Tuesday, December 2, 2008

Grudzielanek.

In my last column, I openly wondered whether Miguel Olivo would have earned the Royals a draft pick as a type B free agent had they let him move on to another team. My friend Keith Law set the record straight: Olivo would not have entitled the Royals to any compensation. This makes the decision to bring him back more palatable, though still not particularly appetizing.

But it turns out that Dayton Moore had his eye on an extra draft pick after all. Yesterday, after it was long assumed that the Royals would not offer Mark Grudzielanek arbitration, the Royals caught everyone off guard by offering arbitration just hours before the deadline. And this evening, Grudzielanek responded by saying “I’m probably 95 percent, 98 percent sure I'm going to pass on it.”

Let’s take this one by one. The Royals offered Grudzielanek arbitration, even though they can’t really afford him, and even though they appear to have moved on from him. Grudzielanek made $4.5 million last year; even if he had hit like the love child of Tony Pena Jr. and Andruw Jones last year, he’d be looking at an arbitration award comfortably in seven figures. Grudzielanek didn’t hit like Pena or Jones; he hit like, well, Mark Grudzielanek, batting .299 and playing his typical heady defense at second base. He’d be looking at an arbitration award in the range of about $5 million or so.

And yet Grudzielanek, who is unlikely to get anywhere close to $5 million a year on the open market, is at least 95% sure he won’t take the offer. Trying to guess the market for Grudzielanek is difficult, because it only takes one outlier to alter it. But the market isn’t exactly lacking in second baseman; Cot lists Alex Cora, Ray Durham, Jerry Hairston, Orlando Hudson, Felipe Lopez, Mark Loretta, Nick Punto, and Juan Uribe as free agents at the position, and simply by virtue of age, most of those guys are going to be more desirable than Grudz.

I could see this going one of two ways: either Grudzielanek finds a team that thinks he still has enough left in the tank to be an everyday player, and gets a 2 year, $8 million deal – or he doesn’t, and he’s forced to sign a 1 year, $1 million contract and fight for playing time in spring training. There isn’t much go-between, because a second baseman only has value if he’s playing every day – you can’t be a utility player if you can’t play shortstop.

So why would the Royals offer Grudzielanek more money than he’s worth, and why would Grudzielanek decline it? I’m the last guy to believe in a conspiracy theory – I’m the guy who checks every forwarded email with Snopes.com, then embarrasses the sender by hitting “Reply all” and replying (with proof!) that the United States is not actually minting the “Amero” coin and discarding the dollar. But this time, well, call me Mel Gibson.

I think – and this is only an educated guess, not predicated on any kind of insider knowledge – that Moore and Grudzielanek have reached some sort of gentlemen’s agreement, in which Moore has offered Grudzielanek arbitration with the understanding that it won’t be accepted.

Why? Well, it’s a win-win situation, or at the very least, it’s a win-no lose situation. The Royals get themselves a supplemental first round draft pick, which is a very valuable commodity. The Royals got one of those last year when David Riske left, and used it to select Mike Montgomery, a high school left-hander who was named the #1 prospect in the Arizona League and the Royals #4 prospect overall by Baseball America.

But because Grudzielanek is a Type B free agent, this supplemental pick would not be taken away from his new team; this is an extra pick created solely for the purpose of compensating the Royals. A Type A free agent would cost his new team their first or second round pick, but a Type B free agent is free to his new team from a draft standpoint. Therefore, Grudzielanek’s Type B designation is irrelevant to any team interested in his services, which means his price tag should not be affected at all.

So the Royals get themselves a very valuable commodity, and Grudzielanek does his old team a favor with no skin off his back. To the best of my knowledge, there’s no way for the Royals to compensate Grudzielanek for his participation in this charade with anything more than their gratitude, but that might be enough.

The reason I'm so certain that the Royals can frame this in a way that makes it worthwhile for Grudzielanek is that this has almost certainly been done before. After the 2006 season, the San Diego Padres hit upon a bonanza of extra draft picks, as no fewer than five of their free agents signed with other teams, earning the Padres compensation. One of them, Woody Williams, was a Type A free agent, earning them a supplemental first rounder as well as the Astros’ second-round pick. (How’s that working out for you, Drayton?) Then Type A free agent Dave Roberts signed with the Giants, earning another supplemental first rounder and a fourth-rounder (because the Giants were busy giving up all their higher draft picks to other teams.) Then things got interesting.

Chan Ho Park, who gave the Padres a 4.81 ERA in 2006 (and had a 5.74 ERA in 2005), was mysteriously offered arbitration – and declined. Alan Embree, who had a 3.27 ERA as a LOOGY in 2006 – but a 7.62 ERA the year before – was offered arbitration. He signed with Oakland instead. And finally, Ryan Klesko, who was injured almost all season and had nine plate appearances all season, was offered arbitration. He signed with the Giants.

Park, Embree, and Klesko were all Type B free agents. Embree and Klesko were the two lowest-rated Type B free agents to sign with another team. Yet the Padres got extra draft picks for all of them, and wound up with six of the first 64 picks, and eight of the first 87 picks, in the 2007 draft.

Park signed with the Mets, for one year and $600,000. In 2006, he earned $15 million in the final year of the ridiculous contract the Rangers gave him in the 2001-02 off-season. I find it…hmm…odd that Park would decline arbitration, and then accept what amounted to a 96% pay cut with another team. (It’s extremely rare to see a player awarded an arbitration salary lower than the previous year, and almost unheard of for their salary to decline more than 20 or 30%.)

In 2006, the Padres paid Klesko $10 million, then another $500,000 to buy out his 2007 option. In 2007, Klesko declined the team’s offer of arbitration in order to sign with the Giants for $1.75 million – a pay cut of more than 82%.

Like I said: odd. Even, dare I say it, suspicious.

It’s possible that Grudzielanek could stab Moore in the back (I believe the technical term for this is that he might “Boozer” the Royals), but Moore has an out. As Bob Dutton reported, “The Royals retain some financial wiggle room if Grudzielanek accepts arbitration because arbitration-determined salaries are not guaranteed. Teams must pay only one-sixth of a salary if they release a player with 45 or more days remaining before opening day.”

If that were to happen, Grudzielanek could respond with one final salvo of his own: he could file a grievance. Once again, we have the Padres to thank for the precedent here. It seems that after 2006, one of their players didn’t get the memo: Todd Walker, who was offered arbitration along with all of his friends, gleefully accepted, and won his arbitration case to the tune of $3.95 million. A month later, the Padres released him. “This is strictly a baseball decision,” general manager Kevin Towers said, adding that Walker's salary “didn't factor into the decision. We're two-time NL West champions and want to win again. For us it's putting the right 25 guys on the field to start the year and we felt there were people that were ahead of him.”

While I have found evidence that Walker and the MLBPA were considering a grievance, I can’t find any confirmation that it was officially filed, and certainly there’s no evidence that he won.

I’m not anticipating any of this with Grudzielanek, mind you; I’m simply pointing out what options each side has if this deal were to sour. I have no reason to think either Moore or Grudzielanek are anything other than honorable, so the odds are slim that this will blow up in the Royals’ face. Assuming it doesn’t, this is a huge under-the-radar win for Moore and the Royals: they basically acquired a top prospect for nothing.

In fact, even if Grudzielanek were somewhat likely to accept arbitration, the potential reward of an extra draft pick would make this a worthy gamble. We can’t say just how worthy a gamble this is until we calculate the value of a draft pick. Fortunately, my colleague Nate Silver already did this in a column from back in 2005.

What he found was that late first-round and supplemental picks (basically any pick from #26 through the end of the supplemental round) returned an average of $4.24 million in value, above and beyond a player’s salary (but not his signing bonus) over the course of his career. The average signing bonus for these players was about $1 million – so after accounting for the cost of signing the player, earning an extra draft pick was worth $3.24 million. Accounting for salary inflation over the past three years, we can revise that number upwards to about $4 million.

On the other hand, if Grudzielanek decides to accept arbitration after all, then he’ll cost the Royals about $5 million, and is unlikely to deliver that much value in return. Let’s say that he’s worth about $2 million, which seems reasonable for a second baseman with declining range and no secondary skills, but someone who can still punch the ball to right field.

So if the Royals offer arbitration to Grudzielanek and he leaves, the team earns a draft pick worth $4 million. If he accepts, the team flushes $3 million down the drain. If these numbers are accurate, the Royals should offer Grudzielanek arbitration whether he’s 100% certain to decline, or 95% certain, or even 50% certain. The break-even point is 42.9% - if Grudzielanek is more than 42.9% likely to decline, they should offer him the deal. That number is obviously approximate, and based on a number of assumptions, but if it's not 42.9%, it's 37.1% or 57.3% - not 95% or 98%. This is a low-risk, high-reward move.

Since I started this blog, I’ve written fewer words about Grudzielanek than almost anyone else on the roster, even though he was an everyday player. Like a good umpire, I suppose the mark of a good veteran player is that no one ever talks about him. Grudzielanek joined the Royals in 2006, and for three years did exactly what he was expected to do: hit about .300, rope some doubles, and turn the pivot as fast as any second baseman in the game. And he did so with eerie consistency: in his three years he hit .297, .302, and .299, and finishes his Royal career with a batting average of .29955 – which conveniently rounds up to .300. (Only two other players have hit .300 or higher as a member of the Royals, with at least 1000 plate appearances: Jose Offerman and George Brett.)

Grudzielanek won a surprise Gold Glove in 2006; while his range isn’t what it used to be, he still turns double plays very well. He goes down as one of the better free agents the Royals have ever signed, along the lines of Greg Gagne, who was an exceptional defender at shortstop for the Royals from 1993 to 1995, hit with better-than-expected pop, and (this isn’t something I say very often) did all the little things right.

So Grudzielanek, if this is goodbye – and nothing personal, but I hope it is – then thank you for all you’ve done for this team. Playing for a team that was usually remembered only for its gaffes, thanks for being the forgotten man. Thanks for proving those of us wrong who thought you were too old and too average to help the Royals when they signed you in 2006, and when they picked up your option in 2007, and when they picked up your option in 2008.

And thanks for the parting gift. Dayton Moore might have thought it up, but it was very thoughtful of you to deliver it.

17 comments:

Dan Cook said...

I had the exact same thought, except I think I'm a more experienced cynic than you, as I assume the Royals somehow compensated Grudzy for his parting gift.

NYRoyal said...

Given the payroll constraints, I think if Grudz surprisingly accepts arbitration, the Royals will release him, and be out about $833K. That is a fine amount to gamble for a supplementary round draft pick who is worth about $4M.

Anonymous said...

I love Grudz, and I love this move. He did much more in his three seasons here than anyone expected, and I agree that this might end up being the best of all of the things he did. It's a great gamble, and when the guy you're gambling with is Grudz, I'll take my chances. Hell, if he actually wanted to play 2009 with the Royals, I might even consider it being "OK". Thanks for everything Mark. Especially the supplemental pick...I hope.

Tarnished Crown said...

Hopefully, somebody else will get a chance to drop pop ups in short right field next year.

Anonymous said...

Mark Grudzielanek was the consumate professional these last 3 years here in KC. I for one have greatly appreciated his work ethic, his abilities, and his passion for the game. I just hope he rubbed off enough on our young guys to show them how to prepare for and play this great game.

Anonymous said...

Could this gentleman's agreement have occured a while ago? Does that explain why Dayton didn't make more of an effort to trade Grudz before the deadline this year?

Anonymous said...

I think Moore had planned to trade him in August if he was going to at all, but that didn't work out since he got hurt on August 1st. Grud is a great teammate and I have no doubt that someone is going to want his services next year. Thank you Grud for staying with us in KC as long as you did. You could have taken your services elsewere last year, but you chose to stay here and for that I am very greatful. And thanks for the extra draft pick as a farewell gift. I hope to be cheering for you in the playoffs next year, unless you sign with the White Sox, Red Sox or Yankees, which I don't see happening.

Anonymous said...

Just a thought, but aren't the Twins basically a team full of guys like Grudz? Guys that aren't all that spectacular (save for Morneau and Mauer) but just get the job done and get it done well. He would be an excellent fit there I think.

Anonymous said...

the Twins have no use for Grud,
they have Alexi Casilla at 2B (with some other Grud-like options in the minors Tolbert, Macri, etc) and as a team are based on solid defense/excellent range (save Delmon Young who makes Emil Brown look like a gold glover)

sadly range is something Grud is lacking at this point in his career

Nathan said...

I'm not sure Grudz would be useless on the 2009 Royals. We aren't exactly brimming over with quality 2B candidates, and his value in relation to the Callaspos of the world depends on whether the team thinks he'll keep aging gracefully for another year. Could part of the deal here be that if, after he rejects arbitration, Grudz fails to find a starting job, the Royals will keep him on for something in the neighborhood of the $2M you mention? I don't think it would be the worst idea in the world, if his defense is still strong, which is always a question with 39-yr-olds, of course.

Anonymous said...

Why is it the player can earn $5 mil in arbitration but only get $2 mil on the open market? Doesn't that mean that the process is broken? Shouldn't arbitration award the player what he is worth?

Anonymous said...

GRUD: You know Dayton, I love living in KC. Would sure like to be a part of your organization when I retire.
DAYTON: We would love to have you! Maybe a scout? Minor league instructor? You are what we want this organization to be about. Hey, there's something you can help us with. :-)

N. J. Thomas said...

You know, it is theoretically possible to eventually reward Grudz. You give him a front office job. Obviously, it's a different kind of reward, and I'm not sure if there are any rules against it, but people can get paid in a lot of ways that don't actually involve playing the game.

Anonymous said...

I have no reason to disrespect Grudz at all. He does seem to be the consummate pro and I have valued his contributions to the Royals. But... he is an aging player with a history of injuries (thanks in some part to Ross Gload). So, my bottom-line is that I choose to BELIEVE the guy when he says he wants to go out a winner and sign with a team capable of competing for the Championship. We don't need a conspiracy theory here. It is as simple as Grudz wanting to win, Dayton knowing that, and BOTH doing the right thing. AND... if he happens to come back in a coaching, scouting, or front office role after his playing career ends... well, he is a pro and would be welcomed by THIS Royals fan!

Go Royals!!! C-ya, AusSteveW

steak said...

Does anyone else here notice that reading GMDM quotes is like reading the textbook definition of politically correct, non-committal management? If it weren't for the pictures and having seen him in Suprise with my own eyes, I would begin to question if the guy even were a human and not a Big Blue type of machine in the corner of David Glass' office... can't the guy show some kind of emotion (other than anger when a false trade rumor pops up)? Please don't get me wrong... I'm a huge fan. I just find it slightly humorous... the guy is a machine.

Here is my favorite quote from this week from Royals.com:
Q: "My question is, which part of renovations at the stadium are you most excited about?"

GMDM: "The entire renovation project will be spectacular in the eyes of our fans and players..."

He is so non-commital that he won't even tell us what his favorite part of the renovation is!

I wonder if the guy has a favorite food...

GMDM: "It would be reckless to speculate as to what foods are better than others. I think all food is great and will be great for this team."

Nathan said...

Steak,

Your food example is spot on. GMDM clearly doesn't intend to tell the fans anything about what's really going on in his head. That's fine with me in general, but he does seem to take the idea to extremes. Also, if you're not going to say anything of substance, why even have a chat to start with?

Douglas said...

Dayton is a poker player -- that's why you won't see him publically commit to anything. And this move is exactly the kind of detail-focussed, longer-term thinking the Royals had gotten away from over the last decade or so. Maybe billiards is more apt than poker player for Dayton -- he seems to be making moves with a idea of his next move in mind. He's made some questionable moves, certainly, but I think he's bettering the team overall and being smarter about resources. Too bad about Grudz, but it's time to think about who needs to be on a championship team.