Olivo Acquisition Just Part of Jays’ Plan
Within the span of two hours on Thursday night, the Toronto Blue Jays acquired catcher Miguel Olivo from the Colorado Rockies for either cash or a PTBNL and then declined his $2.5 million option for 2011. That move cost the Jays $500,000, but it also allows them to offer arbitration to Olivo, who becomes a type B agent with his option declined. The Jays now have five different players who could bring back draft pick compensation, with Olivo joining Jason Frasor, Scott Downs (both Type A), Kevin Gregg, and John Buck.
If the Jays offer arbitration and everybody declines – obviously the best case scenario – the Jays will come out of this with at least 5 supplemental draft pick and two second round picks. If Frasor and Downs were to go to a team with an unprotected pick – this year, the 19th pick, held by the Detroit Tigers, is the first unprotected pick – the Jays could pick up two more first rounders. In this ideal situation, the Jays could pick up an utterly massive haul, with eight picks in the top 50 of the draft. Said haul becomes even more impressive when we consider that the upcoming draft in 2011 is considered to be one of the deeper drafts of recent times, and far deeper than the 2010 draft.
If, however, the Jays do indeed on offering arbitration to these five relatively marginal players, there will be risk involved. As a whole, the five players had a salary of $13.15 million. Because of how arbitration works, it’s a near lock that every player would see a salary increase. Buck and Olivo are both coming off career years. Frasor put up a solid 3.68 ERA, and Gregg (3.51) and Downs (2.54) were even better. If the entire group accepted arbitration, I could see a total salary of $20 million to possibly $30 million, on top of the $1.25 million buyouts for Olivo and Gregg.
The difference is nearly equivalent to the potential value of the picks that the Jays would acquire. According to Victor Wang’s research from 2009, a first round draft pick is worth about $5.2 million, a supplemental pick worth $2.6M, and a second round compensatory pick (guaranteed to be in the top half of the 2nd round) worth $0.8M. Therefore, that the type Bs – Buck, Olivo, Gregg – would contribute $2.6M in value each (total $5.8M) and the type As could contribute either $7.8M or $3.4M (range of $6.8M to $15.6M, for a total range of $12.6M to $21.4M).
It is established, then, that offering arbitration to all five players is a high-risk, high-reward situation. One would assume that the Blue Jays organization has both a good idea on whether or not their players are willing to accept arbitration. Particularly with the catchers, the Jays would not want either Buck or Olivo taking up a roster spot which should go to J.P. Arencibia, and Jose Molina is also under contract for 2011 already. That leads me to believe that one of the catchers will not be offered arbitration. With both of them as type B free agents, the risk of one (or both) of them accepting appears greater than the reward.
To me, it’s conceivable that the Jays will offer arbitration to all three pitchers. Gregg has closer experience and could pick up another multi-year deal on the free agent market, but as the type B of the group, he offers the lowest return on the risk. Downs’s 2.64 ERA and good peripherals make declining arbitration the right choice for him, as he should be able to command a multi-year deal with an average annual value above his arbitration rate. Frasor may not be as likely to decline as Downs or necessarily Gregg, but the opportunity to pick up a first round draft pick along with the supplemental choice is appealing, and he’s a good enough reliever (2.99, 3.31 FIP in 2009, 2010) that accepting arbitration at worst provides the team with a solid reliever who could be flipped at the deadline.
Whether you think of the Jays’ acquisition of Olivo as a brilliant strategy to gain draft picks or a sly gaming of an outdated compensation system, it appears that they stand to gain quite a bit of value, particularly in a draft as deep as the one upcoming. The Jays will assume some risk in offering arbitration to these players, but each one performed well enough in 2010 that it’s conceivable the market is favorable enough for them that they will decline. As far as the Olivo deal by itself goes, $500,000 dollars and a PTBNL are a small price to pay for the potential to pick up a supplemental draft pick. Also consider that of all the players here, Olivo probably has the best chance to cash in on the free agent market with his 14 HR, 3.2 WAR season in Colorado. The Jays and Alex Anthopolous have a definite plan in place, and it just may pay off in the 2011 draft and beyond.
“If the Jays offer arbitration and everybody accepts – obviously the best case scenario – the Jays will come out of this with at least 5 supplemental draft pick and two second round picks.”
…declines.
If they were only going to offer arb to one catcher, why bother bringing Olivo on at all? Seems like you’d just offer Buck and hope he leaves. I mean he’s pretty obviously the 3rd catcher going into next season, you shouldn’t need Olivo to convince him to go, and picking up Olivo just to drop Buck when they’re both type Bs seems superfluous if your not going to offer both arb.
After the season buck had, he will get a job major league contract from someone. Olivo actually could very reasonably accept arb.
John buck is younger, had a better 2010 and has a better career OPS and wOBA.
And, even if Buck or Olivo accept arbitration, you can do something similar to what the Braves did with Rafael Soriano last offseason and trade them to another team(and hopefully this would only happen with 1 of them, but not both of them.)
Of course, if the player accepting arbitration is Olivo, then by trading him, you’d hope to get a player in return for him who’s more valuable than the PTBNL you gave up, which really isn’t a guarantee, seeing as how he’d likely make about $3 million in arbitration, and that price tag might deter anyone trading for him from giving anything back of significance if they’re paying the whole 2011 contract.
In which case, the Jays spent about $500,000 to exchange one organizational minor league player for another(or they spent $500,000 + cash sent to Rockies on the gambit if it’s cash they send and not a PTBNL.)
If both Buck and Olivo accept arbitration (unlikely), the Jays’ catching depth, including prospects, will look something like this:
Buck
Arencibia
Olivo
Molina
Jeroloman
D’Arnaud
Jimenez
Perez
I’m probably missing a couple of names, but that is some ridiculous depth at the C position. The Olivo deal looks like a shrewd move to me. I imagine both Buck and Olivo will decline arb. Both players just had strong seasons and will likely want some job security, especially with Arencibia and Molina potentially blocking playing time in Toronto in 2011. Neither is a Type A, so there should be a reasonably robust market for each player.
I’d say that offering both catchers arb reduces the chance of both accepting..John Buck isn’t going to say “hey look Olivo accepted I wanna play with him I’ll accept too”
Jays’ brass has already made clear their intentions to Buck; they have told him that though he is a good, valuable player and retaining him would be nice, there should be mutual understanding of the situation (one in which they have a prospect waiting in the wings and Cs on the way at various levels). I doubt Buck accepts, and to be honest I don’t think Olivo will as well. Or if he does accept, I doubt he makes it to opening day.
The sharpest move of the off-season so far.
“Particularly with the catchers, the Jays would not want either Buck or Olivo taking up a roster spot which should go to J.P. Arencibia, and Jose Molina is also under contract for 2011 already.”
This I really disagree with. Arencibia has good potential but is an unknonwn, and Molina is just a terrible player. It is a mystery why the Jays picked up his opton, and I would expect that if either of Buck or Olivo accepts arbitration then Molina will simply be released at a cost of $1M. A catching tandem of Arencibia with Buck or Olivo would be ideal – if Arencibia proves to be great right away then you have the luxury of a talented veteran backup, if Arencibia is a bust then you’ve got a solid option to fall back on.
I think the Jays intention is to have Molina back as the backup, as bad as he is. He is decent defensively and comes cheap. Though Buck or Olivo are more talented, they might be less happy taking a backup role to Arencibia than Molina will be.
Another, more shrewd, reason for picking up Molina’s option could be the added leverage they give the Jays against Buck/Olivo. They can say “we are already set at C, so there’s no point in you accepting arbitration since you won’t play much.” I imagine that Buck would rather test the market this year than take an arbitration award only to play sparingly in 2011, as this would dramatically suppress his value in the FA market following the 2011 season and he will likely make less money overall by taking this route. I figure that with Molina signed, Olivo can be leaned on to make the same decision.
The Sox picked up Felipe Lopez before the end of the season, another smart move. He’ll decline arbitration and they’ll pick up a Type B.
Great moves by these teams.
Sorry, they’ll pick a Supp pick because he’s a Type B.
will they offer Arb?
Agreed – Lopez’s value as a FA has to be suppressed after a tough year. I think he would jump all over an arbitration offer.
If Lopez made a lot of money, I bet they wouldn’t offer him arb (they wouldn’t trade for him either). I think he made a little over a million bucks last year, so he’s likely to get a similar deal in the open market. I think the Sox will definitely offer arbitration but he’ll turn it down. Maybe I’m wrong, though.
There’s absolutely no way Buck is going to take a one year deal with the year he had. Olivo’s one of the better options outside of Buck/V-Mart, so I can’t see why he’d accept arb either.
I could see Frasor accepting arb because teams might hesitate offering him a deal at the risk of their first. Downs should get a 2-3 year deal, and Gregg is going to look for a multi year deal since unlike Frasor he’s a B.
There really isn’t much risk involved here. The only guy who might accept is Frasor.
This is the new way to compete and gain an edge.
Agreed-it was an “inefficiency” of the baseball market that AA exploited.
And that is, a player with an option for next season who can still be traded after the season ends but before the decision on his option has to be made, since he’s technically still under contract for the current season. Send cash or a not-that-significant PTBNL to acquire him a day or two before the deadline for the decision on his option, then once you have him, decline the option and make him a free agent before the deadline. Offer him arbitration and watch him decline that and sign with another team, and you collect a draft pick in a pretty good draft.
Genius! ;)
Similar to the Red Sox last year. Get Wagner for cheap, offer him arbitration, get draft picks. Though Wagner also obviously came with the side benefit of being great down the stretch, but it would’ve been a good deal either way.
The Red Sox at least got Wagner during the season. This is different.
Which begs the question…how strapped for cash are the Rockies for them to allow this to happen?
Agreed, what was there thought process?
It is hard to know, but I’m assuming they have a list of PTBNL that they thought were pretty good, and they like money.
Olivo was pretty much guaranteed to accept arbitration with Colorado. He was clearly not in their plans, so they wouldn’t have been offerend arb. Worst case scenario, they got a player and $500k to get Olivo off the roster instead of paying $500k to get him off.
Why was it “guranteed” that Olivio would have accepted arbitration in Colorado but not in Toronto?
Matt – I think Olivo liked it in Colorado and wanted to continue playing there. I can’t see why he’d stay in Toronto, not having played there before.
Matt,
Mark essentially has it. I can’t remember a player consistently stating how much he loved playing in Denver and how much he wanted to return. He certainly felt like the starter for the Rockies and would have gladly come back. In Toronto, he’s looking at Jose Molina, JP Arencibia and possibly John Buck there, and as an outsider, he would have no chance of getting a starting job, even though he had 1.2 more WAR in 2010 than any year in his career
Not to be a real sour puss or anything, but that’s not “begging the question.”
sadly, this is common usage now. the real meaning of begging the question -a logical fallacy in an argument, where the conclusion is assumed as a premise, is becoming obsolete. to be strictly correct, you can say ‘raises the question’, but only real sticklers will notice.
If he says “begs the question,” and everyone understands immediately and exactly what he means (except for the few people trying to hold onto an obsolete meaning, and even they know what he means), then I’d say he’s doing just fine.
It is not an “obsolete meaning” any more than the rash of people who mess up to/two/too or there/their/they’re make the proper meaning of those words obsolete.
Misusing a term is nothing but ignorance, and I don’t mean that with any negative connotation. Correcting ignorance does not deserve some snarky reply about how everybody getting it wrong means it has a new meaning now and the proper meaning is obsolete and not worth holding onto.
People who mess up too/to/two are making a spelling error, which has nothing to do with meaning. People writing “two” when they mean “to” aren’t confused about the meaning of the word, only which spelling goes with their meaning. “Begs the question” is a case of a phrase changing its meaning, which is entirely different and happens all the time. Words (or phrases in this case) don’t change their meaning back once they’ve gotten the kind of critical mass of accepted use that the new meaning of “begs the question” now has.
I hope I wasn’t being snarky! I’m not sure what it is I said that offended you (other than the argument itself?) but I honestly apologize, as I really didn’t mean any offense to a valid (if, I think, wrong) linguistic approach.
Also, apologies for furthering the hijacking of an excellent baseball discussion. Hooray for comment threads?
Who would you rather have running your baseball team? AA or brian sabean?
Jays fan here – quite satisfied with AA to date.
Fan of the World Series Championship Giants here. Believe it or not, but pretty satisifed with Sabean…go figure.
Perhaps AA could tell Olivo that they’ve committed to Arencibia as their starting catcher, so he (Olivo) would get little playing time if he decided to accept arbitration and stay in Toronto. It’s not guaranteed to work, but maybe it will chase him away.
Yeah it’s a good point, but i think the signing of jose molina speaks louder than any words will. olivo knows there are 2 guys ready to share the role not named john buck and buck also see’s the writing on the wall i think. too bad b/c i enjoyed watching buck play, but AA has pulled off a very clever ploy
I believe they retained Molina because he’s Morrow’s personal catcher.
Agreed. Until Morrow gets over that addiction, it is hard to part with Molina. Cito tried but did not want to mess with something that worked. I think Arencibia will be given the opportunity to catch him lots in spring training and they’ll see how quickly Morrow can be weaned.
It’s interesting that it’s the Blue Jays of all teams that made this trade in an attempt to obtain draft pick compensation. Just a few years ago, they practically gave away a draft pick when they traded Scott Schoeneweis to the Reds.
whats your point? haha
Well, the GM that traded SS to the Reds is now working for the Mets.
I think in time AA will prove to be one of the top GMs in the game. I’d put him there now, but recognize that it’s hard to say that in just one year.
I’m wondering if Olivo has come out and told the Jays that he DOES NOT want to play for Toronto, under any circumstance. Of course the plan was in place prior to the trade, but I can’t imagine the Jays are thinking that Olivo will accept arbitration, after all, there’s a good chance he’s the 3rd catcher on the depth chart, not really a precursor to future earnings.
Further, I can’t see Buck, after the season he had, accepting arbitration. This is quite possibly the best chance he has at cashing in, even if it is JUST for a 3 year contract.
Great job Alex!
The aribitration increase for Buck will be signigicant over the 2mil he made this year but it would only increase at most 4 mil which is a far cry from what he could get on the open market in both base salary and security in years. I want to see what the Jays are actually giving up for Olivo, its begging the question since we can’t assume the Jays are giving up only cash or a insignificant player in return for this draft pick. The Rockies aren’t likely to get cheated considering how important home grown talent is to them. This is move has the potential to be a good one, but only if the Jays gave up only money to get Olivo and only if he declines, this philosophy of ‘ifs’ is a little to much for me to give this as a win to AA until we know more.
Dave,
It makes no sense for TOR to give up a prospect of any significance and $500k for a compensatory pick. More likely, COL decided that they were not going to offer Olivo arbitration for fear that he’d accept, so they essentially found a taker in TOR who would pay his $500k buyout for them. Whereas COL feared Olivo accepting, TOR is probably confident that he won’t (after assessing their catching situation).