Boras works his magic for Holliday

Evidently, the reports of Scott Boras’ demise were, indeed, greatly exaggerated. The information age in Baseball has put the control of free agency back in favor of the teams. Over the past few seasons, most free agents have found out that the days of large, long-term contracts for older or non-elite players are over. Surely, players such as CC Sabathia, Mark Teixeira, Alex Rodriguez, Johan Santana, and Albert Pujols will always get their contracts. It’s that second and third tier player that will get hit the hardest. Bobby Abreu found that out last winter. Johnny Damon is finding it out now. With this new trend, it has become seemingly impossible for agents to get teams to panic and commit to long-term contracts. This week, Scott Boras, the legendary agent, once again did the impossible. He accomplished it in 2001 when the Texas Rangers were essentially bidding against themselves for Alex Rodriguez. This time, he was able to land Matt Holliday, a good but not great hitter with some question marks, a seven year contract worth approximately $120 million with an eighth year option from the midmarket St. Louis Cardinals. Despite a poor economy, smarter teams, and the lack of a premier player, Boras once again found that team to exploit.

Boras still magical

Scott Boras looked as if he lost his magic touch two winters ago when Alex Rodriguez seemingly put him in a corner to negotiate his own deal with the Yankees. There was talk that Boras’ stunts would no longer work. It is true that most teams will not fall for his paranoia or media tricks that he used to wreak havoc on teams’ checkbooks. Last season, only the Yankees’ big three of Sabathia, Teixeira (a Boras client), and AJ Burnett received big money deals. Boras’ clients didn’t fare as well aside from Teixeira and Derek Lowe. Manny Ramirez wanted a six year contract. He received a one year deal with a second year option for the same amount of money he left on the table with the Boston Red Sox. This winter, Johnny Damon is still floating around wondering which team will sign him to any deal, let alone the four year deal he was lusting for. With smarter General Managers to contend with, Boras’ job has become that much more difficult. The days of the Magglio Ordonez or Barry Zito deals seemed dead. But, then, he pulls off the Matt Holliday deal. Holliday, a player with an impressive resume with questionable splits, will be 30 years old this season. He’s coming off of a very uneven season as he struggled for half of a season in Oakland and then caught fire once traded to St. Louis. Because of a shallow free agent class, he was the premier outfielder on the market. That would not have been the case last season nor would it be next winter. Boras began the free agent process comparing Holliday to another one of his clients, Mark Teixeira. The comparison was invalid as Teixeira is a switch hitting first baseman who has shown that he can hit for consistent power despite the environment, has been an above average first baseman, and hasn’t shown any signs of regression (and is younger).

Further complicating Boras’ demands, there seemed to be a limited market. Essentially, that means that the Yankees were not interested. The Mets seemed more interested in Jason Bay (which they were and ultimately where he landed); The Dodgers, Cubs, White Sox, and Angels all seemed to be unwilling to spend money. The Red Sox were brief players, but they ultimately decided to sign Mike Cameron to a shorter term deal. During the formal Cardinals’ press conference to formally announce the deal, Boras and Holliday stated that other teams were interested, but they refused to name them. There were most certainly rumors of Baltimore making an offer and even the Red Sox offering something early on in the process. But, nothing compared to the seven year, $120 million dollar deal that the Cardinals handed to Holliday. In that deal, Holliday received a full no-trade clause as well as an eighth year option that automatically vests if he finishes in the top-10 of the MVP voting in 2016. The average salary is $17 million dollars a season. As with most contracts, the money isn’t the issue; the length of the contract is what comes back to haunt teams. Because of the Cardinals payroll structure, market, and future needs, this deal will likely hurt the franchise in a few seasons. Holliday makes them legitimate World Series contenders for the next two seasons, but the financial burden for an aging player with (presumably) declining skills is something mid-market teams have difficulty overcoming. Despite the obvious warning signs, Boras was able to get this major contract. It serves as a reminder that he is the best at what he does.

Cardinals Payroll Impact

The St. Louis Cardinals have always been a franchise that spent its money wisely. They’ve never had a $100 million dollar opening day payroll (they finished last season at $102 million). Since 2003, the franchise has had a payroll over $80 million dollars and has only been over $90 million three times. With Albert Pujols hitting free agency after the 2011 season, the Cardinals have expressed interest in getting a long-term deal done quickly. With $120 million committed to Holliday, what exactly is the ceiling on Pujols? In reality, the Holliday contract doesn’t have much to do with Pujols, but it has everything to do with the Cardinals’ future. If the Cardinals were to commit somewhere in the neighborhood of $30 million a year to Pujols, that would be approximately $45-$50 million dollar committed to just two players. For a team that has never opened a season with a $100 million dollar payroll, that seems to be a quite a bit. At first glance, the conclusion drawn is that the Cardinals will have zero payroll flexibility. They just added $17 million (although $2 million will be deferred annually) and Pujols should get paid more than Alex Rodriguez when his contract is up. It would be hard to see the Cardinals parting with Pujols, their identity. If the budget stays the same, the Cardinals will not be able to bring in many players and will become reliant on scrapheap free agents and their own farm system. Therefore, everyone on their roster must stay healthy and perform to expectations. Adding salary will not be an option.

But, that conclusion is just the first glance. A closer look at their salary commitments shows (as it often does) that there is a plan in place. Essentially, the Cardinals will live with the current payroll for the next two seasons. They will have zero flexibility, but most of their core (Pujols, Holliday, Carpenter, Wainwright, and Yadier Molina) is signed through 2012 (with Wainwright under control through 2013). Pujols can be signed with a little creativity and leave the Cardinals some breathing room. The difference can be made up once Chris Carpenter comes off the books in 2012 (assuming they buy out the last year for $1 million rather than spend $15 million for the season). Kyle Lohse’s $11 million dollar salary will be off the books in 2012 too and Adam Wainwright is signed to a reasonable contract through 2013. Pujols’ added salary would be added from Carpenter’s former salary and the Cardinals would have Lohse’s $11 million to improve the team. It will still be difficult for the Cardinals to spend freely, but they will have some money to be creative. The problem is that in three or four seasons they may need something better than a creative option.

Aging Core

Seven years is a long time in the Baseball world. So many things can change. Matt Holliday will be 37 or 38 when this contract runs its course; Albert Pujols will be the same age (fun fact: Holliday was born January 15, 1980 while Pujols was born one day later). While few are concerned with how Pujols will age (he hasn’t shown any signs), Holliday is definitely a concern. After Holliday’s tremendous 2006 and 2007 seasons, he has seen his homerun and slugging percentage decrease in each of the following seasons. According to his UZR ratings, he is declining in the outfield as well. After a tremendous rating of 14.2 in 2007, his performance fell to 9.1 in 2008 (still very good), and to 5.7 last season. Declining power and declining defensive ability is worrisome, especially when one projects that seven years from now. Perhaps the past two seasons are merely blips with all of the worries about trade talks and free agency, but everyone does age. 2016 is a long way away. The aging core isn’t a worry for the next two or three seasons, but it will become an issue shortly thereafter. With the aforementioned payroll limitations, the Cardinals may find themselves with an old team with little help. The long term deal definitely puts more pressure on the Cardinals player development team to scout, draft, and develop talent better to supplement the future aging roster. Even the mighty New York Yankees with the $200 million dollar payroll had a difficult time with their old roster of players in 2008. They were able to throw more money to supplement the roster in order to keep them competitive from 2005 through 2007, but 2008 was inevitable. The Cardinals do not have those resources. They will have to draft better and continue their tradition of finding waiver wire pitchers and turning them into big winners.

Splits aren’t lazy

Of course, the elephant in the room with Matt Holliday is Coors Field, his former home field. Some may say that citing Holliday’s splits is the sign of a lazy analyst, but there is far too data to ignore. If the splits were compiled over a one or two year period, that argument would be valid. But, five years of data is difficult to ignore. For his career, Holliday is a .357/.422/.643 hitter at Coors Field. He hit 84 homeruns and drove in 308 runs in 361 games in the Mile High City. Those are Pujols type numbers. But, elsewhere, he is a .284/.353/.454 hitter. Those statistics are still good, but they are not seven years and $120 million dollars good. 2009 provided even more confusion as Holliday began the season in Oakland and hit .286/.378/.454 in his 93 games with the A’s, remarkably similar to his career statistics outside of Coors Field. But, once traded to the Cardinals, he returned to the elite level hitter that dominated in Colorado. In 63 games with the Cardinals, he hit .353/.419/.604. The Cardinals are betting that Holliday is closer to the hitter they saw than the one who struggled in Oakland. They are likely correct, but the idea that he will duplicate his 63 games in St. Louis is just as unlikely. He’ll probably hit somewhere in between the two which calls into question (yet again) the wisdom of committing seven seasons. Teams will still pitch around Pujols; it’s not as if the Cardinals brought in Alex Rodriguez to protect him (they’d still pitch around him).

The splits argument may be nothing. But, it is undeniable. The Cardinals are gambling the next seven years that it is nothing. They’d better be right. Once again, teams like the Yankees, Mets, and Red Sox can afford to be wrong. Teams like the Cardinals cannot.

Back to the Genius

Despite all of these potential pitfalls and little competition from teams, Scott Boras was able to negotiate this mega-deal. He was still able to get the Cardinals to outbid themselves in order to sign a player who doesn’t represent a guarantee. For the short-term, the Cardinals have a window of opportunity to win some championships. But that window is quite small and closing quickly. Because of this contract, the Cardinals will be dependent on Holliday to produce. Boras sold them that he would. He evidently left out the part about players aging and the effects it can have. If the Cardinals win a World Series or two in the next four seasons, perhaps this contract was worth it to them as World Series victories don’t come often. But, with strong competition, and a Cardinals team that still has some flaws, that will be difficult. They better win soon because those last three or four seasons look to be brutal. Boras, the puppet master, got the Cardinals to see the short-term.

Teams may be smarter now with all of the statistical analysis available. They may even restrain from giving a 38 year old a four year contract. But, there will always be that one team that sees the “here and now” and doesn’t worry about the future. It will happen less frequently, but when that team does show up, Scott Boras will be there to pounce.

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