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.




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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.

23 Responses to “The Rangers and Approaching a Kyle Lohse Valuation Convergence”

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  1. Atreyu Jones says:

    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?

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    • The greatest they’ve ever been!

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    • Jay29 says:

      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.

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      • AS says:

        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.

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      • Jason B says:

        $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).

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        • Jay29 says:

          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).

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  2. gnomez says:

    “a player you might not have ever heard of”

    I take it you don’t see Miller as the Seattle shortstop of the future?

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  3. Shawn says:

    Re: Ogando’s last start being fine, still didn’t have release point, walks, etc. Did you read this: http://www.fangraphs.com/fantasy/index.php/alexi-ogando-injury-risk/

    I think whether they sign Lohse says more about Ogando than the 1 month w/o Perez w/Lewis coming back, esp since they only need 4 april 5th starter starts.

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  4. Hurtlockertwo says:

    Lohse had his best year last year, after years fo being very bad to average. He is also 34 years old now. Will any team take the chance that this guy is as good as last year for the next three, his age 34-37 seasons for big bucks? No so far.

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    • RMD says:

      Nobody thinks of Loshe as a 2.86 ERA guy, but he’s easily put up a below average FIP the last two years (in 400 innings). This is a guy that even in his age 35-37 year seasons would be welcome in the back end of any rotation.

      Think of all the things that have occurred to Texas to make this not only reasonable- but necessary:
      -A division rival appropriates their best hitter
      -The rookie set to break camp breaks his arm
      -They already got a new 1st round pick
      -They absolutely(!!!) can afford a 3 year offer with 3.4 million in attendance and an excellent TV deal.
      -The East is balanced and talented and will almost surely produce a WC spot
      -OAK and LAA knew they had to improve and made great strides toward doing so
      -Beltre’s not gonna do that again
      -They only had one player with 200 IP in 2012.

      If they break camp with some AAAA guy in the rotation, it’s due to laughable, ego-driven vanity of rigid ideals. That is not how you win baseball games.

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  5. byron says:

    This is the first article I’ve read that didn’t act like teams were offering Lohse zero dollars because of draft picks. It’s nice to read something that acknowledges that’s just suppressing their offers to him, not eliminating them entirely.

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  6. chuckb says:

    The common meme from this offseason re: Lohse was that teams weren’t interested in him b/c they were (irrationally) overvaluing draft picks. Isn’t it possible that the real reason that Lohse remains unsigned is that he’s seeking a deal with a “high AAV”? Knowing Boras, Lohse is seeking a ton of money — probably considerably more than he’s actually worth. The value of the draft pick, therefore, may be only a minor reason that he’s still unsigned with the real reason that he’s looking for something like $15 M annually (just speculating here).

    Unless we know for certain that the draft pick is the reason, we ought to at least consider the possibility that Boras and Lohse have overvalued Lohse and teams recognize it.

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    • Cookierojas16 says:

      Demonstrably, Boras has overpriced Lohse: he isn’t signed yet. But that probably won’t matter. The genius of Boras is his recognition that it only takes one insecure, panicky GM to upset reason. If it doesn’t come about early through manufactured bidding wars and phantom teams, it comes about later through “critical” injuries – last year, Victor Martinez; this year, maybe Perez (which IMO is not worthy of breaking the glass to pick up the Borasphone.)

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  7. bkgeneral says:

    Isn’t Robbie Ross better than Perez anyway? I don’t get all the worry.

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    • Man0warr says:

      Potentially, but I think they’d rather keep him in the bullpen where he was great last year and still has a role.

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  8. Mr Punch says:

    Do the Cards have any possible role, or are they totally out of it? They can’t sell or trade the draft pick – now less likely than it appeared – I assume, but can they waive it? For a consideration from another team or from the player? Not saying they should; just wondering.

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  9. Anthony says:

    Why couldn’t the Cardinals make a trade with the team that signs Lohse, where they trade a player to be named later for cash considerations. This deal would be struck with whichever team decides it wants to make an offer that Lohse would accept. The player to be named later can be the player picked with the 24th pick in the draft (if the team in question happened to be the Rangers). Seems like an easy fix.

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  10. Marcus Tullius Cicero says:

    Just out of curiosity, what percentage of FanGraphs posts have titles following the formula “[Player/Team] + ‘and’ + [Slightly obscure phenomenon/statistic]“?

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