Defending the Giancarlo Stanton trade

When the Miami Marlins traded Giancarlo Stanton and $30 million to the New York Yankees for Starlin Castro and a couple of good -- but not top-tier — prospects, the condemnation of the Marlins was swift and unanimous. The Marlins, it has been said, have dumped their marquee homegrown star, their best player, for pennies on the dollar, destroying their leverage by announcing their desire to cut payroll, and betraying their fanbase. MLB allowed an undercapitalized ownership group to take over the Marlins, and they are now short-sightedly ripping apart the team to address their lack of liquidity.

I think there are legitimate concerns about the Marlins’ ownership group’s capitalization and ability to fund the operations of a baseball team. But I also think that, even setting that aside, given the circumstances of the franchise, moving Stanton at this point is a reasonable decision.

Let’s look at the Marlins’ payroll situation coming into the offseason. Cot’s Contracts had the Marlins’ Opening Day payroll for 2017 at $115M — not an insignificant amount. CBS Sports had the Marlins’ payroll to start the season at $111M, which was 20th in MLB. The Marlins weren’t a high-payroll team in 2017, but they also weren’t bottom of the barrel.

Despite having a solid nucleus of good young position players, the Marlins disappointed in 2017, going 77-85, and finishing well out of both the division race and the wild card hunt. And despite their fancy new public-financed stadium, the Marlins finished 27th in MLB in average attendance, and 28th in total attendance — only the Oakland A’s and Tampa Bay Rays had fewer paying customers go through the turnstiles at their home games. They also have one of the lowest paying local TV deals, according to this Fangraphs piece from 2016. Or possibly the lowest -- the Miami Herald in September said that the team’s local TV deal with Fox is the “lowest in baseball,” and doesn’t expire until 2020.

So the Marlins are at or near the bottom of all MLB teams in revenues from attendance and television. And heading into 2018, quite a few players already with the Marlins were looking at significant raises. Looking at Cot’s again, we see that the Marlins have around $107M in payroll commitments at this point for 2018, including estimates for arbitration-eligible players and players making the league minimum to round out the active roster. If we put Dee Gordon and Giancarlo Stanton back in — two players who the Marlins have dealt since the start of the offseason — that would put the Marlins projected payroll for 2018 at around $142.3M.

So if the Marlins just stood pat — didn’t add anyone from outside the organization at more than minimum salary, and just kept the players they had under team control for the 2018 season -- their payroll would go up $25-30M. That would have put the Marlins right in the middle of the pack in terms of payroll for the 2018 season, despite being at the bottom of the league in revenues.

New ownership stepped into a situation where they had a somewhat below average team on the field in 2017, a bad farm system (Baseball America ranked the Marlins’ farm the worst in baseball coming into 2017), a middle-of-the-pack payroll projected for 2018, and bottom of the barrel revenues.

If new ownership wanted to try to win now, dealing prospects for immediate help isn’t really an option, given the state of the farm. Instead, they’d be looking at spending in free agency on pitching help — and in particular, starting pitching help — and raising payroll to the $170-180M level. To put this into context, a $170M payroll would have been the ninth highest in MLB in 2017, a $180M payroll the fifth highest in MLB. Miami would be committing to a top-third payroll with a bottom two or three revenue stream, and still would likely be projected to be the second best team in their division.

If Miami wasn’t going to spend the money to make moves to make the team a potential contender this offseason, it would seem to make sense for the team to go into rebuild mode. Marcell Ozuna and Christian Yelich are very attractive players who could bring a return that would help jump start a rebuild of the farm system, and there are other pieces that could be moved to hasten the process.

Which brings us to Giancarlo Stanton. After the 2014 season, the Marlins and Stanton agreed to a 13 years, $325 million contract extension, which included an opt-out after the 2020 season and a full no-trade clause. It was a monumental commitment to the team’s cornerstone player, but also a commitment that gave Stanton a great deal of power — the opt out ensured he could leave if he wasn’t happy with the state of the Marlins or if he thought he could get more money on the open market, and the no-trade clause ensured he would control his own destiny when it came to where he would land.

As recently as a year ago, the Stanton contract looked like a major albatross for the Marlins. In 2016, Stanton put up a .240/.326/.489 slash line in 470 plate appearances over 119 games, and missed much of the last part of the season with a groin strain. It was the fourth time in five years that Stanton had failed to play in at least 125 games, and even back in 2015, there was talk about whether Stanton was injury-prone.

All that was forgotten in 2017, when Stanton played 159 games, hit 59 home runs, and won the National League MVP in his age 27 season. The d.l. trips, the recurring lower body injuries, all that was history, as Stanton became one of the great stories in baseball last year.

Faced with this, the Marlins had a decision to make. Stanton was in his prime, coming off an MVP season, and his value would never be higher. The team was going into a rebuilding mode, meaning that, if they kept Stanton, they’d be paying him $25-26M per year for the next three years to play for a team going nowhere. And at the end of that three years, Stanton would either opt out, leaving the Marlins with nothing...or, worse, he would not opt out, acknowledging that the $218M he was owed over the next seven years was well in excess of what he could get in the open market, leaving the Marlins with a huge payroll obligation for a player that wasn’t worth that amount.

That $218M was a potential time bomb, a huge obligation, which, in conjunction with the no-trade clause, significantly altered the calculus of the Stanton contract. The upside of the Stanton contract is that you pay $77M over three years for a terrific corner outfielder who would then opt out and seek a new deal. The downside of the deal is that, if Stanton was slowed by injuries or didn’t perform to expectations, you have a huge amount of dead money dragging the team down for another seven years.

If you are a contending team, particularly a contending team with a large payroll, that opt out is less of a concern. Big money free agent deals are generally signed with the idea that a team is trying to win in the immediate future, understanding the risk -- even the likelihood -- that in the later years of the deal, the contract will look unpalatable. For a rebuilding team, however, a long-term contract with an opt out offers the worst of both worlds. If the player is good, he will opt out and be gone when you’re ready to contend. If he’s not good, you’ll have an enormous salary obligation weighting you down in the years when you are ready to try to win.

And the full no trade clause Stanton wields complicates things further, since it diminishes your pool of available trade partners. Not only do you have to find a big market team trying to win now that is willing to take on the enormous contractual obligation with its associated risks, it has to be a team that Stanton would approve a trade to.

Which is why I don’t agree with the arguments that have been advanced that, by virtue of telegraphing that they were intending to move Stanton, the Marlins undercut their market. The market was already limited. There were only a handful of teams interested, but still enough to provide for multiple bidders. The St. Louis Cardinals and San Francisco Giants, for example, apparently made similar offers for Stanton, had trades agreed to, only to have Stanton veto them. Even if you have a motivated — even desperate -- seller, if you have multiple bidders you should end up getting fair value for your asset.

I’ve seen it argued as well that this deal was an awful deal for Miami because they subsidized a below-market contract and got little back in return. That assumes, incorrectly, I believe, that the Stanton contract is a below-market contract. None of the suitors were willing to take on the Stanton contract with some financial contributions from the Marlins, which would certainly seem to indicate that no one would have been willing to give Stanton a 10 year, $295 million guaranteed deal with a full no trade clause and an opt out after year three if he had been a free agent this offseason.

Interestingly, if we look at the list of teams that Stanton was willing to waive his no-trade clause for — the Cubs, the Astros, the Dodgers, and the Yankees — the first three in that group include three front offices generally considered to be among the best in the game. The Cubs and Astros apparently never seriously bid on Stanton. Per Jon Heyman, the Dodgers would only pursue Stanton if the Marlins took on a lot of the Dodgers’ short term obligations, ultimately requiring a subsidy of $75 million from the Marlins, due to luxury tax and debt rule issues. If three of the best front offices in the game were unwilling to take Stanton and his contract without the Marlins kicking in money, doesn’t that indicate that, contrary to assertions, the Stanton deal is not a below-market contract?

I’ve also heard it argued that because the Dodgers are trying to get back under the luxury tax to get their tax rate re-set and because of their debt rule issues, they are a special case and don’t really count, that the Dodgers really did think Stanton’s contract is a good one but were stifled by those MLB rules. My response is that that’s exactly why MLB has those rules in place — to keep teams like the Dodgers from scarfing up every expensive player on a long-term deal. The market value for contracts inherently includes the impact of the luxury tax and debt ceiling rules, and the fact that those things limited Stanton’s trade market is part of the reason why his contract isn’t below market value, not an explanation for why it couldn’t be moved despite it being below market value.

So ultimately, at the end of the day, there was one deal to be had, with the Yankees. The Marlins will kick in $30 million on the deal if Stanton doesn’t opt out (and I will predict now that I don’t think Stanton will opt out). The Marlins limit their financial exposure, get out from under a huge obligation that had limited upside for them (due to their rebuilding) but huge potential downside, and get a couple of decent prospects and a second baseman they can flip in the process. Under the circumstances, I understand why they pulled the trigger.

The counter to that is, well, the Marlins didn’t have to trade Stanton now...they could hold onto him, and look to deal him at the trade deadline, and hope that he’d expand the number of teams he’d be willing to be traded to. My response is...and what’s the upside? If they trade him halfway through 2018, it costs them $12 million, the chance of getting a materially better package back doesn’t seem that great, and they are assuming the risk that Stanton will continue to stay healthy and perform. If Stanton regresses somewhat, or lands on the disabled list again with another hamstring issue or groin strain, they’ve cost themselves even more money chasing after what would likely be an insignificant upgrade in a potential return.

My final thought on this is...rather than condemning this from the Marlins’ standpoint, shouldn’t we be celebrating that a player was able to use his leverage to get out of a situation he no longer wanted to be in and control where he landed? Stanton didn’t want to be on a bad, stripped-down Marlins team, toiling away his best years in front of an empty home park on bad clubs. He wanted to win, and he wanted to control where he would go to try to win. Those angry about this trade (largely, I think, because he ended up with the Yankees — I can’t imagine this level of vitriol if he’d accepted a trade to the Giants) seem to feel that the Marlins and Stanton are obligated to remain stuck with each other, despite each party wanting to move on, out of some sort of sense of obligation.

That makes no sense. The Marlins are better off having made this move now, and Stanton is better off. And I will predict that, five years from now, this deal won’t look like a steal for the Yankees.