Tuesday, February 28, 2012

Perezence.

Three years ago, Salvador Perez was a nobody. He was an 18-year-old kid, a name without a face, just another Latin American kid signed by a rudderless organization, indistinguishable from hundreds of other Latin American kids with big dreams and bigger odds against them.

Or at least, that’s what it looked like from a distance. Within the organization, even then, Perez stood out. Maybe it was the strong arm and preternaturally quick release, maybe it was the massive legs that belied a dancer’s agility behind the plate. Maybe it was his passion for the game, his baseball intellect, his easy bilingual rapport with his teammates and his pitching staff. But there were already stirrings that the Royals may have found a gem.

Back in 2008, Joe Hamrahi, who had attended scout school under the auspices of the Royals, had already filed this report on Perez. And in May of 2009, Kevin Goldstein made his first appearance on my radio show. My final question for him for was to give me the name of a sleeper in the organization. He gave me Salvador Perez. Never mind that Perez was in the process of hitting just .189/.230/.236 for low-A Burlington, necessitating a demotion back to rookie ball. He now had a face to go with his name, or at least some skills – he was a teenage catcher with strong defensive chops. It was something to build on.

Two years ago, Perez was a name to keep an eye on, but that’s all he was. Even as he jumped to high-A Wilmington, a terrible place to hit – particularly for right-handed hitters – and batted .290/.322/.411, he hardly stood out in the organization. It wasn’t his fault – that was The Year Of The Royals Prospect. Just among his Wilmington teammates, Eric Hosmer hit .354/.429/.545 and was promoted to Double-A at mid-season. And then there were the pitchers he caught, guys like Mike Montgomery and John Lamb and Chris Dwyer and Danny Duffy and Aaron Crow. They got the glory; Perez got the reflection.

A year ago, Perez was a prospect, but that was all he was. He looked like he had a major-league future, but didn’t project as an impact player, and in a Royals system being crowned as the Best Farm System Ever, that wasn’t enough – Perez was ranked somewhere between #17 and #20 on the team’s prospect list. True, he might have been considered #1 in the Brewers’ system, but that was true of most of his teammates, several sportswriters, and roughly a quarter of the KC metro area.

Seven months ago, Perez had quietly become of one of the organization’s best prospects, as much because he filled a position of need as for his talent. He showed up in spring training last year and was the talk of camp, with 1.8 pop times to second base and a rapport with pitchers that you just don’t see from 20-year-olds*.

*: Quick diversion to a (second-hand) story from last year’s camp: the first time Perez caught Joakim Soria, he took charge the way he did with every pitcher, gently encouraging Soria, chatting up his pitches, and generally acting like he was the veteran helping the kid along instead of the other way around.

Soria was a little taken aback by the way this 20-year-old from A-ball was projecting his authority, so he decided to test out the kid: without warning, he purposely buried his next pitch three feet outside and in the dirt. In one smooth motion, Perez slid over, snagged the ball out of the dirt like he was fielding a grounder, yelled out some more words of encouragement, and threw the ball back to Soria like nothing had happened. To no one in particular, Soria mouthed a single word: “nice”.

Perez had gone to Double-A Northwest Arkansas to start last season, and hit .283/.329/.427, much as he had in Wilmington – well, but not too well. He was then promoted to Omaha in July and started off hot – he hit .333 in his first 12 games.

Yesterday, Salvador Perez signed a contract that could keep him in a Royals uniform through 2019, guarantees him $7 million, and almost everyone in baseball agrees: the Royals got themselves a bargain.

In some ways, a lot has happened in the last seven months to justify the change in perception. And in some ways, not much changed at all.

What changed, certainly, is that Perez was called up to the majors in August – originally it was a temporary promotion while Matt Treanor recovered from a concussion – and forced the Royals to make him the everyday catcher. He picked off two baserunners in his major league debut. He hit .331 in 148 at-bats, and while that was somewhat of a fluke – hitting .331 almost always involves some degree of good luck – he also hit line drives on 29% of his balls in play, compared to the major-league average of 18%.

So yes, he definitely improved his stock during his audition with the Royals last year. He definitely caught a lot of general (i.e. non-Royal) baseball fans off-guard, the same people who were trying to figure out yesterday who the hell was this kid the Royals just gave a five-year contract to. But within the organization, and to fans who have watched his meteoric but steady rise through the ranks, Perez’ performance last year didn’t change their perception of him so much as it confirmed it.

The most important statistic associated with Perez isn’t .331, it’s 21. As in, Perez was 21 years old last year. If Perez had been 23 years old, he’d project today as a solid everyday catcher in the majors, possibly an above-average catcher at his peak. But he wouldn’t project as a star, and while this five-year contract would look like a sensible piece of risk mitigation by the Royals, it wouldn’t be perceived as a coup.

But he wasn’t 23 years old. He was 21. The rate of improvement in a position player’s baseball skills at that age are dramatic, and a performance of Perez’s caliber at that age is almost unprecedented. As I wrote a few months ago, Perez had the best offensive performance ever for a 21-year-old catcher with at least 100 plate appearances. But forget his performance – the mere fact that he was catching in the big leagues at all was remarkable. Jeff Zimmerman covered this at Royals Review, but here’s a list of all the catchers since 1980 who had 100 plate appearances in a season at the age of 21:

Rich Gedman
Joe Mauer
Brian McCann
Orlando Mercado
Yadier Molina
Dioner Navarro
Salvador Perez
Ivan Rodriguez
Mike Scioscia

Orlando Mercado is the black sheep of the group; I don’t recall that he was ever considered a top prospect, he hit .197 as a rookie, and he never hit in the major leagues. Dioner Navarro generated as much controversy over his abilities as any prospect I’ve ever covered – he hit .341 for half a season as a 19-year-old in Double-A, but scouting reports were very mixed, and he never hit over .300 at any other minor league stop. He’s had his moments in the majors, but has been disappointing overall, held back at least in part by concerns about his focus and work ethic. But everyone else on that list had a long, and in most cases stellar, career in the majors.

Perez wasn’t just 21 last year – he was a young 21. His birthday is May 10th, meaning he’ll still be 21 for the first month of this season. Eric Hosmer was also 21 last year, but he turned 22 in October – Perez was, by over four months, the youngest player on the Royals last year. As I’ve written out repeatedly, when talking about players in their teens or early 20s, the difference between an October and a May birthdate matters. (And in case anyone was wondering, Perez is Venezuelan, where birth records are kept much more securely than they are in the Dominican Republic.)

Perez’s age also explains why his breakout performance wasn’t all that shocking. He played in a full-season minor league when he was still 18 – he didn’t play well, but it’s rare for a player to impress his organization enough to even get the opportunity at that age. He debuted for high-A Wilmington when he was still 19, and played well. Last year, he started in Double-A at age 20 and didn’t miss a beat, and was in the majors three months after he turned 21.

Before last season ended, I postulated that after Hosmer, it was Perez – not Mike Moustakas – who was the most important young player in the organization. No one questions his defensive skills, which are above-average at worst and project as potentially Gold Glove-caliber. He has a reputation for having a fierce work ethic, a reputation which certainly isn’t hurt by the immense strides he has made as a player the last few years. Really, the only question about Perez’s future is how he will hit. Most see a guy who can hit .270-.280, and who ought to develop into a 12-15 homer hitter in his prime. That’s a good hitter for a catcher, but with his free-swinging tendencies and his lack of speed, that’s not a star.

Statistical analysis doesn’t help us a whole lot with projecting a player’s desire or his ability to call a game, or even with his defense. (Although statistics are certainly helpful in quantifying the value of what Perez has already done.) But statistics are highly useful for trying to project a player’s offense, and fortunately, this is where the statistics would argue in Perez’s favor. Perez isn’t really a .331 hitter, but we can translate his performance for all of 2011 and say that he was roughly a .280/.315/.415 hitter (that’s approximate – my copy of Baseball Prospectus 2012 should be delivered to my home today. The problem is that I’m currently in a hotel in Arizona.)

And we can use statistical analysis to project a 21-year-old hitter forward and say that, by the time Perez is in his mid-20s, there’s a good chance he will have blasted his way past those projections of him being a good #7 hitter. I think Perez can hit .280 with 12 homers this year. By 2016, I wouldn’t be surprised if he’s flirting with .300 annually, and hitting 20-25 home runs. That’s the power of a favorable date of birth.

To this point, I’ve written thousands of words on Perez the player, and nothing on the contract that he signed. Well, really, what’s there to write? It’s a tremendous deal for the Royals, the rare contract that combines terrific upside with virtually no risk. Perez will make $7 million over the next five years, and isn’t guaranteed a penny after that. Even if Perez’s 2011 turns out to be the biggest tease ever, and he settles in as nothing more than a good catch-and-throw guy who hits .260/.300/.330 in the majors, he’ll be paid about what a decent backup catcher makes on the open market.

Perez’s contract runs through 2016. At the end of that season, he will have made less money in his career – all the way back to his signing bonus in Venezuela – than Bubba Starling was guaranteed on the day he signed. Starling was worth $7.5 million even though there’s a lot of risk with him – how could anyone argue that Perez, who has already earned the job of everyday catcher in the majors, isn’t worth $7 million over the next five years?

If Perez hadn’t signed this deal, he would make roughly the major-league minimum over the next three years, or about $1.5 million. By signing this deal, the Royals essentially locked in his first two arbitration years at a total of $5.5 million. If he reaches the low end of his projections – the .270 hitter with 10-12 homers – he’d earn roughly that amount in arbitration. If his bat develops from there, the Royals may save millions.

(By the way, anyone notice how Perez is getting paid more than the major-league minimum the next few years? The Royals have not back-loaded the contract as much as you might think. This is a smart thing, because the Royals have the payroll space now, whereas in 2 or 3 years, when Hosmer and Moustakas reach arbitration eligibility, the Royals will face pressure to keep payroll costs down elsewhere.)

But of course, the real savings come in the option years. The Royals can keep Perez for his final arbitration year, as well as his first two years of free agency, for about $20 million in total. The upside here – if Perez turns into an All-Star – are tremendous. Yadier Molina, who is a pretty good comp for Perez overall, is about to earn something like $14 million a year on a long-term deal with the Cardinals. The Royals have the option to keep Perez for less than half that – and considering inflation, free market salaries will likely have gone up considerably more in five years.

The downside here – Perez turns into a good-not-great catcher – is that the Royals would have the option to keep Perez at roughly free-market prices, but they’d only have to commit to him for one year at a time. The odds that the Royals don’t pick up Perez’s options at all are low, and mostly limited to catastrophic occurrences like a severe injury or something. (I hate to even mention this, but given what happened to another young, right-handed hitting Venezuelan catcher this winter, when Perez goes home can we get him a security detail at all times?)

Put it this way: this is probably the most unambiguously good move of Dayton Moore’s career. Very limited downside; very substantial upside.

This contract is unprecedented in so many ways. Start with this: the Royals now control Salvador Perez’s employment for the next eight seasons. Since George Brett retired and the days of the “lifetime” contract (which really weren’t lifetime contracts, but whatever) ended, I’m quite certain the Royals have never had a player under contract eight years into the future.

The longest case of club control I can think of is when Joakim Soria, early in his second full season in the majors, signed a long-term deal for three years with three club options – keeping him under control for six years plus the remainder of the 2008 season. Both contract bought out two years of free agency and bound the player to the Royals for the first eight full seasons of their career, so let’s compare the two contracts:

Year   Perez       Soria

0      ML minimum
1      $0.75M       ML minimum
2      $1.00M       ML minimum
3      $1.50M       $1.00M
4      $1.75M       $3.00M
5      $2.00M       $4.00M
Option Years
6      $3.75M*      $6.00M**
7      $5.00M*      $8.00M
8      $6.00M       $8.75M

*: Plus incentives worth up to $5 million over the 3 seasons combined.

**: Or a $750,000 buyout. Perez’s options do not appear to have a buyout.

Perez’s contract guarantees him less money than Soria’s did. If both players had all their options exercised, Perez would make less than Soria. There’s essentially no way that Perez will make as much money as Soria will over the same number of years. This despite the salary inflation that has occurred between 2008 and 2012. And this despite the fact that Soria is a closer, while Perez is an everyday catcher.

There’s a reason for this, of course – Soria had proven himself as an elite player, and had done so for longer than Perez. But even an elite closer isn’t worth more than an above-average everyday player. Basically, by being willing to sign Perez now – with just 39 games of major-league playing time to his credit – the Royals were able to lock in an even bigger discount than you see in most long-term deals to young players.

(The Royals should probably thank Matt Moore for setting a precedent in this regard. Moore signed a contract with the Tampa Bay Rays with the same framework this winter – 5 guaranteed years, three option years. Moore is guaranteed $14 million over the next five years. As good as Perez is, Moore is indisputably the best pitching prospect in baseball – it’s no insult to Perez that he got half as much guaranteed money. If Perez is half the player Moore is, he’ll be a good one.)

Here’s something to consider – the all-time list of most games caught by a Royal:

Mike Macfarlane: 798
Brent Mayne: 620
John Wathan: 572
John Buck: 562

Here’s the list of the highest career bWAR by a Royals’ catcher.

Darrell Porter: 17.3
Mike Macfarlane: 13.1
Fran Healy: 3.8
John Buck: 3.4

If Perez earns out his options and starts for the Royals for the next eight years, he will almost certainly be at the top of both these lists – and with room to spare. This might sound ridiculous when talking about a player with all of six weeks of major-league experience, but if Salvador Perez is not the best catcher in Royals history when all is said and done, then something went wrong.

(Perez, with 1.1 bWAR last season, already ranks 12th all-time among Royals catchers. With a good year in 2012, he could jump all the way to third.)

When the press release was sent out, heralding a “major announcement” about the “contract status” of a Royals player, the assumption was that Alex Gordon had finally agreed to terms. When it was revealed that the press conference had nothing to do with Gordon, there was certainly a lot of disappointment, myself included. And I still think I’d be even more excited about a Gordon extension – depending on terms – than I am with the real news. Royals baseball in 2018 and 2019 is a hazy event that I’m hardly thinking about, whereas the presence of Gordon’s bat in the lineup in 2014 and 2015 is a very real thing that will have very tangible effects on the team’s ability to contend in those two years.

But in its own way, Perez’s contract should have at least as much impact on the course of the franchise as Gordon’s would have. And certainly, the two contracts are not mutually exclusive – the money guaranteed to Perez is so minimal that it should have no impact on the Royals’ ability to afford Gordon.

When the Royals drafted Moustakas and Hosmer with back-to-back top-3 picks in the draft, we knew what the deal was: by drafting Boras clients, the Royals knew that even if they got them signed and even if they developed into stars, the odds that the Royals would ever get them to sign long-term deals, the sort of deals that revived baseball in Cleveland in the mid-90s when John Hart pioneered the concept, were slim-to-none. The Royals knew this winter that if they were going to lock up a player long-term, it wasn’t going to be their third baseman or first baseman. It wasn’t going to be a pitcher, for obvious reasons. Johnny Giavotella was too unproven, and the Royals had too many alternatives at second base. Lorenzo Cain was too old.

Salvador Perez was none of those things. He played a key defensive position, and played it well. He was extremely young. He had no real competition for his job anywhere in the organization. He was the perfect guy to approach.

More than that, he was the perfect guy to trade the potential for untold riches for lifetime security. I’ve mentioned the St. Petersburg Paradox before, which is the notion that people prefer a guarantee of a small amount of money over the potential for large sums of money, because the marginal utility of the small money is greater, i.e. the first million dollars you make will generate more happiness for you than the second million. This notion works best, of course, with people who don’t already have a ton of money. One of the things that makes Boras clients relatively impervious to long-term deals is that he’s usually already earned them a huge payday when they were drafted. Hosmer got $6 million when he signed; assuming he’s been reasonably responsible with his money, he should be set up well even if his career goes completely south.

But Perez? Perez’s signing bonus as a 16-year-old out of Venezuela was so small that I can’t locate it. He made about $100,000 after the Royals called him up last August, and that probably represents well over half his lifetime earnings. The cost of living in Venezuela is less than in America, so Perez might have quite reasonably decided that a guaranteed $7 million today means that he and his family are taken care of for life. What 21-year-old wouldn’t want that?

So as much as this deal looks like a bargain for the Royals, that doesn’t mean it can’t be win-win. Perez guarantees himself and his family a lifetime of security. The Royals ink a potential star catcher, a player they adore and who they think can be the catcher on a championship club, at a significant discount. The rest of us get to invest in a Salvador Perez jersey with the knowledge that he will likely be here for the rest of the decade.

I love happy endings. Especially when they may lead to the beginning of something even better.

7 comments:

bbxpert said...

As a season ticket holder, I loved watching Perez last year. It seemed like he was always hitting line drives (as opposed to say, Jason Kendall). I think he'll be a 20 homer guy. I love this deal.

Pogue009 said...

Perez is certainly step one in making this temporary spike in minor league talent into a run of sustained success. In 2013 this team's success will rise and fall with four players
1. Felipe Paulino who has the best chance of the nominal starting 5 to become a FOR starter.
2. Johhny Giavotella he has the potential to be a .340-.360 wOBA 2B something only 8 2B did last year.
3. Lorenzo Cain his ceiling is Shane Victorino his floor is Nyjer Morgan if he can be a 2-4 WAR CF for the next 6 Year a Myers/Cain/Gordon OF looks amazing.
4. Alcides Escobar he had two months in 2011 with a BABIP over .300 they were June .305/.353/.432 and September .324 .367 .459 if he can become closer to that player even if it is just to the point of hitting all of the time like he hit on the road .275/.314/.394 93wRC+ then he would be nearly a 5 WAR SS

TangoAlphaLima said...

"The cost of living in Venezuela is less than in America, so Perez might have quite reasonably decided that a guaranteed $7 million today means that he and his family are taken care of for life."

Hey Rany, I'd like to point out that $7 million is probably enough to take care of a family for life in America, too. No, check that, it definitely is enough.

Anyway, I'll admit, I was disappointed when the news came out it wasn't a Gordon extension (I'll blame that on the Royals using the phrase "Major Announcement"). But this is a fantastic deal for the Royals.

dkoehn said...

Salvador Perez will likely hit at a respectable level for his career, but I'm excited that he will provide something that most championship level clubs have and that is solid defense up the middle. I'm pinching myself that he could be doing it for the Royals until 2019. It also means that we all get to enjoy the added benefit of seeing him behind the plate for a majority of the pitches on the TV, instead of say Miguel Olivo who butchered the catching position and always gave me a reason to get riled up when I watched the games. Or Jason Kendall who couldn't hit, or John Buck who couldn't throw out baserunners (at least early in his career). This is a great signing for the psychi of Royals fans, unlike the betancourt signing, because it gives credence to the expectation that the Royals could be competitive for the next decade.

I also this was a very shrewd move because Sal Perez was going to approach arbitration with a bunch of catchers (Wieters, Santana, Avila, maybe even Harper) who might move the bar up for what good catchers get paid.

Pogue009 said...

The more I think about it the more Perez reminds me a lot of Don Slaught as a comp at least on the lower end. His low K good K/BB profile with good contact skills and great D.

Ryan Patrick Dolan said...

Most enjoyable player to watch on the field. The one game I saw him on U.S. Cellular, I couldn't keep my eyes off him. I can't remember saying that about any catcher ever.

Mark said...

Rany,

Love the signing, and look forward to your spring training reports.

I fall asleep with pleasant thoughts of the batting order. I wake up in a nightmare about the rotation. What do we have--two threes, two fours, and a question mark? Is that too harsh? I don't think '85 will recur--Saberhagen, Gubicza and Jackson--but I hope at least one shows up.

Just a note, but Cleveland needs some trainers. Sizemore and Perez are down already. Glad we solved that problem.

I am looking forward to the season. As a Jayhawk fan, I already hate the Tigers anyway (sorry, Aaron).