one more arm to that growing pile, as Toronto acquired left-hander Steven Matz from the Mets on Wednesday in exchange for three young right-handed pitchers: Sean Reid-Foley, Yennsy Diaz and Josh Winckowski. Matz, 29, is entering his final year of team control and is set to make just over $5 million in 2021. He became expendable in New York after the team acquired Joey Lucchesi — a younger, cheaper, and more controllable left-handed starter — from the Padres in the three-team deal that sent Joe Musgrove from Pittsburgh to San Diego. On the Mets, Matz was either the fifth or sixth starter in an elite rotation. In Toronto, he’ll be the fifth or sixth starter in a rotation that is merely okay.

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Pittsburgh’s sell-off continued over the weekend, with the Pirates sending starting pitcher Jameson Taillon to the New York Yankees in return for four prospects. The 29-year-old didn’t pitch in 2020, his season lost due to rehabilitation from Tommy John surgery in late 2019, the second such surgery of his career. Taillon, a former 2010 first-round pick, has suffered more than his share of setbacks, missing three years of his career and most of a fourth due to his elbow injuries and a sports hernia; he also missed time in 2017 due to testicular cancer. He heads to a Yankees rotation with a lot of interesting upside talent and a surplus of question marks.

Taillon’s departure to join former teammate Gerrit Cole in the Bronx represents the end of an era in Pittsburgh. Taken in consecutive drafts in 2010 and ’11, Taillon and Cole were frequently imagined together as the two aces at the top of a future Pirates rotation. For a team that had had recent first-round busts in the quickly injured Brad Lincoln and the bafflingly selected Daniel Moskos, this pair was the cornerstone of the rebuilding efforts of the then-new Frank Coonelly/Neal Huntington regime. Both pitchers were consensus elite choices in the draft and were selected without any of the team’s trademark cynical calculations about whether a player would sign on the cheap.

Taillon and Cole met their lofty expectations as they quickly worked their way through the minors. Cole, a college draftee, made his 2011 major league debut just two years after draft day, and if not for injury, Taillon would have likely followed him early in 2014. Missing two years is an enormous setback for any prospect, but the Pirates averaged 93 wins per season over 2013-15 and could afford to be patient. As the holes the team had to fill in order to continue winning increased, ownership’s commitment to investing in the roster did not, and the Pirates needed Taillon in 2016 more than they did in ’14 or ’15. And he succeeded, requiring only a 10-game tuneup at Triple-A before debuting in the majors and pitching well enough where he would have gotten some Rookie of the Year votes if he had been up for the entire year. Read the rest of this entry »

Sunday, the Pirates traded starter Jameson Taillon to the Yankees for a package of four prospects. Dan Szymborksi will provide in-depth analysis of the deal as it pertains to the Yankees soon, though I’ll note to start that with the return of Luis Severino and Domingo Germán and the additions of Corey Kluber and now Taillon, the Yankees rotation will be reliant on several high-risk, high-reward starters this season.

Of course, nobody likes trading away good big leaguers, especially those who the club and city care about for reasons beyond their on-field performance. Taillon has persevered through a lot, including testicular cancer and an August 2019 Tommy John, the second such surgery of his career. When he next steps on a big league mound, it will have been nearly two years since he last did so. That layoff (he has been throwing live BP to hitters since late last summer and has been throwing bullpens during the offseason) creates volatility that mirrors the added volatility of this particular prospect package. Taillon could be an anchor of the Yankees rotation next year or might be a shell of himself. Regardless of which he would have been in Pittsburgh, the Pirates are not ready to compete and so I think they did well to trade him for four good prospects today, acquiring upside but also mitigating risk by getting several players in return.

On to those prospects. The quartet heading back to Pittsburgh — righties Miguel Yajure (age 22) and Roansy Contreras (21), 21-year-old outfielder Canaan Smith-Njigba, and 18-year-old shortstop Maikol Escotto — is a pretty exciting. Read the rest of this entry »

Over the last two days, the Reds have made a couple of small trades — acquiring Hector Perez from Toronto for a PTBNL or cash and Cionel Pérez from Houston for former South Carolina catcher Luke Berryhill — to bolster their bullpen depth. These are the latest in a series of transactions that are part of an obvious effort to pick up change of scenery candidates (Jeff Hoffman, the Perez(s), Art Warren), or players falling off the bottom of other rosters (Edgar Ernesto Garcia, Brandon Bailey) to try to create an above-replacement injury/COVID safety valve at the bottom of Cincinnati’s active roster and in the upper minors. This might prove especially important if the team’s 2021 innings are spread across more pitchers to prevent huge workload increases after the shortened season. Read the rest of this entry »

On (day of week), the Padres acquired (talented pitcher) from the (spendthrift team) in exchange for a seeming pittance, including (name of decent but not overwhelming Padres prospect). Now, surely, AJ Preller is done. Or is he?

Oh, hello there! Sorry about that. That’s actually the Mad Libs-esque form that I normally use to cover Padres pitching transactions. Today, I’ve got some details for you. It’s Joe Musgrove heading to the best weather in baseball, Hudson Head and Endy Rodriguez highlighting the group headed out (in a three-team trade involving the Pirates and Mets), and Andrew Friedman gently whispering words of affirmation to himself: “We’ll still win the long game, we’ll still win the long game, the Dodger Way can’t be beat.”

Musgrove isn’t an ace, at least not in the way that new teammates Yu Darvish and Blake Snell are. He would have been Pittsburgh’s number one starter this year, which isn’t the same thing. In San Diego, he’ll slot in as the Padres fourth starter. Let the words of Anakin Skywalker speak for the rest of the NL West: “This is outrageous! It’s unfair!”

Seriously, take a look at our Depth Charts predictions for the Padre rotation:

There simply aren’t other teams throwing out pitchers like Musgrove after a whopping three other pitchers. We think that the Padres, Yankees, and Mets will accrue roughly equal value from starting pitchers next year, but the New York teams are doing it with Gerrit Cole and Jacob deGrom, the consensus best two pitchers in the game. Yu Darvish is nice, but not that nice. The Padres are building their own Death Star rotation, and they’re doing it with volume. Read the rest of this entry »