It Begins: Tanaka and Garza off the Board

Unless you’ve been living in a cave you’ve surely heard by now that Tanaka has signed with the New York Yankees for what amounts to 7 years, $175M (including posting fee). It was expected that the market for the rest of the free agent pitchers would pick up quickly after Tanaka signed, and sure enough Garza went to the Brewers for 4 years $53M the next day.

Although many were dreaming over the possibility of the Jays signing Tanaka, most of us recognized it was a long shot. Teams like the Yankees, Dodgers, Diamondbacks, Astros and Cubs, all recently rumored to be in on Tanaka, could offer better money, location, weather, Japanese communities, likelihood of contention, or some combination thereof than the Jays could possibly offer.

There are certainly many people out there who see this as a big loss for the Jays. Not only did they miss out on a potential front-of-the-rotation starter they desperately need, but now they also have to play against him on one of their division rivals. Some will add further flames to the fire, claiming that this shows yet again that Rogers and/or Anthopoulus are not willing to spend the money or make the big moves that are necessary to win in this division.

There may be some merit to these arguments. For me, though, I can’t help but see this as an excellent “pass” on the part of the Jays. Tanaka is getting paid $25M per year, for 7 years. Despite his great numbers in Japan, Tanaka remains an unknown commodity, and one that is not easy to evaluate. He has to be one of the top 10-15 pitchers in baseball to earn his contract, and we’re still not even sure if he’ll be in the top 30.

From the Jays’ standpoint, I look at it this way: If they don’t have $25M per year to spend, then there was no way they were getting Tanaka anyways so there’s no point in analyzing their decision to pass him up. If they really do have $25M Rogers will allow them to spend each year for the next few years, then I’d rather spend that same money to get a starting pitcher and a 2B. Ubaldo Jiminez, who is widely thought to be the Jays primary target, and Stephen Drew combined will likely cost the same $25 that Tanaka will earn. I’ve written in detail already about the 2B options out there, and I think it’s safe to say that the 1.0-2.0 extra WAR that Drew, or whoever else they could acquire, is sure to provide over whoever they’d choose as their starting 2B right now is probably more than enough to offset the potential difference between Tanaka and Ubaldo.

In fact, it’s actually a very strong possibility that Ubaldo is better than Tanaka. A lot of ink has been spilled on both of these pitchers, and I’m not here to repeat that analysis right now, but both of these pitchers carry a lot of upside, significant downside, and a hefty dose of uncertainty. There are three possible outcomes: Ubaldo is better, Tanaka is better, or they’re approximately the same. At this point it’s hard to say that any of these possibilities is that much more likely than any of the others. If it’s up to me, in a situation like this I’m happy taking the pitcher that costs me $13M instead of $25M.

And even if you really think that Tanaka will be 1.0-2.0 WAR per year better than Ubaldo, the extra money to add a 2B makes up that difference. And anytime you can spread your risk among 2 players rather than 1 you’ve made a safer move. If Tanaka busts or gets injured, the Yankees are out on a huge investment. If Ubaldo busts or gets injured, at least the Jays still salvage half of their $25M investment in the form of Stephen Drew.

I don’t mean to talk as if the Jays already have these players, because that’s obviously far from the truth. But using these examples makes things easier to illustrate, and I do really think the Jays passed up on Tanaka with at least one of these other free agents in mind. No, really.

There’s another aspect of the Tanaka signing that I actually have not seen discussed much yet: the role that recent success of Japanese players has had in driving Tanaka’s price up. When Yu Darvish was a free agent not so long ago, baseball still had the failure of DiceK Matsuzaka fresh on its mind. We knew Darvish had posted some impressive numbers in Japan, but we also knew that many others had posted great numbers in Japan before him as well. And of those who came over to MLB, some of them had success, and some of them didn’t. It was recognized that there was risk in signing Darvish. Risk that uprooting a player and bringing him to a different part of the world where the game is played in a different way means that his stats may or may not transfer over.

In the end it worked out for the Rangers in a big way. But Darvish’s success, along with other recent transfers Hiroki Kuroda and Hisashi Iwakuma, have created this perception that Japanese stars will transition smoothly to the MLB. In my opinion, people are too quick to forget all the failures that came before them.

To put things in perspective, many have compared Tanaka to Kuroda and Iwakuma, with most scouts agreeing that Tanaka doesn’t have the upside to be as good as Darvish. Do you know what Tanaka’s comparable Iwakuma signed for? I’ll give you a hint: it’s 2 years, $14M. And do you remember what Darvish actually signed for, the one who is better than Tanaka will ever be by most accounts? It was 6 years, $56M. Granted, the posting fee back then was $50M rather than $20M, but even so, that only puts Darvish’s contract up to 6 years $106M. A far cry from Tanaka’s 7 year $175M.

Now, even though it’s been only 2 years the market has changed and there has been some inflation, so it’s not completely fair to just look at these numbers in a vacuum. But even after you account for all of that, to me the conclusion is still glaringly obvious. Teams were maybe too afraid to spend big on Darvish because they still had DiceK in their minds. Teams now are maybe too quick to spend really big on Tanaka because they have Darvish in their minds.

By most accounts Tanaka will settle in as a great middle-of-the-rotation guy, a #2 or #3 starter on a good team. And maybe these days a pitcher like that is worth north of $100M and $20M per year. But $25M per year when you’re not really sure what you’re getting is really quite steep. I, for one, am happy the Jays backed away.

And that brings us to the Garza signing. I’m not going to spend time analyzing Garza as a player. This is a Blue Jays blog, and Garza is neither a Blue Jay nor somebody who has the chance of becoming a Blue Jay. What’s important for our purposes though, is that Garza signed for $13M/yr over 4 years. Garza comes with questions about health, but has been consistently very good when he stays on the field. He also doesn’t come with draft pick compensation.

If that’s where the market’s at, I’d have to think that Ervin Santana and Ubaldo Jiminez will sign for something similar. They don’t have as many questions about health, but they have more questions about performance, and they both will force their new teams to give up an early draft pick. In the end these factors should all balance out, and I see 4 years $60M being the absolute maximum any of the remaining free agent pitchers could possibly command. A price of $10-15M for 4 years is certainly something I could swallow for Ubaldo or Ervin (fingers crossed for Ubaldo), and it probably even leaves them with some money left over to do something at 2B.

Especially if the Jays can back-load a contract for a pitcher and only pay him $10M for 2014, I think that leaves the Jays with $5-10M of wiggle room (keeping their theoretical $150M payroll in mind) to do something at 2B. While I’m not among the camp of writers who suggest that since the Jays are all in this year they might as well become the Yankees and just spend for whoever they can get their hands on, I do think that if they’re sitting on a payroll of around $145M and a Stephen Drew or a Rickie Weeks is available to them, I can’t imagine the Jays would be so stubborn about the $150M limit to miss out on filling the final hole on their roster when it will only bump the payroll to the $155M range.

I can see Rogers balking at the idea of signing Tanaka and a 2B, bringing the payroll up to the $175M range. While others feel it’s just money, and the Jays are all in, etc., I really disagree (for reasons that will have to come in a separate post). But to bump payroll to $155M for the right players I’m sure is much more palatable, much more within range of where Rogers would like the payroll to be, and a much more sound investment of what precious little cash the Jays have left available to them this winter.