Hey Dave!

Found an article our GM needs to read.

The Diamondbacks designated Russ Ortiz for assignment (akin to releasing him, since I don’t thing ayone is stupid enough to sign him).

Keith Law of Scouts Inc. presents a good explanation of the difference between "eating" a contract (what folks say ARI is doing) and a "sunk cost" (which is the real case) summary if you’re too lazy to read the article:

Basically, Russ Ortiz signed a 4 year, $33 million contract with Arizona prior to the 2005 season. It was, as with most large contracts, a guaranteed contract (3.5 million bonus, and escalating yearly amounts – 6.5/7/7.5/8.5 million). So the folks who say the Diamondbacks are eating his salary are wrong, the money was already spent. The moment that contract was signed, the Diamondbacks guaranteed Russ Ortiz that they would give him 3.5 million for signing the contract and 29.5 million over the next 4 years no matter what. So the D-backs payroll is the same today without Ortiz on the roster as it was yesterday. Ortiz will still get his 7 million this year AND his 16 million the next two years, no matter what. Therefore, whether he was on the team and pitching like **** or off the roster and playing golf, he gets paid. That is a sunk cost – the money is already gone. The D-backs make their payroll for the next two seasons with that $16 million already on the books.

Dave Littlefield could learn something from this. Granted, his sunk costs aren’t in the form of $20 million over the next 2 1/2 seasons, but it still exists. The $18.35 million (roughly $113,271 per game) being paid to Burnitz, Randa, Hernandez, and Casey is going to be paid to them no matter how well or poorly they play this year, so it’s silly to try and wait it out and see if they eventually play up to a level worthy of their salaries (and I think in Burnitz and Randa’s cases, and probably Jose K’s too, it’s fairly obvious as to whether or not that will happen). So if they are going to get paid no matter what, why not just cut the sunk cost and give someone else the roster spot (Boeve, DeCaster)? Because this is the Pirates, and they have no intention of admitting the mistakes until they can say "see? mistake taken care of, he’s not on the payroll"…which is kind of like having your little boy mess his pants, walk around with it all day, and then at the end of the day say "oh, that. well, all gone now!" – he can function with it there, but it will be an awkward burden, and one which is easily rectified.

Sweet, I just compared DL to a kid who pooped his pants. A banner journalistic day for me!

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One comment

  1. Matt

    Your human waste analogy is spot on, so to speak.

    My Ortiz piece poses that when corporations effectively admit to expensive mistakes, they require more compelling evidence than “everybody thinks Ortiz s*cks” to collect all the needed signoffs to close the deal.

    To your point, you need a GM both inclined to, and capable of, making that factual case to the “board”, convincingly explaining away most of the perceived risks.

    http://azdiamondhacks.mlblogs.com/diamondhacks/2006/06/anatomy_of_a_.html

    P.S. – May I still call you Ogden?

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