Quick Thoughts on the Miguel Alfredo Gonzalez Signing

As recently as Tuesday, I wrote that the Phillies “aren’t very active in attracting international talent”. GM Ruben Amaro turned that statement on its head last night when the Miguel Alfredo Gonzalez signing was announced. Gonzalez, 26, is a Cuban defector and will earn a guaranteed $48 million over six years with a seventh-year option for $11 million.

Eric Longenhagen will have some player-specific information for you soon, but I wanted to briefly address the signing with some general analysis.

Gonzalez was signed with the intent to use him as a starting pitcher, but some say his present arsenal profiles best in a relief role. Depending on the Phillies’ needs in August and September, you may see him initially used as a reliever. With an average annual value of $8 million and one Win Above Replacement costing about $5 million currently (per FanGraphs), Gonzalez would need to average 1.6 WAR over the life of the contract to provide break-even value. 1.6 WAR is slightly below average. Last year, Kyle Kendrick provided 1.5 WAR, according to Baseball Reference. 1.6 WAR may not seem like much, but even slightly below-average pitchers are a commodity since only a fraction of them are consistent and durable. It is much tougher to accumulate 1.6 WAR out of the bullpen.

To put the contract in context, the AAV of $8 million represents five percent of the Phillies’ current payroll. That percentage will change next year depending on what the Phillies do in free agency and with trades, but if they keep their payroll in the same neighborhood, that’s a good way to look at it. Jonathan Papelbon, a reliever who logs a third or half as many innings as a typical starter, will earn $13 million per season through the end of his contract. Kendrick is making $4.5 million this year and will enter his fourth and final year of arbitration going into the 2014 season. Though unlikely, if an arbitrator was to decide his 2014 salary, it would likely be in the vicinity of $8 million. Put simply, this isn’t the type of salary that hamstrings the Phillies the way the Ryan Howard extension and Papelbon signing have.

That the Phillies have been all but silent on the international front since finding Carlos Ruiz in Panama, but made the biggest international free agent signing in baseball history with Gonzalez, should tell you something. In his column for the Inquirer (linked above), Matt Gelb suggests Sal Agostinelli’s “fingerprints are all over this signing”. (Agostinelli originally scouted Ruiz.) It should tell you that they are confident in Gonzalez’s future more than any other international player they had ever bothered to watch, and that they are confident in their coaching staff to fix his current flaws. For instance, Baseball America suggests his arm slot on breaking balls tips hitters as to what pitch is being thrown. The Phillies must be extremely confident they will see return on their investment here. I realize this argument may not be terribly convincing considering that this is the same team that handed out $125 million to Ryan Howard, but it is at least important to note.

The risk is in the length of the contract, particularly if he fails. The six-year deal takes Gonzalez through his age 31 season, capturing all of his prime years. If he doesn’t pan out the way the team expects him to, his salary may force the Phillies into keeping him on the roster at the cost of a more productive player in order to continue justifying the signing. If he turns out to be a Yunesky Maya redux, the Phillies still owe him $48 million over six years whether he’s with the Lehigh Valley IronPigs, pitching  low-leverage mop-up innings out of the bullpen, or hanging on in the #5 spot in the starting rotation. Remember, in 2009, the Phillies continued to use a struggling, injured Brad Lidge in high-leverage situations to justify the three-year, $37.5 million extension they had awarded him.

Still, relative to their other potential options, the Gonzalez signing still qualifies as low-risk. During the past off-season, only three pitchers signed a contract of four years or more, each earning at least $52 million in total: Edwin Jackson (four years, $52 million), Anibal Sanchez (five years, $80 million), and Zack Greinke (six years, $147 million). The previous year, there were three more: Mark Buehrle (four years, $58 million), C.J. Wilson (five years, $77.5 million), and CC Sabathia (five years, $122 million). As mentioned in the afore-linked article I wrote on Tuesday, the free agent market is becoming more and more of a secondary market for old, injury-prone, expensive players. Teams are focusing more and more on developing their own talent or finding it internationally. That the Gonzalez signing helps the Phillies avoid free agents, at least in one area, is beneficial.

Hopefully, this isn’t the last of the Phillies’ forays into international waters. As the industry continues to evolve, the Phillies will be forced to constantly keep pace with their competition or risk falling behind. The Gonzalez deal is a good indicator that the Phillies recognize this and may foreshadow how the organization will operate once they get their new TV deal.

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  1. Seth B.

    July 27, 2013 01:44 PM

    I hope they add depth to their international system and not just throwing money at a sexy risk. As vaguely colonialist as it might be, the real benefit is going to come from the young guys they sign for under 100k

  2. Kyle

    July 27, 2013 04:28 PM

    Bill do you think this indicates the Phillies are A) going to make a move or two soon and want to get younger and rebuild next year? Maybe dealing or not resigning Young(s), Ruiz, etc. or B) will use this movie to justify keeping/re-signing the aging core to compete for next year? Hope that makes sense.

  3. Larry

    July 27, 2013 07:57 PM

    I’m going to give props to Joecatz for calling this move. If he is a true # 3, I like this move. Honestly, I would have rather given him a 4 year deal, to be safe. However, there may have been a bidding war, so who knows? This was RAJ thinking outside the box of what he usually does. If it doesn’t work, then I’m not going to be critical of another RAJ blunder. I hope he is really only 26 though. lol

  4. Larry

    July 27, 2013 07:59 PM

    Also what will we call him? Gonzalez, Miggy, Gonzo, MAG, Sauce, or something else?

  5. FC

    July 28, 2013 08:40 AM

    There WAS a bidding war. The Red Sox. As for international signings does the name Carlos Tocci to ring a bell? Yes it wasn’t less than 100k, but compared to the FA market it’s peanuts. Compared to draft bonuses it’s pretty good.

  6. Joecatz

    July 28, 2013 10:26 AM

    Franco was international as well. So was Galvis, and Cesar Hernandez if I’m not mistaken.

  7. Larry

    July 28, 2013 03:46 PM

    1st starting pitcher though

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