Friday, February 03, 2012

Roy Oswalt and Market Determination Revisited

Yesterday in this space, this author wrote that Roy Oswalt had earned the right to limit his market choices and to stick to his price in negotiations as a free agent. The piece was a counterpoint to another writer who stated that Oswalt "had too big a head" and can move along from the St. Louis Cardinals' feeding trough. The point was also made that Oswalt is well worth what he is asking for his services. This other writer wasn't very happy about yesterday's post and chose to rebut it by reprinting this writer's entire post and interspersing comments throughout. That's kind of rude, but at least the writer provided a link back to here. Thanks for the page views, sir.

Disagreement is fine. Enlightenment only comes from open dialogue, which is why the Freedom of Speech is so important to us as a people. Your host here certainly doesn't believe he knows all the answers. Somebody once said that wisdom begins with the knowledge that there is more unknown than known. So the name calling directed here as "noninformed ," is not overly troublesome. Without resorting to a flame war, which is way too unseemly in polite society, this author does want to make a few points in response.

The key issue is market determination. That other writer feels that Oswalt has run into a problem where the market considers his value lower than Oswalt does. That would be true enough if Oswalt had allowed a complete and open market for his services to develop and could still not find a job. Oswalt's true "problem" is that he has limited his market choices to a few teams that do not care to pay Oswalt what he wants. If Oswalt was available to any team on the market, someone surely would have given him the money is is asking.

Roy Oswalt doesn't want to pitch in Seattle or Detroit or a host of other different cities. He has narrowed his choices to just a few teams he would consider. That's not a true market determination problem. That's a personal market limitation choice that has led to a problem. This other writer also states that Oswalt's performance value (which last year stood at $11.1 million, Oswalt's lowest) doesn't matter. It's the market that matters. But performance value does matter. That's why the Phillies chose not to offer Oswalt arbitration. Arbitration would have given Oswalt the money. That's what arbitration does.

Okay, you might say that the Phillies just proved the market determination point. It only proves it as far as the Phillies were concerned. They had cheaper options in Vance Worley, etc., and have a huge and unwieldy payroll they have to worry about. Other teams may not have those options or problems. Let's look at the Cardinals as an example. On the Cardinals, only two of their pitchers' performances were more valuable than Roy Oswalt's last season: Chris Carpenter and Jaime Garcia. Jake Westbrook was paid $8 million and was far less valuable a pitcher. Kyle Lohse made $11.8 million and was far less valuable. On paper, Adam Wainwright is more valuable than Roy Oswalt. But let's see what happens as he returns from Tommy John surgery.

Could Roy Oswalt be a benefit to the Cardinals? Certainly. Will they choose to pay Oswalt $10 million for a season. Maybe not. We'll see. This other writer made a point that the Cardinals can't afford $10 million for 139 innings. The Cardinals are still $20 million below last year's payroll and that's with the addition of Furcal and Beltran and a bump in salary to Berkman and Garcia. With the cash from their World Series title, the savings from Pujols and La Russa, the team may well choose to incur more profit this season as is their right. But they could certainly afford Oswalt.

Roy Oswalt has made the personal choice to limit his market. That choice may lead to less income (or no income) than he wants. Any personal choice comes with inherent risks. Frankly, any team that wants to compete should sign the guy. Pitchers with his skill aren't rampant in the game. Feel free to disagree. Oswalt's problem isn't that he has a big head. He absolutely knows his value. He has simply chosen fewer teams to pay him market value rather than allowing the full marketplace to bid on his services. Time will tell if his choice costs him in the end.


Cardinal70 said...

It is interesting that we tend to complain when players choose to chase after the money, but when they want to determine their work place via other factors, we get on them as well.

Right now Roy might be trying to have his cake (play where he wants) and eat it too (at the salary he wants). With the clock ticking, he's likely going to have to choose one or the other very shortly.

William Tasker - Caribou, ME said...

Well said, sir. And exactly.

Left Field said...

You know, I was going to say in response to the other post that the guy who writes El Maquino is kind of an ... well, let's just say the guy wrote a post where he claims to be a small Hall guy, but has Lou Brock in his small Hall.