(CREDIT: MLB Photo) This is what a Theo Epstein will buy you.
I knew as soon as Nick Cafardo said “John Lackey” back in October that the Theo Epstein compensation “saga” was going to be an early front runner for most irritating story of the winter and of course it delivered in only the way these kinds of stories tend to do.
Now that the Boston Red Sox know they’ll be getting Chris Carpenter back from the Chicago Cubs as compensation for Theo Epstein, hopefully we can put this to rest and be done with it. Of course, the Boston sports media thinks the Red Sox brass are still incompetent boobs, but in all reality, that was going to be the narrative regardless of how the story concluded.
Had Larry Lucchino played hardball with the Cubs, it’d have just reinforced the ongoing characterization the media’s stuck to in the past. There’s no question Lucchino would have inevitably been portrayed as controlling, domineering, egotistical paranoid and selfish. For a frothing at the mouth Boston Sports Media, this one would have been a layup. I can still smell the “LARRY GETS REVENGE ON THEO~!” headlines – even now.
The other option for the Red Sox was to do what they actually did – and that was to let Theo walk and in the process lose the leverage they had in the negotiations. Of course in media land, that leads to the Red Sox front office being painted as bungling and confused and as a result, ultimately failing in their pursuit of adequate compensation.
Unfortunately, the media had decided the outcome before it had been decided, meaning that there was no conceivable way the Red Sox could have won the PR game, anyway.
Even in spite of that, I think the compensation is fair once you 1.) tune out the background shrieks and 2.) lay everything out on the table. I’m not usually one to speculate my face off, but I feel like I’ve got a pretty good sense of what the argument might have been behind the scenes and I think that understanding lends itself to making the compensation package make a lot more sense than it might have on the surface.
I think the Red Sox came at the dispute from the perspective of ‘You’re not just getting a year of Theo. You’re getting him for as long as you’d presumably want him. He’s going to create a lot of revenue for you, we should be justly compensated and that means a piece of your Major League Roster.”
Truth be told – it’s a totally viable point and needs to be heard clearly.
One of the major reasons the Cubs were so smitten with Theo from the get-go was due large in part to his stadium development background. The Cubs have a very strong brand and a loyal fan base, which in many ways is a good thing. However, it becomes problematic when you’re looking to diversify your revenue streams. Cubs revenue streams historically haven’t responded to winning (or losing for that matter) and the opportunities to create additional revenue as a result of a playoff berth are seriously compromised due to limited seating, sponsorship opportunities and other amenities currently lacking at Wrigley Field.
With Epstein expanding Wrigley and finding new ways to create and enhance the ballpark experience, he’s creating the potential for serious revenue increases in the future, all of which will likely eclipse the value of any one player on the current Cubs 25-man roster.
So the Red Sox are right in the fact that by strictly valuating Theo, they were totally within their rights to ask for a Major League talent in return.
The Cubs on the other hand, probably saw it as a simple transaction: “You’ll get what’s equal to the loss of one year of Theo Epstein, which is about $2 million dollars.”
The Cubs aren’t far off, either. The only interests on the part of the Red Sox that had been encroached upon was the single year left on Epstein’s contract. Even though – based on the win curve- most of the Cubs’ players hold little to no value in terms of revenue creation, there still is potential to acquire talent outside of the organization that are both cheap and could create significant returns both on and off the field by using said talent in a trade.
In the Cubs world – and based on where the Red Sox are on the win curve (The ultra-high value 86-91 win zone), their giving up a year of say – Randy Wells, who has gained an average of 1.5 fWAR a year – wouldn’t be fair.
Why? Because wins 86-91 are worth a ton of money. How much would Randy Well’s 1.5 wins mean to the Red Sox? Roughly – $3.4 million dollars (Using Vince Gennaro’s Dollar Value of the 91st Win chart p. 49 Figure 3.2 “Diamond Dollars”, 2007). Not only would they get that money back in production, but also if they made the playoffs, the acquisition of the seemingly mediocre Wells could yield as much as $8-10 million in residuals over the course of a few years. $2 million for $8-10 isn’t fair, either if you’re looking at the compensation as a swap.
Thus, the crux of the impasse: The Red Sox valuated Theo’s impact as a whole to the Cubs. The Cubs valuated the worth of the remainder of Theo’s contract to the Red Sox.
As a result, Selig likely moved to the middle and gave the Red Sox the opportunity to have a player who will LIKELY generate as much value as Theo’s contract over the course of his tenure in Boston AND have the potential to exceed it if he develops and becomes a contributor. For the Cubs, the money they get back or the chance to ‘win’ the deal will ultimately lie in how much revenue Epstein can scratch together in year one. It’s not ideal for either side but risk (to a degree) is shared by both with there being plenty of room for profit potential on both sides.
All things considered, it’s a pretty fair deal. It’s not ideal. It was annoying to read about and most of all – it seems like a lot of hullabaloo over a AAA relief pitcher. But these are the kinds of little decisions that can add up to big returns if played correctly. All things considered, it seems like a fair, balanced deal. Case closed.
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And I believe we need heroes, I believe we need certain people who we can measure our own shortcomings by. -Richard Attenborough
