Article: Twins Must Get Creative To Lure Darvish

[Nick Nelson]

If you're having a hard time wrapping your head around this, I can't blame you. But there is mounting evidence that the Minnesota Twins are indeed very serious about trying to sign Yu Darvish.

 

Yes, the Twins – notoriously risk-averse in free agency – are making a run at the top name on the market. In their first full offseason at the helm, Derek Falvey and Thad Levine seemingly have the go-ahead to make an historical splash.

 

But landing Darvish will take more than that.In the Offseason Handbook, we projected that Darvish would get a five-year contract worth $135 million. MLB Trade Rumors predicted six years, $160 million. So it seems there's agreement that $27 million annually sounds about right, and given the competitive market for his services, the right-hander shouldn't have trouble getting someone to offer it.

 

Who knows, perhaps the Twins will outbid a number of large-market clubs and dangle the most money flat-out. I think we can all agree that's not very likely. This is a guy that pretty much every heavyweight contender would love to add. Even if Levine gets the sign-off on an offer in the $150 range (clearly a monumental IF) he could still easily be surpassed by another team that needn't concern itself with adding another 10 or 20 million to sweeten the pot.

 

So if we operate under the assumption that Minnesota won't be able to match other suitors in terms of pure dollars, how might they get creative and entice him to sign here for less money?

 

Sure, the Twins have some factors working in their favor. The bond between Darvish and Levine appears to be real. Any outside pitcher has to like the idea of throwing in front of Byron Buxton. And I've heard that the 31-year-old hurler doesn't necessarily gravitate toward playing in a big city.

 

But, with prized free agents, sentimentality rarely wins out. The Twins need to figure out some tangible methods for overcoming heftier bankrolls and persuading Darvish.

 

I see a few different avenues they could try:

 

Opt-Out Clause

 

These are becoming more and more common in contracts for top free agents. A lot of general managers don't like them because they're extremely one-sided, and offering one now would be a first for the Twins, but I think it'd almost be an obligatory component of any contract for Darvish that doesn't approach $30M/year.

 

I'm sure Minnesota won't be the only team willing to include an opt-out clause, but maybe they're willing to let him trigger it earlier? Such a scenario would mitigate Darvish's risk in taking a smaller deal, because if he significantly out-pitches his pay he can hit the market again in two or three years, still shy of 35.

 

It's not ideal for the Twins because they could easily lose Darvish right in the middle of a theoretical prime window of contention. But if that's what it takes to get him, you do it without a second thought.

 

Deferred Money

 

Here's an outside-the-box idea. Many baseball fans will immediately envision a Bobby Bonilla scenario where the Twins are paying Darvish a few million bucks in 2065, but Bonilla's infamous deal with the Mets is not the only example of this framework in action.

 

In January of 2016, when the Baltimore Orioles signed slugger Chris Davis to a seven-year, $164 million contract, they deferred $42 million of it. He receives $3.5 million every year from 2023-32, and then $1.4 million annually through 2036.

 

This reduced Baltimore's actual commitment on the ledgers to $119 million over the seven years, or $17 million AAV. The deferral is interest-free, which works in the club's favor, but Davis can look forward to steady income well into his retirement.

 

That kind of distribution would make Darvish more palatable for the organization's bottom line. And while a perpetual $3-5 million payroll penalty for a decade-plus would hurt, the Twins are more than accustomed to carrying dead salary weight. That's a relative drop in the bucket. For a franchise-altering acquisition like this, it's worth considering.

 

Personalized Experience

 

We're veering back toward intangibles here to some extent, but not entirely. The most pervasive trend in business today is offering personalization. If you can tailor your solution to the specific needs and wants of the customer, you greatly increase your chances of closing a sale.

 

To stick with that transactional metaphor, if the Twins are marketing themselves to Darvish, they may not be able to offer the best price, but could woo him with the most customized experience.

 

Consider this: Chris Gimenez, who was Darvish's personal catcher in Texas, has been actively recruiting the righty to Minnesota despite his status as a free agent. Minnesota could easily bring Gimenez back if it'd be a draw. The Twins also recently signed Masa Abe, a Japan native who served as a trainer on the country's 2017 WBC team, as an assistant on the staff.

 

With Gimenez indicating that Darvish was "not necessarily a fan" of some of the team rules during his time with the Rangers, Minnesota looks to have an experiential advantage over at least one other known suitor. And in fact, given the intel they have on Darvish's unique preferences, Levine and Co. have the ability to really appeal to the free agent on a deeper level.

 

Money talks. But in the case of Darvish, it might not be alone at the podium. The Twins will probably have to hope that's true if they wish to defy the odds and win the ace they need.

 

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[old nurse]

When you picked a contract as an example to sign somebody couldn't you have found someone who did well after signing the contract?

[Riverbrian]

Not only is my head wrapped around it. I'm scratching other teams off the potential list and it's dwindling down. 

 

Dodgers and Yankees are going to try and stay under the cap. 

 

Red Sox are focused on hitting... JD and Hosmer should be priorities over Darvish and they probably don't want to go over the cap either. 

 

Cubs are possible but I think they will offer a bargain price instead of max price. They were willing to let Arrieta and Davis walk and potential payroll was probably why. 

 

Giants want hitting. 

 

D-Backs want J.D. 

 

Lots of the usual suspects may be sitting this one out. 

[Brandon]

The opt out was actually devised by the Twins as an enticement to sign Jack Morris. They invented it.

 

We can also frontload the contract. 28 million next season 35 the next 2 and 19 each of the last 2. For example.

[Dantes929]

 

Not only is my head wrapped around it. I'm scratching other teams off the potential list and it's dwindling down. 

 

Dodgers and Yankees are going to try and stay under the cap. 

 

Red Sox are focused on hitting... JD and Hosmer should be priorities over Darvish and they probably don't want to go over the cap either. 

 

Cubs are possible but I think they will offer a bargain price instead of max price. They were willing to let Arrieta and Davis walk and potential payroll was probably why. 

 

Giants want hitting. 

 

D-Backs want J.D. 

 

Lots of the usual suspects may be sitting this one out. 

You've go me thinking we can get him for the minimum, but lets double it just in case.

[Brandon]

We can also offer a 6th year option for 25 mill with escalators to make ut higher with a 10 or even 15 million buyout.

[Brandon]

I think the Cubs are using their interest as a ploy to lower Cibbs demands or see if Darvish would rather sign with them fir less.

[Brandon]

Teams in on Darvish could be Minnesota, Texas, Seattle, Milwauki, maybe Anahiem Angels or San Diego. I dont know about east coast teams.

[Deduno Abides]

Good article, but here’s something I don’t get.

 

Once someone is offered an annual salary of say, $20 million, wouldn’t you think they’d separate offers above that on factors other than money? I mean, sure, in our culture making the most money is considered the most logical, intelligent and respectable thing to do, and having the most money is considered a mark of superiority, but, really, what’s the difference between $24 million and $27 million a year? A better seventh home?

 

You’d think that social and atmospheric factors, such as the quality of the people someone would work with, would matter a lot more. I know that isn’t how it typically works, and it makes sense for money to matter for someone who hasn’t made much, but it seems to me that it would matter less than it does for the mega free agents.

[Mike Sixel]

Creative? How about just pay the most?

[ashbury]

Once someone is offered an annual salary of say, $20 million, wouldn’t you think they’d separate offers above that on factors other than money? I mean, sure, in our culture making the most money is considered the most logical, intelligent and respectable thing to do, and having the most money is considered a mark of superiority, but, really, what’s the difference between $24 million and $27 million a year? A better seventh home?

Players in the upper salary echelons sometimes set up charitable trusts and the like. An extra $3M to feed some additional hungry children might still get such a player's attention.

[Deduno Abides]

Players in the upper salary echelons sometimes set up charitable trusts and the like. An extra $3M to feed some additional hungry children might still get such a player's attention.

Rarely happens, especially of any size, and, if they do, often the impact is surprisingly limited. No, it’s the money that matters.

[Penthang]

I think that those are the things the Twins need to sign him for equal or even more money if it’s close.

[nytwinsfan]

Really great and thoughtful article Nick. This was helpful to read in thinking about Darvish and the front office more generally.

[rdehring]

It is seldom that anyone ever mentions taxes when talking about signing players.  Yet, they are and can be a major factor in these discussions.  May not be for the player, but certainly his advisors.

 

I understand that players file tax returns in all markets in which they play.  But half their games are at home, thus, half their income is taxed in the State of their home team.  So that's a negative for Minnesota versus lots of teams...although not the teams from places like New York or California.  And that hit will be bigger now that it appears State and local tax deductions are going to be limited.  After all, $27,000,000 at almost ten percent is a lot of money...especially when your Federal deduction looks to be limited to $10k.  

 

Will this be a negative for the Twins?  Or can they get creative and find a way to help their pitch?

[Blackjack]

 

The opt out was actually devised by the Twins as an enticement to sign Jack Morris. They invented it.

We can also frontload the contract. 28 million next season 35 the next 2 and 19 each of the last 2. For example.

I like it. Better yet, make it for four years. I hate the idea of a long contract for a 31 year old pitcher.

[Tomj14]

Remember 20 million a year after taxes (fed - 39.6 and state 9.85) and 10% going to the agent is really closer to 8.

So a couple of million and/or a state with lower taxes is something.

Sure that is winning the lottery for us, but for people that make and spend large amounts it is a big deal.

[MN_ExPat]

 

Rarely happens, especially of any size, and, if they do, often the impact is surprisingly limited. No, it’s the money that matters.

With some...yes, but the charity happens a lot more than most realize.   For example, I happen to know from personal experience that Adam Wainwright put several million of his own dollars to build a new baseball complex in his home town for his old High School and the county (it's actually a heck of a nice set up and my son and his teammates absolutely love it).

[ashbury]

Rarely happens

I have no idea how to gauge the frequency, to discuss this more meaningfully. Anecdotal evidence won't suffice, and baseball-reference.com fails to keep proper stats. I'll stand by my take, for now.

[Doomtints]

I'm not as high on Darvish as everyone else. He is a guy I can see getting injured and sitting out much of his contract.

 

I won't be upset if the Twins land him, but I caution everybody to temper their enthusiasm.  

[Nick Nelson]

 

Creative? How about just pay the most?

I get that everyone wants the Twins to loosen up the purse strings but you realize there are basic fundamental realities at play when a mid-market team is vying against numerous large-market teams with virtually infinite budgets, right? 

[bobs]

 

I'm not as high on Darvish as everyone else. He is a guy I can see getting injured and sitting out much of his contract.

 

I won't be upset if the Twins land him, but I caution everybody to temper their enthusiasm.  

Now THIS sounds like a Minnesota sports fan!!...lol

[wabene]

It is seldom that anyone ever mentions taxes when talking about signing players.  Yet, they are and can be a major factor in these discussions.  May not be for the player, but certainly his advisors.

 

I understand that players file tax returns in all markets in which they play.  But half their games are at home, thus, half their income is taxed in the State of their home team.  So that's a negative for Minnesota versus lots of teams...although not the teams from places like New York or California.  And that hit will be bigger now that it appears State and local tax deductions are going to be limited.  After all, $27,000,000 at almost ten percent is a lot of money...especially when your Federal deduction looks to be limited to $10k.  

 

Will this be a negative for the Twins?  Or can they get creative and find a way to help their pitch?

The problem with playing in a state with lower taxes is you have to live there most of the year.

[wabene]

I'm not as high on Darvish as everyone else. He is a guy I can see getting injured and sitting out much of his contract.

 

I won't be upset if the Twins land him, but I caution everybody to temper their enthusiasm.

Yes as with any free agent acquisition.

Hughes with three times the money tied up.

[PDX Twin]

 

It is seldom that anyone ever mentions taxes when talking about signing players.  Yet, they are and can be a major factor in these discussions.  May not be for the player, but certainly his advisors.

 

I understand that players file tax returns in all markets in which they play.  But half their games are at home, thus, half their income is taxed in the State of their home team.  So that's a negative for Minnesota versus lots of teams...although not the teams from places like New York or California.  And that hit will be bigger now that it appears State and local tax deductions are going to be limited.  After all, $27,000,000 at almost ten percent is a lot of money...especially when your Federal deduction looks to be limited to $10k.  

 

Will this be a negative for the Twins?  Or can they get creative and find a way to help their pitch?

 

And Darvish has been paying zero income tax in Texas. Seattle, Texas, Houston, Tampa Bay, and Miami could offer this advantage. 

[Mike Sixel]

I get that everyone wants the Twins to loosen up the purse strings but you realize there are basic fundamental realities at play when a mid-market team is vying against numerous large-market teams with virtually infinite budgets, right?

I do. But he is the top free agent. The way to win the bidding is to win the bidding. I am just being realistic here. It's about the money.

 

These posts never once mentioned anyone being cheap. I never implied it either. The point is simple, if you want the most expensive asset, you have to pay up.

Edited December 18, 2017 by Mike Sixel

[Tomj14]

 

The problem with playing in a state with lower taxes is you have to live there most of the year.

Yes Florida, Tenn, Texas would be horrible places to live.

 

The reason athletes don't mention taxes as a reason is because those that do get destroyed in the Media and by people about not paying their fair share. (look what they said about Phil Mickelson when he talked about moving out of Cali for tax reasons)

But if taxes didn't matter you wouldn't have athletes owning places in FLA or Texas when signing their contract so any bonuses won't be taxes at 10%.

[laloesch]

 

Yes Florida, Tenn, Texas would be horrible places to live.

 

The reason athletes don't mention taxes as a reason is because those that do get destroyed in the Media and by people about not paying their fair share. (look what they said about Phil Mickelson when he talked about moving out of Cali for tax reasons)

But if taxes didn't matter you wouldn't have athletes owning places in FLA or Texas when signing their contract so any bonuses won't be taxes at 10%.

 

Or Joe Mauer.  Florida is his home away from home.  When he's not playing baseball he doesn't live in Minnesota.

[Doomtints]

 

Now THIS sounds like a Minnesota sports fan!!...lol

 

Except I don't live in Minnesota. 

 

Look at Darvish's history. He has played one full season, every other year has seen him riding the pine due to injury.

[bobs]

 

Except I don't live in Minnesota. 

 

Look at Darvish's history. He has played one full season, every other year has seen him riding the pine due to injury.

Oh I agree.  I'd rather see an Alex Cobb-type PLUS a good reliever than Darvish, for the same money. It's just funny...because that's how we Minnesotans have come to see our sports teams.  What will go wrong?  We're all waiting for the Vikings carriage to turn into a pumpkin (even though I don't think it will).  Wolves are disappointing.  Gopher basketball loses at Nebraska and almost loses to Drake......we tend to have a doomsday outlook on our sports.  Even though our Twins have won two WS in my lifetime.