Thursday, March 21, 2013

The Twins won't Stash Hicks at AAA

There has been a lot of speculation about the Twins sending Aaron Hicks to AAA to start the season as some kind of budget management strategy. This is usually based on the idea that they can save money by delaying Hicks eligibility for arbitration and/or free agency. The logic of this gets explained here for Wil Myers, the Tampa Bay prospect recently sent to AAA, Wil Myers Super Two.

Unfortunately this fairly standard analysis misses the real problem with this. If Hicks opens with the Twins and stays in the big leagues, he will get paid something near the major league minimum for three years, then he will get arbitration for three years and then he will be a free agent. That assumes that the Twins don't negotiate a longer term contract with him during that time, as they did with Denard Span. That means Hicks will be eligible for arbitration for 2016 and a free agent for 2019.

The idea of sending Hicks to AAA to start the year is that they delay his eligibility for free agency until 2020 by having him spend part of this season at AAA. If he spends enough time at AAA, they can also delay his eligibility for arbitration until 2017.

The result is that they only pay major league minimum for whatever time Hicks spends in the majors this year. And they still get six years of minimum salaries and arbitration before Hicks becomes a free agent. In essence, they are trading whatever time he misses this year while in  the minors, for the 2020 season when Hicks will be 30 years old. Of course, this is a bit of a gamble since a lot can happen in seven years. If Hicks improves as he gets older, his arbitration salaries will be higher than they would have been. If the Twins negotiate a long term contract, he might very well have more leverage as an older, more established, player. So, while there are still the same six years, the financial costs of those six years may increase.

In short, there is not really any guaranteed financial advantage to delaying Hicks entry into the big leagues. Its a short-sighted strategy.  Which is likely the reason Terry Ryan says the Twins don't do this, didn't do it with Joe Mauer and won't do it with Aaron Hicks.



6 comments:

Anonymous said...

I'm almost positive you're wrong about this, but okay. Hicks needs to show better plate discipline, and the Twins are going nowhere in 2013. It makes perfect sense to stash him in AAA for development reasons alone. Finances make it a near certainty.

TT said...

"I'm almost positive you're wrong about this"

I guess we will find out in 10 days.

Anonymous said...

You only have to send him to the minors for 3 weeks to gain the 2020 season. It would be short-sighted to keep him in the majors.

TT said...

In three weeks, they would lose him for 10% of the games this season where he is paid the minimum salary. In 2020, he would be in his fourth, most expensive, year of arbitration. A lot can happen by then. He will almost certainly have lost a couple steps in the outfield.

The bigger problem is that making decisions like that is a lousy management. You have told everyone in the organization that you are willing to sacrifice their chances to win this year to save a few bucks. That isn't the way to build a winning organization.

Anonymous said...

Isn't Mastroianni hitting over .400 this Spring while playing good D and stealing a bunch of bases? Explain to me again why Hicks in AAA for 3 weeks is bad. Saying that this is somehow this "sacrifice" for a few bucks is ludicrous. Playing a raw rookie over a more seasoned player having a great Spring is not the obvious choice here.

TT said...

If they think Mastroianni is a better player, then he will win the job and Hicks will start the year at AAA. At that point, whether that is for three weeks or three months will be determined by Mastroianni's play.

I don't think that is going to happen.

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