Rays Re-sign Joel Peralta, Inflation Still Absent

You can’t talk about Major League Baseball’s financials these days without hearing about how much money is flowing into the sport. New television contracts are everywhere. MLB Advanced Media is one of the most valuable technology companies in the world. The Dodgers ownership group has their own printing press, apparently. Baseball is rolling in cash, and everyone involved with the sport is getting rich.

Except for Joel Peralta. If he pays attention to any of this stuff, he has to be wondering why his own personal experience is so different than everyone else’s.

In 2010, Joel Peralta threw 49 excellent innings for the Nationals, posting a 50/76/86 ERA-/FIP-/xFIP- line thanks to his excellent command of the strike zone. For his efforts, he was non-tendered, as the Nationals decided they didn’t want to give him a raise that a pitcher with those numbers would get in arbitration. The Rays eventually signed him for $925,000, or about $500K more than the league minimum.

Since joining the Rays, Peralta has thrown 135 innings, with his minus stats lining up nicely – 84 ERA-/83 FIP-/87 xFIP-. His fly ball tendencies finally turned into a small home run issue, but his ability to limit walks and rack up strikeouts allowed him to be a good reliever even while putting the ball in the air all the time. While there is understandable skepticism about putting homer prone pitchers in the game with one run leads, he has basically the same skillset as Huston Street, and he’s had no problems collecting big paychecks throughout the years.

Of course, Street is a Capital-C Closer, while Peralta is a middle reliever, and there are known price differences that go along with those two roles. Even in an expected inflationary market, a 37-year-old middle reliever with a home run problem wasn’t going to land a huge contract, but he could have looked at what Frank Francisco got from the Mets last winter and assumed that 2/12 shouldn’t be completely out of reach. Francisco is basically Peralta with twice as many walks, and while he had experience as a closer, he also lost those jobs and wasn’t exactly a proven ninth inning guy.

Instead, early reports suggest that Peralta got exactly half of Francisco’s deal, signing for $3 million per year for the next two years with a third year team option that could push the total value all the way up to $8.5 million if its exercised. That’s basically what Brandon League is going to earn in the first year of his three year deal with the Dodgers, and while he’s younger, it’s not clear that he’s actually better.

Maybe Peralta just really likes the Rays, and he took what they were able to give him in order to avoid changing addresses and adjusting to life in a new town. It is called a “home town discount” for a reason, after all, and Peralta wouldn’t be the first player to trade a little cash for some extra stability.

Of course, there’s also another possibility, and one that looks more possible with each non-Dodger re-signing over the last week. After seeing Jake Peavy (2/29), David Ortiz (2/26), Hisashi Iwakuma (2/14), Bartolo Colon (1/3), and now Peralta sign short term deals at reasonable (or even bargain) AAVs — alongside the decisions to not make qualifying offers to Torii Hunter, Edwin Jackson, Angel Pagan, and Mike Napoli — the early returns aren’t really playing along with the runaway inflation idea. Or, at the least, the inflation isn’t trickling down to the tier of player who are willing to re-sign early before testing the market.

Obviously, it’s way too early to know what prices are going to look like over the rest of the winter. In the past, though, bargains weren’t usually found until January or February, as teams had to pick through the leftovers and to gain some leverage and drive price down. So far, we’ve seen a half dozen contracts signed with players who could have been free agents, and all but one appear to be pretty team friendly.

The Rays have to be pretty happy with how this shook out. They get a quality reliever at a nice price, and because they have Fernando Rodney and Jake McGee to share the high leverage relief work, they can limit Peralta’s appearances in one run leads if his home run problem worsens. For Peralta, he gets the first multi-year contract of his career, so perhaps he’s happy with this result as well. Given what other relievers have gotten over the last few years — and how all the talk heading into the winter is that owners are currently black truffles wrapped in gold from their forks made of rhodium — Peralta might have ended up leaving money on the table. Or maybe there just isn’t as much money available for these kinds of players as we’ve been led to believe.

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Dave is a co-founder of USSMariner.com and contributes to the Wall Street Journal.

11 Responses to “Rays Re-sign Joel Peralta, Inflation Still Absent”

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  1. Darren says:

    Dave, based on the League and Peralta deals which appear polar opposite to each other; what is your guesstimate on what two other set-up guys Adams and Uehara get in the market?

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  2. Renan says:

    “Or, at the least, the inflation isn’t trickling down to the tier of player who are willing to re-sign early before testing the market.”

    Well, isn’t that just it though? That these players who are signing are guys who are willing to resign quickly for what the team at least considers to be a team-friendly deal (even the Dodgers signing of League can be viewed through this prism, if you assume Colletti has no idea how to properly value relievers. Which he pretty obviously does not). When you couple that with the advent of the new free agent rules, where there’s no longer any benefit to offering a guy arbitration with the hope that he doesn’t accept and explores the market, it seems to me that the new CBA incentivizes teams to at least make these kind of offers quickly, to see who is or isn’t willing to take it before moving on to bigger fish. There’s really no downside to this strategy– if the player rejects the deal, the team can still allow him to test free agency and hope to either resign him or get someone else in the January-February bargain shopping season that you mention above. I don’t know if any inferences about the presence/absence of inflation can be inferred from any of these contracts though.

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    • Dave Cameron says:

      Peavy and Ortiz were top 10 free agents in this class. Sure, Peralta’s a bit player, but I don’t think it’s entirely accurate to say that these guys would have been signing these same deals in January had they tested the market.

      The story of this type of inflation is that it’s supposed to come from the bottom up, not the top down. The Yankees are cutting payroll, the Red Sox are probably not going to go nuts in free agency, the Angels are dumping players to create financial flexibility. This isn’t supposed to be price increases driven by the top few guys getting huge deals from the big market teams. This is every team in baseball getting an influx of cash, and that should theoretically serve to push up salaries across the board, rather than just with a few players and a few teams like we’ve seen in the past.

      Obviously, it’s too soon to say what the market is going to do. But, I think the early signings and the lack of qualifying offers suggest that the teams and agents might not be expecting the same kind of crazy inflation that the media is.

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      • Nivra says:

        I think the more important question if it unfolds this way is why not?
        Did teams like the Tigers/Angels/Dodgers blow their cash in advance of the influx (which is very probable, given the way financials project), or is there another unknown cost sink that clubs are putting money into. If its neither of those two, then the owners are just “deciding” to take a bigger share of the revenues than before, which will lead to whispers about the c-word. It’s much too early to be talking about that, though.

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      • Paul says:

        If “the media” is expecting runaway inflation it just proves how dumb they are. Where did they get the idea that huge corporate revenues “trickle down” to employees? That hasn’t happened in the real economy in 50 years. Check out the charts in the linked article. Baseball owners are not going to “share” this windfall, because their business buddies would clown them for it on the golf course. First rule of being rich, stiff the help.


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      • Renan says:

        While I agree with your point about how inflation is expected to play out, and I agree there’s no way to argue that these deals argue for anything but lower than expected inflation, my point is that these deals seem like outliers in the sense that you have players completely forgoing the open market in favor of accepting the money being offered by their teams. My sense from just following free agency the last few years is that the larger deals get signed when the players are subject to open bidding. But when players essentially remove themselves from that process voluntarily they don’t necessarily get the highest dollar, with the exception of some of the game’s superstar level players (i.e possibly Grienke this year). I mean, it’s not as if Ortiz broke the bank the last time he was a free agent when he essentially limited himself to resigning with the Red Sox, as he did this time around.

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  3. benjh5 says:

    Dave, the Rays seem to have a lot on their plate this offseason with a number of arbitration eligible players, James Shields one-year deal, and options to consider picking up. For teams like the Rays every dollar counts, so it would seem to me that even a minor move like this might signal an attempt to trade a player set to make a healthy paycheck increase this going into 2013. Do you think this move has any signal in it that they may look to deal David Price or Jeremy Hellickson, or am I seeing too much in this?

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  4. Larry says:

    Peralta’s still your typical journeyman – I thought he’d be looking to latch onto another team – the security of a two year deal and guaranteed money isn’t bad for someone like him.

    Peralta is serviceable but doesn’t really have the lights out stuff – he isn’t young and could fall apart any time.

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  5. melotticus says:

    For a guy who has only known one year deals it doesn’t surprise me in the least bit that Peralta jumped at the first mutli-year deal. He gets nominal security (he’s not getting a no-trade clause), 6 million guaranteed, all while winding down his career. Tampa is also already looking at the trade deadline and how valuable Peralta will be if he catches lightning in a bottle and is lights out in the first half.

    Friedman and Co. are some of the brightest minds in the game. I think its a great move on their part.

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  6. Tim Dierkes says:

    I think this is entirely home town discount. Check out what Peralta said in mid-October:

    “I wish I wasn’t a free agent. Definitely I want to be back. I’m wishing, I’m hoping, I’m praying that I can come back here. This feels like home. I want what I deserve — I don’t want more, I don’t want less. So it’s up to them. I’m cheap. They can afford me.”


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    • MC says:

      Have to disagree with Dave here. $3M is plenty good enough for a middle reliever, not even a closer. He’s not an elite player by any means-he merely fills a role, albeit well.

      These guys often have wide swings in performance and run into health, other issues, etc., such as who else is in the bullpen with them. One good reliever doesn’t save a bad bullpen (instead his numbers usually worsen) and vice versa.

      So yes anywhere outside the Beverly-Hills/Disneyland world of MLB $3 for 1 year of work is a TON of money.

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