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Indians Indians Archive Analyzing the Santana Deal
Written by Al Ciammiachella

Al Ciammiachella

IMG1224800x450As Paulie C. has so eloquently expounded on, the Indians announced recently that Carlos Santana has agreed to a five-year contract extension with a club option for a sixth year. The five-year term covers Santana’s two pre-arbitration seasons plus the three years in which he would be arbitration-eligible, and the club option (if exercised) will be responsible for what could have been Santana’s first season of free agency. Similar to the Asdrubal Cabrera deal, Santana took money up front in turn for delaying what could be a big payday in free agency once he’s free to hit the open market. While Paulie took a great look at the deal in the context of former Indian Vic Martinez, I thought it would be interesting to compare the contract to some other catchers around baseball, both those that signed pre-arbitration deals and those who did not.

More than anything, the deal begs the question…just how much money might the Indians save here? Do they really gain much considering Santana would have been under club control through 2016 no matter what? Side note; I love reading that sentence. Santana will be with the Indians through 2016 no matter what. Being that it’s 2012, that gives me a really warm and fuzzy feeling inside…but I digress. How much would Santana have made if the Indians had simply fought it out with him in salary arbitration? Well, there are no clear-cut answers to those questions, at least not here in April of 2012. But we can take a look at some of the numbers of players who Santana would have been going up against if the case had gone to arbitration and at least make an educated guess. For reference sake, Santana’s 2011 season line was .239/.351/.457 with 27 HR and 79 RBI. Santana’s numbers are important, and his “baseball card” stats especially so, because that’s what the arbiter uses to determine final salary if it comes to that. Remember, the arbitration cases are not settled by a panel from Baseball Prospectus, Keith Law or other sabermetric-minded individuals; the arbiters still go off the “classic” baseball stats, primarily the triple crown stats. There’s a trend toward using things like OBP and OPS in the determination, but I doubt we’ll soon see an arbitration case settled using things like WARP, VORP, FRAA or TAv. Before we get into the details and the comparables, let's break down exactly what Santana is getting in his new deal:

2012: $501,900

2013: $550,000

2014: $3.5 million

2015: $6 million

2016: $8.5 million

2017: $12 million (club option with a $1.2 million byout)

The first player I want to look at is not the most similar, but is an interesting case nonetheless. Our old friend and current Chicago White Sox catcher A.J. Pierzynski, one of my least favorite players in the game today, hit his first arbitration-eligible season way back in 2004. He was coming off of a 2003 season where he went for a line of .312/.360/.464 with 11 HR and 74 RBI. A nice little offensive season for a catcher, but Pierzynski has long been known as defensively deficient, so that would have worked against him in the hearing. Still, Pierzyinski received $3.5 million in his first arbitration-eligible season from the Giants, a figure they were able to settle on without actually going to arbitration. Remember, this was eight years ago. The average baseball salary in 2004 was $2.4 million. The average salary in 2012 is $3.4 million. Assuming that the average salary and arbitration numbers are more or less linear, let’s say our buddy A.J. would have been in line for somewhere in the neighborhood of $4.25 million if his 1st year of arbitration was 2012.

Santana 733x800But wait, you’re saying…Pierzynski had a higher average and a lot less HR. Plus he’s a total jerk. Agreed, it’s not the perfect comparison. Let’s look at someone who is a much more similar player…Anahiem Angels C/1B Mike Napoli. Napoli has very similar numbers to Santana, with a low batting average (last year being the exception) and good HR/SLG numbers. After a 2008 that saw Napoli hit .273/.375/.586 with 20 HR and 49 RBI, he avoided arbitration by signing a contract for an even $2 million for the 2009 season. Bear in mind though, Napoli was only a part-time player in 2008, splitting time with Jeff Mathis and playing in just 78 games. You’d think that putting up those #’s in fewer games would bode well for him in an arbitration hearing, but they actually work against him as the Angels could argue that he wasn’t even their full-time catcher and did not deserve to be paid as such. At any rate, Napoli remained fairly consistent in 2009 (.271/.350/.492 with 20 and 56) and 2010 (.238/.316/.468 with 26 and 68), earning himself raises to the tune of $3.6 million in 2010 and $5.8 million in 2011. A stellar 2011 campaign that saw Napoli become one of the top offensive catchers in baseball (.320/.414/.631 with 30 and 75) earned the now-30 year old Napoli a big raise, as the Rangers are paying him $9.4 million in this, his final arbitration eligible season. So for a player who was about the same age when he was scheduled to hit arbitration and had similar production, Napoli didn’t get the long-term deal that Santana just signed and made $20.8 million in his arbitration eligible seasons. Napoli got an extra arbitration season because of Super Two, so again it’s not an exact comparison, but it’s pretty darn close. Also consider that in Napoli’s second season in the majors he hit just .247/.351/.443 with 10 HR and 34 RBI, a far cry from the Axe Man’s 2011 campaign. 

How bad could it have been? Let’s take a look at Joe Mauer’s contract history. Not even the 8-year, $184 million potential albatross currently hanging around the small-market Twins neck (including a full no-trade clause!), but the deal Mauer signed in 2007 that bought out his three arbitration years and his first year of free agency. Coming off of a stellar 2006 where he hit .347/.429/.507 with 13 HR and 84 RBI, Mauer signed a 4-year, $33 million extension to keep him in the Twin Cities for (you guessed it!) one season of free agency in 2010. The contract bought out all three of Mauer’s potential arbitration seasons, and he signed it a year after making just $400,000. Given his talent level, if Mauer had continued to improve over the next three seasons (including 2007) he would have likely made more than $25 million in his arb-eligible seasons alone, and certainly would have commanded well over $10 million a season in the open market. So the Twins saved a nice chunk of change, provided Mauer keep up his elite level of production, which he did. Despite dealing with a couple of nagging injuries, Mauer was the best catcher in baseball for those four years, and the Twins kept him around for one year at a deeply discounted rate in return for fronting the money and assuming the risk. The Twins signed that deal the season before Mauer was to go to arbitration, so they both minimized risk to themselves and ended up forking over more upfront $$ than if they’d signed the deal two years earlier like the Indians did with Santana. So again, it’s the same, but different as the Indians traded risk for less money.

An even better example would be to look at a catcher who signed while he was still a year away from becoming arbitration eligible, like Santana. Preferably an elite offensive option, a guy who can be counted on to hit 20-30 HR per season. Well look at what we have behind door number four…ladies and gentlemen, Mr. Brian McCann! McCann signed a 6-year extension in 2007, with a club option for 2013. He hit an impressive .333/.388/.572 with 24 HR and 93 RBI in his first full season as a 22-year old in 2006, so if anything he actually had a better season than Carlos when he signed his deal. In what would have been his 3 arbitration seasons, McCann made an impressive $16 million, and what would have been his first free agent season (2012) ended up costing the Braves $11.66 million. So $27 million for their all-star slugging catcher, and they still have a $12 million club option for next year as well. Even if we ignore next years option, the deal will cost Atlanta right around what the Indians are likely going to end up paying Santana, and bear in mind that the going rate for a power-hitting catcher in 2017 will be a lot more than what it is here in 2012.

Let’s look at just one more comparable, mainly because it is a nice, fresh example of what a young catcher can expect in his first season as an arbitration eligible player. Jarrod Saltalamaccia of the Boston Red Sox had a pretty lousy year in 2011. He hit just .235/.288/.450 with 16 HR and 56 RBI in 103 games for the Sox. This offseason, Salty became arb-eligble for the first time and was given a $2.5 million contract by the Boston Red Sox. Read that again, I’ll wait. If Saltalamaccia got $2.5 million for his .738 OPS, imagine what Santana would have been in line for if he was arb-eligible in 2012? He’d have likely pulled in at least $3 million, if not more. And that’s just in year one; he’d have two more seasons in which that dollar figure would have risen exponentially.

This brings us back to the original question that most of us had when we heard the deal announced; great, but how much $$ did the Indians really save here? Well, allow me to venture a guess. Let’s say Santana hits his 50% Baseball Prospectus PECOTA projections in 2012 (which to me is a conservative estimate). That puts him in line for a .252/.367/.459 season with 27 HR and 85 RBI. He still wouldn’t be arbitration eligible in 2013, so would likely be forced to sign a deal in the $600,000 range. Sticking with the BP forecasts because that’s a nice, reputable, independent and proven consistent source, his next three seasons would look like this:

2013: .255/.373/.470 with 24 and 82

2014: .254/.374/.470 with 25 and 82

2015: .253/.374/.470 with 25 and 83

Again, this is assuming almost no improvement (and of course no regression). Sticking with our 2013 figure of $600,000, here’s a guess on how much the Indians would end up paying him through arbitration if his production held up:

2013: $600,000

2014: $3,000,000

2015: $6,000,000

2016: $11,000,000

2017: Free agent and God knows how much the Yankees would pay him by then

Again, these are just educated guesses on my part. It’s a little more than Napoli got, but MLB average salaries are going up, not down. So what the Indians are doing is basically taking a calculated risk that Santana will continue to improve as he gains MLB experience. In return, Santana is giving up the potential for huge dollars in the next few years for financial security for the rest of his life. If Carlos remains what he is today, the Indians get a good deal. If Carlos improves, the Indians get a great deal. If Carlos collapses and turns into Matt LaPorta, the Indians lose a little over $20 million over the next four seasons. Even for a small-market team like the Indians, that’s not a crippling amount. It’s a risk that makes too much sense for both sides to refuse, and hopefully one that will pay of for both Santana and the Indians for years to come.

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