Will Marlins Have to Overpay For Cespedes, Free Agents?

The Marlins have been extremely active in the early parts of the offseason so far, but it would see as though the there are still folks who are skeptical about the Marlins' run at various free agents. Despite assurances by owner Jeffrey Loria and manager Ozzie Guillen, the early numbers indicate that the Fish's offers have not been competitive, at least in the case of Albert Pujols.

This brings up an important situation regarding the Marlins and their need to pay for free agents. Clark Spencer of the Miami Herald asks the question of whether the Marlins will need to overpay their free agent targets to acquire them.

If the bidding for Pujols, Reyes and the rest goes sky high, beyond a reasonable level let's say, is it imperative that the Marlins overspend to acquire at least one of the Big Three players, given all the buzz they've created already? Would you be satisfied if they ended up with, say, Buehrle and Madson -- but not Pujols, Reyes or Prince Fielder, the cream of this year's free agent crop? Where would you draw the line?

What is particularly interesting is that this comes at the heels of news that Cuban outfielder Yoenis Cespedes is also looking for a major deal beyond what Aroldis Chapman received. Joe Frisaro of MLB.com discusses that.

In January of 2010, Chapman signed a six-year deal worth $30.25 million. Cespedes, the source said, could be seeking more than double Chapman’s salary over eight years. Technically, no negotiations can take place until after he is declared a free agent.

In both cases, we are talking about the Marlins possibly paying significantly more than what was expected when talks began. In the case of the major free agents, Spencer asks whether it would be worth the Marlins' money to make good on their early commotion in the market, whereas in Cespedes's case, it seems the Marlins would have to make a significant splash with the Cuban export for the chance to see if he pans out. Should the Marlins make either move?

UPDATE: Peter Gammons mentioned via Twitter that scouts have Cespedes interested in a deal worth $35 to 50 million. I presume that that would be based on a six-year deal like the initial reports on his contract demands said. The upper end of this deal would look similar but a bit more expensive in average annual value to the eight-year, $60 million dollar contract discussed here (H/T Hardball Talk)

Overpaying For Names

The Marlins have made enough headlines this offseason that there is an expectation among Marlins fans that the team will sign a major free agent, with Jose Reyes being the most likely to take his talents to South Beach. However, while the Marlins may be operating on a higher budget, it is still, after all, a budget. This means that the team must still be fiscally responsible despite the bigger purse. If the team is to remain competitive, they need to be certain that they do not carelessly throw away money just to appease a fanbase that has admittedly been riled up. Overpaying is not an option to a degree.

What is that degree? Obviously, there are levels to all of this, and a certain amount of overpaying should be in the cards for the Fish if necessary. But this may be more along the lines of giving Reyes $19 million a season over the expected $17 million yearly payout. This is not, for example, paying Fielder $27 million over his expected $23 million salary. Again, there are levels to this, but the important key here is that the Marlins cannot afford to spend their money carelessly simply because they started the offseason in a newsworthy fashion. If the team has to overpay at their desired salary based on the team's own projections, they need to be careful by how much they will overpay. Spending for more than the cost of one Win Above Replacement (WAR) annually may be a mistake the team cannot afford.

This sort of mistake is compounded by the fact that these contracts to the big three names would be long-term deals. If you take out the rumored short-term option to Reyes, each of these players would at least be looking for six years. For a team like the Red Sox or Yankees, they can afford to make a $24 million overpay over the life of a six-year deal and not be crippled. But for the Marlins, their payroll situation would still be in an area where one poor move would hobble their spending power in successive seasons. There is already risk in offering these players their market value at such an average payroll; there will be even more risk if the team gambles too much. Overpaying for a Fielder or Reyes may prove disastrous in the long run and could hold the team back for years.

Cespedes's Demands

On the other hand, the Marlins would be wise to continue looking into Cespedes even with his increased demands. In his case, there is also risk. He is 26 years old, meaning that he is at an age when he should be major league ready and able to compete. He has been successful in limited international competition, but he still has not consistently faced major league pitching and a major league workload. Despite all of this, his contract demands remain substantial; if the rumored $60 million over eight years demand is true, this would average out to $7.5 million annually. This would demand that the Marlins pay the equivalent of a very talented minor leaguer with limited major league experience almost as much just $2.5 million less per season than my proposed Mike Stanton extension.

However, despite all that risk, the Marlins can afford to make a mistake at this level of contract length and value. Even if you feel this is an overpay of almost $20 million over the life of the deal, there are factors that allow for a favorable outcome for the Marlins at play. For one, there is more of a wide range of possible outcomes with Cespedes. While you are guaranteeing a larger return from the big free agents, you are paying a lot more to do so and thus likely getting a lot less surplus out of the deal; in the case of Cespedes, the investment is smaller and the variability higher, meaning there is a better chance that the Marlins "win" the deal if Cespedes becomes a star. If the team "loses" and he busts, the club will not have sank nearly as much money in the affair as they would have in locking up a major free agent at overpaid prices.

For the Marlins, the goal still remains to get the most bang for their buck. In the case of the three big-name free agents, the investment is too large to consider paying even more just to make 2012 seem extra special. If the Marlins pay too much into Pujols, Fielder, or Reyes and lose, their franchise will be crippled in spending for years to come. In Cespedes, the Marlins are gambling less for the chance at more surplus return. If he fails, the team loses a lot less, but if he succeeds, he will give them more value for their money. Even with a bigger budget, the Marlins have to remain cautious, as their projected league-average payroll can still be hampered by a huge deal (see the potential danger to the Minnesota Twins if Joe Mauer fails to bounce back). In their case, risking less on more variance is a smarter play than overpaying for more assurance.

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