Holliday, Pujols and Contracts

Could the St. Louis Cardinals' salary structure accommodate a trade for Colorado's Matt Holliday? What about Albert Pujols' extension? Is there room for another superstar contract?

When considering the rumors of the St. Louis Cardinals trading for Colorado Rockies star Matt Holliday, The Cardinal Nation seems divided.

There are issues surrounding the loss of the players reportedly to be given up, concerns over whether Holliday is a freak of the mile-high altitude of Denver, with non-superstar numbers delivered elsewhere as well as questions over how much of the club's existing financial flexibility would be exhausted by acquiring another outfielder while open needs in the middle infield, left-handed relief, closer and starting pitching are not being addressed.


Yet, to me, this discussion quickly evolves to a discussion of contracts – and not just those of the players involved in this proposed trade.


If the Cards send three players to Colorado, outfielders Ryan Ludwick and Skip Schumaker along with starter Mitchell Boggs, for example, there is considerable inherent risk. None of the Cardinals three are anywhere near free agency, with Ludwick the closest at three years out. For the foreseeable future, Holliday will make considerably more than the three Cardinals combined.


On the other hand, Holliday has just one season remaining prior to free agency, one in which the Scott Boras client is set to make $13.5 million.


Would the Cardinals dare risk making a trade for Holliday without an extension agreement locked down? Sure, they did it with Mark McGwire, but that was a different player in a different time.


Without that extension in hand, they would reportedly give up three MLB players for a single year of Holliday and the chance for a couple of draft picks - not a good deal, in my humble opinion.


What would it take to keep Holliday and Boras happy long-term?


A very, very important data point is that the 28-year-old Holliday turned down an extension offer from the Rockies last spring that totaled four years, $82 million, or an average annual value (AAV) of $20.5 million.


That means any deal the Cardinals make would surely be expected by Boras to top the Rockies' spurned offer.


Let's take a very conservative view that four years, $84 million would be a starting point in negotiations. Given the Cardinals' desire to back-end load contracts, let's assume the offer would break down as follows: $19 million in 2010, $20M in 2011, $22M in 2012 and $23M in 2013.


Therein lies the rub.


Superstar Albert Pujols, 28 years of age like Holliday, is set to make $16 million in 2010 and $16 million again in 2011. The latter is a club option which will surely be picked up.


How could the Cardinals pay the newcomer Holliday more than the franchise icon Pujols for two seasons?


They can't and won't.


The Cardinals have been very firm in managing to a team salary structure that pays their stars the most money. This was emphasized when the organization extended Chris Carpenter's deal two years sooner than required. One factor in their decision was their attempt to sign then-free agent Jason Schmidt at a higher salary than their incumbent ace.


The ink on that extension was barely dry when Carp suffered his Opening Day 2007 elbow injury and subsequent Tommy John surgery, followed by unresolved nerve ailments in his shoulder and elbow. In the two seasons since the extension, Carpenter has appeared in just five games and his 2009 health and role remains the largest question mark on a Cardinals team full of them.


The status of Pujols' elbow, the off-and-on again focus of drama queens all over baseball, still has to be considered a risk factor. If his recent surgery for decompression and transposition of the ulnar nerve doesn't moderate the pain and reconstruction of the medial collateral ligament is eventually required, an entire season will be lost at whatever point the procedure is done.


What would it take to ensure Albert is treated fairly?


First of all, Pujols' current deal would need to be sweetened to pay him more than Holliday in 2010 and 2011. Estimated cost: at least an incremental $9 million - $4M in 2010 and $5M in 2011.


Now, let's move on to the extension.

In terms of years, six plus an option year would be a lot, but in fact, is one year less than Pujols' current contract. I could see the Cards having to add a year, though if I was on the other side of the table, I would play up the two years of increased value on the current contract.


In terms of the market, here are some other data points from around the game. Yankees Alex Rodriguez and Derek Jeter will make $32M and $20M respectively in 2009 and Manny Ramirez has reportedly been offered $25M per year for two or three years to remain in Dodger blue.


While Cardinals fans are fond of hoping for hometown discounts with players, the fact is that Pujols has been a bargain for the club in recent years. While I think he would take slightly less to play in St. Louis, I don't think the Cardinals can succeed with an insulting, low-ball offer, nor do I expect them to make one.


From my point of view, I don't see how the Cardinals could land Pujols without paying at least $25M in average annual value. Over six years, from 2012 through 2017, that would be at least $150 million, plus the extra $9 million to cover the "Holliday raises" for 2010 and 2011.


In this scenario, the hypothetical amounts could be $20M and $21M in 2010 and 2011, followed by $23M, $24M, $25M, $26M, $27M and $28M with a $5 million buyout or $30M in 2018, when Pujols would be 38 years old. The total value of the extension would be $167 million. If the 2018 option was picked up, for the nine years from 2010 through 2018, Pujols would make $224 million, an AAV just a hair short of $25 million per year.


So, in assessing the cost of bringing in Matt Holliday, one should consider adding in an additional $9 million or more in pay to Pujols for the 2010-2011 seasons as well as cutting up to two years off the time they would have to further assess the future health of El Hombre's elbow.


Is it worth it?


With a total payroll planned to be in the $110 million range, can the Cardinals afford to have between $45 million and $50 million locked up in two superstar players? Or, $60-plus million in three, including Carpenter, who is under contract for three or four (with option) more seasons?


It is not easy to forget how many millions the club had tied up in players that could not take the field in 2008, including Carpenter, Mark Mulder and Juan Encarnacion. If the Cardinals are planning to considerably grow their player payroll in upcoming seasons, it would be a positive, but there has been no indication that is on the horizon.


Still the nagging issue remains whether the Cardinals could work out a Holliday extension now, anyway.


Boras' history is to take his players into the market as free agents. Others point out the recent Kyle Lohse extension as evidence of a kinder, gentler Boras evolving without acknowledging the uniqueness of Lohse's situation. He was left high and dry when Boras passed up an offer to remain in Philadelphia for three years and didn't receive another call until mid-March. Lohse made it clear that wasn't going to happen again.

Boras' recent actions (such as voiding first-round pick Pedro Alvarez' contract to squeeze more money and a MLB contract out of the Pittsburgh Pirates), reinforced the perception of his desire to score top dog salaries for his clients. Even if he would do a deal now, would Boras acquiesce to having his man Holliday perched at number two on the Cardinals salary totem pole?


One would hope so or that could be a show-stopper - unless you believe the Cardinals would risk making the trade without an extension agreement locked down. As noted above, without that, they would roll the dice by giving up three MLB players for a single year of Holliday and the chance at a couple of draft picks.


Sure, by not doing an extension on Holliday now, the Cardinals might save 12 months making a long-term move on Pujols, but the risks in losing Holliday after just one year might easily outstrip that.

In summary


For me, the bottom line is to seriously question whether Holliday is a financial fit for the Cardinals, though some of the other concerns with the trade mentioned earlier also have merit.


It Holliday does come, I would wait on a Pujols extension until Holliday's is done, assuring Albert right up front that he will get more money. Once Holliday's extension is in place, I would push to get Pujols' done as soon as possible – no later than next off-season.


On the other hand, if Holliday doesn't come to St. Louis, then I'd wait at least another year until getting serious about Pujols' extension.


Note: To join in the ongoing discussion about this topic, head over to our free Cardinals Message Board.



Brian Walton can be reached via email at brwalton@earthlink.net.


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