Wednesday, February 5, 2014

Is signing Homer Bailey long term in the best interest of the Reds?

Rare photo of Homer Bailey
In what has been a relatively quiet offseason in Cincinnati, much of the banter has been about rumors and what could happen. Most of these rumors have swirled around Brandon Phillips and Homer Bailey. Now that the BP rumors are all but dead and all but one arbitration-eligible player has been signed for 2014, all eyes have turned squarely to Bailey (that one player) and whether or not the Reds can work out an extension with him. It has been an intensely-debated topic and I've begun to wonder whether or not it would be in the Reds best interest to actually sign Bailey to a long term deal?

Should the Reds pull the trigger on an extension, trade Bailey, or take advantage of his services in 2014 and then let him walk? At first glance, it seems like it would be a no-brainer to lock up Bailey if both he and the Reds could agree upon a reasonable contract. He's turning 28 in May and coming off the two best seasons of his career, which included throwing two no-hitters. If the Reds had unlimited funds, there'd be no reason for them not to have this thing done by now, but as we all know, that is far from reality. Jim Bowden predicted that Bailey could receive a payday in the range of six years and $102 million, which is $17 million annually.

If one considers the future, one will realize the reason it's not as easy of a decision as it seems. As it currently stands, in addition to Bailey, the Reds rotation consists of Johnny Cueto, Mat Latos, Mike Leake, and Tony Cingrani. That is quite a formidable bunch and should not raise much concern among fans for 2014. However, if we examine the contract situations of the Reds best starting pitchers, which at this time will exclude Leake and Cingrani, and also look at the current monster contracts the Reds own, it uncovers a potential problem in the near future for a cash-strapped mid-market baseball team like the Reds. It could also make a person feel less envious of the task lying ahead of Walt Jocketty and the rest of the Reds front office, as the Reds are about to happen upon several very expensive baseball players. Which ones should they keep or better yet which ones can they keep?

We already know there's two huge deals on the books for the Reds with the extensions of Phillips and Joey Votto signed in 2012. Phillips is signed through 2017 and is still owed $50 million. That breaks down to $11MM in 2014, $12MM in 2015, $13MM in 2016, and $14MM in 2017. Votto is locked up through 2023, with a club option for 2024. His breakdown is $12MM in 2014, $14MM in 2015, $20MM in 2016, $22MM in 2017, and then $25MM per year from 2018-2023 with a $20MM club option in 2024 or a $7MM buyout.

Cueto throwing
For the pitchers, let's start with Cueto. In 2011, he signed a four-year deal with a club option for the fifth year. Simple math shows that 2014 is the last guaranteed year of that deal, with 2015 being the option year. This puts Cueto in line for free agency in 2016, safely assuming the Reds pick up that option next year. Cueto will be 30 years old on Opening Day in 2016, and potentially a top of the rotation-type pitcher going onto the market. I am far from a numbers or contract expert, but I do know that Zack Greinke was 29 going into 2013 and signed a six-year, $147 million deal. I'd have to assume Cueto could be in line for a similar contract. Greinke had nine years under his belt at the time he signed his deal and Cueto will be going into his ninth year in 2016. Looking at their season averages, one can see that these two pitchers have had similar results to this point:

Cueto (six MLB seasons) 
26.7 starts, 161.2 innings, 10.8 wins, 125.5 strikeouts, 3.53 ERA
Greinke (10 MLB seasons)
25.9 starts, 167.2 innings, 10.6 wins, 148 strikeouts, 3.65 ERA

I'd call that pretty similar. Of course, Cueto had some injury concerns in 2013, but hopes to have that ironed out for 2014. If he can continue on a path akin to the success he has had for the majority of his career, he should no doubt be able to secure a contract in excess of $20 million a year, considering Greinke's deal averages out to $24.5 million a year. Is that something the Reds will be able to stomach when 2016 and the ensuing years come?

The next case in point would be Latos. Currently, Latos is going into the second year of a two-year contract he signed before last season. He will be arbitration-eligible for the final time in 2015, and then will presumably be a prime candidate for a massive free agent contract in 2016. Depending on what happens with Bailey, this very same debate will come up again next offseason as to how the Reds will be able to sign Latos to a long term deal or perhaps if they should consider trading him. In my humble opinion, Latos is the most valuable pitcher in the Reds organization at this time. He turned 26 in December and has been a dominant pitcher in each one of his four full seasons in the majors. He also started 10 games in 2009, the first year of his career, but the numbers weren't as pretty. He is a beast on the mound and will cost someone a whole lot of money in 2016 and beyond. I'm not saying he's going to get $30 million a year like Clayton Kershaw, but if he keeps doing what he's been doing, I wouldn't be surprised if the then 28-year old Latos possibly commands a contract worth over $25 million a year in 2016. Things keep looking scarier and scarier for the Reds pocketbooks, don't they?

Although he's not a pitcher, Jay Bruce deserves to be in this discussion as well. He is a budding superstar outfielder. The Reds got lucky and signed him to what looks like a very team-friendly deal back in 2010. He was given six years and $51 million at the time. That keeps him in Cincinnati through 2016, with what appears to be a $13 million club option for 2017. It is also known that Bruce would like to finish his career in Cincinnati. That makes Bruce 30 years old in April of 2017, which would cover the guaranteed years of his current deal and he's said to be interested in adding six more years. How much is Bruce worth? At his current trajectory, he could easily get $16 million plus a year.

The Reds will have to decide which players they value the most. Perhaps extending Bailey this year could be viewed as a sort of pre-emptive move in case they are unable to re-sign one of Cueto or Latos or both in the future. Also, perhaps it prevents them from having to reach and overpay to extend one of those two guys out of desperation from losing out on Bailey, thus costing them even more money. It's all about the business and the business is baseball, which is not as easy as Twitter makes it seem.

On the flipside, any of these players could be traded at some point or another paving the way for another player or younger prospect to make his way into the majors as well as give the Reds wallet a little more wiggle room to extend one of the other guys who remains with the team. It's all very complicated and might as well be considered a gamble. Sometimes it's a win and sometimes it's a loss.

Yet still, it wouldn't be a fair discussion without looking at who in the farm system might be in place to potentially alleviate the loss of any of the above mentioned players. There are promising young arms in the Reds system such as Leake and Cingrani, as well as prospects Robert Stephenson, Nick Travieso, and even guys like David Holmberg and Daniel Corcino. In the outfield, names like Phil Ervin, Jesse Winker, and Yorman Rodriguez are all ones to watch. Those are just a few names, and there's no telling who could burst onto the scene in the next five years or so, not to mention the numerous draft picks which will come through Cincinnati as well. A team like Cincinnati has to rely on its farm system to replenish stars lost due to lack of funding. Think of a situation similar to the Tampa Bay Rays.

Green Reds hat on mad fan
The Reds have to figure out all of this while still pleasing the fans as well. Patience is not a strong suit when it comes to fans, especially ones who have waited for the Reds to reach their current level of success for 15 years. Even success has grown stale to the Reds nation though, as the team has failed to advance past the first round of the playoffs in its last three appearances. If the Reds were to trade Bailey and then experience a down year in 2014, fans would go insane. If the Reds keep Bailey and fail to win in the playoffs again, and then he walks in 2015, the fans would again, go insane. It's almost a no-win situation off the field unless the Reds win on the field. Winning cures everything, as they say.

If the Reds were to come to a long term deal with Bailey, it's sure to impact their ability to sign some of their other players as well. It certainly doesn't seem feasible that the Reds would be able to keep all of these players on their roster past, say, 2016, if they are going to be worth $15 or $20 or $25 million per year. Even if they stand to make more money with a new TV deal, how much will that help them? They will have to roll the dice, hoping they can sign the right players, while relying on their farm system to replenish any voids left by players leaving via free agency or trade.

What do you think? Now considering all of this, should the Reds still come to a long term agreement with Bailey before he becomes a free agent in 2015?

All 3 "Photo" credits to Jesse Welte


Jimmi Adair said...

I think it's in the Reds best interest to not sign Bailey long term. It's going to take a load of money for whatever team does so and the Reds aren't in a position to have three burdensome contracts handicap them for many years to come. At this point, the team should hang on to Bailey as long as their in the thick of the postseason race. But if they're out of it by July, they should cut ties with Bailey early and get some sort of trade package in return, while they still can.

Jimmi Adair said...

They're* not their

Anonymous said...

Assuming neither are asking for $25M per year, I say sign Bailey and Latos. Both are still in thier 20's. Cueto I think is the one to let walk after 2015. Also consider Leake is free agent after 2015 as well. Reds farm system does not seem to have enough arms to replace all of them. So need to resign at least 2 of them, otherwise Reds are spending money on other teams free agent pitching, so its still going to cost.