On Saturday morning, following the previous night’s shellacking, I was too angry to discuss John Lackey and quite frankly, I had no energy left to mount ANOTHER Lackey-related diatribe. Yes, Friday night represented a new low for Lackey, as he got hammered by the Jays, but at this point, is there any mystery left in the Lackey saga? Suffice to say, Lackey’s problems have been covered to death in this space.
But with a little time to settle down, and the 2010 season nearly complete, it seems like this is now a good time to assess John Lackey’s future in Boston and more importantly, just how big a liability he is on the Boston Red Sox balance sheet. For the purposes of this discussion, we will not delve into the loss the Sox took on their $18.7M investment for 2010, which shows up on the balance sheet as a hit to shareholders equity, or book value.
Now going forward, the Sox owe this guy $61M over the next four years. That is a hefty sum, particularly after you account for the fact that the club owes Daisuke Matsuzaka $20M for the next two years and Josh Beckett another $68M thru 2014. All told, these three represent almost $150M in future liabilities.
With 61 bones earmarked for Lackey, and coming off a season where his ERA+ was just 94, there clearly is no way Lackey could be traded right now without the Sox eating a huge slug of his contract. How huge? I’m guessing the number is at least $29M as I don’t think another team would be willing to take on anything more than a 4yrs/32M contract (And even that may be high.) So that is really the size of the liability as it stands today. But because the cost of separation is so high, and the Sox don’t have a 500K/yr replacement ready for April, I don’t see owner John Henry authorizing a trade until at least one, and probably two more cards are flipped.
So John lackey will obviously be with the Red Sox next season and the way I see it, here are some facts and assumptions to consider going forward:
* With Matsuzaka’s horrible finish, he will be terribly difficult to trade this off-season so the Sox will be stuck with their current five heading into next Spring.
* Felix Doubront has been groomed as a starting pitcher, has shown promise, and will most likely be ready by the middle of next season. So if he is part of the future, a spot will need to be cleared for him before 2012. That means an exit for either Matsuszaka or Lackey. More likely, that will be Matsuzaka as he will have just one year left on his deal and by the end of Daisuke’s fifth year, the Sox will probably be ready to move on. Given Matsuzaka’s recent effort, the Sox are probably leaning in this direction already.
* Casey Kelly’s ETA probably falls somewhere around August of 2012. Assuming he stays on schedule and in the organization, another rotation spot will be needed in April of 2013. Aside from Kelly, Anthony Renaudo could also be in the 2013 picture.
* So sometime over the next two years, but before the 2013 season, two rotation spots will need to be cleared. This assumes Doubront is ticketed as a starter. If he isn’t, only one spot will be needed for Kelly and he could simply slip in and fill Daisuke’s vacated spot. It also assumes that a high-ceiling prospect deserves a spot over a middling (or worse) veteran.
All that said, here is the way I see it unfolding. Matsuzaka will either be dumped this winter or sometime over the next 14 months. Either way, he won’t be on the team in 2012 and Doubront will get that spot.
So the 2012 rotation figures to be Lester, Buchholz, Beckett, Doubront and Lackey. And my gut tells me that Lackey will be no better in 2012 than he was in 2010 and therefore he will be the one to go when spot is needed for Casey Kelly (or Renaudo/Drake Britton/Stolmy Pimintel) in the 2013 rotation.
That leaves the 2013 rotation looking like this: Lester, Buchholz, Beckett, Kelly and either Doubront, a veteran on a short contract, or another internal guy like Britton or Renaudo.
Circling back, it’s now time to add it all up and quantify the size of Lackey’s liability. So let’s assume Lackey makes it two more seasons in Boston and he replicates his 2010 season, take or give a little. Well, that means the Sox will basically be getting a replacement-level starter, which the market says is worth roughly 16M over two years. Against that 16M in value, there will be 30.5 M in costs, so that represents about a $15M hit. Now you have to throw in what it will cost to trade him after 2012, which figures to be another 15M, which is half of what Lackey will still be due. So all in, as the Sox auditor, I would tell them to list Lackey as a $30M liability on the balance sheet ….. 15M for the hit to “baseball earnings” and 15M for separation costs after 2012.
I am obviously making a lot of assumptions here. First, I am assuming there is not a big rebound in Lackey’s future. Second, I am assuming Doubront works out and Kelly, along with a few others, come knocking on the door for a spot in the rotation. And third, I am assuming that Lackey stays relatively healthy. These are obviously big assumptions but given what we saw in 2010, I think it is more reasonable to assume these outcomes than it is to assume Lackey will suddenly find better stuff, better control and better results over the next two seasons.
I’m sure the front office doesn’t quite see it this way and I am guessing they believe Lackey will be better in 2011 and 2012 than I assume. Let’s hope they are right since a comeback would lead to a smaller hit to “baseball earnings” over the next two years and allow the Sox to get more for Lackey when they dump him in 2013. I’m not ruling this out and therefore it’s possible that the losses from this contract will end up being manageable. That said, I am fairly confident that Lackey will not be around after 2012. And if that is the case, the final tab from this contract figures to be pretty steep. So steep, in fact, that it will wipe out much of the savings that will come if Boston successfully develops some young pitching.