On Johan Santana and Why No Signing Is Risk Free

"Risk Free" is a term that has been bandied about when discussing the past two signings the Orioles have made.  When used with Nelson Cruz, the concept of something being risk free is simply absurd.  Investing almost 10% of your team payroll in a player is a risk.  It is an immediate risk because that money could be spent on other players either via free agency or in a trade.  It is also a future risk because it reduces money to be used for the draft, international free agents, or team infrastructure.  Nelson Cruz is not a zero risk.  Now, you can argue that he is a minimal risk.  I can understand that.

The Johan Santana signing is a much fainter shade of risk, but, again, it is not risk free.  Even right now at this very moment it is not risk free.  Let us take a look at the likely contract:



If Santana hits all of his marks, he is likely to reach a contract worth 7.64 MM.  There is an extra 950k in his deal, but it is unlikely he will be able to make starts 22-25 even if he was healthy and able to make his start every trip through the rotation.  I will explain a little bit about each part of his salary.

Roster Bonus
With this CBA, minor league free agents who receive an invite to the big league camp receive a 100k bonus for being sent down to the minors after the end of Spring Training.  Santana's contract ensures he will be paid this money.  If he is cut before the end of Spring Training, the Orioles must give him 100k.  If he is transferred to extended Spring Training or joins Norfolk, he gets a 100k bonus.  To put this money in other terms, Santana is ensured a sum of money that would have been equivalent to a top five international signing for the Orioles.

Base Salary
Upon being shipped down to the minors, which will happen due to Santana needing to regain arm strength to enable him to throw consistently above 80 miles per hour, he will then receive a minor league salary.  It has not been reported what this salary would be, but I would imagine he is one of the higher paid players in AAA.  That should be worth about 20k a month to him.  For April and May, he would take in 40k total.  Upon graduation to the Majors on June 1st, he would then receive a pro-rated portion of the MLB minimum.  That amount will come to about 100k per month.

Active Roster
If Santana is indeed promoted on June 1st, he receives a bonus of 3 MM regardless of how long he remains on the big league club or how well he does.  At this point in time, he will have cost the Orioles nearly three times their 2013 international amateur free agent budget without throwing a single pitch.

Games Started Bonus
Santana's incentives for games started are shown below:

GS	Bonus
5	250
10	350
15	500
20	750
21	150
22	150
23	200
24	200
25	400

Games 22-25 are in italics as we do not expect Santana to reach these incentives given his start date on June 1st.  That is to say, we think it is impossible for him to be able to make these starts even if he was completely healthy.  There simply does not appear to be time to do so.

Days on Roster Bonus
His incentives for being on the roster are shown below:

Days	Bonus
30	250
60	350
90	500
120	1000

These are important numbers for Santana because it ensures him money in case he is used as a reliever and not as a starter.

But What is Santana Worth?
This is really the question that needs asking.  Yes, there are risks associated with resource expenditure in Santana, but we simply cannot look at this move in a vacuum.  The point after all is to win the World Series and a shrewd use of resources on a pitcher who could provide mid-rotation performance would be helpful.  OK, so who are other pitchers who have gone under the knife for a similar injury?

Dallas Braden
Tim Byrdak
Rich Harden
Orel Hershisher
Mark Prior
Bret Saberhagen
Chien-Ming Wang
Chris Young

That list is the best I could uncover with the disabled list database I have along with a short stint of Googling.  Of this group, really only Bret Saberhagen came back to give any quality innings.

Bret Saberhagen post-surgery

Year	Age	Tm	W	L	ERA	GS	IP	ERA+	H/9	HR/9	BB/9	SO/9
1998	34	BOS	15	8	3.96	31	175.0	119	9.3	1.1	1.5	5.1
1999	35	BOS	10	6	2.95	22	119.0	171	9.2	0.8	0.8	6.1

Provided by Baseball-Reference.com: View Original Table
Generated 3/6/2014.

Those numbers are pretty astounding and show just what is possible although not what is probable.  What I would like to suggest is that we have about five different scenarios with Johan Santana.  I will only consider him as a starter.  I am using this past offseason value for one free agent win, which is roughly 6MM in cost.

1. Spring Training Washout (100k, 0 WAR, -100k value)
2. Minor League Washout (140k, 0 WAR, -140k value)
3. MLB Washout (3.74MM, -0.5 WAR, -6.74MM value)
4. Below Average MLB (7.64MM, 0.7 WAR, -2.64MM value)
5. Average MLB (7.64MM, 1.4 WAR, 760k value)

Basically, if Santana regains the ability of being an average MLB starter (a high level backend arm for a first division team) then he gets paid what he is worth.  Anything short of that and it appears the Orioles pay more than what he is worth.  On the front end, that is close to nothing, but is similar to what the team offers their larger international free agent acquisitions.  It should also be mentioned that a below average MLB pitcher may be valuable to the club, but one somewhat suspects with arms like Gausman and Matusz around that the benefit will not be all that great.

Conclusion
What we have above in the discussion are basically whispers of probability and value.  The truth is that Santana will likely be taking the path of the second scenario.  His shoulder injury will still be impacting him and he will not be ready for Major League action on June 1st.  This likelihood is probably a near certainty.  This near certainty of no value is the cost of 140k.  As a reliever, he will be overpaid and, perhaps, redundant.  As a starter, he needs that one in a, guessing, thousand shot of being fortunate enough to take the Saberhagen route.  That would provide the Orioles with a solid option as a backend arm and prevent the club from dealing more international bonus slots or competitive draft picks.  All in all, yes, there is risk, but that risk probably does not matter much.

Why Did the Orioles Sign Johan Santana?

Note: Check out our other article on the Santana signing not being a risk free move.

On Tuesday, the Orioles agreed to a minor league deal with Johan Santana. Santana, who turns 35 in a week, would make $3 million if he's added to the 40-man roster. He has a chance to make another $5.05 million in incentives. He also has an opt-out date of May 30 if he is not yet added to the major league roster, which goes along with Dan Duquette's June 1 target date for a decision.

It's hard to find much to dislike about the signing. Santana has pitched very well in the past, and if he's able to overcome his shoulder problems, he could give the O's another decent option to improve the team's pitching depth. Chris Tillman and Ubaldo Jimenez are the O's top two starters, so a healthy Santana could eventually compete with Miguel Gonzalez, Wei-Yin Chen, and Bud Norris for innings. Kevin Gausman could also earn starts down the road, depending on any injuries or how well the back-end of the rotation performs, but Santana would likely get the first chance, assuming he's ready.

Santana is not guaranteed to make that $3 million, as some fans initially suspected. If he is never added to the 40-man roster, he doesn't get that money. He is essentially a lottery ticket, and the Orioles have a couple months to decide if they want to promote him. Santana has time to work his way back in the minors to strengthen his shoulder and potentially return to form. But the odds are stacked against him. Santana has had two major shoulder surgeries since 2010, and he's recently had trouble throwing above 80 mph. That may have been fine for someone like Jamie Moyer to get away with. But Johan Santana is not Jamie Moyer.

Signing Santana doesn't make the O's any worse, but there isn't necessarily much upside with the move. Even if Santana is able to pitch in the rotation, he hasn't pitched all that well since 2010. In 2012, when he threw 117 innings, he posted an 8.54 K/9, his highest since 2007, but he also walked 3 batters per nine (his highest mark since 2002) and allowed 1.31 home runs per nine (his highest since 2007). His numbers weren't quite as bad as his 4.85 ERA indicated, but he certainly wasn't frontline starter material. The O's have a few of those guys already.

Also, likely because of the combination of injury and age, Santana's pitching velocity has consistently been dropping each season on all of his pitches.

Johan Santana's declining velocity

Santana has been losing about 1 mph on all of his pitches each season -- sometimes more. That has mainly affected the movement on his four-seam fastball, which he throws nearly half the time. He also adjusted in 2010 and 2012 by throwing more sliders and fewer change-ups, despite his slider losing a bit more movement than his change-up. Maybe he wasn't as comfortable throwing as many change-ups as before since he was offering them up at 77 mph. With that level of velocity, Santana will need pinpoint control on all of his pitches.

It's also worth wondering how the Santana signing affects Gausman. Bringing in Jimenez basically forced Gausman to Norfolk, which is fine, because Gausman could certainly use those Triple-A starts to work on improving his slider and his overall command. But if the O's turn to Santana later in the season instead of Gausman, could that stunt his growth? He could make a case for being the O's fifth starter right now, and he could be the shot in the arm the O's need in June or July. Would the O's toy with the idea of moving him to the bullpen again to get him to the majors? I'd say no, but they did use him out of the bullpen last year occasionally in one- or two-inning appearances. That's not really the best use of his services, and it's probably not the best for his development. Granted, Santana pitching well would be a nice problem to have, and Gausman could eventually be promoted and used out of the bullpen even if Santana never pitches for the Orioles. But Gausman's progress is more important to the Orioles than Santana's. This is probably a small gripe, though, and hopefully Gausman's reliever days are over. And perhaps my concerns are more with how -- and why -- the O's jerked Gausman around last year instead of just leaving him alone and letting him start. It's not like the Orioles employed the Earl Weaver long reliever model with Gausman, either.

It'll be interesting to see if Santana can indeed work his way back and pitch in an Orioles uniform this season. It's a long shot, and the O's may not need him anyway. But if he can come back as just a competent starting pitcher, then the signing was worth it.