Nationals Sign Matt Capps

The Nationals have reportedly reached agreement with Matt Capps on a one-year contract for $3.5 million with an additional $425,000 in performance incentives based on games finished.

I actually don’t like this deal for the Nats, at least not as much as I like the idea of signing Matt Capps.  I really think that signing Capps for only one year is a mistake.

As I’ve said before, the Nats can go out and sign all the Pudge Rodriguez’s, Jason Marquises and Matt Capps in baseball, and they will still be a long-shot to win 90 games in 2010.  They need players at reasonable prices who can help them build a consistent pennant contender two to five years from now as they develop young stars.

Matt Capps is young (26 in 2010), coming off a bad year way below his career norms but with good peripheral numbers, and the market for player contracts is way down this year.  In short, the best deal for the Nats would probably have been a three-year deal that would keep Capps in DC for what are likely to be the three prime seasons of his career (age 26 through 28).

Matt Capps’ 2009 ERA was ugly and he gave up a lot of hits and homeruns.  However, he also had a Ks-to-BBs rate of 2.71-to-1 and struck out 7.6 batters per nine innings.

If Capps is healthy in 2010, I think it’s more likely that Capps’ numbers will be closer to his terrific 2007, when he posted a 2.28 ERA in 76 appearances and had a 4-to-1 Ks-to-walks rate, than his awful 2009.  This is mainly due to the fact that he is only 26 years old and typically that’s an age when players are still getting better.

The problem with a one-year deal for the Nats is that if Capps has a terrific year in 2010 (Let’s say a 2.60 or 2.70 ERA with 35 saves), the Nationals still won’t make the playoffs.  A great closer, assuming Capps is one in 2010, won’t help a team as bad as the Nats were in 2009 all that much.  A closer only goes into games to protect leads, and isn’t likely to help in most of the many games where the Nats will be the team trailing in the late innings.

If Capps has a big year in 2010, the Nats can offer him arbitration, but Capps will make far more money then for 2011 than the Nationals could have locked him up for now.  In fact, even if Capps has a mediocre year in 2010 (say, 4.00 ERA and 15 saves), he’d still probably get more money through arbitration than he could have been signed for now, or the Nats have to non-tender him the way the Pirates did this year and lose him completely.

Given the deal he actually signed, I suspect that the Nationals could have signed him to a two-year deal in the $6-7 million range, or at least gotten an option for a second year for a $250,000 or $500,000 buy-out.  Capps probably could not have been signed to a three-year deal, because he is eligible for free agency after year two.  However, Capps likely would have agreed to a two-year deal, because from the players’ point of view, there is a great deal to be said for guaranteed money.

Obviously, a two-year deal entails more risk than a one-year deal.  However, every player acquisition entails some degree of risk, and for the Nationals to become a pennant-contending team, they are going to have to take some well-calculated risks.

One of the reasons I suspect that Nationals only offered Capps a one-year deal is that teams still look back on their glory days before the formation of the players’ union, when all baseball player contracts were for one season, and if a player with a high salary had a bad year, he could be offered much less money the next season or simply released.  Of course, in those days players couldn’t become free agents or go to salary arbitration either.

Some teams definitely still dream of a return to the days when all players could be forced to accept one-year contracts.  The problem is those days are gone forever, and teams need to learn to master the salary regime in place today.  In the current salary regime, sometimes the best player contract from the team’s perspective is a multi-year deal.

For example, sometimes even enormous long-term contracts turn out to be tremendous bargains for the signing team.  Two great examples are the six-year $43.75 million contract the Barry Bonds signed with the Giants before the 1993 season, and more recently the five year $70 million contract Vladimir Guerrero signed with the Angels before the 2004 season.

At the time the Bonds contract was signed, it was the biggest contract ever.  However, it came right after the 1990-1991 Recession when the player contract market was down, and in succeeding years, prices for elite players like Bonds went through the roof as the economy and MLB revenues soared.

Similarly, the year that Guerrero signed his big contract, the market was down, and the Angels managed to lock him in for years at what turned out to be a bargain price.  The Angels picked up Guerrero’s option year in 2009, and he didn’t play well, but that in no way minimizes how good the original five-year contract turned out for the Angels.

If I were a general manager, I would be much less willing to sign pitchers to long-term deals than position players, because pitchers are so much more injury-prone.  In fact, unless the pitcher is so good that you have to offer more years just to sign him, I wouldn’t give any pitcher more than a three-year deal.

That being said, with a player as young and talented as Matt Capps, the Nats’ failure to lock him in for at least two seasons was a mistake.