Wednesday, December 12, 2007

"The Signing": Francisco Cordero


I've been avoiding writing about the Francisco Cordero signing, but clearly it's the 800 lb elephant in the room, so it's time to tackle it. I've been avoiding it because I am of two minds on the signing.

The Reds signed Cordero to a four year contract worth $46M. Cordero gets $8.5M in 2008, $12M in 2009, $12M in 2010, and $12M in 2011. In addition, the Reds negotiated for a team option for the 2012 season at $12M, which also comes with a $1M buyout.

PROS

1) It's obvious that the Reds could not afford to have another season ruined by an inept bullpen. The fans would not tolerate it and Krivsky's career might not survive it. Accordingly, Krivsky once again identified the problem, targeted the solution, and moved quickly to sign Cordero. It's the same M.O. that he demonstrated with the Alex Gonzalez signing.

In 2006, The Reds were undone by the bullpen, as the lack of a reliable closer cost them countless games. That problem was only resolved by the arrival of Eddie Guardado, who provided a stabilizing influence in the 9th inning.

In 2007, the Reds were once again undone by the bullpen, but this time the problem wasn't the closer, but rather the 8th inning. The Reds had no reliable option to get the ball to David Weathers, who performed admirably as the closer. The emergence of Jared Burton late in the season helped offset the problem, but countless games were once again lost by the flawed bullpen.

In 2008, the arrival of Francisco Cordero will bump everyone up a role. Cordero will work the 9th, Weathers/Burton will move up to handle the 8th, and everyone else will be relegated to 7th inning work.

2) Francisco Cordero was tremendous in 2007. It's hard to see it any other way, as Cordero posted an impressive 2.98 ERA, 1.11 WHIP, 2.6 BB/9, and 12.22 K/9. In addition, Cordero's peripherals support his level of performance, as he posted a FIP of 2.19 and a BABIP of .324. Cordero was actually that good in 2007.

3) The Reds signing Cordero weakens the Brewers. By signing away their dominant closer, the Reds weakened the Brewers and forced them to sign Eric Gagne for $10M. The allegations of Gagne's steroid use only increase the risk for the Brewers.

CONS

The "only" true con to the contract is that it completely flies in the face of every sound small-market organization principles.

General Rules for Smaller Market Organizations

1) In order to compete with organizations with larger revenue streams, a smaller market organization must get more production per dollar spent than the larger revenue organizations. If the Reds get the same amount of production per dollar spent as larger market organizations, then the Reds will lose due to the larger resources available to their competitor. The Reds must maximize the amount of production they receive for every dollar they spend, as that's the only way to compete in the current Major League Baseball marketplace.

2) Given the volatility of relief pitching, it's unwise to offer much more than two year contracts to relief pitchers at free agent prices. The inherent volatility of performance means that it is unwise to hand out big money to most relievers, as those relievers aren't likely to be able to earn their money in each year of the deal, which means the team is drastically overpaying for the production they receive.

3) Given the limited playing time of relievers, the impact that they can impart on the game is substantially less than that of starting pitchers or position players. Accordingly, it's wise to focus limited resources where they will have the most impact.

4) Small market organizations should only pay for players who provide unique production. If a player provides production that is easily replaceable at a lower cost, then that's not the most efficient use of resources.

WIN SHARES ABOVE BENCH ON THE REDS

Bill James' Win Shares is the quickest way to look at the unique of the player's production. Win Shares Above Bench (WSAB) compares a player's win shares to what an average bench player would have received given the same playing time. An average bench player is not a scarce commodity, so paying huge coin for production that is not unique, but rather easily obtainable, is unwise. The money should be spent on those players whose contribution creates the the most wins for the team and accordingly those players who possess the most unique value on the marketplace.

In 2007, Francisco Cordero pitched only 63.1 innings and posted a WSAB of 5. For comparison, David Weathers had a WSAB of 5, Jared Burton was at 4, Aaron Harang was at 12, Adam Dunn was at 9, Edwin Encarnacion was at 7, Josh Hamilton was at 6, and Brandon Phillips was at 5.

Team WSAB per Dollar Spent

Again, to be successful, smaller market teams must get more production per dollar spent than the competition or else they will lose just by being outspent. Accordingly, I took a quick and dirty look at the cost (using estimated team payroll) paid per each WSAB for a select number of organizations.

Here's how it panned out:



So, in 2007, the Reds paid more for each WSAB ($1,299,347) than the World Champion Boston Red Sox ($1,178,690). Not surprisingly, the D-Backs and Rockies paid substantially less, as they rely on young, impact prospects who provide great production and don't cost an arm and a leg. That, in large part, is how they were able to compete with the big money teams.

Are the Reds gaining any ground on the big boys by paying $46M over 4 years to a pitcher who was only had 5 WSAB? There seem to be more efficient and effective ways to spend such a massive amount of money than on a relief pitcher.

CONCLUSION

In a vacuum, the move is terrible and violates most sound mid-market baseball principles. However, baseball moves aren't made in a vacuum, rather they are made under a particular set of circumstances. Given the Reds futility in the late innings, it's understandable that the Reds made the move they did. However, despite the logic behind the move, the Reds aren't likely to beat the odds, which are stacked against such a deal.

If the Reds rely on cost effective young talent in the future, then they likely won't be hurt by having so much money tied up in a closer. If the Reds rely on Hamilton, Bruce, and Votto, then Cordero's contract is less damaging. If that's the case AND Cordero remains healthy AND consistent, then this deal will likely workout just fine.

However, there are quite a few "ifs" in that statement and given that likely relievers Sean Watson, Carlos Fisher, Pedro Viola and Josh Roenicke are on the horizon, this deal may ultimately prove to be unwise expenditure of resources, which is about the worst thing a mid-market team can do.

Krivsky moved fast to correct a flaw, but it may have been the equivalent of swatting a fly with a bazooka. We'll have to wait and see what the collateral damage is on this signing.

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