Pablo Sandoval, Ryan Braun, and Sunk Cost

During the 2014/2015 offseason, the Red Sox signed Pablo Sandoval to a five-year $95-million-dollar contract. Boston needed to fill a hole at third base and decided to sign one of the premium offseason free agents.

Sandoval definitely had his appealing qualities. He was a productive hitter in a pitcher-friendly ballpark and a good defender. Bringing him to Fenway would increase his slash line numbers and he was filling a much-needed hole in the Red Sox lineup. Most importantly, though, free agents nowadays hit the market when they are past their primes and are into their 30s. Sandoval may have already been passed his prime, but he was still relatively young at 28. Therefore, his decline would not be as precipitous as other free agents.

A year has now past and Sandoval was arguably the worst baseball player in 2015 – yes, even worse than Hanley Ramirez. Travis Shaw, a Red Sox “prospect” who didn’t even make a Top-100 list beat him for the starting third base job, and Sandoval’s contract is now an albatross.

One of the unusual factors is that Sandoval was a good player through his age 27 season. While some people had issues with the contract and with Sandoval’s weight, no one could foresee this sort of downfall. Essentially, at 28, it all came apart. Sandoval couldn’t field, couldn’t get on-base, and didn’t hit for any power.

On top of that, Sandoval is being paid a lot of money. In 2016, he’s scheduled to make more than $17 million dollars. What’s unusual is that players who get paid that much money and have Sandoval’s profile don’t typically sit on the bench. They typically get a lot of playing time because, hell, it looks really bad to have that player sit on the bench. You’re essentially, as an organization, admitting guilt, or admitting that you screwed up. That this is a bad contract and we already know it.

Some teams though will play their most expensive players even if they’re not their best option. This train of thought is very problematic. It basically makes teams play a worse player just because of status and money and not based on talent and production.

That’s when the concept of sunk cost comes in. In economics, sunk cost is a cost that has already been made and cannot be recovered. In baseball, it refers to the amount of money guaranteed to a player that has yet to be paid. “The money is committed, and must be paid to a player regardless of whether he’s playing or not,” wrote Joe Sheehan. This is essentially dead money. You are stuck with it, regardless of the player’s health and production. It’s the risk of free agency. When a team wants to sign a player to a big contract, they’re essentially taking a leap of faith. That, that player will perform, even though he is guaranteed to make the money we signed him too.

The principle here is that this money is essentially gone. There might be a few ways in which one can recover it, but those ways are typically minimal and don’t happen very often. After all, the Red Sox and Dodgers trade doesn’t happen every day, and it took a slew of lucky circumstances for the Red Sox to get out of those contracts. Plus, they still had to give up Adrian Gonzalez, who had been a productive player. Therefore, since this money is gone and may never be coming back, the team should still evaluate the players for what they’re worth. Meaning they should evaluate the players based on talent and production. Even if a player is being paid 20 million dollars, it doesn’t mean that that player gives you the best chance to win. If the team can acquire a better player to replace him, they should do that. If a team has a better in-house replacement, than that player should take his place. The team can also look at ways to get rid of the albatross contract, and save themselves some money, but at the end of the day you should be playing your best players, money doesn’t really matter in that respect.

This is a Brewers site, so what the hell am I doing, writing about Pablo Sandoval and his contract? Well, it’s possible that the Brewers someday might be in this same situation. Ryan Braun’s first contract was a good one for the Brewers, but the second contract might have been a mistake. In 2011, the Brewers signed him to a $105-million-dollar extension, through the end of 2020, and that contract starts kicking in this year.

Now, Ryan Braun is still a productive player. Even though he’s no longer an MVP candidate, he’s still a good power hitter, and he’s able to get on base at an above average clip.

With that said, it’s not hard to envision a time when Braun won’t be a productive player anymore. His defense was dreadful last year (-11.6 FRAA) and he’s constantly battling injuries. He’s also past his prime. At 32 years old, he’s likely to be in the declining stages of his career. Therefore, it’s possible that in the not too distant future, Braun’s contract will be an albatross, especially around the time the Brewers are starting to become good again.

The Brewers are rebuilding, but they have a lot of young studs coming up, and coming up quickly. The next question will be, well what do you do with Braun? Michael Reed’s got an ETA of 2016, so we should see him in the big leagues sometime this year. Brett Phillips’ got an ETA of 2017, and Domingo Santana is already in the majors. If Santana and Reed perform well this year, then there won’t be any room in the outfield for Braun next season. One could envision a situation where Braun plays first base, but that could backfire quickly.

Braun has never played first base in the big leagues and hasn’t played the infield since 2007 when he played third base and a dreadful one at that. In fact, Braun’s worst defensive season came when he played third base.

At that point, Braun’s contract and age will be an albatross. The Brewers can therefore do a few things. They can gamble on him playing an adequate first base, which would be a gamble. They can put him on the bench, which would probably make him unhappy and reduce his value. Or they can trade him. None of these are great options, but if the Brewers want to get the best return for they’re buck, they should probably see Braun’s contract for what it is – dead money. Money that they won’t be able to get back, at least not entirely.

Over the past few years, Braun has been around a 2-win player. If he keeps this up this year, then he should have some value in the trade market. If the Brewers are looking to get some prospects back in return, they should eat most if not all of his money. This, however, might be overly burdensome for a small market team, and would hinder them until 2020. Therefore, the Brewers could look to eat a portion of the money and simply dump Braun to whatever team would take him, with limited returns.

The main point here is this, the Brewers have a slew of outfield prospects. I haven’t even gotten into Trent Clark, Tyrone Taylor, Monte Harrison, Demi Orimoloye, and more. Most of them will make their debut before Braun’s contract is up. His skills are fading and at this point, it’s near impossible for the Brewers to get their moneys worth. This was a bad contract, every team hands those out, there’s no shame in admitting it. The Brewers now have to stare reality in the face and get whatever they can for it. Maybe that’s money, by dumping Braun to another team, maybe that’s more prospects by eating most of the money. Either way, if David Sterns’ early tenure is any indication, he will not let Braun’s contract be a hindrance in making a smart and savvy baseball move.

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