A Contrarian View of the Mauer Contract

Since Joe Mauer signed his massive, unprecedentedly large contract with the Twins last weekend, Twins fans and Twins bloggers have seemingly forgotten (or at least blocked out) complaints we have had for the last few months. The national media has gotten into the act as well, and suddenly Mauer represents the great hope that a middle-market team could compete with the Yankees and an example of parity in the Major Leagues.

The whitewashing of this contract needs to stop, right now.

The fact that Joe Mauer signed the fourth-largest contract of all time and the largest contract not offered by the Yankees or a crazy person is not a reason to call him a good guy. Is it nice he decided to stay in Minnesota? Of course. Is it great that he’s always been more receptive to fans than the average player? Sure. Is it nice that he teared up in his press conference? Of COURSE. But none of those things indicate that he signed the contract because he is a good guy or that signing the contract makes him a good guy.

Let’s remember for a minute the sheer size of this contract. Joe will be making $23 million dollars a year. For eight years. To play BASEBALL. Now, I’m in my last year of law school. If the legal market recovers, I can look forward to making a nice salary if I go to work for a law firm (which I’m not going to do, but hang with me for the time being). Let’s round it up to $200,000, which is near the upper limit of what lawyers Joe’s age would make. Even at that nearly absurd salary level, it would take 115 years to make Joe’s salary.For someone who makes a more normal salary, say, $35,000, congratulations, Joe will earn more in 2011 than you would earn in 657 years. So let’s ditch the meme about how Joe is a good guy for taking less than he could have in free agency.

I also doubt that he’d have gotten that much, except from the Twins. People have been throwing around numbers like $30 million or so for months. But that money would not be over 8 years, it might be for six. The most I could possibly see Joe getting in free agency over eight years would be $25 million from the Yankees or the Twins. Let’s be honest, the Twins would be forced to join the bidding war if Joe hit free agency. The Red Sox wouldn’t have joined. They have Victor Martinez, who by all reports is enjoying his time in Boston, and wouldn’t have cost them more than $10 million per year for three or (maybe) four years plus an option. The Dodgers have shown no interest in spending big money this season, and with the impending ugly divorce of the team’s owners, it seems like there would not be the money in the Dodgers’ future to be a player in the Mauer scenario. The Angels have Mike Napoli, and plenty of options that don’t cost $25 million.

So that leaves the Twins, who have no choice but to bid on Mauer, for reasons I’ll explain in a bit, and the Yankees, who are newly on a budget under the Steinbrenner son and Brian Not-as-much-Cashman. Would they have gone to $25 million for eight years? I don’t know, maybe. Their rivalry with the Red Sox wouldn’t have been pushing them, so they would have had considerably less motivation to go there. So let’s assume Mauer could have gotten $25 million, a fact of which I am not at all assured. That means he would have made $16 million more over the course of the contract. Which leads to a meta-question: when your $23 million annual salary would let you buy nearly anything you could ever want, does adding $2 million or so a year really make a difference?

So did Mauer end up signing for a discount, for functionally less than he would have gotten in New York? No, probably not: his cost of living, oh-so-important in economics, would be nearly double in or around NYC.

So, please, for the love of God, let’s stop pretending that Joe’s signing of the fourth-largest contract in history demonstrates that he’s a nice guy or that he is doing a nice favor for Minnesota.

InĀ  fact, he might have done exactly the opposite. Everyone remembers that famous, insane contract offered to Alex Rodriguez by Texas, right? Texas, which at the time had a payroll of just over $47 million, offered A-Rod a contract of $252 million over 10 years. The media went off it’s collective nut about how suddenly the playing field was even due to the huge, unprecedented contract being offered by a middle-market team. But the contract crippled the Rangers. They lasted exactly two years with a payroll over $100 million, and then had to start cutting players and were forced to trade A-Rod to the Yankees, and had to keep paying a portion of his salary just to get rid of him. The Rangers so overpaid A-Rod that they couldn’t surround him with decent players, and were bad teams those years.

That was 2001, and the economics of baseball have changed since then. Contracts have gotten larger, revenues have gone up. Last year the Twins’ payroll was $65.3 million or so, not including the partial seasons of Pavano and O-Cab. This year, it is already at $105 million. Next year, with Mauer’s salary added in and assuming all else remains constant (assuming no one gets a raise in arbitration, for example), payroll will be at $116.5 million. Sure, a couple contracts may or may not come off the books (namely Pavano), but raises for other players will probably eat up that money and more. This will be in the second season at Target field, after the novelty of the new stadium has worn off and the joy over Mauer’s contract will have dimmed.

So, the question I ask you: who leaves the Twins so they can afford Mauer? Is it Justin Morneau? Jason Kubel? Scott Baker? Joe Nathan will almost certainly go after 2011. Possibly all of the above? The Twins cannot and should not assume that revenues will rise that much. They WILL be forced to make pay cuts. In a sense that might be good, because there’s a lot of good minor league talent almost ready. However, there is NOTHING that assures me in all that I have researched that Mauer’s contract won’t cripple the team’s ability to get good free agents, which they didn’t do in the first place. In 2012 or 2013, I would expect the Twins to be around $100 million or slightly below, which means that the payroll will be $23 for Mauer and $77 for everyone else. Does that sound like a winning team to you?

At the same time, I can’t fault the Twins’ front office too much for making the offer. The fans and the bloggers and the national media and the rest of baseball, eager to stop the flow of the best talent to NY, basically mandated that they had to get the contract done. They knew that the season and the new stadium would be tarnished without a Mauer contract. They knew that Fanatic Jack‘s shouts of “cheap, cheap, cheap” would ring from far more mouths than they did this off-season. They knew that Minnesota’s anger at the team would be palpable and unavoidable. So they made an offer, and offer Joe accepted.

Joe Mauer is a professional who made a savvy business decision that maximized his own value. That doesn’t make him a good or a bad guy. What will make him a good guy is if he continues to be a class act to fans, a good guy in the locker room, and the continued epitome of “Minnesota nice.” It sure doesn’t make him a bad guy, because the Twins made the offer to Mauer and had the power to go a different direction.

There are two things I know five days after the contract: One, the Twins are soaking up all the risk and were quite possibly stupid for offering such a large contract even though there is no real way to predict revenues past 2011; and Two, Joe Mauer signed a contract for the most money he could get.

I repeat, that doesn’t make him a bad guy.

But lay off the stories praising him for signing the contract.

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2 Responses

  1. You make some really solid points Eric and I totally agree that there’s no “home team discount” in play here. But I think most of us who paid attention were aware that Mauer’s agent had a reputation for getting pretty much market-value deals out of the team his clients were already playing for (Ripken and Puckett for example).

    We could debate whether Boston, either NY team and either LA team (and maybe even someone like the Cubs) would have entered a bidding war for Mauer, but that would just be a hypothetical exercise.

    While the Twins took on considerable risk, there are two factors you didn’t take in to consideration. 1) the Twins reportedly were able to get some amount of insurance on Mauer’s ability to stay healthy, and 2) while the new ballpark will spike revenues this year and next, I don’t think it’s necessarily true that revenues will drop as attendance plateaus.

    The Twins need to win… and win big… the next couple of years. If they do, I believe the Twins will be looking for significantly better media contracts. If they can accomplish that, I see no reason why they would be limited to $100 million payrolls during Mauer’s contract years.

    Of course, a more sensible MLB approach to revenue sharing wouldn’t hurt either.

    • I think those are all very fair points. To the first point, some insurance to me doesn’t mean that it will cover the full loss if Mauer goes down for a season (add to that the fact that insurance for a catcher with an injury history for that amount would be extremely expensive). Just as with Nathan, I would imagine that insurance would cover less than half of the lost value of the contract. That said, I don’t know that getting insurance on a (slightly) insane contract makes the contract any less insane. Sort of like getting life insurance, then going BASE jumping, but without testing the parachute. Bad analogy, i know, but I think the point bears true.

      Re: the new ballpark, I think (and maybe I didn’t make this clear enough) that the real point is that no one has any idea what will happen with revenues after the first few years at Target field. For some stadia, revenue has continued to be steady or even increase, like Camden Yards, while for others, like Progressive/Jacobs Field or The Cell, it has sharply dropped after the first 3-5 years. While I agree it’s a given that revenues might not drop, I also want to make the point that there is no guarantee that they will remain steady or increase.

      All that said, I completely agree with the rest of your comment. About three weeks before the contract was signed, I went on record (somewhere, whether it was Twitter or on this blog) saying that I thought the Twins were offering about 8/180 and Mauer was holding out for 8/200, and predicted an end value of 8/186. While I should have done the math and realized that 8/184 rounded off much better to $23 a year, I wasn’t at all surprised by the amount.

      The real purpose of this entry was to respond to the fervent joy that seemed to pervade the fanbase and blogosphere at the announcement of the contract – it just seemed to me that calling Joe such a good guy JUST because he signed the contract and then cried at the presser didn’t make any sense in context. But the entry turned into more than that, and I think you caught me napping in a couple places where I either should have explained my assumptions or entered the caveats.

      Thanks for reading and commenting!

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