What Should You Think Of The Chris Davis Deal?

Chris Davis is going to re-sign with the Orioles, and he'll be playing in Baltimore for the foreseeable future. In a few ways, that's a very good thing. He's talented at what he does. He's one of the premier power hitters in the game. He's popular among fans. And he's well liked by teammates, who clearly want him back.

If you want to just stop there, that's fine. This doesn't have to be complicated. Watching sports is supposed to be fun, and the Orioles (on offense, at least) should be enjoyable to watch for the next few years (and maybe longer). But we do our best to dig a little deeper here, and you probably wouldn't be reading this if we didn't.

I've been trying to figure out what's bothering me most about the Orioles' decision to re-sign Davis. It's not the enormous amount of money, which seemed comical at first but is at least less bad after the reported amount of deferred money. Jon discussed Davis's contract in detail on Saturday, and you should give it a read.

It's not that Davis turns 30 soon and plays first base, and it's extremely risky to hand out such a lucrative contract to those types of players. That's not stating anything new.

It's not that the Orioles have spent a lot of money and, for now at least, seem very similar to last year's team.

It's not even that the Orioles seemed to bid against themselves to get the deal done, with no clear competitor in the market for Davis's services. It's tough to see that $161 million figure and wonder which other team was willing to come close to that offer.

All of those things matter. But I have more of an issue with Peter Angelos willing to spend a huge sum of money for one player -- only to reel in Davis. If Davis were far and away the best player on the market, maybe that would be easier to defend. But he wasn't. There was nothing hidden about the priority to keep Davis at seemingly whatever cost; Dan Connolly, formerly of The Baltimore Sun, was on top of this a month ago. Angelos inserted himself in the negotiations with Scott Boras early on, demonstrating the level of seriousness in keeping Davis in an O's uniform.

Jeff Sullivan of FanGraphs expanded on this topic in his analysis of the Davis deal. Here's a section of his excellent post:

The idea presented: the money budgeted for Chris Davis wasn’t being budgeted for just anyone. Angelos has a particular fondness for Davis, and a particular appreciation of everything he’s done. It’s not quite that Davis is being paid right out of Angelos’ pocket, from a completely separate budget, but there are hints that the Orioles’ payroll might go higher with Davis than it would’ve without Davis. If that’s in any way true, then it has to also be a factor, because it means the Orioles would spend more on a team with Davis than they would on a team with, say, Yoenis Cespedes. Again, if that’s true, it would mean Davis is getting money that wouldn’t have been put elsewhere.

Sullivan later hits on a point that gets to exactly what has been eating at me: "...as a fan it could be frustrating to think about this situation because you’d want the same amount of money to be available regardless." And that option evidently was not available here, regardless of whatever offer the Orioles had extended to Yoenis Cespedes. You couldn't pick between Justin Upton, Cespedes, and Davis, because Upton and Cespedes were never real options for similar money (barring a tremendous discount or a bizarre short-term deal). It's better to have Davis than none of the three.

If the Orioles didn't have a particular amount of money set aside, and whatever else Angelos was willing to give to Davis was just icing on the cake, then maybe this is all easier to swallow. It seems likely that Connolly was right all along that the Orioles (Angelos, really) did not want to go above $100 million for any other player. But it's unsettling both because we'll never know for sure, and that also maybe isn't the best way to go about things.

Overpaying for sentimental reasons and past performance isn't a great pattern to follow, though willing to go above and beyond for a skilled player is a positive (especially if that extra money would not have been available for anyone else). The best use of all funds would be to use them in a way to build the best possible team, but that option likely was not on the table.

Do you really care about Angelos losing money on the Davis deal if it starts to go south in a hurry? Would you rather him just pocket that extra money? Probably not. But if this contract affects the likelihood of Manny Machado signing an extension, it will look much worse. This is the type of contract that can hamstring a team. That concern is real.

Then again, maybe Machado will be one of Angelos's guys, and he'll be willing to go above and beyond for him, too. At least in that case, he'll be making an exception for one of the very best players in the game. But let's not get ahead of ourselves or anything. Let's instead start with hoping that the 2014 version of Davis doesn't resurface anytime soon.

The Money Is There. Where Is It?

As we settle into the final stages of free agent acquisition, the market begins to stabilize. First of all, several top tier talents remain available. To be elite and available in January is not an unusual thing. Ask Max Scherzer or Prince Fielder. However, to have as many perceived elite talents out there for hire is indeed unusual. According to STEAMER, Chris Davis, Howie Kendrick, Yoenis Cespedes, Justin Upton, Wei-Yin Chen, and Ian Kennedy are all present and stand to be worth more than two wins for 2016. Six players stand to make about 18 MM apiece (a total of 108 MM for 2016). That is a great deal of talent to change the outlook of the league without mentioning mid-range talents like Ian Desmond, Yovani Gallardo, and others. In all, STEAMER project 54.4 loose wins remaining, a value of about 380 MM. Complicating the matter is that many teams in search of talent have spent a great deal of money, which might have caused the market to constrict significantly.

Of course, available talent though does not equal available money. If there are 12 apples whose intrinsic value is a dollar while only six dollars are available in the market, then those apples will likely sell for less than they are worth. We do not know how much money each franchise has, but we can guess. To arrive at a reasonable answer for this, payrolls from 2013, 2014, and 2015 were assessed for change over time. This change could then be used to estimate what might be the overall pool of money available for 2016. Estimated current total payroll for 2016 is $3,747,200, which is a 1.01% increase over last year. Should we expect more?

	Payroll	%
2013	3150500
2014	3396200	7.80%
2015	3709800	9.23%
p2016	4025875	8.52%

If that 8.52% increase happens, then we have about 280 MM in open spending available. With overall talent at 380 MM, it looks like it might shape up to be an incredible buyer's market, which was something we thought Dan Duquette would be angling for this offseason. Also, the rumors about players considering one-year deals, punting a season, and then resetting for the 2016/17 offseason make a bit more sense. It must have someone like Chris Davis thinking twice about rejecting the 7/154 offer he had on the table or why he is refusing that offer if it is indeed still there.

Using the generic 8.52% increase over 2015 payroll marks might help us understand who exactly is in play for major talent. To note, this is generic because we are not considering whether 2015 was an abnormality in excess or under payment. Additionally, we do not know if resources are being redirected for immediate play or to support future franchises fortunes. Off the bat though, we have several teams that appear to be out of the game: Toronto (13.5 MM above 2015 + 8.52% payroll), Cleveland (22.5 MM), Angels (24 MM), Oakland 13.4 MM), Arizona (28.5 MM), Chicago (37.9 MM), St. Louis (4.1 MM), and New York Mets (1.3 MM). These eight teams seem, at a glance, out of the running for any of the top-tier talent.

What are the team needs of the 22 other clubs based on STEAMER projections?
(x denotes minor need as defined by 25th to 50th percentile; X denotes major need as defined by 1st to 25th percentile):

Team	C	1	2	3	S	LF	CF	RF	SP
NYY								x
Baltimore		x	X		x	X		X	X
Tampa	X	X						x
Boston	x			x		x
Kansas City			X		X			x	X
Twins	x	X		x	x		x	x	x
Chicago AL			x		X	X	x	X
Detroit	x			X	x	X	X		X
Texas	x	x				x	X
Houston	X	X		x		x
Seattle		x			x	x	X
Colorado	x	X	X		x	x	X	x	x
San Diego	x	x	X	X	X	X	X	x
San Francisco						x
LAD			x
Cincinatti	x		x	x		X	x	X	x
Milwaukee		X	X	X		x	x		X
Pittsburgh		X			X
Philadelphia	X	X	X		x	X	X	X	X
Atlanta	X		X	X	X	X	X	X	X
Miami	X	X		x	X				X
Washington	x	x					X

The data provided by STEAMER is slightly dated. For instance, it is difficult to portray Washington as having a great need in center field when they have just acquired Ben Revere. However, the data is nearly up to date and gives us a good indication of roughly where clubs are at the moment (as of Alex Gordon's re-signing).

First Base
The Orioles offered Chris Davis 7/154, BORAS model projected 5/110, and the Comp model thinks 5/91 makes sense. Regardless, he is a near 20 MM first baseman (even though the actual Boras is trying to sell him as an outfield option). Teams with great need at first base include Tampa Bay, Minnesota, Houston, Colorado, Milwaukee, Pittsburgh, Philadelphia, and Miami. Of those, it is difficult to see Tampa or Pittsburgh putting out the money from a payroll perspective. Meanwhile, entrenched veterans exist in Minnesota (Joe Mauer), Milwaukee (the newly signed Chris Carter), and Philadelphia (Ryan Howard with Darin Ruf and Maikel Franco making future noise). This leaves us with Houston and Miami as the most sensible destinations. A team that really values Davis, like the Orioles, seemingly has pretty much these two clubs as primary competitors. My guess is that Houston would be reluctant to meet Baltimore's price and may well be waiting on the Orioles to make a move elsewhere and then swoop in with a low offer to Davis. Houston right now looks weak only at catcher and first base, so Davis makes a great deal of sense. Miami? Who knows? They could have something up their sleeve. That said, Miami also has weakness at catcher, shortstop, and starting pitcher. As it stands, Miami likely only has payroll to acquire one elite player.
Likely Destinations: Baltimore, Houston, Miami

Second Base
The second base market has been a bit quiet since Ben Zobrist signed, and Howie Kendrick is Mr. Incognito. A solid second baseman, but someone who has not been heard of much this offseason. Based on the clubs with cash and STEAMER, the weakest clubs appear to be Baltimore, Kansas City, Colorado, San Diego, Milwaukee, Philadelphia, and Atlanta. That hurts for Kendrick. Baltimore appears to be quite happy to see how Jonathan Schoop develops. Kansas City has fringe options in Omar Infante and Christian Colon and appears to be largely disinterested in the infield market. They could be a landing place for a one-year bid. Colorado has larger troubles and appears content with D.J. LeMahieu to continue on. San Diego could be a spot when the dust clears. They have a number of weaknesses and should be looking at player to fall off to the floor. Milwaukee likes Scooter Gennett, the Phillies are in no place to compete and are working with Cesar Hernandez, and the Braves likewise have too many holes and a promising 2B in Jace Peterson. With all of that said, it looks like the Royals and, moreso, the Padres are the two openings. Both appear to be one-year deal scenarios, but the Padres could commit longer.
Likely Destinations: Kansas City, San Diego

Corner Outfield
The big paydays predicted for Yoenis Cespedes and Justin Upton have lost some of their shininess. The list here is not exactly as long as one might think: Baltimore, Chicago (AL), Detroit, San Diego, Cincinnati, Philadelphia, and Atlanta. To mention previous points, Cincinnati, Philadelphia, and Atlanta appear to be dedicated to rebuilding and signing a player descending from peak value seems doubtful. If there is cash to burn, there is an extreme scenario where one of these clubs signs a Qualifying Offer player, hands over a second-round pick as their first-round picks are protected, and either moves up with a compensation pick or deals said player at the trade deadline. A move up in draft selection looks like a waste of money spent, but a deal for prospects could help jump-start the rebuild a little and make it worth sinking 10 MM for half a season.

More realistically, these two players will wind up in Baltimore, Chicago (AL), Detroit, or San Diego. After San Diego pushed their budget far, plopping down 20 MM for one of these guys might be too much, too soon. They have not been attached in the papers with an elite free agent, so it might well be that they are in the sub-15 MM market (such as Ian Desmond). For the others, they have each been mentioned in passing with either/both Cespedes and Upton. Baltimore may find themselves in a situation where it is difficult to choose because they could finalize deals with Cespedes, Upton, or Davis and only have Houston, Chicago (AL), and Detroit as primary competition. Perhaps Baltimore is the domino. It makes sense now that Alex Gordon re-signed with Kansas City because this market could wind up looking bad for someone.
Likely Destinations: Baltimore, Chicago (AL), Detroit

Starting Pitching
This is another area where the market is not as great as it might appear for Wei-Yin Chen and Ian Kennedy. Of course, it always seems like an unknown team will launch themselves into the void to secure a stronger pitching rotation (again see Max Scherzer), but how often might that happen? As it stands, we have Baltimore, Kansas City, Detroit, Milwaukee, Philadelphia, Atlanta, and Miami. It is hard to see Milwaukee, Philadelphia, or Atlanta stepping into this negotiation. As they are all in rebuilding mode, starting pitchers tend to be poor options for those clubs. Starting pitchers primarily provide value their first season (~90% give more than 100 IP), but break down in the years following (~50% give more than 100 IP in year two or three or etc. afterward).

As it stands, Baltimore, Kansas City, Detroit, and Miami are the primary players one might think based on the above methodology. We know Baltimore is in the market and has been circling Gallardo. Ian Kennedy makes a great deal of sense for them as well, but it makes one wonder if they can fit two 20 MM players on their roster. Kansas City appears to have pieced together a rotation, but would like to push Danny Duffy or Kris Medlen to a sixth starter role. It is questionable whether they are planning on any more splurges after Gordon. Detroit and Miami are options. Detroit is being pushed in a few ways, but I doubt they want anyone significant after signing Jordan Zimmermann. That leaves Miami who has been the most noticeable in their quest to secure Chen.
Likely Destinations: Baltimore, Miami

Slightly Informed Projections
So where will everyone go? My choice yet is for everyone to find a need that meets their interests. Here we go.

Chris Davis, Houston Astros
The Astros have one big need and that is first base. This fit seems to make a great deal of sense and might well happen. Davis has been a major target of Peter Angelos, but after a while someone saying no to 154 MM gets frustrating.

Howie Kendrick, San Diego Padres
I do not know whether this would be a one-year deal (which I think would make more teams interested) or a multi-year deal. One might think ownership would be concerned after devoting so much money to older players last offseason.

Yoenis Cespedes, Baltimore Orioles
Justin Upton makes more sense for the Orioles with his youth, but his youth makes it likely a player option or two would be involved. Those things apparently make Dan Duquette mad. Cespedes is old enough where opt outs stop making as much sense. Cespedes also has a much better arm and range than Upton, fitting in more with the Orioles' defensive goals. The Orioles may also like that Cespedes will not cost them a draft pick for signing him.

Justin Upton, Chicago White Sox
While there has been no mention of Upton to the White Sox, this seems to make sense once Baltimore settles in on Cespedes. The White Sox are probably more willing to offer a player option. Detroit, in my opinion, will rest on their laurels as their payroll is nearing luxury tax levels.

Wei-Yin Chen, Miami Marlins
The Marlins have cash, have been highly associated with Chen, and he seems to be a great fit for them. I would also assume that Chen, who lives outside the United States, would not be all that bothered if Miami went and traded him elsewhere after a couple seasons.

Ian Kennedy, Kansas City Royals
This scenario has the Royals coming in unexpectedly to beef up their rotation with a short-term deal for Kennedy. If Orioles secure Upton over Cespedes, then I think they will be more willing to let go of a second-round pick to ink Kennedy to a deal in a similar vein to Ubaldo Jimenez'.

At the end of the day, a lot can happen. The Yankees may think they need to tighten up right field. Boston might determine they can spin some players around and get a proven left fielder. Rangers ownership could do a 180 on their stance about not significantly raising payroll. Regardless, all of these should be answered in the next four weeks.

Cup of jO's (December 2, 2011): O's and Yoenis Cespedes

Taking a break from the Orioles Top 25 Prospect list, this morning I wanted to give a quick write-up on Cuban outfielder Yoenis Cespedes -- the top international free agent currently on the market (technically, he will not hit the market until his residency is officially established in the Dominican Republic). Baltimore was recently linked to Cespedes by Roch Kubatko at MASN, who wrote on Wednesday that the O's were "interested in Cuban outfielder Yoenis Cespedes and will watch him work out in the Dominican Republic."

While Cespedes has been closely followed by international evaluators for the last five years, average baseball fans were made aware of his presence this November when his "publicity video" went viral on YouTube (a copy of the video available here), leading to drums of e-ink being spilled by sportswriters around the net. He has been a fixture on the Cuban National Team and was rated by Baseball America as the sixth best prospect at the 2009 World Baseball Classic.

Putting aside the likelihood of Cespedes electing to sign with Baltimore, is he a target Baltimore should consider? To answer that question as best we can we must look at two items: 1) his skillset and projection, and 2) his likely price.

Scouting Snippet

I haven't seen enough of Cespedes to stand firmly behind a full evaluation -- really my exposure has been limited to video feeds and television broadcasts from international tournaments. The following is my take based on about six or seven in-game views, so assign the requisite level of weight to these thoughts. Also, be sure to crosscheck this report with whatever you can find at BaseballAmerica.com, who routinely leads the pack in coverage of international talents.

Physical Description:
Listed 5-foot-10, 200-pounds. Thick, strong, athletic build. Broad chest and wide, strong hips and trunk. Agility and explosiveness to excess. Moves very well underway; can drag out of the box.

Hitting:
Cespedes's calling card is power and he has lots and lots of it. Because of his physical strength, particularly his monster core, he does not need much load or seperation to give his barrel time to accelerate. With a basic, fairly compact swing he is able to produce enough torque to drive the ball out from pole-to-pole. He doesn't need to sell out for homeruns, but his approach in the box can noticeably falter when he gets too focused on trying to force hard contact. This isn't evident in a loss of balance, head pull, or leak, but you will see some backside collapse at times and, more often, he'll extend early and come around the ball, creating holes and some lag in the barrel. There is significant bat wrap, but he seems to overcome it with his bat speed. Raw power grades at a 65, though his in-game realization could be closer to 55 against advanced MLB arms. Hitting could be anywhere from a 40 to a 55 depending on how capable he proves at making adjustments at the Major League level.

Fielding:
Cespedes has more than enough footspeed to cover gap-to-gap in center, and shows a very good drop-step back on balls. He isn't a natural fielder, but shows comfort in the outfield. He can try to do too much at times, and could possibly benefit from pro instruction as to how to play more within his tools -- not getting overly aggressive with his throws and setting up his routes a little better. His arm is an easy 60, though his accuracy can come and go due to his set-up and arm action. I would have no issue believing his glove can grade as a 60 if told so by someone who has spent more time sitting on him, but my limited views lead me to give a more conservative 50 grade.

Summary:
Cespedes is a difficult assignment for evaluators. His physical tools are phenominal, and he has a track record of performing against high level competition (albeit inconsistent and varying talent levels from player to player) both in Cuba and through international tournaments. Still, there is a large degree of uncertainty as to how a player in his situation ultimately reacts to the change in culture, lifestyle, on-field pressure and media scrutiny when making the adjustment from life in Cuba to life as a professional baseball player in the United States.

The safest course of action is likely providing him the opportunity to spend at least half of a season at Triple-A, allowing him to adjust to the pro game outside of the national broadcasts and nightly highlight wraps that accompany MLB games. With limited looks, it is very difficult to wager a guess as to the likelihood that Cespedes is suited to make the transition to the Majors with his production intact. For purposes of this exercise, we'll slap a consertive grade report as follows:

Hit: 45
Power: 55/60
Speed: 60
Arm: 60
Fielding: 45/50
Feel: 45
OFP: 52-56

*Click here for primer on Grades

What we have, for purposes of this exercise, is a potential first division starting center fielder, with some risk that he will not make enough contact for his power to fully emerge at the highest level.

Price Tag

Aroldis Chapman currently holds the record for initial contract given to a Cuban defector, with the Reds handing him a deal $30.25 million over six years. Cespedes figures to easily eclipse that contract, and is rumored to be looking for more than $60 million over six years. At 26-years old, he is entering his physical prime, with his signing Major League team getting his best years for the term of their investment. Significant interest from some potentially big spending clubs (including the Yankees, Red Sox, Tigers, Phillies and Nationals) would seem to all but ensure a big pay day for the standout Cuban outfielder -- for purposes of this exercise we will use a conservative estimate of $60 million over six years. Keep in mind that if Cespedes ends-up at Triple-A for three months, you are eating away part of the value of that first year -- in effect driving the annual price up to around $11 million a year.

Conclussion

Our "scouty" report projects Cespedes to a solid to above-average first division starter, and his upside is that of a five-tooled multiple all-star talent. A 6/60 deal for that type of player would seem to be a steal, particularly for a player entering his best four or five years of production and physicality. The sixty-million dollar question, however, is one of probability.

While evaluators can find comfort in Cespedes's successful track record in Cuba and on the international scene, it is a tall order to ask that evaluator to stake $60 million dollars, maybe more, on that production translating against the best competition in the world. Add to that an inconsistent track record for Cuban defectors and the larger issue of cultural adjustments and the ability to perform under the weight of the media scrutiny and expectations that accompany a record-setting contract, and the evaluator's task of filing a suggested price starts to more closely resemble a game of darts (skilled darts, but darts nonetheless).

Ultimately, for Baltimore, the likelihood is that so long as the big spenders remain interested the price tag will be problematic when considering the risk you are taking on. Additionally, the Orioles may be looking at a situation where they are forced to overpay the market in order to convince Cespedes to turn down a better competitive and higher profile situation in New York, or perhaps a more Cubano-centric situation in a city like Miami.

Cespedes is worth a long look from Baltimore, and the return on investment has a chance to be the type of "hit" that the Orioles will need to have if the organization hopes to turn things around any time soon. Unfortunately, the potential of having $10 million or so tied-up in a fringe-average regular (if things don't break right for Cespedes in his transition), in addition to the combined approximately $47.5 million owed to Roberts and Markakis over the next two seasons, and escalating prices for Baltimore's arbitration-eligible youngsters, could severely limit spending in any other areas, including extending some of the younger Birds.

Were Baltimore a more complete team at the Major League level, or a more wealthy team in terms of prospects in their system, this may be a risk worth taking. But the Birds need to focus inward on systemic changes before a high risk/high reward investment like Cespedes makes sense.