Twins extend Joe Nathan’s contract through 2011
Posted by SBG on Monday, March 24th, 2008 at 1:09 pm
Link. Club option for 2012. The link provides no further details, but I've heard rumors about $11 million or so a year.
Ubes, feel free to add to this post or write your own.
<ubelmann>I'm a stats guy, so I'm supposed to hate this move. Closers can be created, don't overpay for the mystique, etc., etc. I agree to that to the extent that closers come from many places, and it's not that hard to find an adequate closer. But there's a big difference between an adequate closer like Todd Jones or Eddie Guardado and an elite closer like Mariano River or Trevor Hoffman. And far in his Twins career, Joe Nathan has been an elite closer. He has never ranked below 12th amongst relievers in expected wins added over a replacement level pitcher in the last four years, and even when he ranked 12th, he had a 2.19 FIP and a 2.70 ERA.
2007 -- 5.1 WXRL -- 6th
2006 -- 6.6 WXRL -- 3rd
2005 -- 4.4 WXRL -- 12th
2004 -- 7.7 WXRL -- 3rd
My biggest concern is that his strikeout rate dropped a lot last year--from 14.0 K/G to 10.6 K/G--and he is getting older. On the other hand, for his age, he doesn't have a ton of mileage on his arm, and the Twins have handled him with care. (Consider that Johan Santana has pitched 1651.7 innings in his professional career and Joe Nathan has pitched 1109.7 innings in his professional career.)
LEN3 is reporting that the contract is $47M from 2008 through 2011, with an option for 2012. (And the Twins already owed him $6M in '08, so it's only a marginal cost of $41M.) There are only three years of added commitment here, and having a team option for 2012 is definitely a good thing. Also, there seems to be a limited no-trade clause, where Joe can block 3 teams. That will make it a bit harder to move him if things go terribly wrong, but I'm pretty confident that even in a disaster scenario where he completely implodes, the Twins will be able to move his contract somewhere.
I think that the general reaction to this trade will be too extreme. We basically gave the VP the same contract that Francisco Cordero got from the Reds, and I would rather have Nathan than Cordero. On the open market, I think that Nathan would've gotten more like $15M/year, so there's some room for him to underperform and look attractive to other teams. It's not a great contract and it's not an awful contract. It's just another move that cements my opinion of Bill Smith as a rather average GM, though one with different priorities than I would have.</ubelmann>
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A good move from a PR perspective, I think. Financially, you also get cost certainty in that position for the next 4-5 years. He'll be cheaper than Rivera ($45M/3yr), and right now I think he's at least as good. I don't know how many save opportunities he'll get this season, given the makeup of our starting rotation, but I like the deal.
I don't like it. Not one bit. Just seems to be another move by Bill Smith that doesn't seem to make sense in the larger context of all his moves. The public shouldn't be forcing the decisions. Do we really want the front office moves dictated by the people commenting at the Strib?
Can still be traded, unless there's a No Trade Clause included.
Agreed. If there is a no-trade clause then I don't like it. Otherwise, it's not exactly a disaster since he could bring a certain amount of bang for the buck in a trade down the road.
So maybe I should have read the story: Nathan also gets a limited no-trade clause - he can pick three teams he can’t be traded to. It’s the same clause that was in his previous deal.
I guess that kind of puts me in the middle again.
So we won't be able to trade him to the Marlins, Rays, or Nats. That's the next best thing to not having a no-trade clause at all, isn't it?
How does that work? I mean, when does he have to declare?
Yeah, can Smith say "We're trading you to Tampa"
"No"
"OK, then Kansas City"
"No"
"Fine, Oakland"
"No"
"HA! That's three. Now I can send you anywhere I want"
+10 soul patches.
SBG, Mauer and Morneau have similar clauses as did Torii. Normally they supply the teams in writing prior to the beginning of the season.
The rumor is that they tore up the 2008 deal and he gets 4 years at $11.25 million per, plus a $2 million option on the fifth year.
I think the $2M is the buyout for 2012. The option for 2012 would probably be about $12M-$13M unless it was an exceptionally bizarre contract.
I'll take a deal like this over the Monroe/Livan/Punto contracts any day of the week. It's not like he's a crappy player that Gardy feels obligated to play; he's a great player that Gardy already likes to play, and sometimes Gardy even plays him in the right situations.
They're paying something near the market rate to keep a great player, which normally would be fine by me, but I question the wisdom of committing to that kind of contract with a closer at the start of a major rebuilding project. For the next few years, great, we'll have a top closer nailing down half the wins for a sub-.500 team. When the team might get to be good again, he'll be a few years older--in his mid-30s--and Smith will have to entertain trade offers in 2010-11 to avoid paying Nathan's escalating salary and get some prospects "before losing him for nothing."
This was only done for short-term PR, because Smith had the money to spend right now. I don't believe Nathan will be part of another contending Twins team.
For me this deal is evaluated on three different facets.
1) Is Joe Nathan worthy of the money? Given the financial "market" for relievers, I think this is an eminently fair deal for a relatively young reliever who has been consistently excellent as Ubelmann documented.
2) Should a mid-market team be splurging on a closer? Given that Joe Nathan will be earning approximately 1/6th-7th of the Twins team salary and playing in about 1/50th of a team's innings, I would say this isn't a financially wise decision for this, or any, mid-market team. If you have a team like the Rays where you have a bunch of pre-arb studs it might be an allowable splurge but it definitely constrains your future options if you already have other financial commitments.
3) Should the Twins as currently constructed be paying Joe Nathan this much? To me this is a definite no. Although I think the "Project 2010" goal isn't very promising to begin with for a variety of reasons, even if you believe in the idea the signing makes no sense. By the time the Twins are supposed to be good again, Nathan will not be at his peak and will certainly have far less trade value than he currently does. I just don't see the glory in working for a 75 win season when you could improve your future by trading Nathan at the trade deadline or letting him play out this year and taking two compensation picks. Obviously they can still trade him at any point now but a lot of the leverage the Twins had (Low salary, no financial commitment after 2008, promise of Type A compensation) no longer exists which greatly decreases the expected return of a trade.
I think this contract increases the expected return of a trade. The receiving team will know that they have an elite closer at a reasonable price for 3 years. They also know that the Twins don't HAVE to trade him.
That limited no-trade clause really doesn't do anything. I doubt Nathan would list any of the teams that would be willing to trade for him anyway.
Potentially he could list places like NY and Boston if he didn't want to bother with the inconveniences of a big city (cost of living, insane media, etc.), which would hurt, but even then, the market for closers is typically pretty good and the Twins were able to get a decent haul for Johan even though they only had 3 (more or less) interested teams, so I think they'll be okay.
By the time the Twins are supposed to be good again, Nathan will not be at his peak and will certainly have far less trade value than he currently does.
This is all a matter of how much we expect Nathan to decline and what those chances to decline are. Every year from age 33 to 36, Mariano Rivera posted an ERA better than his career ERA. I don't think it's a certainty that Nathan's trade value will totally plummet.
Should a mid-market team be splurging on a closer?
Wins are wins, and bad teams play practically as many close games as good teams do. The important question is wondering how many runs Joe Nathan will save compared to replacement level and how much money we are spending for that many runs.
I've heard a lot of "well, Neshek can close if Nathan leaves" which is true, but moving Neshek to closer means inferior setup pitching, and someone like Julio DePaula moves that much farther up the depth charts. So the Twins might still be able to say that they were able to replace Nathan as a closer, but that doesn't mean they'll be able to pitch as well without him. Losing games in the 6th and 7th inning because you don't have enough setup help is just as harmful as losing games in the 9th because your closer is bad.
Obviously they can still trade him at any point now but a lot of the leverage the Twins had (Low salary, no financial commitment after 2008, promise of Type A compensation) no longer exists which greatly decreases the expected return of a trade.
At the same time, two years from now, Nathan would effectively have a two-year contract with a team option, which would definitely increase his trade value compared to the trade value of a pending free agent.
I basically see this contract in the same light as Morneau's contract. Neither player is all that likely to be elite for a good portion of their contract, but if you look at how many wins they will bring in compared to how many wins spending that money on the free agent market would bring in, it's probably about a wash. Whatever the Twins were going to spend that $48M over 4 years on was probably going to be about as valuable as Nathan will be over the next 4 years. Neither contract is necessarily the type of risk I would want to make, but it's not an absolutely awful risk, either.
I can't quote and rebut since I agree with most of your analysis in terms of Nathan's value. I would just say that teams will always put an increased premium on younger, cheaper players. See Bedard or Cabrera v Santana. Obviously comparing the trade value of Nathan age 33 to Nathan age 35 is an excursion to counterfactual island which is fraught with danger. However, while I'll refrain from arguing a specific degree/price to this premium for younger and cheaper, I think recent history has shown that there is a premium for younger players that don't have financial commitments. I'd also argue that a $6 mil one year commitment and two first round picks (depending on draft slot of signing team) is of more value than two years of service at $24 million but I digress.
Concerning the DePaula scenario, I am of the belief Twins pitching depth is much stronger right now than where it was a year ago. Humber, Mulvey, Blackburn, Duensing, Perkins, and Swarzak could all conceivably be decent reliever options by the end of this year if not earlier. DePaula doesn't even get mentioned in BP this year.
To me this symbolizes the general degradation of the Twins from a Oakland A's/San Diego Padres type organization to a Chicago White Sox/Houston Astros type organization where you are always in a state of "if things bounce right we might be in contention." Why not spend the money on above slot talent in the draft or increasing your international presence? I don't deny Nathan will probably produce a statistical "profit," just like Nick Swisher will continue to be a stud on the White Sox. I just don't see the glory in spending $75 million for a 75 win season. It is really the lack of clear direction from the organization more than the signing that is frustrating.
Why not spend the money on above slot talent in the draft or increasing your international presence?
I think that's a bigger problem when the Twins are clearly paying over market value for a player (see, for instance, Livan Hernandez.) It's not clear to me that the Twins would definitely be better off spending this money elsewhere. $10M in extra draft pick bonuses and international free agents will get you more wins, but Joe Nathan will get you wins, too.
I just don't see the glory in spending $75 million for a 75 win season. It is really the lack of clear direction from the organization more than the signing that is frustrating.
I see where you're coming from on this, but look at what the Tigers did after the 2003 season, for instance. They signed Ivan Rodriguez to a 4-year, $40M contract. At the time, most pundits were all over this as a mistake for both sides--what does a losing team need with a veteran superstar? Why would a veteran superstar want to play with someone who is clearly not a contender? The Tigers spent $7M of $46M that year on Pudge (not sure how much overall) to be a 72-win team. (In a somewhat similar vein, they traded for a 28-year-old shortstop who turned out to be Carlos Guillen.)
After that completely underwhelming 2004 season, they added even more payroll, signing a 31-year-old injury-prone Magglio Ordonez to a 5-year, $75M contract. With some other spending, their payroll increased to $69M. They won only 71 games that season. Then after 2005, they added some more payroll, some of their young talent finally matured, and they had a great team on their hands.
What is the moral of the story? It's not such a bad idea to sign good players to long-term contracts if you have reason to believe they will be good in the future. The Tigers probably got a little lucky on the Pudge/Magglio gambit, but most title contenders need a bit of luck. I might feel differently if Nathan was blocking a good prospect from developing, but that's clearly not the case here. If the Tigers had waited until after 2005 to make all the free agent acquisitions for their team, they probably wouldn't have been able to get as much bang for their buck.
As for direction, I think the Twins' direction is fairly clear. They just added two 22-year-old players and signed stopgaps at positions where the young talent isn't advanced enough to play for the big club. They're building around Mauer/Morneau/Cuddyer/Nathan/Gomez/Delmon/Liriano/Slowey/Baker, and while I would have chosen a somewhat different group of players to build around, they are clearly gunning for 2010 when Gomez and Delmon could be near their peak, Liriano might be at full strength and they could make some free agent signings to fill in positions of weakness.
The contract that Nathan accepted is essentially an equivalent contract to the one that Santana reportedly turned down. The Twins wanted to keep Santana, but he was interested in his record payday, so they couldn't. If Nathan was similarly interested in getting the biggest possible contract, he would not have signed this contract. So even in that sense, the Twins are even being somewhat consistent in how hard they are trying to retain the talent in the organization.