Let's Make a Deal: Johnny Cueto
Continuing our quest to stockpile young talent
Last time out I successfully paired up Kevin Gausman with the Oakland A’s — and then the Giants ripped off six successive wins and swore a Pledge of the Fellowship to never lose again in the Joey Bart Era™. Clearly laying out prospective trade options is exactly the kind of anti-jinx formula this club needs so I’ll keep on matching up their talent with other clubs and they can keep on doing….whatever they need to do in response.
Today, I’m taking on a slightly more daunting task — finding just the right suitor for Johnny Cueto.
Photo: Johnny Cueto Instagram feed
Don’t get me wrong — it’s not daunting because Cueto isn’t a valuable and desirable trade target! Cueto is part Wonder Years, part Awesome Sauce! But there are…um…complications.
The fun part of concocting internet trades (aside from never having to face the consequences of losing them) is messing around with the baseballiness of it all —looking up player stats on Fangraphs and Baseball Savant, parsing the granularities of recent games, surveying teams and assessing strengths and weaknesses. All the old fashioned back-of-the-card stuff.
The less fun part is adding in contracts and offsets and payrolls. And the absolute, poke your own eyes out, scrape it off the bottom of your shoe, no fun at all part? That would be assessing owners’ financial situations in a reasonably empathetic and clear-eyed manner. Today, we’ll be doing a lot of the no-fun-at-all part. I apologize in advance for the Ick Factor.
So first the specifics of Cueto’s situation. It looks like Cueto’s contract for 2020 will carry an obligation of approximately $3.5 million after the trade deadline. He’s owed $21m for 2021 and has a $5m buyout for the $22m club option in 2022. There’s also a $500,000 “assignment bonus” for being traded. So, approximately $30m in total remaining obligations.
The normal math would be to figure out how much of the obligation the Giants would need to kick in so that the return would balance out everyone’s financial and baseball needs. Is $10m enough to up the prospect level from a FV40 to a 40+ or 45? Discuss, discuss, discuss.
But I can’t stress the following enough — we are far, FAR from Kansas at this point. Normal has left the building and it took its accounting books with it. While we needn’t give credence to the more remarkably facile comments made by some owners this spring — Bill DeWitt claiming “the industry isn’t very profitable” springs to mind — there have certainly been true signs of distress on teams’ operating budgets across the industry throughout the spring and summer. To note a few obvious examples:
Layoffs of teams’ permanent personnel (as in Tampa and Oakland)
Teams having to be shamed into continuing to provide minuscule sums to their minor league players (as in Oakland, again, and Washington)
Mass firings of team scouting departments (the Angels in the summer and just this week, Milwaukee)
MLB en masse deferring approximately $221m of draft bonus money (of roughly $240m total) into 2021 and 2022 seasons and cutting the 6-10 rounds of the draft at a savings of only about $775,000 per team
Perpetual rumors that some clubs, including the heretofore high spending Angels, preferred to cancel the draft altogether
Moving the international J2 signing day to January to defer paying the signing bonuses in the amount of about $6m per club
Perpetual rumors that an expanded Arizona Fall League which would give desperately needed development reps to minor leaguers probably won’t come together because certain teams are adamant about avoiding the approximately $3m in spending that would necessitate.
This is not to suggest that we need to have pity on the poor little rich kids. Owners’ long-term wealth isn’t threatened in the least and they will all continue on with their fabulous lives, light their cigars with thousand dollar bills, and someday hand off assets that have only increased in value to their progeny. Nice work if you can get it. And yes, they could all take on greater debt loads (adding on to the significant debt most already float) or liquidate a little of their wealth in order to finance real world baseball talent for their teams right here and now. They could. Yes they almost certainly all could do that.
But they also absolutely positively certainly will not be doing that. And for the more or less good reason that taking on debt for operating expenses would violate all manner of common sense business management principles. You and I shouldn’t use credit cards for groceries or gas without paying our full statement amount monthly and businesses shouldn’t take on debt to meet their payroll. Especially not when the good, common sense executives teams have minding their Business Operations currently are no doubt spending their time modeling “No Fan Scenarios” for 2021 and assessing what another year like this one might mean to their portfolios. So let’s just lay that fantasy aside for now.
Of course, MLB owners have always been defiantly opposed to opening their books to see if their poor-mouth claims have legitimacy (and to see what bookkeeping slight-of-hand is taking place in the background), but as it happens we do have exactly one public-traded team which is legally obliged to some level of transparency and that helps greatly in painting a truer picture of the state of things.
The Atlanta Braves, a holding of Liberty Media, gets some of their finances exposed to the bright light of scrutiny on a quarterly basis. We know, for instance, that their revenues have been between $400-450mm the last two years as the industry has generally surged. We can’t know fully what their costs have been — the team’s salary has been in the $120m range the last two years, but stadium operation and upkeep, burgeoning full-time personnel (front offices are stretching to as many as 400 personnel for some clubs), and costs associated with transitioning to the high tech development tools we’ve discussed a great deal this year add on significantly to overall costs. Just as one instance of how little things add up, Kiley McDaniel noted in Future Value that the maintenance costs alone of most teams’ Dominican facilities are in range of $1m per year and Dominican staff, operations, feeding and housing players etc add on approximately another $2m per year. A million here, a million there…pretty soon you’re talking about real money, am I right?
Still, without knowing what the Braves actual profit has been the last two years, we can certainly appreciate that they’ve had to dig into it significantly when we see that their Q2 revenues alone this year plummeted 95% from over $200m to $11m. Losses for the quarter (prior to amortization) were estimated at about $30m. That’s a hefty chunk of change!
With that said, it’s not that hard to understand why the Braves might be ruling out acquiring pitchers whose contracts extend beyond 2020. Especially since, again, we have so little certainty on when fans may be allowed to return to stadiums and what percentage of fans will feel comfortable doing so when they are allowed. Teams have long prioritized cost certainty. They’re now in a situation where they have absolutely no revenue certainty. And while some teams (like the Giants) are better positioned to weather such drops in revenue, those same teams are likely being hurt worse by the pandemic conditions because so much of their financial might is connected to huge stadium crowds and related revenue.
And for the Giants to help mitigate future financial obligations of an acquiring team, they’d need to transfer the money in the deal — right now, when their revenue and liquidity situations are at their nadir. Teams aren’t looking at $30m losses and thinking of an additional $10-20m obligation as no big deal, no matter how much asset wealth their ownership group has.
I know some readers will respond to this argument with a “yeah, but Mark Melancon” — and frankly that’s a pretty good retort as the Melancon deal was a stunner at the time and rather remains so. But I will stand firm on my position that events of 2019 have no more relevance to Baseball 2020 than the events of 1919 do. And as the Giants won’t be acquiring Babe Ruth to bankroll “No, No Nanette,” neither will they be offloading $20-30m of Johnny Cueto’s salary obligations to anybody or swallowing it themselves.
As talented and delightful as Cueto legitimately is, if we’re going to identify contenders to trade him to, we’ll need to find ourselves some unicorns — real outliers in some way or another.
The Contenders
So, what might make a club a unicorn? For my way of looking at things, we need to have a club who:
Came into 2020 with top of the industry financial strength;
Fields a 2020 baseball roster with legitimate championship potential — they’re not just hoping to be part of the scrum;
Has some enhanced sense of urgency that moves them to act now rather than wait till the winter and focus on a more normal 2021.
There are a lot of teams that could certainly use Johnny Cueto — the Rays, the Braves, the Indians, the Padres, the A’s — Cueto could make a difference in a lot of races. But when I look at the criteria above, I’m really left with two teams: the Yankees and the Cubs.
And since Theo Epstein was in the news this weekend, I might as well start with the Cubs. They’re hot (16-10), they’re mighty, and they face a very uncertain future with stars Javy Baez and Kris Bryant both entering their walk years in 2021. Reportedly the Cubs were deep in extension discussions with Baez when the shutdown hit and brought an icy chill to the situation. Getting a second ring before the core disappears would take a lot of the sting out of that whole “Cubs Dynasty” thing never really coming together.
And they have talent to give that would be interesting to the Giants. The Cubs are one of the teams that have relatively few of their prospects in their 60 player pool. But they’ve raved about the improvements that Adbert Alzolay has made at their alternate camp, and he’d be an excellent guy to pencil into the Giants rotation for the next few years. And they could use the PTBNL mechanism to try to add some talent to a package. But then Theo went and threw cold water over the hot coals of trade talk with his “the financial picture’s not great” quote. And again, the Ricketts family is fabulously wealthy, they could float the difference…
They’re not going to. The Cubs do have a couple of specific additional financial constraints that most other teams aren’t dealing with -- their renovations of Wrigley Field have involved a very hefty new debt load to their portfolio. And while most clubs are relying on money from their regional sports networks to help them get through the financial crunch, this isn’t a great avenue for the Cubs. Instead this is the year they’ve chosen to launch their own sports channel which is just getting up and running, so that’s not the normal ATM source of quick cash they might otherwise have had access to either.
Consequently, I’m striking the Cubbies off the list. Which now is down to just the Yankees. Surely the Yankees and Giants together have the financial wherewithal to make a deal happen. The Yankees who just completed their first decade without a championship in over a century. The Yankees who are smarting from the Astros nefarious blockage of their path the last few years. With injuries once again biting their pitching staff (and the rest of their roster), having Cueto to slot in as a solid postseason #2 after Gerrit Cole would be a real luxury. And they have surplus talent to deal from — although I suppose it was more surplusy before both Aaron Judge and Giancarlo Stanton returned to their homes away from home, the IL. Do they really need Clint Frazier around to be nothing more than AAA depth? Are they sold on Deivi Garcia’s future? They have the talent that would help the Giants’ rebuild.
Not sure…..let’s see what the Match-O-Meter thinks…
Nope, just doesn’t look like a fit. That contract is really not moving this summer.
Final deal: Johnny Cueto stays with the Giants
This option doesn’t come with any shiny new talent but it has some pretty obvious benefits. For one thing, it allows the Giants to spend the next month being competitive. Which is fun! And if their ~28-32 final record does manage to blunder into the Oprah Playoffs (“you get a post-season and YOU get a post-season!”), then they’ll have a pretty nice combo of starting pitchers with which to compete in the first round.
More than that, the club will obviously talk about wanting to be competitive in 2021. And having Johnny Cueto on their roster is a step in the right direction for doing that, particularly given the potential losses of Kevin Gausman and Drew Smyly in the offseason as well. If they were to trade Cueto now, there would be some fairly substantial costs this winter to try to replace his value in the rotation. Better to keep him, try to compete, and hope that baseball’s financial picture changes for the better over the next 11 months. Maybe they’ll be in a better position to return value from him down the line when something more like normal appears on the horizon.
In the meantime, we all get to enjoy just a little more shimmy…
PS….I’m only going to write this post once, so you’ll understand that there is going to be NO forthcoming “Let’s Make a Deal: Evan Longoria” or “Let’s Make a Deal: Brandon Belt” pieces. Money isn’t moving. Next topic.
So says I. What say you?
This Date in History
To celebrate a family birthday, I’m going to look at yesterday’s date in history instead. It’s a good one! So turning back the clock to August 23, we find….
2005: Matt Cain threw 6 shutout innings in Tacoma against old friend Jesse Foppert. Neither were around when Fresno finally claimed a 9-4 victory in 13 innings. The 20-year old Cain struck out 7, giving him a PCL-leading 176 at the time, walked one and allowed just four hits. Cain never got to add onto that strikeout total (though he still ended up leading the league by more than 30 at season’s end). With San Francisco heading nowhere for the 2005 season they decided the time was right to look to the future. This would be Cain’s final game as a minor leaguer and his final appearance in the minors until a rehab assignment 10 years later in Richmond — by which time he was a three-time All Star, three-time world champ, and twirler of the first perfect game in Giants history.
2008: Tim Alderson threw 7 innings of one-run ball to help San Jose cruise to a 5-1 victory over High Desert. The nineteen-year -ld right-hander taken with the Giants second 1st round pick in 2007 was slightly over-shadowed by Bumgarner, but his 2008 was nearly as impressive. With the win Alderson moved to 12-4 in the Cal League with a sparkling 2.91 ERA in 140 innings. The Giants had given the teenager a huge challenge assignment and he’d really responded. The low strikeout totals were a warning sign but he would still be the #2 prospect in the system that winter. The following year the Giants would sell high on the 20 year old (whose performance was starting to fade in AA) moving him to Pittsburgh for 2b Freddy Sanchez.
2014: Ray Black made his A+ debut — more than three years after being drafted out of the University of Pittsburgh. Black threw a scoreless 7th inning in San Jose’s 4-2 win over Visalia. Black, who had been a 7th round pick all the way back in 2011 hadn’t pitched in a professional game prior to 2014. Assigned to Augusta in the Sally League in April, Black pitched in exactly one game before being placed yet again on the DL with shoulder inflammation. But he returned successfully to pitch in 33 games with Augusta that year, striking out 64 batters in 31 innings before getting a late season promotion to San Jose. Black would endure seven more DL stints, another season completely lost to surgery, a DFA, a release and a near retirement before finally making his big-league debut in July, 2018, seven years after being drafted.
The Giants added another intriguing piece of young talent over the weekend, while saying goodbye to a legend.
Daniel Robertson was the A’s 1st round pick in the 2012 draft, selected #34th overall out of Upland High School in the Inland Empire. As a prospect, Robertson bore a tremendous similarity to the Giants 2013 1st rounder Christian Arroyo. He was viewed as a slight overdraft at the time (more like a Supp or 2nd rounder) because of his tweener profile. Everybody believed in the RH bat and his contact ability, but the High School SS didn’t have the speed or lateral quickness to stick in the middle, and scouts doubted the power to play on the corner.
Truly I could be writing a prospect profile of Arroyo here. Robertson consistently posted solid batting averages with low power totals, and while he played mostly SS he didn’t really wow any scouts there. Like Arroyo, Robertson would find himself on the move to the Rays middle infield-rich organization — part of the trade return for Ben Zobrist. The one thing Robertson consistently did, however, that Arroyo did not was control the strike zone. He consistently added secondary average with strong OBP and a career BB% of 11% in the minors. As a major leaguer that’s been even better (11.6%). The 26 year old made the majors in 2017 and was on his way to a break out year with the Rays in 2018 — compiling a 128 wRC+ and 2.4 fWAR in just 88 games — before a thumb injury derailed his progress. His 2019 was disastrous (below replacement level production) and, after leaving him behind at the alternate camp in 2020, the Rays DFA’d him last year.
Still the 26 year old may offer the Giants something like a better fielding version of Wilmer Flores. The biggest weakness in his profile as a major leaguer is a pronounced tendency to put the ball on the ground — 50% of the time as a big leaguer. He’s spent the offseason working on the ubiquitous “swing changes” and is not sporting a more upright stance with low hands looking to lift and separate. A healthy Daniel Robertson with a more fly ball leveraged swing is definitely a promising addition to the organization’s talent stock. So welcome back to California, Daniel!
Honestly, when you can pick up this level of talent for free (or Jordan Humphreys or Luis Basabe), who needs to move Johnny Cueto?
Sadly, Robertson’s addition meant that Hunter Pence’s time with the Giants has come to a close. Pence, ever the pro, understood what hitting below the interstate means in the big leagues, and he left with the class and dignity that everybody who knows Hunter Pence takes as second nature, rooting on his ex-teammates even as he departed.
We could all use to have a whole lot more Hunter in our dispositions and we will, I think, never see or hear of him without smiling. God speed, Hunter! To the next adventure! Maybe that three-run homer in Houston will end up making a difference for a Wild Card spot for this team!
Have a great week everyone. May there be more moments to celebrate and enjoy in the weeks ahead:
Becoming a go to site.
Consistently excellent content.
Roger, your pieces are so much better than your peers. Better researched, more thoughtful, not trying to be cute or a homer. I always learn something. Thanks!