Orange County Register

Sometimes, we have to acknowledge our limitations. After seven hours of considering whether Mark Teixeira could possibly be worth a 10-year contract (presumably for something like $200 million), I’m still not sure what the right answer here is. (Take our poll if you are sure.)

There are too many unknowns. We may be able to predict with quite a bit of accuracy what Mark Teixeira is likely to do next year, but in 2018?

We could predict with great accuracy how much top players will be paid in 2009, but in 2018?

We can foresee the Angels needs in 2009. We know the Angels are a championship contender if they have a bat like Teixeira’s in the cleanup spot, and quite possibly aren’t a contender if they don’t. We know he’s not blocking a first baseman who absolutely must play now. But what do we know about the Angels in 2018?

We know nothing. So, ultimately, we must conclude a 10-year deal is a bad idea. Even if he’s worth it.

A friend of mine was a finance major in college, and he writes this: 

In finance, options have value — a greater value the longer the time period. The options a baseball club has (draftable positions/players, available cash, etc.) are worth something. So too is the risk. The riskier the investment, the greater the return better be. You need only look at our current economic crisis to see what happens when risky investments are not met with higher premiums. In this analogy, risking the cash and lack of flexibility (what would amount to liquidity in a financial instrument) needs to be met with sufficient “upside” (read “return”). Not just enough to justify the deal, but enough to also compensate you for the 3-5 years you may be burdened with what has become a bad deal.

Wow was that geeky! But his point is accurate, especially when it comes to first basemen who can’t play anywhere else. The Phillies signed Jim Thome to a long-term contract, then watched Ryan Howard develop into a potential star with nowhere to play. They traded Thome for Aaron Rowand, a nice ballplayer at a nice price but not an impact bat. They didn’t have any options.

So then why am I so torn by this decision? Because I think it’s actually likely that Teixeira will earn that contract. He rarely strikes out (for a power hitter), so he’s likely to keep hitting .300 or so; he draws loads of walks (for an Angel) so he’s likely to keep reaching base at nearly a .400 clip; and he’s a lock to slug .500 deep into his 30s. He’s somewhere between above average and excellent as a fielder. He’s even posted good clutch scores for most of his career, for what that’s worth.

Dave Cameron, whose U.S.S. Mariner blog is one of the best about baseball, estimated Teixeira would be worth a seven year, $171 million contract. Let’s say this is correct; would you be comfortable promising Teixeira $29 million for the three extra years, at age 36-38? You’d have to be, right? If we consider salaries go up 8 percent a year, that’s the equivalent of about $5.5 million in 2009 dollars. Even if he’s old and useless and can’t earn that, it’s still no big hit to the team’s budget.

But I go back to what my friend the finance major says. The very conditions that make this such a hard situation to analyze probably make it a bad contract. What if the Angels aren’t in contention for three or four of those years? They’re paying for a first baseman to improve them from 70 wins to 77 wins, and would be better off developing young players and saving their money. What if Kendry Morales is the breakout star of 2009? They’d be limiting him to DH. Even if Teixeira’s worth $20 million every year, he might not be worth it to the Angels specifically every year.

And, of course, what if something happens to Teixeira?

It’s never a great idea to make decisions based on outlier situations, but there is a pretty good worst-case comparison in Mo Vaughn. Vaughn was two years older than Teixeira when he signed a six year deal with the Angels. He was coming off a run of three top-5 MVP finishes in four years. His previous two seasons, he had a OPS+ of 152 and 153 — Teixiera’s the past two seasons are 151 and 150. Then, in his first game with the Angels, he fell into a dugout.

Teixeira is not Vaughn. Teixeira is likely to help his team many of the next 10 years. But after seven hours — now eight and a half — of thinking about this, I’m pretty sure you regret signing him more often than you regret passing him up.

More on Teixieira:

• Ten years for Teixeira.
• Teixeira for 10 years is anybody’s guess.
• Losing Teixeira leaves Angels in limbo.
• Will Teixeira’s next owner suffer winner’s curse?

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