Article: Non-Guaranteed Contracts: Dollars And Sense

[Seth Stohs]

In the excitement of spring training, we can often forget some of the business side of baseball. As we make projections for the Twins Opening Day roster, we often make a lot of assumptions. But there are some little-talked-about rules that could alter the thinking as we move through spring training. There are a handful of Twins players who are working under somewhat non-guaranteed contracts.Back in late November, the Twins had to make arbitration decisions on five players (after releasing Trevor Plouffe earlier). In January the Twins avoided arbitration with all five of those players; infielder Eduardo Escobar, LHP Hector Santiago, and RHPs Kyle Gibson, Brandon Kintzler and Ryan Pressly.

 

Arbitration contracts are not fully guaranteed.

Players on arbitration contracts who are cut on or before the 16th day of Spring Training are owed 30 days' termination pay (based on the prorated version of his agreed-upon arbitration salary). A player cut between the 16th day and the end of Spring Training is owed 45 days' termination pay (based on the prorated version of his agreed-upon arbitration salary). The arbitration salary becomes guaranteed if the player is on the 25-man roster when the season begins.

In other words, if Derek Falvey and Thad Levine were to release any of the five arbitration players before the 16th day of spring training, they would only need to pay the player approximately 1/6th of their arbitration agreement. If they are released between the 16th day and the end of spring training, they are guaranteed approximately ¼ of their arbitration number.

 

Let’s take a quick look at what that means for the five Twins players.

 

HECTOR SANTIAGO - When the Twins traded Ricky Nolasco to the Angels last August 1st, they sent $4 million with him. The term ‘salary neutral’ was introduced. Nolasco is owed $12 million in 2017. It was likely known that Santiago was going to get about $8 million in arbitration, so the $4 million made the costs neutral (not factoring in Alex Meyer and Alan Busenitz, the other players involved in the deal).

 

The Twins aren’t going to release Santiago within the first 16 days. In fact, he’ll be pitching for Puerto Rico in the WBC. It’s actually assumed and very probable that he will be on the 25-man roster. However, it is worth at least noting that if he were released before Opening Day, the Twins would only owe him $2 million, which would give them $6 million to play with later in the season.

 

Santiago will be in the starting rotation to start the season. A trade is much, much more likely than a release.

 

BRANDON KINTZLER - The right-hander currently sits atop the list as most likely to be the Twins closer. He was reliable in 2016 and should be reliable in 2017 whether it is in the 7th, 8th or 9th inning. Like Santiago, it’s much more likely that Kintzler would be traded than released. If released he would only be paid $731,250 (25% of his $2.925 million arbitration agreement, saving about $2.2 million).

 

KYLE GIBSON - The right-hander, like Santiago, will be in the Twins starting rotation to start the season. One year removed from being the Twins pitcher of the year, Gibson is looking to stay healthy and take a step or two forward in 2017. If released, he would still cost $725,000 (25% of his $2.9 million arbitration agreement, saving just under $2.2 million).

 

EDUARDO ESCOBAR - Escobar finds himself in an interesting position this spring. A year ago, he was finally handed the Twins starting shortstop job. Injury and struggles in 2016 meant that at this time, he’s most likely going into the season as a utility man again, a role he has thrived in. However, with question marks surrounding Jorge Polanco’s defense, Escobar could be valuable as he could move back into the starting role again. However Ehire Adrianza being in the picture complicates that as well. There is a scenario in which the Twins have to pick between Escobar and Adrianza for one spot. In that case, Adrianza (who had agreed to a $600,000 arbitration number with the Giants earlier in the offseason) and his defensive prowess might make more sense. Escobar agreed to a $2.6 million arbitration number. If he is released, the team would save just under $2 million.

 

RYAN PRESSLY - The former Rule 5 pick agreed to a $1.175 million arbitration deal. While he hasn’t been able to put together a full season yet in the big leagues, he has certainly shown the stuff and velocity to become a terrific set up man. $1.175 million is peanuts in baseball terms. If released before Opening Day, he would still get $293,750, so the Twins would be saving about $900,000.

 

As I noted, the most likely scenario is that all five of these guys will be on the Opening Day roster. But the finances have to make sense too. The front office will need to evaluate if the dollars make sense for each of these, relative to the other options at the start of the season.

Do you think that this information will, or even should, factor into Opening Day decisions this year?

 

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[HitInAPinch]

Gut feelings:

 

Santiago, Gibson, Pressly and Kintzler are space fillers until something better comes along.  Actually, I'd say that about a majority of the starters for sure.  Don't care if Gibson was "Twins Pitcher of the Year".  Slight praise, considering the Twins starters.

 

Escobar:  Personally, I wouldn't replace him with a guy that has minimal experience at shortstop like Polanco.  I don't expect Escobar to have a high trade value, unless some other team, in the pennant race,  is unluck, their starter is injured and they have no real replacement. 

 

I like Polanco a lot, but believe 2nd is by far his best position.  I think we'll see a Dozier trade before or around the All-star break.

 

 

[beckmt]

Pressly is the only non space filler I see in that group.  Would not mind if they sent Gibson packing, but the youngsters will have to step up into the rotation for that to happen.

[Comrade Bork]

They didn't blink when they gave Santiago arbitration and I don't think they care about saving 6mil at this point, much less paying out the smaller contracts. I don't feel that money is playing into this very strongly.

[mikelink45]

Thanks for the update.  I did not know this, but it is false hope for me since I would love to see Santiago packed and gone.    I think Escobar is better than Ehire for the bench.  Gibson has one more year to show that he has more than one good year in him.  He would be next after Santiago to be moved to clear the deck. 

[DocBauer]

Under last season'starts payroll and we'll below the ML average payroll, and with questions surrounding the roster, I don't see a single guy here being cut or traded.

 

Despite major concerns with the rotation, Santiago would be the most likely to go with Santana and Gibson locked in with Berrios and May hopefully ready and a few remaining options for the 5th spot. But questions remain regarding Hughes while May and Berrios are still in a bit of a "prove it" mode, though each needs and deserves the opportunity.

 

Just don't see a single move taking place unless someone has an injury, the rest of the rotation candidates step up, and it makes sense to trade Santiago.

[Otto von Ballpark]

Arbitration guys getting cut during spring training is incredibly rare, not just for the Twins but all around the league.  The only one I can recall, for any team, was Emilio Bonifacio of the Royals in 2014 (and he was actually cut before spring training, in early February).

 

And it makes sense -- if you have any doubts about a player at arbitration salary, you nontender them and try to bring them back at a lower price.  It makes no sense for clubs to go to arbitration, guarantee termination pay, and tie up a roster spot all winter if there's a chance they might cut the guy before opening day (and zero chance at that point of retaining the player's services at a lower price).

 

Generally I enjoy discussing baseball contract minutia, but perhaps it's a bit irresponsible if it gives people false hope about cutting Hector Santiago.

Edited March 2, 2017 by spycake

[jrod23]

 

Don't care if Gibson was "Twins Pitcher of the Year".  Slight praise, considering the Twins starters.

 

Escobar:  Personally, I wouldn't replace him with a guy that has minimal experience at shortstop like Polanco.  I don't expect Escobar to have a high trade value, unless some other team, in the pennant race,  is unluck, their starter is injured and they have no real replacement. 

 

I like Polanco a lot, but believe 2nd is by far his best position.  I think we'll see a Dozier trade before or around the All-star break.

 

 

I agree with the Gibson comment a great deal.  However, we give him some help and plate some runs, his numbers would probably get to average, and above average on a good year.  Sucks because he's one of our most reliable guys on the hill, and he's not very reliable.

 

I'm in the camp that Polanco can hold down short.  I'm not a huge numbers guy, and I understand Escobar's fielding percentage at short in about 1,800 more innings is .020 points higher than Jorge's, which is actually quite a bit.  Maybe I'm just getting sick of the Minnesota Twins' SS issues.  I love Dozier, but let's trade him, get a solid couple of prospects, put Jorge at 2B, fast-forward time and get Nick Gordon up here batting .317 with a .998 fielding percentage.

[Thrylos]

Other than Santiago maybe, I just cannot see the others not being on the roster by opening day, trades aside.

 

Here is the thing with Adrianza: he has been pretty horrible with the stick and late in the games against AA and AAA pitching. At this point he bring the same skillset as Vielma does.  Escobar's clubhouse presence is also something that is positive for him.

[Steve Lein]

I don't think there's any reason the Twins care about what these guys are being paid at this point to determine whether they should or shouldn't be on the roster. Keep the guys you think are going to help the most. I would venture to say those players are the guys in this list.

 

And aren't they already below last year's payroll? 

[FormerMinnasotan]

Honestly I would hope both Santiago and Gibson are traded before the end of this season. Neither starting pitchers seem to be a part of the Twins future and would likely be nothing but a back end starter anywhere else.

[laloesch]

 

Honestly I would hope both Santiago and Gibson are traded before the end of this season. Neither starting pitchers seem to be a part of the Twins future and would likely be nothing but a back end starter anywhere else.

 

I don't agree on the part that neither of these pitchers is part of the club's future.  The Twins VERY MUCH seem to have Gibson in their long term plans because they've given him every opportunity and then some to stick in this rotation since 2013.  

 

I'm not sure whats going to happen with Santiago (although i have my thoughts on the matter).  His 11 games last season were mostly atrocious and he's not exactly a diamond in the rough find. He's still here because of lack of options IMO. 

 

That said, people need to see this for what it is.  The Nolasco, Meyer, Santiago deal was a desperation move on Ryan's part to rid the Twins of a chronic under-performing clubhouse cancer.  Unfortunately, it appears that they don't have a whole lot of faith in some of the young guys like Berrios, May and Mejia.  I would be giving all three a legitimate chance at the rotation this season.  I don't really give a dam about guaranteed money obligations to Hughes, Santiago and Gibson.  After losing 100 games last season Falvey and Levine would be crazy rolling with those three if they are seriously under performing later this spring.        

Edited March 2, 2017 by laloesch

[Seth Stohs]

 

They didn't blink when they gave Santiago arbitration and I don't think they care about saving 6mil at this point, much less paying out the smaller contracts. I don't feel that money is playing into this very strongly.

 

I agree... They don't care about the money part of it. And, what would they spend it on at this point? They can't spend extra in the draft. They can't spend extra in international signing. I don't think there are any free agents out there still that are worth worrying about.

[Richie the Rally Goat]

 

I agree with the Gibson comment a great deal.  However, we give him some help and plate some runs, his numbers would probably get to average, and above average on a good year.  Sucks because he's one of our most reliable guys on the hill, and he's not very reliable.

 

I'm in the camp that Polanco can hold down short.  I'm not a huge numbers guy, and I understand Escobar's fielding percentage at short in about 1,800 more innings is .020 points higher than Jorge's, which is actually quite a bit.  Maybe I'm just getting sick of the Minnesota Twins' SS issues.  I love Dozier, but let's trade him, get a solid couple of prospects, put Jorge at 2B, fast-forward time and get Nick Gordon up here batting .317 with a .998 fielding percentage.

and an infield of Dozier, Polanco, and Sano sets Gibson up for success how?

 

He's in for a rough year, even if Adrianza or Escobar supplant Polanco at short, but especially if they don't.

[Broker]

Nice article but it doesn't matter much. Money is not a big deal with the Twins. As a part of the Pohlad's business ventures the Twins are chump change. Kinda like me buying a six-pack. 

[Richie the Rally Goat]

 

I don't agree on the part that neither of these pitchers is part of the club's future.  The Twins VERY MUCH seem to have Gibson in their long term plans because they've given him every opportunity and then some to stick in this rotation since 2013.  

 

I'm not sure whats going to happen with Santiago (although i have my thoughts on the matter).  His 11 games last season were mostly atrocious and he's not exactly a diamond in the rough find. He's still here because of lack of options IMO. 

 

That said, people need to see this for what it is.  The Nolasco, Meyer, Santiago deal was a desperation move on Ryan's part to rid the Twins of a chronic under-performing clubhouse cancer.  Unfortunately, it appears that they don't have a whole lot of faith in some of the young guys like Berrios, May and Mejia.  I would be giving all three a legitimate chance at the rotation this season.  I don't really give a dam about guaranteed money obligations to Hughes, Santiago and Gibson.  After losing 100 games last season Falvey and Levine would be crazy rolling with those three if they are seriously under performing later this spring.        

At this point, you still can't really count on Hughes. I think that's what got Santiago his Arb $. They just couldn't go into 2017 with only Mejia as the fallback, and don't see Duffey as a starter. With Hughes in the mix, the rotation is crowded with mediocrity (hes had one excellent season c'mon) and without Hughes there's more upside with May and Berrios but it's really shallow depth.  

 

My guess is if Hughes is "healthy" Berrios starts in AAA this year until injury brings him up.

[FormerMinnasotan]

I don't agree on the part that neither of these pitchers is part of the club's future. The Twins VERY MUCH seem to have Gibson in their long term plans because they've given him every opportunity and then some to stick in this rotation since 2013.

 

I'm not sure whats going to happen with Santiago (although i have my thoughts on the matter). His 11 games last season were mostly atrocious and he's not exactly a diamond in the rough find. He's still here because of lack of options IMO.

 

That said, people need to see this for what it is. The Nolasco, Meyer, Santiago deal was a desperation move on Ryan's part to rid the Twins of a chronic under-performing clubhouse cancer. Unfortunately, it appears that they don't have a whole lot of faith in some of the young guys like Berrios, May and Mejia. I would be giving all three a legitimate chance at the rotation this season. I don't really give a dam about guaranteed money obligations to Hughes, Santiago and Gibson. After losing 100 games last season Falvey and Levine would be crazy rolling with those three if they are seriously under performing later this spring.

What I meant is neither Gibson or Santiago should be part of the Twins future plans in the rotation especially since they are blocking Berrios, Mejia, and Gonsalves (to a lesser extent) from the rotation. Now will the FO be smart enough to remove Gibson and Santiago from the rotation, probably not, but they should. Edited March 2, 2017 by FormerMinnasotan

[tobi0040]

I realize this was a move by the old regime, but trading Alex Meyer seemed like it sort of made sense if we were going to non-tender Santiago. Effectively selling him for $8 million.

 

After bringing him back this doesn't really seem like it makes sense. I would rather have Meyer and the 5-10 percent chance he becomes a good starter or 25 percent chance he becomes a good reliever than Santiago or Nolasco.

[Linus]

I realize this was a move by the old regime, but trading Alex Meyer seemed like it sort of made sense if we were going to non-tender Santiago. Effectively selling him for $8 million.

 

After bringing him back this doesn't really seem like it makes sense. I would rather have Meyer and the 5-10 percent chance he becomes a good starter or 25 percent chance he becomes a good reliever than Santiago or Nolasco.

I don't believe you are alone on that one.......but water under the bridge.

[diehardtwinsfan]

umm... Ryan didn't trade Nolasco for Santiago.  He had already been fired at that point.

[tobi0040]

Correct Die Hard. Poor word choice on my end. It was Antony who made the trade. I was trying to point out that the trade and decision to tender were made by different people.

[HitInAPinch]

 

Pressly is the only non space filler I see in that group.  Would not mind if they sent Gibson packing, but the youngsters will have to step up into the rotation for that to happen.

I confess I jumped on Pressly there a little.  He was just one of many bullpen guys that got overused because of a non-performing starting staff.  Like the rest of the bullpen, limited use will make things better.  Just like the starters!   Ooop Ack !!

[Otto von Ballpark]

It happened -- White Sox are planning to release Brett Lawrie and pay him just one-sixth of his $3.5 mil salary in termination pay:

 

https://www.mlbtraderumors.com/2017/03/whitesox-release-brett-lawrie.html