The Rangers and Approaching a Kyle Lohse Valuation Convergence

Not a whole lot of players were extended a qualifying offer at the end of last season. Those who were extended such offers were good baseball players, and Kyle Lohse was among them. Lohse is a good baseball player, and he turned down the offer, and he remains to this date a free agent. We’re at the point now where Lohse is waiting on a significant injury, because for months he’s been unable to find a new home. This despite the fact that Lohse is good at what he does, and is capable of helping a contender.

There was an injury to a contender over the weekend, when a player you might not have ever heard of broke Martin Perez‘s arm with a line-drive comebacker. Perez was in the running to be the Rangers’ fifth starter, and many felt like he was out in the lead. Now the team hopes he’s back and ready to pitch in the majors around the beginning of May. That is, in other words, at least a lost month, and people are wondering whether the Rangers are now more likely to give in to what Lohse demands might exist.

Where, you might ask, are those demands? Here’s Ken Rosenthal with a timely tweet:

 

According to that, Scott Boras is still seeking a hefty contract. This in addition to the lost draft pick, and basically there are reasons why Lohse is still out there, available. If Boras and front offices agreed on Lohse’s worth, Lohse wouldn’t today be a free agent.

So how might the Perez situation affect the Lohse situation, from the Rangers’ perspective? Let’s assume that, prior to the Perez injury, the Rangers didn’t want to meet Boras’ demands. We can make this assumption because the demands weren’t met. I don’t think there’s any question Lohse would make the Rangers at least incrementally better. Perez wasn’t good just last season in triple-A. But there would be a difference of opinion on just how much better the Rangers would be made.

Let’s assume now that the Rangers like Perez more than the other fifth-starter candidates. They are, most notably, Randy Wells, Kyle McClellan, and Robbie Ross. Let’s give the Rangers the benefit of the doubt and say that Perez is the best of those four, when it comes to projecting 2013 performance in the rotation. Perez, after all, is still an exciting young prospect. That makes Perez’s injury absence a problem.

Let’s make some more assumptions, and generously project full-season Perez for two wins. Whatever. Let’s project the other guys as being about replacement-level. Using one of the other guys in April instead of Perez, then, would cost the Rangers about a third of a win by this simple model. A third of a win is worth, what, about $1.5 – $2 million? Maybe bump that up to $3 million if you want, given the Rangers’ projected position on the win curve. The Rangers look like they’ll be battling the Angels and the A’s for the division, and there’s also the wild card to consider. For them, wins will be extra important.

Wherever the Rangers valued Lohse before Perez’s injury, maybe now you could add $3 million. Previously, they didn’t think the difference between Lohse and Perez was worth the investment. Now it’s about the difference between Lohse and Perez and a bit of a Perez replacement.

So Perez’s injury isn’t a non-factor when it comes to the Kyle Lohse sweepstakes. The Rangers are now a little thinner, and they’re looking to make the playoffs. Lohse would probably help. But a bigger factor might be Boras’ sinking demands, if indeed they are sinking. It stands to reason that, the longer Lohse goes without a job, the more affordable he should become. So we might be approaching a convergence. Upon a convergence, a contract is signed and we all learn lessons from this and move on all the wiser.

Remember that signing Lohse would cost the Rangers the 24th pick and the corresponding amount in the bonus pool. That hasn’t changed, although the Rangers will pick shortly thereafter as compensation for having lost Josh Hamilton. The 24th pick cannot possibly be considered that valuable, given the nature of late-round draft picks, but it isn’t negligible. The Rangers made a certain decision that they didn’t want to pay Kyle Lohse what he would cost. But that was before the Rangers’ rotation got weakened, and Boras might additionally be willing to be a little bit more flexible.

There aren’t any issues with Yu Darvish, Matt Harrison, or Derek Holland. Alexi Ogando is working on a return to the rotation, and last time he started, he was fine. The Rangers have fifth-starter candidates, they have Perez due back before too long, and Colby Lewis is also rehabbing from surgery. The Rangers aren’t in a position where they absolutely need to sign Kyle Lohse. But he makes more sense for them now than he did just a few days ago, so we’ll see how things develop. The probability of Kyle Lohse ending up in Texas has been lower.



Print This Post



Jeff made Lookout Landing a thing, but he does not still write there about the Mariners. He does write here, sometimes about the Mariners, but usually not.


Sort by:   newest | oldest | most voted
Atreyu Jones
Guest
Atreyu Jones

What are the chances that Lohse just decides to wait until the draft to sign with a team when he will no longer be entangled with the loss of a pick?

Jay29
Member
Jay29

If he waited until after the draft, it’d mean he’s not paid for ~2 months. Lohse and Boras probably want something around $2-3MM/month, so he’d have to make up for that lost $4-6MM on the back end of a deal. I don’t know if his value will be that much higher with no compensation pick factor.

AS
Guest
AS

Unless he just signs for the rest of this season, after which his team would not be able to tag him with a qualifying offer due to not having him for the full season, and he’d go into next offseason in a very different situation.

Jason B
Guest
Jason B

$3M per month? That would be $18M per year, which isn’t (and wasn’t ever) happening (and probably wasn’t expected even in Scotty’s wildest dreams).

Jay29
Member
Jay29

OK what I meant was around $2MM but probably more. Guess I should’ve said $2-2.5MM.

Obviously people like us who know about DIPS probably wouldn’t pay him more than $6-8MM per year (and only 1 or 2 years), but I was basing it off of pitchers with contracts in the range of what Boras probably thought Lohse was worth in November (i.e. $12-15MM per year).

wpDiscuz