31 December 2009

Does Holliday Make Sense for the Orioles?

Tracy Ringolsgy wears a cowbot hat. Rongolsby also writes for Fox Sports. He wrote today that the Baltimore Orioles had extended an 8 year offer to Matt Holliday to the tune of 130MM. That is an annual average of 16.25MM. An eight year deal will also take Holliday through his age 37 season. Andy MacPhail has offered to get together with him and Peter Angelos in Austin where Holliday lives. Roch says MacPhail denied the offer was ever presented.

The alleged offer consists of a rather lengthy contract. Based on his age and position, he projects to roughly 26 wins above replacement over that eight year period. Assuming an increase of 10% increase in the cost per win and that this year's value is 4MM/win, Holliday is worth 137MM over those eight years. More pessimistic projections see his value as closer to 124MM over eight years with those last two seasons rating him as severely below average. In truth, it is difficult to find any projection that is optimistic over years 7 and 8.

Although I am not a great fan of this supposed proposed offer, I can understand why it would make sense. More after the jump.

Some points:

1. We have excess outfielders, why do we need to purchase a left fielder?
By signing Holliday, it leaves a glut of outfielders with Felix Pie, Nolan Reimold, and Luke Scott. Such as situation would enable the team to engage in a trade to move talent around. Players like Pie and Reimold (to a lesser extent Scott) present plus value for other teams with payroll restrictions due to their status under the CBA as renewal year players. Signing Holliday could mean a redistribution of talent from Reimold to Blanks at first.

2. Holliday is on the wrong side of 30, how does that fit?
Players with a high contact rate, decent walk rate, some speed, and power age better than others. What is more worrisome is the athlete who relies many on one or two skills. His bat should age rather well and his defense should remain passable in left field for several seasons. He figures to age much better than Jason Bay.

3. What about the Coors split?
Much concern over Holliday is his home/road splits attributed largely to the Coors effect. While this was a concern last off season, it may not be as much of one this off season. He exhibited another extreme home/road split this year with Oakland and St. Louis (OPS; 982 vs 830). This may just be his performance characterization. He hits well at home. With Camden Yards as one of the top three homerun hitting environments in the Majors, he stands to do well with his high contact rate and power. He should hit well as an Oriole.

4. So what do I have against this trade?
This sort of contract ensures a nearly worthless player on the team for two seasons down the road. That restricts a team's roster in sunk cost and potentially a sunk 25 man roster slot. Such a signing also means that about 15% of the team's possible budget will be tied to a left fielder who skills are decreasing each year instead of getting better while all the players around him are excelling. Such a signing means that we are ignoring the plus value available from the left field slot that we currently have and hoping to find that elsewhere in the lineup or needing to overpay more to fill positions. It also means we are paying a premium on a position that is of little consequence this season.

I can understand why a Holliday signing makes sense, but I would not suggest it. I think it would do more to limit roster and payroll flexibility down the line in a way that is not essential for the future success of the team.

No comments: