Jay Bruce to Mets - 3 years/$39M

[reillymcshane]

Bruce signs with the Mets. 3-years, $39M.

 

He gets $10MM in 2018 and $13MM in both 2019 and 2020, plu a $3MM signing bonus that will be paid in two installments of $1.5MM — one in 2019 and one in 2020. He also gets a limited no-trade protection where he will specify five clubs to which he cannot be traded without each consent on an annual basis.

 

A solid power bat, Bruce has hit 33 and 36 HR the last couple of seasons while putting up batting averages of around .250.

 

https://www.mlbtraderumors.com/2018/01/mets-to-sign-jay-bruce.html

[TooLiveBrew]

Covers his age-31-33 seasons. With his past two seasons' production, & overall durability, I'm surprised he didn't get a 4-yr deal, or at least an option on a 4th year.

[monty57]

Sorry if this is off track, but including deferred money, I believe the Brewers owe Braun $86M if his '21 option is exercised, and $75M if it is not.

 

I think this Bruce contract shows around what Braun would get on the open market today. A lot of people, myself included, were really hoping Braun would get traded over the past couple of offseasons and this is why.

 

I like Braun, and expect to see his number retired by the Brewers shortly after he retires, but even without the 10/5 no trade clause, he's virtually untradable at this point.

 

btw, this is also why I hate deferring money in contracts. In order to spend more money on the roster a few years ago, we will have less payroll room all the way through 2031 because we will still be paying a retired Ryan Braun. No time value of money argument will convince me that it's worth it.

[KeithStone53151]

Regarding this final contract, he was initially asking 5/80 according to reports...so he settled for less than half that. And his ask wasn't all that unreasonable, especially considering the excessive asking prices being reported for other FA. I wonder if he would have done better, worse, or about the same if he put forth a reasonable asking price from the beginning. I personally think these absurd asking prices wind up giving the GM's leverage and hurt the player when the asking prices inevitably start to come down as the offseason starts coming to a close.

[reillymcshane]

Regarding this final contract, he was initially asking 5/80 according to reports...so he settled for less than half that. And his ask wasn't all that unreasonable, especially considering the excessive asking prices being reported for other FA. I wonder if he would have done better, worse, or about the same if he put forth a reasonable asking price from the beginning. I personally think these absurd asking prices wind up giving the GM's leverage and hurt the player when the asking prices inevitably start to come down as the offseason starts coming to a close.

The funny thing is that the final number (years and money) was exactly what MLB Trade Rumors predicted - 3-years/$39M.

 

As you state, the initial asking prices are crazy. But it's a game these guys play. Ask high and adjust. I mean, it only takes one team to be stupid - so why not try?

 

I'm not sure if the high numbers hurt the players that much, but I think where it definitely does hurt is when major league jobs get filled you could have some guys left standing without a gig. Sort of like the 1B market last year as guys like Chris Carter and Logan Morrison had to settle as teams filled roster holes with other players.

 

I think asking a lot for elite players rarely hurts. They're going to get paid at some point. But the guys that tend to have to come down are the middle and lower class players. Not always, but often.

[Roderick]

No time value of money argument will convince me that it's worth it.

 

As for you will never be convinced, it sounds like you understand the concept, so you are just being old man Shawshank obtuse.

 

First of all, it isn't always a payroll budgeting technique. Sometimes the agent/player wants the money deferred (assuming they get more of it - time value of money). Sometimes the reason to defer contracts may be cash flow reasons for another part of the team business. Just a made-up example, say the team knows they are going to pay for a concourse upgrade three years out, so instead of taking a bank loan (keeping it simple) to cash flow, they just defer some player contracts (assuming the inflation rate used on time value of money is less than the interest cost on the bank loan). The increased revenue from the concourses will then be put back in to assist in player salary in future years.

 

It is very easy to budget your roster, it isn't like these numbers are a surprise - they are known years in advance. The Brewers knew they had to pay A. Ram $3M, KRod $2M, Lohse $2.33M, Garza $2M this year. Even an incompetent accountant can make sure these are accounted for when the front office was putting together their 2018 baseball budget.

[monty57]

No time value of money argument will convince me that it's worth it.

 

As for you will never be convinced, it sounds like you understand the concept, so you are just being old man Shawshank obtuse.

 

First of all, it isn't always a payroll budgeting technique. Sometimes the agent/player wants the money deferred (assuming they get more of it - time value of money). Sometimes the reason to defer contracts may be cash flow reasons for another part of the team business. Just a made-up example, say the team knows they are going to pay for a concourse upgrade three years out, so instead of taking a bank loan (keeping it simple) to cash flow, they just defer some player contracts (assuming the inflation rate used on time value of money is less than the interest cost on the bank loan). The increased revenue from the concourses will then be put back in to assist in player salary in future years.

 

It is very easy to budget your roster, it isn't like these numbers are a surprise - they are known years in advance. The Brewers knew they had to pay A. Ram $3M, KRod $2M, Lohse $2.33M, Garza $2M this year. Even an incompetent accountant can make sure these are accounted for when the front office was putting together their 2018 baseball budget.

 

That's not a time value of money argument, that's a return on investment argument. Yes, if they took the money they deferred (essentially taking out a loan) and used it to purchase a permanent income stream that would increase payroll for the future, that's a good idea. Businesses do that all the time.

 

When the Brewers deferred these contracts, they were right at budget on the MLB roster, and deferred the money so they could afford to add more players at that time trying to "win now." The argument of the day by those that thought this was a good idea was that money in the future was worth less than money today, so they should do more deferrals and they would save money. That theory only holds water if they are investing those funds into something that will return greater than or equal to the inflation rate you are using when computing the future value of the money. The Brewers weren't doing that, they were deferring the money so they could spend more in the present with no additional future gains.

 

As you stated, there will be no surprise. Future payrolls will now be less than they could be because of these deferrals. In order to afford to have an extra player on the roster several years ago, our payrolls will be less (and therefore our teams may not be as good) when we are paying Braun when he is not playing for the Brewers.

 

I have no problem being called obtuse when I'm arguing against bad business practices.

[KeithStone53151]

As for you will never be convinced, it sounds like you understand the concept, so you are just being old man Shawshank obtuse.

 

First of all, it isn't always a payroll budgeting technique. Sometimes the agent/player wants the money deferred (assuming they get more of it - time value of money). Sometimes the reason to defer contracts may be cash flow reasons for another part of the team business. Just a made-up example, say the team knows they are going to pay for a concourse upgrade three years out, so instead of taking a bank loan (keeping it simple) to cash flow, they just defer some player contracts (assuming the inflation rate used on time value of money is less than the interest cost on the bank loan). The increased revenue from the concourses will then be put back in to assist in player salary in future years.

 

It is very easy to budget your roster, it isn't like these numbers are a surprise - they are known years in advance. The Brewers knew they had to pay A. Ram $3M, KRod $2M, Lohse $2.33M, Garza $2M this year. Even an incompetent accountant can make sure these are accounted for when the front office was putting together their 2018 baseball budget.

 

That's not a time value of money argument, that's a return on investment argument. Yes, if they took the money they deferred (essentially taking out a loan) and used it to purchase a permanent income stream that would increase payroll for the future, that's a good idea. Businesses do that all the time.

 

When the Brewers deferred these contracts, they were right at budget on the MLB roster, and deferred the money so they could afford to add more players at that time trying to "win now." The argument of the day by those that thought this was a good idea was that money in the future was worth less than money today, so they should do more deferrals and they would save money. That theory only holds water if they are investing those funds into something that will return greater than or equal to the inflation rate you are using when computing the future value of the money. The Brewers weren't doing that, they were deferring the money so they could spend more in the present with no additional future gains.

 

As you stated, there will be no surprise. Future payrolls will now be less than they could be because of these deferrals. In order to afford to have an extra player on the roster several years ago, our payrolls will be less (and therefore our teams may not be as good) when we are paying Braun when he is not playing for the Brewers.

 

I have no problem being called obtuse when I'm arguing against bad business practices.

 

I'm actually going to side with Roderick here. From a purely accounting perspective, the expense for these players has all been realized over the life of their contract. The remaining money owed is purely a balance sheet item at this point. For Ramirez, Lohse, Braun, etc...anything deferred is sitting in some liability account on their balance sheet until it actually gets paid. Since the expense has all been realized in the years they played, the amounts owed shouldn't impact future payrolls.

[monty57]

I'm actually going to side with Roderick here. From a purely accounting perspective, the expense for these players has all been realized over the life of their contract. The remaining money owed is purely a balance sheet item at this point. For Ramirez, Lohse, Braun, etc...anything deferred is sitting in some liability account on their balance sheet until it actually gets paid. Since the expense has all been realized in the years they played, the amounts owed shouldn't impact future payrolls.

 

Only if they put money away to offset the liability. "Realizing an expense" just means writing it off for tax purposes, and putting an item as a liability on the balance sheet doesn't mean there is a corresponding asset to counter it. If it did, Illinois wouldn't be in bad financial shape at all.

 

The money will have to be paid, so it will have to come from somewhere. Therefore those funds will not be able to be used to pay for additional players at that time. That could be now, or that could be in the future, but at some point unfunded liabilities have to be funded, and that means you can't use the money elsewhere.

[KeithStone53151]

I'm actually going to side with Roderick here. From a purely accounting perspective, the expense for these players has all been realized over the life of their contract. The remaining money owed is purely a balance sheet item at this point. For Ramirez, Lohse, Braun, etc...anything deferred is sitting in some liability account on their balance sheet until it actually gets paid. Since the expense has all been realized in the years they played, the amounts owed shouldn't impact future payrolls.

 

Only if they put money away to offset the liability. "Realizing an expense" just means writing it off for tax purposes, and putting an item as a liability on the balance sheet doesn't mean there is a corresponding asset to counter it. If it did, Illinois wouldn't be in bad financial shape at all.

 

The money will have to be paid, so it will have to come from somewhere. Therefore those funds will not be able to be used to pay for additional players at that time. That could be now, or that could be in the future, but at some point unfunded liabilities have to be funded, and that means you can't use the money elsewhere.

 

I see your point, and it's absolutely fair that the Brewers need to manage cash flows to successfully run their business. I just don't agree that these deferred salaries are impacting future payrolls. I also see your point with the Illinois example, the difference is the Brewers are making money. That added value from income is going somewhere, and I can't imagine a business as big as the Brewers would be run poorly enough to have cash flow significantly impact the club's spending abilities. Illinois on the other hand is taking in far less then they bring in in revenue, which the deficit each year gets added to their liabilities(they borrow money).

 

If you still think they do, we can agree to disagree. It's hard to know much with any certainty without being able to get our hands on financials.

[JosephC]

I was thinking Bruce would be 3 years in the 42-45 million dollar area. So just slightly below what I was expecting. Props to MLBTradeRumors for nailing this one right on the head.

 

Bruce had a solid 2017 but from 2014-2016 he slashed .231/.295/.440/.735. He was on the plus side in DRS and UZR/150 last year, but he sure looks like a declining defensive player when one watches him play. The guy can still hit the long ball which is a big deal, but outside of that there just that much exciting about him anymore.

[Devinep]

He’s a cleaner fit on other teams like SF, the Jays, or O’s. But if they can at least at times play him at 1B and Confirto at CF it could work well, albeit with some defensive issues

[pacopete4]

Add Adrian Gonzalez to the headline. Signed with the Mets. Doesn’t say much about their prospect Dominic Smith.

[adambr2]

Add Adrian Gonzalez to the headline. Signed with the Mets. Doesn’t say much about their prospect Dominic Smith.

 

Maybe, but with it being likely 1 year and only having to pay the minimum MLB salary, I would say it's more of a no risk insurance policy. Smith has been pretty bad at the MLB level but so has Brinson but we still see him as an elite prospect. Too soon to tell on either.

[jerichoholicninja]

Add Adrian Gonzalez to the headline. Signed with the Mets. Doesn’t say much about their prospect Dominic Smith.

 

Maybe, but with it being likely 1 year and only having to pay the minimum MLB salary, I would say it's more of a no risk insurance policy. Smith has been pretty bad at the MLB level but so has Brinson but we still see him as an elite prospect. Too soon to tell on either.

 

Ya I don't think this has anything to do with Smith. I wouldn't be surprised if Gonzalez is released around May from flat out sucking.

[pacopete4]

Smith has some really nice minor league numbers. Still very young.

[reillymcshane]

A month or two ago I read that the Mets were a bit concerned about Smith due to his struggles when called up last summer - plus his conditioning. But as noted, I think the Gonzalez signing is an insurance policy. It gives Smith a big warning that the job isn't his - he has to earn it.