Warning: Baseball wonkery ahead.

But it sure seems to me that purely as a baseball question, you would much rather give a guy a bigger and shorter contract than stretch it out over six or seven or eight years, where everyone finds themselves facing an awkward ending when the player isn’t worth the money anymore and the team has to figure out how to handle it, the player has to deal with the abuse, and so on.

Honestly, in some cases, I’d rather give a guy four years at $100 million than six years at $100 million.

Joe Posnanski* wrote that in early November.  It’s obviously overstated — there’s no reason to give up the two free years.  But the sentiment — fewer years, more annual dollars — makes sense.

* Given that this post is a discussion of Posnanski’s idea, I’m also using his asterisk-as-footnote thing.  I don’t do this, ever; consider it a homage.

Let’s posit some other things.  What goes through a front office’s head when they’re looking at free agents*?

* By free agent, I mean a guy who did his six years of MLB service time and now find himself able to sign a contract with a new team for the first time.  And I mean “free agent” — not a contract extension or a buyout of pre-FA years.

First, teams sign free agents to contracts of four year and under, they do so to meet immediate needs, not speculative ones three or four years out.  The year(s) at the end of the contract are sweeteners included to get the player to sign, often with the hope that the player will meet or exceed the value of the contract even at that time.  Sometimes, the teams hedge this latter bet with an option year, and the player re-hedges with a buyout of that option.  Randy Wolf’s contract (3 years, $28.25 million, $10m option with additional $1.5m buyout) with the Brewers before the 2010 season is a great example here.

Contracts of five years and over are different.  The team may be trying to meet an immediate need, but more importantly, they’re getting a superstar in the process.*  CC Sabathia versus Randy Wolf or Ted Lilly; Adrian Beltra v. Placido Polanco; Carl Crawford v. Marlon Byrd, even if that hasn’t worked out well to date. 

(If the player isn’t a superstar, the team is making a huge mistake.  See Carlos Lee, Barry Zito, and I bet, Jayson Werth.) 

* Note that superstar acquisitions often involve subsequent moves to make them fit in right. A-Rod move to third base when the Yankees acquired him; Carlos Beltran meant Mike Cameron shifted to RF; the Mike Piazza acquisition lead to the trade of Todd Hundley; Adrian Gonzalez meant Kevin Youkilis moved to 3B; etc.

If this is true — and I’m pretty sure it is — there is a big disconnect between goals and execution on behalf of the teams.  The goal is to improve at a specific position for the upcoming season, but the method is to tie allow for the creation of problems in subsequent years.  This doesn’t make much sense.

My solution: Buy what you want, even if you have to pay more.  How?

I believe that a free agent signing a three or four year deal will gladly take a one year deal paying, roughly, 1.5 times the annual average value (“AAV”) of the multi-year deal, instead.  So a guy who could get a $50 million, 4 year deal on the open market would accept a one year, $19 million deal; a $27 million, 3 year guy would take a one year contract paying him $12 to 13 million.

In most cases, I posit, the player would sign, if not prefer, the shorter deal with the much higher AAV. There are definitely some issues with this — and it won’t work for all free agents.  

1) The player has to be relatively young and healthy; a quick and dirty approximation suggests he has to turn no older than ~34 in the last year of the contract and not have any obvious health issues which would make a subsequent lucrative deal unlikely.

Basically: if you’re taking a very short contract that pays a lot, you’re doing so because you expect to make it up and then some in subsequent years.  If that’s not likely, you aren’t taking the shorter contract.

After the 2007 season, the Mets offered Luis Castillo a four year, $25 million ($6.25m AAV) contract.  Castillo had bad knees and would be 32 in 2008, so at the end of the contract, he’d be 35 and have really bad knees.  There’s no way he’d take a ~$9 million contract and leave about $16 million on the table.

2) The player needs to have at least one other competitive offer on the table.  Let’s take Oliver Perez, who received a three year, $36 million deal from the Mets a year after Castillo robbed the Shea stagecoach.  Would he have signed a one year, $16-18m deal? Probably not, because no one else was offering him anywhere near $12m a year for 2+ years, and it’s not entirely clear that he’d get that contract a year later.

3) If the player can get a five+ year contract, he’ll take that contract.  Pretty straightforward — it’s simply too much money with too much security to pass up.  Similarly: 

4) A four year deal with an easily vesting fifth year is a 5 year deal.  Basically, for our analysis, we should treat many vesting years as simply contract years, as the player and team both expect it to vest.

But note in most of those cases (certainly in situations 1 and 2, and in non-star cases, 3) the team shouldn’t have offered the multi-year pact either. 

* * *

The really bad side effect of offering a player a three or four year deal is what I call “contract plaque.”  Contract plaque occurs when the third and fourth year of a deal no longer align with the needs of the team, leading to a misallocation of funds.  It’s not necessarily a huge problem, of course — even if Marlon Byrd’s third year under contract with the Cubs becomes a mismatch, he’s only under contract for $6.5 million.*  But there are three factors which can cause contract plaque to become a big problem:

1) The player isn’t worth the contract;

2) The team is no longer that good; and/or,

3) The team has a cheaper (even if lesser) solution at the player’s position, but a bigger need at another position.

* Byrd’s situation is an example of why a team should prefer a longer term deal — he signed for a huge bargain.

Let’s use Jason Bay as an example.*  Before the 2010 season, Bay signed a four year, $66m deal with the Mets — an AAV of $16.5m.  Using the 1.5x shorthand, I am assuming that Bay would have accepted/preferred a one year, $25m deal instead of that onei

* Bay’s a terrible example. He violates all four of my caveats. He’ll be 34 with questionable knees in the fourth year of his contract.  There really were no other bidders except maybe the Red Sox, and they weren’t going to go to four years.  And his contract has an easily vesting fifth year.  So he probably wouldn’t have accepted a one year, $25m deal if the Mets gave him the choice. (Note that if the Red Sox had offered $50m over three years, and the Mets simply offered $25m/1 and no four+one year pact, he very well may have taken the Mets offer.) But I’m a Mets fan so he’s an easy player to analyze.

Bay, of course, imploded and found himself injured — concussed.  And the Mets just stunk.  Finally, two years later, the Mets are still bad and, well, so is Bay — and they owe him $16.5 million.  Meanwhile, the team has Lucas Duda who can play left field* and a big whole at 2B — and a solution, in Jose Reyes, if they just had an extra $16.5m or so laying around.

* Duda is probably going to be the Mets RF, so yes, the Mets would need a RF if he played left.  But that’s really neither here nor there. Duda is likely a defensive disaster-to-be in right and really should be playing left, and the Mets are in the situation right now where a guy like Cody Ross or Ryan Doumit would be fine in right, for about $3-5 million.  Or screw it, just put Fernando Martinez in there. You get the point.

In order to do this, Omar Minaya would have had to find $10 million during the 2009-2010 off-season.  Bay earned $15 million in reality; I’m paying him $25 million.  That’d be pretty easy.  Minaya paid $5 million to Jeff Francoeur*, $2 million to Alex Cora (!), $3.3 million to John Maine, and habitually gave out too much money to random relievers.  And, all said and done, Minaya ended up spending 10% less money than in either 2009 or 2011 (and added $1m in a patently stupid deal to acquire Gary Matthews Jr.)  So there was definitely a way to get this done, assuming incorrectly that signing Bay was a good idea in the first place.

* Francoeur probably was worth around what he got paid, but that’s hardly the point.  When the Mets signed Bay, they already had Frenchy, Pagan, and Beltran under team control, and at the time, they believed Beltran was healthy.  The Bay signing effectively moved Pagan to the bench, and only because Minaya/Jerry Manuel failed to realize that Pagan was much much better than Francoeur.

And for subsequent years? We have a built-in solution.  If you want to retain Bay, you may be able to do so for the same $25M (or less); if not, there’s $25m coming off the books.  (And with the new CBA, you could make him a qualifying offer of $12m and get a draft pick or two when he leaves.  But honestly, I came up with this scheme before the new CBA was leaked, so I see that as icing.  Significant icing, but icing.)  Given that the 2011 Mets would have been better served by an outfield of Duda-Pagan-Beltran and $16.5 million left over, it’s doubly a no-brainer.

* * *

I floated this idea on Twitter and one of the concerns is that if you kept doing this, you’d be constantly overpaying.  I’m 100% sure that’s right.  I’m also increasingly convinced that it’s irrelevant — because you won’t keep doing this.

First, the system optimized toward your emerging assets, allowing you to exploit the market failures created by the reserve clause system while giving high reward, low risk players a shot. That’s a wonky way of saying that if you have a prospect who is underpaid because he’s not yet a free agent, well, he won’t be blocked by an overpaid veteran — and that low cost veterans can be given the chance to thrive where higher cost ones may be currently sitting.

This is a big deal, I think.  It’s part of the problem that Posnanski was hitting on in his quote way above.  The Mets 2010 outfield should have been Duda, Pagan, Beltran, with no mention of Jason Bay.  Their 2008 and 2009 rotation should have included Jon Niese and/or R.A. Dickey from the get go, respectively, without wasting starts on Oliver Perez. 

Second, there is no reason to do this if the team isn’t likely to compete even with the player.  It’s a “strike while the iron is hot” move.  There’s no reason to sign Jason Bay to a $25 million contract* if the team is unlikely to compete even if you have him.  It’s much better to spend that money on amateur free agents and overslot draft pick contracts.

* Again, Bay’s an obviously bad example.  There’s no reason to sign him to a $25 million contract ever. 

And finally — and most importantly — teams are constantly overpaying anyway.  The Mets are too obvious an example, having effectively paid out over $25 million to Perez, Castillo, Matthews Jr., Beltran, and K-Rod to play for other teams (or no one at all).

So I don’t really think that these one-year overpays are necessarily a slippery slope; in fact, there’s a good chance they contrary to intuition, it’s the opposite.  And I’d love to see the Mets give it a try.