Warning: Police Report Potential Baseball Sighting in Philadelphia

Just when you think they are out, they pull you back in! The Phillies, now sporting their first three-game winning streak of the season (let's be honest, first winning streak of the season), are starting to look like a real baseball team. That's three straight days with a solid starting effort, no blown saves, and a little bit of offense. Utley and Victorino have been ginormous over the last 3 games, and Rowand is riding a bit of a hitting streak. Rollins had a phenomenal day yesterday. Hopefully those guys all level off and stay as good as we think they are (or stay hot, that would be fine) and Howard wakes up. Then the offense is back to where we know it should be, and need it to be, and we can get back in this divisional race. Still plenty of Mets and Braves games left!

The purpose of this post is mostly to show that we do say positive things about the Phillies, too. Therefore, I won't mention the team's past experience with scoring 10 runs one day and 1 run the next. We can pitch and moan when they lose, let's just savor the winning streak (which I have now officially jinxed) while it lasts.

First Day of Summer

In my calendar, today is the First Day of Summer. You can tell because it's Opening Day. This works much beter with people who talk about hope and beginning anew - that is the stuff of spring, and spring training. Now it is April, and we can start eliminating the Orioles, Nationals, Devil Rays, Royals, Rockies, and Pirates from playoff contention.

Luckily for me living in DC, we are opening against the Braves, which means I get the game on TBS. As I sit here watching the first pitch (fastball, outside corner, strike 1!) of the Phillies' season, here are a few Phillies predictions to put me on the record for 2007.

1. Cole Hamels will not win 15 games. Brett Myers will. Hamels is still a year away, because he will walk too many.

2. Pat Burrell will drive in 100 runs.

3. Ryan Howard will hit 50 home runs.

4. If he isn't your hero yet, Chase Utley will be your hero by the end of the year.

5. I will not have goosebumps. It's going to be a fun year anyway.

Random Philly Sports Notes

Just some random recaps from the week:

Spring Training

The Phillies packed up their big rig for Clearwater. This article details exactly what goes to spring training with the team. My favorite:

There were 400 batting helmets on the truck? Four hundred?

"We have them with the [ear] flap on the left, with the flap on the right, and some with double flaps," Sheridan said. "We have them from size 6 7/8 to 8. Howard wears a 7 5/8. Todd Pratt wore an 8. And we have a few extra for Chase."

Sheridan explained that fiery second baseman Chase Utley can be a little hard on helmets.

"He'll go through six or seven a year," Sheridan said. "Somehow they end up having accidents, as he likes to say."

Schmidt and Burrell

Mike Schmidt critized Pat Burrell again, this time throwing Adam Dunn under the bus too, for striking out too much. This article details the interview.

Now I realize Schmidt has reached immortal status where he can say whatever he wants to the media (Curt Schilling is still striving to attain that status), but seriously, come on now, Mike! Critizing players for striking out too much, just like you, and saying they need to have a revelation, at 30, that you're having at 58. There isn't anything wrong with wishing the players well, but it comes off as a pointless scold from a stereotypical senile elder.

I'll ignore Adam Dunn because he doesn't mean anything to me. Schmidt is obviously the far better player than Burrell. Schimdt struck out 127 timees for an average 162 game season in his career to Burrell's 166. Schmidt's highest year exceeds Burrell's (180 to 162), though Burrell has been consisently higher (lowest career total is 130 to Schmidt's 80s towards the end of his career).

I realize Pat was a moron and refused Schimdt's help during his horrible slump year's back, but it seems like this interview was almost done out of spite. If Mike really wanted to help, I think he could have given Pat a call or paid him a visit to discuss things. Then, go to the media afterwards and talk about the chat they had. But, like I said, who am I to criticize Schmidt. Hopefully it doesn't shake Pat too much.

Jeff Garcia

This article pisses me off. Now I'll admit Jeff Garcia didn't pick the headline, and some of his words were most definitely taken out of context, but if Jeff Garcia is even thinking about leaving Philly for a starting role for a bad team, he's a complete and utter fool. The man is not starting QB material, not anymore atleast. He is for a few teams, but that only means that they don't have any talent on the roster. He just came from two bad situations (see Browns, Lions) where he got to start for last place teams. He's not getting any younger, and you would think he would be willing to resign with the Eagles for close to the minimum for another shot at the Super Bowl. Either that, or go start for the Bears since they clearly could have used him.

I also think it's a joke that another article I saw made resigning Garcia a priority saying the Eagles won't go to the Super Bowl without a capable back up behind McNabb. If McNabb doesn't stay healthy for a seaon, the Eagles will never win the Super Bowl during the McNabb era, unless we end up with the Joe Montana, Steve Young combination. McNabb is still the best quarterback on the team, and one of the best in the league. You need a back up to fill in for a couple games, but if he goes down for the season again, we are simply not winning it. The team is not built with enough talent to have a disposable quartback. It was nice that the players rallied around Garcia, but he should not be the QB of this team. Overpaying for a capable backup, such as him, would be a huge mistake this offseason. Let him start for a bad team for an inflated salary and a losing record.

Weird note:

I was looking at the Phillies spring training roster and noticed that Tom Gordon and Jamie Moyer, the team's two oldest players and integral parts of the team's pitching staff, share the same birthday (11/18) exactly five years apart. Combined, they have 83 years of life experience. The same amount as Chase, Jimmy and Ryan Howard combined (whose birthdays are all around the same time as well, 12/17, 11/27, and 11/19 respectively).

Baseball Economics: Breaking Down Utley's Contract

In response to Jeff's comments regarding his disproval over the backloading of Utley's contract hurting the ability to trade him after his peak years, I decided to mix my finance background and love of sports to do an analysis of the VALUE of Utley's contract.

First off, the Phillies would never trade Chase Utley, Jeff, and prepare for an afterlife in Phillies purgatory for even mentioning that slander. Second, if Chase were to suffer a career ending injury, we have to pay him the money either way, so it wouldn't matter how much of the contract was left.

Now, let's get into the contract as it was originally signed:

Signing Bonus: 2 Mil
2007: 4.5 Mil
2008: 7.5 Mil
2009: 11 Mil
2010: 15 Mil
2011: 15 Mil
2012: 15 Mil
2013: 15 Mil

Total: 85 Mil/7 years

Now, Chase Utley will never actually see that 85 Mil, and not just because of taxes. To illustrate the VALUE of Utley's contract, I'm going to use the compound interest formula to show what Utley's contract will be worth at the receipt of his last paycheck. Then, I'm going to use the Time Value of Money formula to find the value of the contract in today's dollars. I'll compare that to a balanced contract, as Jeff suggested, and also a contract built around paying the highest dollar for "peak" performance, meaning his 29-32 aged years.

Before we start, we're going to throw out the signing bonus, since it will be a constant for all 3 contract types, and simply make extra work. The compound interest formula will calculate the future value of each contract year, by assuming that every penny is invested. It doesn't matter if Chase invests his money or not, this rate will only serve as a constant and will work both ways (when we find the Present value, too). Otherwise, we could just be boring and adjust the future rate for inflation. Anyway, the generally accepted finance rate of return for standard investments is 8% (11% Stock Market historical average - 3% accepted inflation). Here is the formula for compound interest:

Total = Principal x (1+Rate)^years

The first year, for instance, would read:

Total = 4.5 Mil x (1.08)^7
Total = 4.5 Mil x 1.71
Total = 7.71 Mil

So the first year of the contract will be worth 7.71 Mil in 2013. If you do this for each year, raising it to one less year each time (for example, year two would be raised to the 6th power) and add up all of the totals, you get 108.78 Mil.

Next, we find the Present Value of that sum using the Time Value of Money. The Time Value of Money formula states:

Future Value = Present Value x (1+r)^years

The math works as follows:

108.78 Mil = PV x (1.08)^7
108.78 Mil = PV x 1.71
63.61 Mil = Present Value

That means that if Chase's contract was settled in one lump sum today, he would be entitled to a check for almost 64 Mil, not the 85 Mil reported in the contract. The 85 Mil does not represent an actual number that will ever be realized. It's the addition of 7 static payments, at 7 different times (in actuality, the contract will be paid in hundreds, if not thousands of small increments, and may even be deferred with interest until well after his playing years).

Back to the point, though, on to the other contract types. The balanced payment model is actually a lot easier to compute since it represents an annuity and requires only one calculation for the compound interest instead of 7 (a lot of this could actually be simplified into one calculation, but I've taken the long way to illustrate things better). The annuity formula reads:



Now subtracting the signing bonus from the contract gives us 83 Mil. Over 7 years, that's an average of 11.86 Mil per year. So the math reads like this:

Total = 11.86 Mil x [((1.08)^8 - 1)/.08] - 11.86 Mil
Total = 11.86 Mil x [((1.85) - 1)/.08] - 11.86 Mil
Total = 11.86 Mil x [.85/.08] - 11.86 Mil
Total = 11.86 Mil x 10.63 - 11.86 Mil
Total = 126.15 Mil

We use the same Present Value formula from before to get 73.77 Mil. That means that the Phillies would be paying almost 10 Mil more in today's dollars to sign Utley for a balanced contract. So yes, the Phillies may have trouble trading his 15 Mil per season for the final 4 seasons. The net savings of 10 Mil in today's dollars, however, more than offsets any contract they have to eat down the road. In fact, the value of the final year of his contract in today's dollars is 9.5 Mil, which is less than the money they save by backloading it to being with. That means that they essentially get the final year out of him for FREE compared to a balanced contract that was one year shorter. So if worst came to worst and they had to trade him in the offseason before his final year, they could eat his entire remaining 15 Mil in order to net a few prospects, and still turn a small profit over a balanced contract of one year shorter. Or they could trade him with two years left and pay half his salary, while netting out at 0 or a slight profit and get players in return. All of this ignores the fact that given the market, and Utley's natural abilities, he may still be a bargain in 2012 and 2013 at 15 Mil.

I also did one more calculation, just to round out the picture. If the contract was built around his peak years, maybe resembling this:

2007: 7 Mil
2008: 10 Mil
2009: 12 Mil
2010: 15 Mil
2011: 12 Mil
2012: 10 Mil
2013: 7 Mil

It still adds up to 83 Mil (without the signing bonus) over 7 years. The math for this contract gives you a future value of 121.84 Mil and a Present Value of 71.25 Mil. That is a slight improvement over the balanced contract (because you're paying him less early on) but still doesn't compare to the current contract.

So what does this all mean...that the Phillies have some bright accountants who know how to design a contract. Chase also had no bargaining power and couldn't really squabble over details anyway, but he'll get his money and the Phillies will get their man (right after his wife is finished with him, that is).

On a sadder note, Vern Ruhle, former Phillies pitching coach died at 55 from cancer. That's a tragicly young age for anyone to pass. Vern was only with the Phils for a couple tough years, but reports around baseball say he was outgoing and a good man.

Phillies sign Utley through 2013

The Phillies signed Chase Utley to a 7yr/85 Million dollar contract extension. Every Phillie fan in the nation is breathing a sigh of relief, knowing that, barring injury, Chase will be patroling the right side of the infield for the foreseeable future. Yes the Phillies could have settled on a one year deal, or tried their hand in arbitration, but Utley deserved to be rewarded, and Pat Gillick smartly realized that the time was now. With Rollins singed through 2010, the most productive middle infield combination in the history of the National League gives Phils fans reason to cheer for years to come.

Not to diminish Utley's moment in the sun, but I wanted to compare this deal to another current Phillie, Pat Burrell. Everyone remembers (and now disdains) Burrell's long contract extension after he powered his way onto the scene in 2002.

Let's compare the numbers:
Utley


Burrell


While the numbers are similar, Utley has been head and shoulders above Burrell, considering that the power numbers are close, and Utley is not a prototype power hitter. Utley has a slight edge in games played, but the most important factor here
is consistency. Look at the gap between the year before the extension and the career numbers. Utley's career averages were close to his most recent year, suggesting a stable, consistent trend. Burrell's averages were far from his breakout year, hinting that it could have been a fluke, or simply a slight aberration from a streaky player.

There are other factors here that I am overlooking, namely that power hitters are streaky by nature and the fact that Burrell had established himself in college, as one of the greatest collegiate hitters of all time. But if contracts were given on college stats, we would have signed JD Drew. And because power hitters are streaky, maybe that requires a little more time before locking them up long term if they don't find consistency early. Ed Wade chose to hope for the best, and locked Burrell up on a 6 yr/50 Million dollar contract, heavily back loaded, as we are experiencing now.

While you can't predict how Utley will fare for the next few years (same as you couldn't with Burrell), you can control when you give the extension, making sure the player has established himself, so it is less likely that their numbers will regress. Utley has shown consistency for two and a half seasons, as he's established himself as arguably the best second basemen in the league.

And while fans were clamoring for Aramis Ramirez this offseason (who eventually took a reported 'hometown discount' to stay with the Cubs at 5yr/75 Million), I can only say that Utley's deal is not only more important to this franchise (than Aramis to the Cubs), but Utley is a better players, and will make slightly less money per year over a longer term (though it's noted that Utley had no bargaining power as he could not yet test Free Agency). It can be argued that the drop off from the top tier second basemen is greater than the drop off from the top tier third basemen, making Utley's position even more valuable, too.

Regardless, this is a great signing by the Phillies, as Utley has put up incredible numbers, and shown promise and consistency. I can't guarantee, but I would be extremely surprised if we ever heard Utley's deal compared to Pat Burrell's (at least in the light of unrealized expectations) again.

Philadelphia Optimism?

Leave it to Chase Utley to pick the city of Philadelphia up when it's down (certainly no easy task). Excerps from his interview in the Inquirer:

"I'm very excited," Utley said. "I expect Ryan to come out and be ready. I actually think he still has room for improvement. The same with Jimmy, as well as myself. I think I can play better. I hope - actually, I don't hope - I expect everyone to want to get better."

"Two years in a row, we've been one or two games out of the playoffs, and I don't want that to happen again," Utley said. "We need to come into spring training from day one and be ready to go. We know what it takes to win - we've just got to do it."

And if for some unknown reason you still need proof:

'They were the most productive trio of infielders in baseball last year. None exceeded the group's 362 runs, 576 hits, 115 home runs or 334 RBIs. The trio outproduced Derek Jeter, Alex Rodriguez and Jason Giambi of the New York Yankees, and Carlos Delgado, David Wright and Jose Reyes of the New York Mets.'

So the future of Philadelphia sports isn't as gloomy as the last few weeks.

The full article can be found here: http://www.philly.com/mld/philly/sports/baseball/16467919.htm