The (harsh) lessons of the GM meetings

Thursday, November 12, 2009

Executives and agents packed their bags and boarded planes in Chicago, thinking about what they had seen and heard over the previous 48 hours, such as:


The Rust Belt Ripples. Just months after the Indians' payroll concerns nudged them into unloading Cliff Lee and Victor Martinez, the Tigers and Reds have indicated to other teams a willingness -- and rival executives are reading it as a plea -- to dump salary. Among the players said to be in play: Bronson Arroyo, Curtis Granderson, Edwin Jackson, Carlos Guillen, Brandon Phillips, Aaron Harang et al. This is a surprise to no one, because of the discounts given out by teams during the season in an effort to bolster sagging attendance and to make up for revenue lost with expiring sponsorships. This will have a major bearing on the current personnel market, presenting unique opportunities for the big-market teams. For example (and to be clear, what follows in this paragraph is pure speculation): Could the Red Sox call the Reds and say, "OK, we'll take the $13 million that you still owe to Bronson Arroyo or Aaron Harang off your hands -- if you give us Brandon Phillips so we can play him at shortstop." Or maybe the Yankees could propose a deal with the Tigers for Curtis Granderson that has New York absorbing the bulk of the last dollars owed to Dontrelle Willis.

"I don't think this is nearly that far along," said one GM, "but I think it's pretty clear that there are real financial concerns driving those teams."


Cincinnati GM Walt Jocketty says the Reds are not in fire sale mode yet. Dave Dombrowski refused to rule out trades, writes Lynn Henning. The Indians are in a deep hole, and Paul Hoynes wonders what it will take for them to dig out.

All of this makes the Reds' decision-making in July even more curious. They made a deal for third baseman Scott Rolen, who is owed $11 million for 2010 and is now essentially immovable, and they did not pursue an opportunity to move Harang to the Yankees, who had indicated to Cincinnati that they were willing to take the pitcher if the Reds kicked in a chunk of the $16 million still owed to Harang at that point. And with the benefit of 20-20 hindsight, the Tigers might be wishing that they had just released Magglio Ordonez early in the 2009 season, rather than allowing his $18 million deal for 2010 to vest.


More financial cutbacks on the horizon. Other teams besides the Reds and the Tigers could be looking to shed salary after the owners meetings next week. A year ago at this time, executives say, the impact of the economy on the majors was still uncertain, but now it's all very real, and some general managers expect that after Bud Selig rolls out his facts and figures and charts for the owners, more teams will be cutting payroll. The Astros went through several rounds of payroll slashing last winter, as they were presented with financial information, such as ticket sales.

None of this will be good for the current crop of free agents, of course. Besides the fact that there will be fewer teams bidding, the fact that the market continues to be flooded with available players (through fire sales and non-tenders, etc.) is going to create many alternatives. For example: The Cubs might've thought about bidding on a free-agent outfielder -- but instead, they can just try to make a deal for Granderson instead, Phil Rogers suggests.

Remember those days of massive sell-offs on Wall Street last year, and the look of grave concern among the traders about plummeting prices? Well, that's exactly what some executives are seeing now among their colleagues -- and the teams that actually have available cash will be in position to make some excellent deals.

Scott Boras disputes the notion that the economy has broadsided baseball.


The Boras take on Johnny Damon's age. That "take" was that Damon should get a long-term deal, and that he's essentially immune to aging because of his genetics. Look, with a couple of more good years, Damon will be a legitimate Hall of Fame candidate: He's got 2,425 career hits, 1,483 runs, 996 RBI, 374 steals and a couple of World Series championships. But the suggestion that Damon should get a deal like that signed by Jorge Posada a couple of years ago just flies in the face of the current market realities. I wrote here Wednesday that I thought the Yankees would offer Damon arbitration, to make sure that they at least got draft picks. Well, that's not happening; the Yankees will likely offer him a deal with a sizeable cut in his annual salary of $13 million.


The scarcity of teams spending big dollars. Matt Holliday, John Lackey and Jason Bay are going to get paid big dollars, but executives and agents are having a difficult time identifying more than a small handful of teams who are potential bidders on the Big Three. In lieu of a robust bidding war, it seems like a long shot that any of the three will get a nine-figure contract.

The Cardinals are indicating they will stay in the Holliday bidding only to a point, writes Joe Strauss. It's best for the Cardinals just to ignore Scott Boras, writes Bernie Miklasz.

The Brewers' interest in Lackey will depend on his price tag, Doug Melvin tells Tom Haudricourt.

(There continues to be a lot of speculation about the Yankees' getting involved in the Holliday or Bay bidding, but keep in mind that New York has to keep an eye on Derek Jeter's future in the outfield. It's not going to be next year and may not be the year after that, but unless his relationship blows up with the Yankees -- highly doubtful -- he will have to move to another position at some point. And the Yankees already are locked in at third base and first base, because A-Rod and Mark Teixeira are signed for eight and seven more years, respectively. If the Yankees were to lock themselves into a long-term deal with a corner outfielder like Bay, they'd be boxing themselves in significantly. And there is this to consider: Last winter, the Yankees almost single-handedly propped up a weakening free-agent market, contributing about 35 percent of all dollars spent on free agents, about $423 million. This winter, that won't happen, the Yankees fully intend to reduce their payroll.)


The Red Sox's strategic retreat. Boston is trying to re-sign Bay, and if the Red Sox can't get that done, they might aim for Matt Holliday. But by AL East superpower standards, the Red Sox seem prepared to lie back this winter, and some rivals believe Boston is preparing for a big strike ... next winter. "The free-agent market is going to be a lot better, and they'll have David Ortiz and Mike Lowell coming off the books," said one high-ranking AL executive. "I think they'll be much more aggressive next year."

Among the guys who might hit the market: Joe Mauer, Carl Crawford, Roy Halladay and Cliff Lee.

The Red Sox and Yankees are among the teams involved in the bidding for Halladay, writes Mark Feinsand.


The Rangers' ownership situation. This is not going to be concluded any time soon, partly because of the difficulty in obtaining financing. Commissioner Bud Selig is said to be seeking a $500 million price tag on behalf of Tom Hicks, and in the past, prospective buyers could put about 20 percent down and finance the other $400 million. "But it's much tougher to get loans like that now," said one executive. "The banks just won't go along with that kind of deal. Now you need about 50 percent of the deal in cash."

What does this mean for the Rangers? Well, with the ownership situation in flux, they don't have a lot of flexibility. The perception of the Rangers is changing, GMs tell Jeff Wilson.


The potential non-tender trade market. It started last week with the swap of Mark Teahen and Jeremy Hermida, and it continues robustly. GMs say teams continue to push their second-line arbitration-eligible players, like the Marlins' Matt Lindstrom.

The White Sox might move Bobby Jenks, writes Mark Gonzales.