Sunday, January 23, 2011

Billy Butler Extended

When Dayton Moore took over in June of 2006, he promised that the Royals would lock up players long term when they were deserving. Obviously the team would not be able to lock up every young star. But they would be more willing to spend than they had been in the previous regime.

Well since 2006, the Royals have had three players that in my opinion have deserved to be extended: Joakim Soria, Zack Greinke, and Billy Butler. So far Dayton Moore is 3 for 3 on fulfilling his promise.

Joakim Soria is locked up thru 2014 on what could be the most team friendly deal in baseball. How often can you lock up an elite closer and have the final three years on the deal be club options?

Zack Greinke was locked up to a four year deal just before his 2009 Cy Young campaign. Even by extending him thru 2012 it was determined that his controlled years didn't quite matchup with the Process's timetable to success. Match that with the fact that Greinke was threatening a no show for spring training and the Royals were forced to make a move. The trade netted the Royals roughly twenty-three years of major league service time control in Alcides Escobar, Lorenzo Cain, Jeremy Jeffress, and Jake Odorizzi. All because Dayton Moore and the front office made a great move and signed Greinke to a team friendly extension at just the right time.

Now two years later the Royals have extended Butler for potentially five more years, by buying out his remaining three years of arbitration, one year of free agency, and a club option for a second.

The terms of the deal are as follows: $2 million signing bonus, $3 million for 2011, $8 million fo 2012, 2013 and 2014, plus a club option for $12.5 million for 2015 with a buyout of just $1 million.

This deal isn't just good for the Kansas City Royals, this deal is an absolute steal for the Kansas City Royals.

I'm sure by now that everyone reading this blog has seen the list that Butler joined after his 2009 season. You know the list that includes just five players besides Butler that had hit 50+ doubles, 20+ homers at 23 years old or younger in a single season. You know the list that now includes only Butler, Hammerin Hank Greenberg, A-Rod, Albert "The Machine" Pujols, Grady Sizemore, and Miguel Cabrera.

One season later Butler finds himself on another exclusive list. Over the past two seasons only five other players under twenty-five have posted an OPS as good as Butler's .855 figure: Evan Longoria, Carlos Gonzalez, Ryan Zimmerman, and Troy Tulowitzki.

According to currently the market value for 1 WAR (win above replacement) is around $4.5-5 million. Basically this means that if Butler was on the open market this season he would have been coming off a season with a 3.4 WAR making him worth about $15 million conservatively. Not to mention that Butler is going to be just twenty-five for the 2011 season.

If Butler continues to be a 3.4 WAR and doesn't improve at all, he would accumulate about 17.5 WAR over the length of the five year deal. Using the current 10% inflation rate in MLB salaries per year these wins would be worth about $93.5 million conservatively. Butler over the course of those same five years would make just $42.5 million.

Keep in mind that is IF Butler shows no improvement on his 2010 campaign. If Butler were to progress to be 4 WAR guy during what would have been his arbitration years, then a 4.5 WAR guy in 2014, and a 5 WAR guy in his 2015 season. His value during the next five years would have been right around $120 million.

Even if Butler regresses and becomes a 2.5 WAR player over the next five seasons, his value still comes in at just below $70 million. So as you can see this deal has relatively low risk, and has a reward that is potentially very, very high.

Entering the 2011 season many speculated that whichever player performed better between Kila Ka'aihue and Butler would be kept while the other would then be shopped in order to create space for Eric Hosmer.

However, entering 2011 Butler's long term appeal may have been too great to pass up the opportunity to lock him up. Butler is now locked up through his age 25-29 seasons, this is to say that according to most aging curves he is locked up right through the prime years of his career. Meanwhile Ka'aihue who should be under team control through 2015, is currently locked up through his age 27-31 year old seasons. These are also prime years, however by the end of his arbitration years Ka'aihue could be regressing a bit as a player. Butler on the other hand will be hitting his peak.

So what's the problem? The Royals possibly have two strong hitters for the middle of their lineup that hit from the opposite sides of the plate through 2015? Well it is a good problem to have, but the Royals also have a player that they believe could be the best of the bunch that could be major league ready by June of this season.

This is not to say that Kila will not be giving an opportunity. On the contrary as far as he is concerned the next one and a half seasons will be the most important of his career. I say one and a half because in about that amount of time Eric Hosmer will not just be knocking at the major league door, instead he will be running right through it.

If Kila and Butler both destroy the ball for the next season and a half the Royals will have a great trade chip at the 2012 deadline in Ka'aihue as the Royals would probably prefer to keep the right handed bat that has the longer track record. However, if by chance Kila dominates and Butler fails to progress the Royals could hang onto Kila given that he will be under team control just as long as Butler (I find the latter of these two scenarios extremely unlikely.)

If Kila is just an average hitter in 2011, then we will see Hosmer in Kansas City even sooner and the Royals should still be able to fetch a solid prospect in return for roughly 5 years of service for Kila.

*There have also been discussions that Hosmer could make a move to the outfield. He is a decent runner and has a very strong arm, but having watched him play for half the summer in Northwest Arkansas I just can't see that happening.

I think that overall this extension means that more than likely Ka'aihue's days in Kansas City are numbered, if they weren't already. I think that unlike the Greinke deal Butler's now coincides with the timetable for contention, meaning that he will not be traded two years into the deal. (Unless it is determined that Mike Moustakas cannot handle third base.)

Butler wants to be in Kansas City, if he loves the city. He has clearly given the Royals a major hometown discount. But if Butler continues to progress as a hitter and continues to establish himself on the premier hitting lists of professional baseball then the value that the Royals will receive in this deal cannot be overstated.


  1. Nice job....

    It is interesting that Butler fired his long time agent about two months ago ...

    Greg Schaum

  2. I do love me some Billy Butler. I'm not so sure that the Kila monster will play up to any level that will create trade value though. But I hope I'm wrong on that one.

  3. @ Greg Schaum Thanks very much your blog is one of my favorites. It seems as though after the Greinke trade with Butler's comments he was almost begging to be extended.

    @ Nelly I hope you are wrong too, just because if they can create any trade value it would be a bonus.

  4. I love signing, it's just kind of frustrating that Kila's time was pretty much wasted.

  5. Looking forward to 5 more years of double plays and no homers from our firstbaseman.

  6. I don't think that 30 HRs from Billy would be such a big surprise - he is a power hitter who hasn't translated that into HR in the majors - yet. But 30 homers this year or next is what I expect.