Sheets blurb in Sporting News

[endaround]

Also the Seligs had no other outside money source and were always liquidity constrained. They had to borrow to cover spring payrolls until the money from the national TV contract came in. As such the franchise was always up against its debt limit.

[nate82]

Nate I'm just sure what you're trying to say, I don't want to knock on you, but your math doesn't add up. A budget is a fixed amount... if the payroll is 80 million, and should stay at 80 million, then when some players make more money the following year, that means other players have to make less. Considering that players in arby get a raise every year, and the players under contract all more more money next year, to resign Sheets there has to be a cheap influx of talent someplace. The more the players in the left hand make, the less money there is available for the players in the right hand...

You have to take into account inflation and rising player salaries. So every year your 80 million budget will increase. Attanasio isn't an idiot and understands this. You have to put some of the money that you gain from the season into either the ball park or into the team. So far they have been doing both increasing the payroll and keeping Miller Park up to date.

 

So far Attanasio has hinted at a higher payroll for the players. This goes along with Melvin's and the rest of the front office's plans. You can't expect to keep all the players cheaply. You can replace one or two players on your roster from your minor league team but you are going to have pay for most to stay competitive.

 

Sheets can be resigned with the current payroll it just depends how much Mark is going to increase the budget. If we have a successful year expect a higher budget for the next 4 years. You have to put money into an investment to get something from it. Trust me not a single owner in the MLB will go bankrupt because of their teams. There are a lot of loop holes that MLB owners can use to make it look like they are losing money when in reality they are making a lot.

 

[logan82]

nate82 wrote:

Sheets can be resigned with the current payroll

Of course he can be resigned, but it wouldn't make sense to tie up the kind of money and year that Sheets is likely to command.

[TheCrew07]

Nate I'll concede the point that inflation will have an effect, but what percent do you expect? This isn't like football where the TV contract goes up 10% or so every year so there's always money available to shrewd teams. I'd expect on average maybe 5% inflation, there is a point of diminishing returns here with baseball salaries. Ticket prices are already on the fringe of affordability for a family of 4, and to me one of the big draws to baseball was how affordable the games were. Factor in gas and the cost to attend a game for residents outside of the Milwaukee metro is considerable, there is a point where people will no longer be able to afford to attend games if salaries continue to escalate.

 

Then again maybe everyone will just go for the Uecker seats and "sit in the front row".

[endaround]

Ticket prices and salaries are not related. Ticket prices are set by demand not the costs a team faces.

[kramnoj]

nate82 wrote:

Sheets can be resigned with the current payroll

Of course he can be resigned, but it wouldn't make sense to tie up the kind of money and year that Sheets is likely to command.

 

Let's say that Sheets will get $18 million/year for 4 years. How would you spend that money and get better value for the Brewers?

 

Sheets is a star. You overpay for stars because of their scarcity (to a certain degree of course). If the Brewers can sign Sheets to what they consider a reasonable deal, you do it and figure out the rest later. You don't worry about being able to afford players who haven't proven to be stars like Hardy, Weeks, Bush, etc. They are more easily replaced with younger players or short term contracts for veterans. If Sheets goes, we won't be able to replace his value at lesser or even equal money.

[TheCrew07]

Ticket prices and salaries are not related. Ticket prices are set by demand not the costs a team faces.

I don't believe that to be true, in any sport. If it was the Packers wouldn't make an effort to stay middle of road in ticket prices, they have 50,000+ waiting list for season tickets. The big difference of course in the NFL is salary cap and the TV contract shared by all teams in the league which accounts for a significant portion of each team's yearly income. I've read various places that player salaries are roughly 55-60% of a MLB team's annual revenue, 35%-40% goes to running the franchise, with about 5% left over for the owner(s). When you have the worst TV contract in the sport, where is the rest of the money coming from? They make a significant amount money per year off of parking, concessions, and merchandising, but I haven't come across an article that ball parked that number for the Brewers, I'd venture a guess that it's less than 7% of the Gross revenue. The Brewers play 81 home games in a 40,000 seat stadium, everything I've read leads me to believe the majority of their income is generated through ticket sales.

[endaround]

Yes and if they had a team with half the salary they'd charge the same for tickets. Believing that the cost of inputs leads to a final price is Marxian.

[kramnoj]

http://www.baseballprospectus.com/article.php?articleid=1294 is the best in-depth look at baseball finances that I have seen. It is over six years old, but I still think it's a great read. The info is from the 2001 season. Obviously today's numbers are different, but I haven't seen anybody tackle these issues since.

 

In 2001, the Brewers had $46 million in ticket revenue with an attendance of 2.8 million. They got only $5.9 million in local media revenue. They got $24.4 million in national TV money. They got $37 million in stadium revenue other than tickets (8th highest that year). The payroll that year was $51 million. The Brewers spent $47.8 million on non-player expenses. Their total operating revenue was $113.5 million. The article says that the team made $14.385 million and got $1.7 million in revenue sharing, meaning they were the most profitable team that year with $16.129 million.

[TooLiveBrew]

Sheets can be resigned with the current payroll

 

Why do you keep trolling with this? No one except you is talking about this.

[Never Outhustled]

Sgt. Clueless had it right earlier. Sheets future in Milwaukee will depend on his willingness to except on incentive laden contract. MLB rules only permit playing time incentives, which is exactly what we want here. I would be fine with Sheets being 1 of the 3 highest paid pitchers in baseball if he rached his innings pitchers incentives. He's oustanding when he pitches. I'm thinking 3 yrs $36 million, with another $4 million for reaching 200 innings, and another $3 million for reaching 225 innings.

Sheets is constantly annoyed by being refered to as injury prone, which might push him to except a deal like this.

[danzig6767]

Sgt. Clueless had it right earlier. Sheets future in Milwaukee will depend on his willingness to except on incentive laden contract. MLB rules only permit playing time incentives, which is exactly what we want here. I would be fine with Sheets being 1 of the 3 highest paid pitchers in baseball if he rached his innings pitchers incentives. He's oustanding when he pitches. I'm thinking 3 yrs $36 million, with another $4 million for reaching 200 innings, and another $3 million for reaching 225 innings.

Sheets is constantly annoyed by being refered to as injury prone, which might push him to except a deal like this.

 

Or it could do the reverse, annoy him that it's a point of emphasis in his contract negotiations

If i had to guess, the only thing i could possibly see Sheets accepting in regards to incentives is say a 3yr/45 million dollar deal that vests into a 4th year if he meets certain innings limits over those three years. Or a 4yr deal that vests into a 5th year via meeting innings criteria.

 

[rluzinski]

I'm thinking 3 yrs $36 million, with another $4 million for reaching 200 innings, and another $3 million for reaching 225 innings.

 

And if Sheets pitches 190+ innings this year, what do you think are the odds that an offer like that is even considered? I would say, zero. That 225 IP bonus is a near worthless one, since even most healthy pitchers don't get the opportunity to rack up that many innings these days. 32 starts probably isn't going to do it.

 

Here's the scenario I see being fairly likely. Teams are going to look at Sheets and are going to see a 30 year old that's had some nagging injuries the last few years but still pitched at least 100 innings every year (which is a big deal, despite many Brewer fans acting liek it might as well be 0) and was healthy and solid (3.5 ERA?) for all of 2008. They may adjust their offer somewhat because of his injury history but it's not going to be much (whether they should or not). 3 years and $36 isn't going to be even close.

 

I won't pretend to follow this stuff very closely but are there any recent contract that would serve as a comparable to Sheets? Young (relatively speaking), solid pitcher with moderate injury history?

[Oldcity]

But I expect it's going to take something in the 4 yr/$65M or 5 yr/$80M range. The players association will not let him take a "home town discount".

Like they did with Jake Peavy, Roy Oswalt, Mark Buehrle, Roy Halladay, John Lackey, Brandon Webb and even Ben Sheets and Johan Santana with their first extensions?

Of course he can be resigned' date=' but it wouldn't make sense to tie up the kind of money and year that Sheets is likely to command.[/quote']

Really? The only way I'd agree with this is if the Brewers can replace most of Sheets' production with significantly less than Sheets would cost. How do you plan on doing that?

Sheets isn't going to get Zambrano or Santana-type money on the open market. Sure, he'd get more than if the Brewers extended him in-season, but that move isn't unprecedented at all. I really believe 4 years/55-60 mil is very possible, and I can't imagine not doing that from the Brewers' perspective.

Sheets has been the Brewers best player for the last several years, and he still is today. You aren't going to find that kind of production anywhere else on the free agent market, and in the trade market it will cost you your best prospects. People have been discussing the Brewers need for another top arm aside from Sheets and Gallardo, and if Sheets leaves you'll need two. That won't happen either.

 

[lukevan]

Zambrano's deal was worth just over 18 mil per year, Sheets' production is comparable but obviously has a little more injury history than Zambrano. Still, Zambrano accepted less than he could've had. I imagine Sheets would get no less than $16 mil per season on the open market.

[Invader3K]

Really, like I'm sure many realize, it's up to Sheets more than the Brewers. All this talk that "The Brewers need to focus on getting Sheets re-signed, maybe make an offer during the All-Star break", is pretty moot if Sheets is determined to test the free agent market. Mr. Attanasio has been quoted as saying he expects Sheets to do just that. There it is from the horse's mouth.

 

Personally, while I had been adamant that the Brewers really shouldn't bother to make a big offer to Sheets in the past, due to his injuries over the past three seasons, I have warmed up to the idea, if just a little bit. Just looking at him this season, it seems like he's in much better shape. He appears more muscular than he did last year, and is of course performing quite well so far in 2008. I just don't think the Brewers can realistically compete with the huge offers Sheets is likely to get from the New Yorks and LAs of MLB, teams that can risk a big money long term contract on a starter with a moderate injury history.

[Invader3K]

But I expect it's going to take something in the 4 yr/$65M or 5 yr/$80M range. The players association will not let him take a "home town discount".

Like they did with Jake Peavy, Roy Oswalt, Mark Buehrle, Roy Halladay, John Lackey, Brandon Webb and even Ben Sheets and Johan Santana with their first extensions?

I agree. Recently, MLB is full of examples of guys probably taking a little bit less to re-sign with their "home" team. This idea that the MLBPA is forcing guys to always go for the biggest contract possible isn't totally accurate. I mean, it's assumed they want their guys to sign for a lot of money to keep contract rates up, but if a guy wants to stay where he is or sign with a certain club, there isn't really a lot the union can do.

[TooLiveBrew]

I won't pretend to follow this stuff very closely but are there any recent contract that would serve as a comparable to Sheets? Young (relatively speaking), solid pitcher with moderate injury history?

 

Maybe Burnett or Halladay?

 

Burnett: 5 yrs./$55M (signed 12/2005)

 

Halladay: 3 yrs./$40M (signed 3/2006 -- this deal was an extension on the 4 yrs./$42M deal signed 1/2004. Covered '04-'07)

 

 

It's important to bear in mind that both contracts are old enough that (imo) the expected AAV has probably gone up quite a bit, but I think the length of the deals & relative value can help us try to frame a Sheets deal/extension.

[endaround]

Burnett's injury history is more severe but its a starting comparison. Halladay maybe closer.

[rluzinski]

It's important to bear in mind that both contracts are old enough that (imo) the expected AAV has probably gone up quite a bit,

 

MLB salary inflation is about 10%, so there would be a lot of adjustment.

 

Last year, I asked one of the authors of "The Book" about Sheets' value on the open market after the 2008 season:

 

http://rluzinski.blogspot.com/2007/03/what-will-ben-sheets-be-worth.html

 

Let's take Tango's +.25 WAR (wins above reserve) per 9IP estimate for Sheets at face value. A big part of the equation is trying to estimate how many innings you should reasonably expect from him going forward. Conservatively, we'll use 150 innings/year for Sheets (and really, probably any 30 year old pitcher?). That's .25 WAR / 9IP x 150 IP = ~ 4 wins above reserve per year. Using his chart (which was derived from seeing how much teams have been willing to spend for a player at x WAR on the open market):

 

http://www.tangotiger.net/salary2008.html

 

3 Years: $50.5 mil

4 Years: $65.2 mil

5 Years: $78 mil

 

That's 2008 numbers, but let's pretend Melvin could easily get that 10% home discount from Sheets. That's about $16 mil per year, which is basically the minimum he's going to get with a solid 2008, IMO. Some team might be overly optimistic and assume 200 innings per year, and could offer Sheets $20 mil a year. No thanks.

 

I think we have to assume that 4 years, $60 mil is the minimum realistic offer Melvin would have a chance of Sheets accepting. It will probably take more, though. Sheets knows that this may be his last big payday.

[TooLiveBrew]

I think we have to assume that 4 years, $60 mil is the minimum realistic offer Melvin would have a chance of Sheets accepting. It will probably take more, though. Sheets knows that this may be his last big payday.

 

Probably similar to the 'cap' on what we were able to offer El Caballo. Yes, a handsome offer... but if Benny can get even just one more season on the open market, why should he sign our offer? Imho he'd get 4 years at worst as a FA.

[Oldcity]

If he were hell-bent on getting the highest amount possible, well then sure, he's as good as good. But some players think like Braun, in the sense that there isn't much I can't buy with X amount of money. Either way, the guy will be set down to like his grandkids' grandkids. Sheets already took a discount once, one that was much bigger than 10%, so I don't think it's a reach to think he might do it again. I happen to think getting him for less than $16 mil per year is doable.

[RobertR]

I think part of the issue with resigning or not Sheets is the "Who do you replace him with?" question. Suppan, Gallardo, and Parra are the only locks for the 2009 rotation. Heck, it's not like Bush, Capuano, and Vargas didn't cost the Brewers anything this year either. Arguably, if the Brewers get pushed up against a budget cap, they have more options for replacing their higher priced position players than their starting pitching with LaPorta, Gamel, Escobar, and Salome doing well in the upper levels of the minors.

Given the scarcity of pitching and the in system replacement options, it certainly makes sense to explore extension options with Sheets. Yeah, he'll be expensive, but he's also likely to give a nice return on the investment as he is their most valuable pitcher. The question is "at what point is Sheets just too expensive for this to make no sense?" I'd say 5 fully guaranteed years is definitely too much. Three with an option might be optimal and probably the minimum that's acceptable from Sheets. I'd probably be fine with 4 years as I'd assume inflation and that the Brewers will develop/acquire some cheap pitching in that time frame (and if they don't they'll have much bigger problems).

Robert

Robert

[TooLiveBrew]

Sheets already took a discount once, one that was much bigger than 10%, so I don't think it's a reach to think he might do it again. I happen to think getting him for less than $16 mil per year is doable.

 

Good point(s). I have felt for a while that if there ever were a guy that'd sign here for less than market value, it's Ben... and that he's such a talent that we shouldn't pass up that chance if it's there. He's said in the past that he felt a contract was every bit a reflection on what you had done as much as it was an estimate on what you would do (in terms of production).

[rluzinski]

I could see Sheets willing to take a 20% discount and getting $15 mil/year. What's going to be hard for him to pass up is if the Brewers offer him 4 years and someone else offers 5.