On Frontloading and Trading Your Newest Player

That is the face of a shortstop, everybody. - Elsa

I'm going to keep things relatively brief today; it's sort of the beginning of a holiday, after all. So no, I'm not going to write 3000 words about how much I love seeing Peter Bourjos brought to this team (though I could, if I wanted to), or pile on about how unbelievable it is the Cardinals managed to snag Randal Grichuk in the same deal, or even cast back in my memory to the two weeks leading up to the 2009 draft, and how Grichuk's name was pretty heavily bandied about in connection with the Cardinals, and how much consternation there was with what seemed a rather underwhelming, rather meh, rather budget-friendly, rather....Kozma-esque draft pick. Maybe I'll break that one out sometime closer to Christmas, when the Redbirds are sitting home wrapped up in a Cardinal-themed Snuggy while the rest of the baseball world tries to figure out how they managed to put off their holiday shopping until the last minute again, and why in the hell do the oh-so-perfect Cardinals have to rub it in their faces that they pretty much finished weeks ago. The Grichuk sentiment was somewhat fascinating to me at the time, and it still sort of is, but really, it's such a small footnote now that perhaps it's minutiae too minute for all but the dullest, darkest, most navel-gazing of days.

I was also considering writing this post without a single paragraph break, just to fuck with everybody, but that would be obnoxious. So, paragraph ho!

As for Jhonny Peralta, the man I plan on writing a word or two about today, well, he wouldn't have been my first choice. Or, rather, I should say Jhonny Peralta wouldn't have been my first kind of choice; once it was clear the type of choice he is was the type going to be made, he actually was my first choice. And yes, I am rather enjoying my own loquaciousness today, perhaps a bit more than is actually decent.

Anyhow, what I mean to say is my preference in addressing the shortstop position would have to really, completely address it for the long term, fixing the hole once and for all. (And by for all, I mean for, say, the next decade.) It was my feeling coming into the offseason that the Cardinals had an opportunity due to the remarkable confluence of a glut of talent in a few specific areas, a market starving for young pitching, and a roster with just one or two areas which could be significantly upgraded, to make a big splash. To go all in for a Jurickson Profar type (and by Jurickson Profar type I mean Jurickson Profar), and just end all questions about shortstop for the foreseeable future. I wanted to see them boldly dip into the asset pool, pull out a gob of value, and use it to extort a young superstar from some desperate club.

Unfortunately for me, things didn't quite work out that way. The Rangers managed to find someone to take Ian Kinsler off their hands, somewhat surprisingly, and so lost all desire to deal from their deck of middle infielders. The Orioles wanted Shelby Miller for one year of J. J. Hardy, a deal roughly akin to that Manhattan-for-beads thing from back in the day. I assume other clubs made other, similar demands for their young assets, apparently reading the Cardinals' embarrassment of riches and specific desperation as an excuse to be assholes.

And so it became clear the trade market, at least of the grand slam, do-you-see-the-wonders-I-have-wrought variety, was pretty much a no-go. So, no-go we go on to the free agent market. At which point Jhonny Peralta, as I said before, was, in fact, my first choice over Stephen Drew, the name who seemed to get the majority of the attention.

Oh, and while I'm thinking about it, Mr. Mo: awesome bow tie. Someone send Ken Rosenthal a picture of how a real sartorial genius rocks a bow tie. Also, send Ken Rosenthal a punch in the Adam's Apple. Just because.

Of all the things I find fascinating about the Jhonny Peralta deal, from the player outrage to the sexy, sexy lineups we can type up using the Cards' hitters this year, the one I find the most fascinating of all is one that probably seems a bit prosaic, if not downright sordid.

I'm talking about the contract.

More specifically, the frontloaded contract.

Ah, frontloading. Long the exclusive domain of message board blue-skying, where people who should really know better speculate teams should really pay their players more money up front, that way they can save money down the road. And oh, it sounds so very reasonable when you put it that way!

The problem, of course, is fairly basic economic theory, things like the value of money over time; specifically, the future is cheaper than the present. Or, rather, the present is more expensive than the future, since the two things are, strangely enough, not exactly equivalent.

Teams would be foolish to frontload a contract, the sensible voices say. You would be paying far more in actual value vs a contract that's backloaded, even if it seems like you would paying more if the big money is all coming at the end of the deal when the player probably isn't worth it anyway. Teams simply do not frontload their contracts, and there are lots of really, really good reasons why they don't.

Except, well, this team just did.

The contract the Cardinals just handed Jhonny Peralta is worth $53 million total over four years. That's a lot of money, especially when the player in question has age questions, body questions, defense questions, and PED questions. Then again, the Cardinals had no questions at shortstop, only an answer, and the answer was no. So questions....eh, not so bad.

The years break down thusly:

  • 2014: $15.5 million
  • 2015: $15 million
  • 2016: $12.5 milliion
  • 2017: $10 million
And that, ladies and gentlemen, is not what a contract normally looks like. Sort of the reverse, actually.

Of the $53 million the Cardinals will pay Jhonny for his servhices, slightly over $30 million of that will come in the first two years of the deal. After that, he becomes steadily more affordable, to the point that in 2017, when marginal wins are assuredly going to be much more expensive than they are now, he won't have to be worth too very much at all to justify that salary.

Again, I just want to stress how balls-out strange this contract format is. Teams just don't do this. So why did this team?

Well, a couple reasons, I think. There was a thread recently -- I don't recall which one -- in which frontloading was again discussed, and there was some back and forth over what, if any, circumstances would ever justify writing a contract in this exact way, and luxury tax concerns were put forth as one of the very few examples. And that makes sense; if a team was fairly comfortable with their payroll this year, but have a few huge escalators built in to contracts that could push them dangerously close to the threshold in two years, then perhaps paying extra now would make a bit of sense.

In a way, that's kind of where the Cardinals are right now. They aren't anywhere near any kind of luxury tax threshold, of course, nor will they be in the near future, unless things go all pear-shaped on us suddenly for no discernible reason, but they are way, way under what would be the pain point for their own personal payroll this season, with a team expected to contend for a title again in 2014. On the other hand, here's the thing about young, inexpensive talent: it tends to act kind of like a drug dealer. In other words, shit gets expensive fast. At some point, the Cardinals are going to have to start paying some of these young players we're all so very fond of; guys like Matt Carpenter are going to be looking for a payday relatively soon. (Speaking of, is this offseason too soon to try and lock him into one of those arbitration-bypass deals like Allen Craig and Evan Longoria have signed in the past? Wait another year? Try to get it done now? I can't quite decide.) All that young pitching? Sure, some of it is probably going to be shipped out piece by piece in trades, Tampa Bay-style, to keep the talent pipeline flowing while avoiding some of the big costs and risks associated with high-quality pitchers, but you have to keep some of those guys, don't you?

And so we have a roster which, while extraordinarily affordable at the moment, considering the team, as it stands right now, is very likely the best in the National League, could also get expensive quite quickly. Perhaps using that big bag of cash the team has laying around to pay Peralta extra the first two years of the deal makes some sense, if it means he's going to be more affordable in years three and four. Right?

But, wait. Again, we run into that whole value of money over time thing. The $15 million the Redbirds are paying Peralta in 2014 dollars is much more expensive than $15 million worth of 2017 money. They could just take a chunk of that money, invest in something (I hear Facebook stock is a really good bet), and come out with more money in 2017. Paying him $10 million this year, sticking that $5 million in a bond, and then paying him $15 million in 2017 would be objectively cheaper. And not by an inconsequential amount. So, sure, the roster as a whole is going to be more expensive in 2017 than it is now, but saving the money now means the team would have a much larger amount down the road to try and afford it.

So why, then? Perhaps the rate of inflation in baseball is outpacing anything the organisation thinks they could accrue in the meantime? Maybe that would make sense here, but I'm not sure. Someone with a bit better understanding of financial markets would need to school me on this one, in terms of how differing rates of interest and inflation would affect the actual cost of something relative to when you're spending the money. It's a bit too in-depth for me.

But, I have another idea. And maybe it's a crazy idea. Maybe not. But it's the one that makes a certain amount of sense to me, and so I write it down for all of you to tear apart.

The Cardinals want to trade Jhonny Peralta.

That's right, less than a week after signing him, the Redbirds are looking to move their new shortstop. Oh, not immediately, of course; that would be silly. But I'm thinking...maybe year three of this deal.

Look, we all know Peralta is looked at as a guy with Positional Flexibility listed on his dossier, right? Of course he is. Shortstop, third base, left field....if you've got a position on the left side, Jhonny can fill that hole. (So...many...jhokes....) Second base is absolutely an option as well, though it doesn't fit the left side thing nearly as well. And when Peralta signed with the Cards, that positional flexibility was something plenty of people seized on, to the point John Mozeliak was asked about it at his news conference the other day. He didn't exactly shoot the idea down, either, saying he isn't thinking about Jhonny Peralta moving off short in the near future, but it's certainly something that is intriguing, at least down the road-ish. If year three of this deal rolls around and Jhonny just isn't handling short so well anymore, he could always transition to a slightly less demanding position.

Of course, unless something goes wrong, the Cardinals probably aren't going to need him at another position. Matt Carpenter is pretty much locked in at third for the foreseeable future. Matt Holliday has a big contract and a spot in left field I don't think anyone is especially eager to move him off of. Kolten Wong isn't written in stone yet at second base, but you have to think he's going to get every opportunity to put his name on there with at least Sharpie-level permanence.

So there are two interesting things about this contract. There is no No-Trade Clause, and there is a lower annual salary in years three and four. I'm just spitballing here, but it seems to me that if you wanted to make a player more attractive in the future -- if, for instance, you had a shortstop who can't quite handle the position anymore at 33, but looks like he just might be a league-average third baseman -- one way you might go about doing so would be to pay him up front, then slope down his salary so that he's making something which could be very, very enticing to a team looking to acquire a league-average third baseman. Or something like that.

Then again, you could probably also just eat some salary in any potential deal, so maybe my theory makes no sense at all. But my thinking right now is this: Jhonny Peralta is a solid hitter who plays a pretty solid shortstop by positioning himself well, using his brain and instincts to overcome what seems to be a lack of ideal range. But as he moves into his 30s, that range is going to decline even further, to the point he may not be able to outthink the position any longer. At that point, he's probably going to need to move, and his value takes a hit. But, even then, his bat is probably good enough he could be an asset to some team at one of the other positions he can play, particularly if he came with a very reasonable salary, made possible by a contract which was mysteriously frontloaded, in spite of that being a very, very strange thing to do.

The Cardinals have, I think, two years of Jhonny Peralta at shortstop. They will pay him very well for those two years while they try to find their long-term solution at short. And sometime after the second year of this deal, I wouldn't be at all surprised if some team with a real need for a third baseman gave the Cardinals something pretty nice for their surprisingly affordable league-average infielder. Or maybe not. I never discount the idea I'm either a) crazy or b) kind of stupid or c) a little of both. In fact, c) might be the most likely of all answers.

Hmph. I look at the word count, and I see my brief column about an odd contract and what implications I think it might have has metastasized into a 2500 word behemoth, and I feel I should apologise for it. I really did mean for this to be short. I actually had planned to get the Peralta contract thing and some consideration about the next step I see for the Cardinals -- that of acquiring a right-handed hitting utility infielder with a cromulent bat -- all wrapped up in around 800 words or so. I have badly misestimated myself, apparently. The original title of the post was On Frontloading and Utilities. I changed it sometime around word 1800.

On the utility front, though, can I just say my initial thought was, "I don't know what Michael Young is going to get paid, or if he still thinks he's a starter or something, but that seems like exactly the kind of guy the Cards should target." Bring him in to be your utility infielder slash first bat off the bench, send Pete Kozma off into the darkness from which he came, and transition from Daniel Descalso to Greg Garcia as your lefty infielder/backup who can actually play shortstop because he's been a shortstop all this time, and call your bench the most improved part of the team. After all, you do still have payroll flexibility, and Young still has a little pop in the bat, still hits for a pretty good average, and he is physically capable of standing at several different places on the baseball field, giving him Versatility.

Then, of course, I pulled up Fangraphs, went to the Michael Young page, and my thoughts turned to, "Holy Fucking Shit! How in the world has Michael Young been this horrible!?" It's really quite shocking how awful he is at defense, regardless of what position you try to play him. To the point that, despite posting a perfectly acceptable 102 wRC+ in 2013, he managed to be worth -0.2 WAR.

So maybe he's not the guy I really want as a utility infielder.

I will now end this very brief, nearing 2800 words essay of mine, wishing you all a nice Thanksgiving.

Goodbye, everyone.
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