The thing that gives me pause with this deal is Soler’s contract.
The benefit of good young players under contract, as Dave mentions, is that they are cost controlled and therefore provide a lot of surplus value. Which is especially important for a relatively mid level payroll team like the Royals.
The way Soler’s contract is structured though it almost guarantees to minimize the amount of surplus value the Royals, or anyone, can get because it contains a clause that says he can opt out of his contract for arbitration if he wants as soon as he is eligible (which would be after 2017 assuming he plays all year and my math is correct) So if he out plays his contract (AKA: provides a lot of surplus value) he is just going to go to arbitration and get a new deal more in line with his new production thus putting a big dent in that surplus value.
Even if the Royals just plan on flipping him after 2017 it would likely still affect his trade value.
Obviously that is true. But I think it is a pretty safe bet that if Soler becomes Mark Trumbo like this piece speculates then he gets a significant raise from the $4 million a year he is due in 2018, 2019 and 2020. To use Trumbo as an example he went from $4.8 million to $6.9 million to $9.1 million through arbitration (the orioles actually avoided arbitration last year by signing him for 1 year 9.1 million but still).
Sure, it won’t be free market money but it will likely be significantly more than he is currently signed for. It is not hard to imagine a scenario where that $16 million he is supposed to make in 18, 19 and 2020 actually becomes $22 or $25 million (or more) through arbitration. And anything above what he is signed for eats into that surplus value which is the point.
If soler becomes so good that he gets expensive in arbitration it would be a win anyway for the royals.he is expensive then but also good.however if he doesn’t become good he stays cheap. Win win for the royals
Players in arb though are getting somewhat close to their FA value in the final year or two, using the newer 40/60/80 rule. Still below market but not a small fraction
Even with those caveats you mentioned, SGB, this move pays immediate dividends for 2017, perhaps (hopefully) more than keeping a $10M closer with cheaper in-house options. With the relative wealth of arms in the bullpen, and saving several million in the process, KC is no worse off, with the potential of coming out much further ahead (unless Soler breaks his leg in spring training, or something). Soler may not want to risk the rest of his contract ($16M) for a one-year payday.
Oh I’m not criticizing the trade. I agree that it is a good deal for the Royals. Davis had to go and Soler is good return. It will actually be nice to not have a AAA players in RF for once. I just think there is more to the deal then mentioned in the article.
I think this is a good point, but it’s not as if arbitration will award him what he would get on the free agent market (which is his “real” value).
As a bad example, Kole Calhoun got $3.4 million to avoid arbitration with the Angels last year, and that was after two 4-win seasons in a row. Soler is nowhere near the player Calhoun was/is, so he’d likely get closer to $1-2m in his first year, unless he makes a dramatic offensive improvement. And if he does, he’ll still likely be only in the $3m range, and worth well more than that.
Even with arbitration every year, one of two things happens:
1) Soler plateaus and remains an average or slightly above average hitter with mediocre defense. He gets something like $2m/$4m/$8m for the next three years. If he plays full time, he’s about a 2-win player each year, that’s $48 million (or more) value for those years, and only costs the Royals, or another team, $14 million. That’s $34 million surplus.
2) Soler continues to walk more, strikeout less, and hit for decent power, and gets his defense to average and becomes a 4-win player, much in the same vein as Calhoun. Then he gets $3.5m/$7m/$15m in arbitration. He’s worth close to $100m but is only paid about $26 million, providing close to $75m surplus.
Even if my arb estimates are way off, which they probably are, he’s definitely not going to get paid as much as he is worth on the open market.
And the Royals have a few options to keep his price down: 1) manipulate his service time this year and have him start in the minors (he’s at 2.033 years right now and probably wouldn’t be Super 2 after this year if he’s at 2.9) OR 2) they trade him anytime before he gets real expensive OR 3) they release him if he gets expensive and isn’t hitting.
I don’t think there’s too much downside here for the Royals. The Cubs have a ton of downside risk with Davis’s health, but Soler’s surplus value wasn’t going to do much for them, so this didn’t really cost them much.
Calhoun isn’t a very good comp for Soler in arbitration, because arbitration panels are notoriously old school and focused on baseball card stats.
Soler has a skill set that will be relatively well-paid in arbitration if he takes a step forward. If Soler moves his production up to being a 2-3 WAR player, that will be because he hits for a lot of power. Soler will still be a below average corner OF defensively, however.
Calhoun has certain skills that add WAR but net him little if anything in arbitration: above average corner OF defense and above average base running with few SB’s.
He’s due 3/$14M 2018 onward — even if he breaks out big-time in 2017 and opts out of the contract, he’d have 3.033 years of service.
Last year, here were the top settled amounts for position players +/- 25 days of that:
$5.0M Manny Machado
$2.1M Jose Iglesias
$2.0M Freddy Galvis
$1.7M Matt Adams
Machado got that after a 6.8 fWAR season at age 22 and 16.6 fWAR career to that point. If Soler ends up getting elite levels of pay through arbitration it is because he’s a massively valuable player.
Would you rather pay him 4/$40M because he puts up three 6+ win seasons or get him for 4/$18M because he’s morely been good? I’ll take the former every day.
Trumbo, who Soler is compared to in the article, went from $4.8 million to $6.1 million to $9.1 million through arbitration.
If Dave’s comp is accurate and Soler becomes a version of Trumbo then it is not hard to see him getting more than the 4 million a year he is owed on his contract for 18, 19 and 2020. If you want to use Trumbo as a model you would have Solar making 6 million in 2018, 9 million in 2019 and say 11 or $12 million in 2020.
That is ~$11 million more than he is signed for. Using Dave’s free market estimate of 4/50 for Soler then by his contract Soler has $21.5 million in surplus value for 18, 19 and 2020. Using those arbitration numbers though it would actually only be about $10 million. So that is over 50% of his surplus value gone. And he would not even have to be that good to get those raises (See: Trumbo, Mark).
Where does i say that? It says his current market value is 4/50. If your argument is that he would be worth more if he gets better then you could say that about literally every single contract ever signed.
The point is that he may be signed for 4/16 right now but with his profile he almost certainly will make more through arbitration and probably get much closer to his market value.
The thing that gives me pause with this deal is Soler’s contract.
The benefit of good young players under contract, as Dave mentions, is that they are cost controlled and therefore provide a lot of surplus value. Which is especially important for a relatively mid level payroll team like the Royals.
The way Soler’s contract is structured though it almost guarantees to minimize the amount of surplus value the Royals, or anyone, can get because it contains a clause that says he can opt out of his contract for arbitration if he wants as soon as he is eligible (which would be after 2017 assuming he plays all year and my math is correct) So if he out plays his contract (AKA: provides a lot of surplus value) he is just going to go to arbitration and get a new deal more in line with his new production thus putting a big dent in that surplus value.
Even if the Royals just plan on flipping him after 2017 it would likely still affect his trade value.
Arbitration isn’t free agency though. Players under arbitration are still only paid a small fraction of what they would get on the open market.
Obviously that is true. But I think it is a pretty safe bet that if Soler becomes Mark Trumbo like this piece speculates then he gets a significant raise from the $4 million a year he is due in 2018, 2019 and 2020. To use Trumbo as an example he went from $4.8 million to $6.9 million to $9.1 million through arbitration (the orioles actually avoided arbitration last year by signing him for 1 year 9.1 million but still).
Sure, it won’t be free market money but it will likely be significantly more than he is currently signed for. It is not hard to imagine a scenario where that $16 million he is supposed to make in 18, 19 and 2020 actually becomes $22 or $25 million (or more) through arbitration. And anything above what he is signed for eats into that surplus value which is the point.
If soler becomes so good that he gets expensive in arbitration it would be a win anyway for the royals.he is expensive then but also good.however if he doesn’t become good he stays cheap. Win win for the royals
Players in arb though are getting somewhat close to their FA value in the final year or two, using the newer 40/60/80 rule. Still below market but not a small fraction
I really kinda miss Johnforthegiants trolling all the Cubs articles. Perhaps he’s found a life.
Old trolls never die. They just tweak their user name a little bit.
Even with those caveats you mentioned, SGB, this move pays immediate dividends for 2017, perhaps (hopefully) more than keeping a $10M closer with cheaper in-house options. With the relative wealth of arms in the bullpen, and saving several million in the process, KC is no worse off, with the potential of coming out much further ahead (unless Soler breaks his leg in spring training, or something). Soler may not want to risk the rest of his contract ($16M) for a one-year payday.
Also, I will miss Wade Davis 🙁
Oh I’m not criticizing the trade. I agree that it is a good deal for the Royals. Davis had to go and Soler is good return. It will actually be nice to not have a AAA players in RF for once. I just think there is more to the deal then mentioned in the article.
I think this is a good point, but it’s not as if arbitration will award him what he would get on the free agent market (which is his “real” value).
As a bad example, Kole Calhoun got $3.4 million to avoid arbitration with the Angels last year, and that was after two 4-win seasons in a row. Soler is nowhere near the player Calhoun was/is, so he’d likely get closer to $1-2m in his first year, unless he makes a dramatic offensive improvement. And if he does, he’ll still likely be only in the $3m range, and worth well more than that.
Even with arbitration every year, one of two things happens:
1) Soler plateaus and remains an average or slightly above average hitter with mediocre defense. He gets something like $2m/$4m/$8m for the next three years. If he plays full time, he’s about a 2-win player each year, that’s $48 million (or more) value for those years, and only costs the Royals, or another team, $14 million. That’s $34 million surplus.
2) Soler continues to walk more, strikeout less, and hit for decent power, and gets his defense to average and becomes a 4-win player, much in the same vein as Calhoun. Then he gets $3.5m/$7m/$15m in arbitration. He’s worth close to $100m but is only paid about $26 million, providing close to $75m surplus.
Even if my arb estimates are way off, which they probably are, he’s definitely not going to get paid as much as he is worth on the open market.
And the Royals have a few options to keep his price down: 1) manipulate his service time this year and have him start in the minors (he’s at 2.033 years right now and probably wouldn’t be Super 2 after this year if he’s at 2.9) OR 2) they trade him anytime before he gets real expensive OR 3) they release him if he gets expensive and isn’t hitting.
I don’t think there’s too much downside here for the Royals. The Cubs have a ton of downside risk with Davis’s health, but Soler’s surplus value wasn’t going to do much for them, so this didn’t really cost them much.
Calhoun isn’t a very good comp for Soler in arbitration, because arbitration panels are notoriously old school and focused on baseball card stats.
Soler has a skill set that will be relatively well-paid in arbitration if he takes a step forward. If Soler moves his production up to being a 2-3 WAR player, that will be because he hits for a lot of power. Soler will still be a below average corner OF defensively, however.
Calhoun has certain skills that add WAR but net him little if anything in arbitration: above average corner OF defense and above average base running with few SB’s.
His arb is also based off his previous years salary and can only go down 10% so like 4 mil is his lowest possible arb salary.
He’s due 3/$14M 2018 onward — even if he breaks out big-time in 2017 and opts out of the contract, he’d have 3.033 years of service.
Last year, here were the top settled amounts for position players +/- 25 days of that:
$5.0M Manny Machado
$2.1M Jose Iglesias
$2.0M Freddy Galvis
$1.7M Matt Adams
Machado got that after a 6.8 fWAR season at age 22 and 16.6 fWAR career to that point. If Soler ends up getting elite levels of pay through arbitration it is because he’s a massively valuable player.
Would you rather pay him 4/$40M because he puts up three 6+ win seasons or get him for 4/$18M because he’s morely been good? I’ll take the former every day.
Trumbo, who Soler is compared to in the article, went from $4.8 million to $6.1 million to $9.1 million through arbitration.
If Dave’s comp is accurate and Soler becomes a version of Trumbo then it is not hard to see him getting more than the 4 million a year he is owed on his contract for 18, 19 and 2020. If you want to use Trumbo as a model you would have Solar making 6 million in 2018, 9 million in 2019 and say 11 or $12 million in 2020.
That is ~$11 million more than he is signed for. Using Dave’s free market estimate of 4/50 for Soler then by his contract Soler has $21.5 million in surplus value for 18, 19 and 2020. Using those arbitration numbers though it would actually only be about $10 million. So that is over 50% of his surplus value gone. And he would not even have to be that good to get those raises (See: Trumbo, Mark).
But Dave’s estimate of 4/50 is if he doesn’t improve at all offensively. And if he doesn’t improve, he’s not getting 6/9/12 in arbitration.
Where does i say that? It says his current market value is 4/50. If your argument is that he would be worth more if he gets better then you could say that about literally every single contract ever signed.
The point is that he may be signed for 4/16 right now but with his profile he almost certainly will make more through arbitration and probably get much closer to his market value.