Friday, March 28, 2008

The Joe Nathan Deal: Harbinger for 2010

Recently, the Twins signed Joe Nathan to a four year, $47 million dollar deal. Twins blogger Aaron Gleeman did a good job of breaking down the Joe Nathan deal. Local columnists Jim Souhan and and Kelsie Smith predictably differ on their opinions. Below are my thoughts.

Market Value
To accurately assess the Joe Nathan deal we need to look at the closer market. Below are closer contracts that compare to Nathan's in order of the date they were signed. In brackets is each closer's approximate age when they signed their respective contracts.

Jason Isringhausen (2005) 4 yrs./$33.75 mil. [33 years old]
Mariano Rivera (2006) 3 yrs./$45 mil. [36 years old]
Trevor Hoffman (2006) 3 yrs./$21 mil. [38 years old]
Billy Wagner (2006) 4 yrs./$43 mil. [34 years old]
Francisco Cordero (2008) 4 yrs./$46 mil. [32 years old]
Joe Nathan (2008) 4 yrs./$47 mil. [33 years old]

When comparing Nathan's contract to those of his peers who signed at a similar age, it is a very fair deal for the Twins, especially considering Nathan's record setting 160 saves since 2004. Not only that, the market only seems to be inflating. Any one who thinks Francisco Cordero and Joe Nathan are comparable needs to take a closer look at the numbers. In his four seasons as the Twins closer, Joe Nathan has compiled a 1.94 ERA. In those same four seasons Cordero's ERA sits above 3.

Why Not Johan?
In the immediate aftermath of the contract extension many people second-guessed why Twins management would invest in a 33 year old closer rather than putting that money towards locking up Johan Santana, a 27 year old two-time Cy Young winner. The reality is that Joe Nathan may be a less risky investment than Johan Santana. Rarely have large, long-term contracts like the Mets gave to Santana worked out (i.e. Mike Hampton, Denny Naegle, A.J. Burnett). Even though, Joe Nathan's contract will make up somewhere between 12-15% of the Twins payroll throughout the deal, it is much more likely that his performance will be worth it, throughout the deal. This cannot be said for Santana, whose skills will probably decline dramaticaly in years 5 and 6 of his contract with the Mets. There were indicators of such decline last year, as Johan did not have his typical second half surge, and gave up a career high in home runs. Being in the National League may stall the inevitable for Santana, but Joe Nathan has showed no signs of decline, and should prove a bargain in years three and four of the contract.

What About Trading Nathan?
Some believe the Twins would have been better suited not signing Joe Nathan to an extension and trading him at the deadline. Not true. Bill Smith, once again would have been held hostage, like he was in the Santana negotiations, with no leverage, unable to extract high level talent from other teams because Nathan would have been viewed as a rental. I believe Joe Nathan is still very much on the trading block. However, now that he's signed to a four-year deal, he does not need to sell at the trade deadline in July. He can wait. He can wait for teams' bullpens to crumble, and then raid their farm systems. The contract is a very trade-friendly contract too. It comes with a no-trade clause that allows Nathan to block block a trade with three teams each year. I am sure that Smith agreed to pay Nathan more money up front in exchange for as few teams as possible in that no-trade clause.

So, G.M. Bill Smith has taken another step towards building the Twins toward becoming contenders in 2010. Carlos Gomez has already showed us flashes of brilliance on opening day. Justin Morneau, Michael Cuddyer, and Joe Mauer are locked into long-term deals. The Twins acquired former Rays #1 pick Delmon Young in the offseason and head into June's draft with 4 of the first 61 picks. In the Nathan signing Bill Smith has obtained leverage for the trade deadline that he did not have during the Santana negotiations--he doesn't have to make a deal if the prospects offer do not satisfy his demands. He may not trade Nathan this season, but don't expect Nathan to finish this contract in the new balpark. This contract extension is a means to an end: Restocking the farm system

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