Pittsburgh Pirates May Have Picked the Wrong Time to Re-sign Sanchez, Wilson

In all fairness, the Pirates' new management had a tough job, coming into 2008, with major "leaks" in the organization, and key players about to obtain free agency and leave.

Not surprisingly, they have often been one step behind where they needed to be. Under the circumstances, they are more to be applauded for their recent "learning" than faulted for their earlier miscues.

The biggest mistake was not trying to re-sign Jason Bay last year, when he protested that he wanted to stay in Pittsburgh. One of three things would have happened:

1) Bay would have been re-signed, thereby providing an "example" to Sanchez and Wilson, or

2) More likely, he would have declined, but management would have learned a valuable lesson then that might have helped them re-sign Freddy Sanchez and Jack Wilson. And

3) If Bay preferred to be traded, maybe he should have been the one to be shipped off to Atlanta for the three prospects, so we could keep at least keep Nate McLouth, who had a contract extension until 2012. (I did say that we should have kept two and traded two of the four outfielders.)

The Pirates' new management has a reputation for "buying low and selling high." That is, they trade away higher-priced veteran players for lower priced players of comparable value, but less experience, in much the manner of Oakland's Billy Beane.

But here's the other side of the coin: buying a given (veteran) player low (when he is having a bad year), to keep him for later years when he is likely to rebound. That's also something Billy Beane would do.

In my "day job" as as stock trader, I like to buy stocks when they are well below their long-term trend line. A few of them will continue to go down. But for every one that does, perhaps three will go back up to where they were earlier, meaning that the four will make money as a group.

In most years, Freddy Sanchez has a playing value averaging $12-$14 million (on a rolling four-year basis) according to FanGraphs. But he had a bad year in 2008 that pulled down that average value to about $10 million. It was then, and not now, that management should have been talking "contract extension" with him for $10 million.

Unfortunately for the Pirates, Sanchez's current value is close to $12 million for the year to date, or about $20 million for the whole year. Now, someone that wants to sign him needs to pony up at least $12 million, and probably more like $15 million. The latter figure is out of the reach of the Pirates.

Jason Bay was another case in point. For his peak years (2005 and 2006), FanGraphs pegged his value at over $20 million (versus the $15 million he's probably worth today).

But then he had an injury-plagued year in 2007, which reduced his trailing four year average value to about $12 million. That's when he should have been signed to another contract extension for that amount.

Jack Wilson is worth on average, the $8 million that he is being offered. But like Sanchez, he is having a banner year, running at a $12 million pace in 2009. Between this, and his recent pique at Nate McLouth's, Nyjer Morgan's and Freddy Sanchez's unhappiness, he didn't have any reason to stay. He probably would have agreed to do so earlier when more of the others were still around.

The Pirates are a low budget team. As such, they need to rely heavily on prospects. But they also need to try to keep a core of veteran players. Re-signing veterans when they have a bad year is not the worst idea in the world.