What’s the Rush?
Posted by JD on September 20, 2010
Carlos Beltran’s days on the Mets are numbered: whether it be an off-season trade (Ken Davidoff thinks there may be a market for him), a deadline deal in July, or simply letting his contract expire, Beltran will not be here in 2012. The player/team relationship has deteriorated to the point that a divorce seems inevitable. As much as it pains me to believe it, believing anything else is indulging in fantasy at this point.
Personally, I think the third option makes the most sense. An injured Beltran is better than most major league outfielders even if he insists on playing center field (which he probably will). Trading him at the deadline makes a good bit of sense, too. Sure, it’s a a gamble: he could get hurt again. But it would give him a few months to rebuild his trade value while giving the Mets their best chance to win in 2010. All that being said, I’m almost positive they’ll rush into it and trade Beltran this winter.
I’m hedging my bets: there’s every chance that whoever gets the GM job will realize that it’s better to hold on to Beltran rather than dumping him. But, given the way the Mets have operated over the past three seasons, the new GM may be pressured to move Beltran as soon as possible. It’s the least palatable option, but that’s no reason to say it won’t happen.
Davidoff lists the Cardinals and Red Sox as potential trade partners. I took a look at their roster commitments on Cot’s Baseball Contracts and saw a couple of possible trades that I think highlight the position that the Mets will be dealing from this off-season. Setting the table, Beltran will earn $18.5 million next year, $5.5 of which will be deferred for an unspecified period of time at 1.72% compounded interest. This is a key (if under-reported) figure: it means that Beltran will actually make “just” $13 million next season.
I’m sure you’re familiar with the terms of Bobby Bonilla’s contract by now. On July 1, he’ll begin receiving annual payments of $1.19 million from the Mets until 2036. Beltran has a similar arrangement, the main difference being that we don’t know how the future payments are structured. Let’s set aside the deferred $5.5 million from 2008, 2009, and 2010 for now (I’d love to say that they’ve $16.5 million stashed in a safe investment, but for some reason I doubt it). That leaves the $5.5 million from 2011, the key to which is the payment’s due date: the further out it is, the less that has to be invested today (here’s a primer on the time value of money). If it’s one year, the payment is worth about $5.4 million today. Ten years lowers the number to $4.64 million, 20 lowers it to $3.91 million, 25 lowers it to $3.59 million. We don’t know when the payments will be due, but we know that less than $5.5 million has to be set aside to cover it today. It’s a safe bet that the Mets would be willing to front whatever that number is, given that they can make up the difference in more profitable investments and that interest rates will surely go up (after all, the Great Recession is over). Wait, what?
Cheap shots aside, let’s use $13 million as a guideline: there are players on the Cardinals and Red Sox that come close to matching Beltran’s contract. On the Cardinals, Kyle Lohse is due to make $11.875 million in 2011 and 2012. He’s been mediocre (to be kind, he was injured this season) since signing his current contract and has a full no-trade clause. The Red Sox offer a similar option: Daisuke Matsuzaka, who is due to make $10 million in 2011 and 2012. Dice-K has been less mediocre than Lohse (while pitching in the much more difficult AL East) but also has a full no-trade clause. Given the uncertainty in the Mets’ rotation next year, they might attempt to convince Lohse or Matsuzaka to waive their no-trade clauses (and, in the process, probably spend more money to do so).
There are undoubtedly more alternatives available should the Mets choose to get creative, but I think these two scenarios nicely highlight market conditions: they’ll have to acquire less talented players with longer contracts or pay the receiving team even more money to obtain higher quality players or prospects. The alternative is to hold on to Beltran long enough to regenerate his trade value (and reap the benefits of having him healthy and productive). This fan thinks it’s a no-brainer to keep Beltran, but I won’t put my money on that happening.