How The Nationals Can Afford Cliff Lee & Potential Back-up Plans
I know the Nationals chances for landing Cliff Lee look dim after both the Yankees and the Rangers increased their offer yesterday, but I wouldn’t count them out just yet. The Nationals have the money to spend and if they want to, they can match any offer to Lee. Also, as the Jayson Werth deal showed, they are willing to offer a contract that goes above the consensus of what a player is worth.
Many people were surprised that the Nationals were able to offer Werth that kind of contract, as well as be in on Cliff Lee, but I think it is time we stop thinking of the Nationals as a small market team. They are in a top 10 television market and share in owning a television deal with the Baltimore Orioles which gives them even more expansive coverage. While the Orioles own the lion-share of MASN still, the Nationals own a significant percentage (that continues to grow each year), as well as a price guarantee for their broadcast rights. Despite having the lowest viewership in the country, the Nationals have been making quite a profit for their broadcast rights. Washington D.C. is also surrounded with many of the richest counties in the country throughout Northern Virginia and Maryland, as well as a number of companies. Both of which should make selling their luxury boxes and premium seats fairly easy when there is a quality product on the field. Combine that with one of the richest owners in the country, and the Nationals should have no trouble affording Werth and Lee.
In addition to their various revenue streams, the Nationals have two other things going for them to be big spenders in free agency. The first is the fact that their payroll has been pretty low since they’ve moved to Washington. Meaning they have some money saved up to afford to splurge on some big name free agents. The second is that even if they sign Cliff Lee for $25 million a year, their payroll will be just around $90 million. Which isn’t bad when you consider they added two of the top free agents for a combined $43 million year. (*Note I assumed they signed a 1B like LaRoche or Lee for roughly the same money that Willingham will make. Which will make it a wash when they trade him). The Nationals will also have another $11 million coming off the books after this season, giving them more financial freedom in the future.
The Nationals should have no problem maintaining a payroll north of $100 million if they are competitive, given the added benefits of a rich owner and previous savings it can be even higher. Washington is also blessed in the fact that they don’t have a single significant free agent for the next three years (again assuming Willingham is traded). Everyone of their key contributors or stars are locked up for at least that long (and most aren’t eligible for 5 or more years). This gives the Nationals a window to spend big on the open market before they need to extend R. Zimmerman, J. Zimmermann, Strasburg, Harper and anyone else. Also by spending now, they can build the fan base to support them giving even more lucrative deals to their own stars in the future. In addition, if the Nationals become a contender, guys like Zimmerman, Strasburg and Harper might be interested in staying around awhile longer.
So what does all of this mean, and what kind of contract can they offer Cliff Lee? If I’m the Nationals, I offer Cliff Lee a 6-year $168 million contract. I would have the first five years average $26 million, with $25 million in the 6th year. I would add both a 7th and 8th option year at $20 million a piece, with a $13 million buyout for the first option and a $5 million buyout for the 2nd option year. The high buyout in year 7 would be almost like a guarantee that it would be picked up, but protect the Nationals if he can’t pitch effectively any longer. With the 7th year almost guaranteed, Lee’s 7 year total will be $180 million (when you count the 2nd buyout at $5 million). That would give Lee a 7 year average of $25.7 million, but the Nationals would have their ace.
Now it is possible that Lee could still choose the Yankees or Rangers, but it would be mighty hard for Lee to turn down between $168-180 million, plus a few nice perks, if the Nationals offer it to him. If Lee doesn’t come to Washington, the Nationals need to have a Plan B. Unfortunately the pitching market is pretty bare after Lee, with Carl Pavano being the next best option. Pavano is a nice pitcher, but far from an ace. The Nationals might not want to get into a bidding war for a mid-rotation starter like Pavano.
It is likely the Nationals will turn to the trade market, but top targets like Zack Greinke and Matt Garza aren’t great fits for the Nationals because of how much they cost. Now their salaries aren’t the problem, but what they cost in terms of prospects is. Both the Royals and the Rays want to be blown away in a deal (as they rightly should), and the Nats don’t have the farm system depth to ‘blow them away’ and not significantly hurt their future. Geinke may be worth Jordan Zimmermann, Ian Desmond, Derek Norris and a few other prospects, but that would leave more holes than it is filling. The Nationals need an ace in front of Zimmermann, not a pitcher replacing him.
Right now the trade market isn’t going to bring any stars to the Nationals unless they hurt their future. Instead I’d do a combination; and add a prospect (likely in a Willingham deal) who is nearly major league ready, a injury reclamation type (i.e. Brandon Webb/Chien-Ming Wang), and a veteran starter on a one year deal (i.e. Kevin Millwood, Jeff Francis etc.). No that group won’t come close to producing like Lee or Greinke, but they can make up for a Pavano/Garza type of pitcher, with the chance of being even better (depending on the prospect or reclamation project). It’s not a perfect solution, but it prevents the likes of Craig Stammen, J.D. Martin etc. from making too many starts. It would also keep the Nationals young major league talent together, and allow them to use some of their relief/minor league depth to trade for a young center fielder, which is an area of need.