What’s Next for Shin-Soo Choo?

I’ve written about Shin-Soo Choo a lot this season.  It’s not that I don’t like Jason Donald or Lou Marson or Mitch Talbot; it’s just that when one player contributes about half of your team’s value, you tend to get some serious tunnel-vision.

But now that the season’s over, we get to anticipate perhaps the most interesting Choo-performance of his career: what will he and Scott Boras do this off-season and how can the Indians respond?

Let’s cover some familiar bases first.  I know that many of you know the rules, but in case you don’t, Choo has now accrued three full years of major league service, so for the first time in his career, he’s due a significant pay raise.  In other words, he’s eligible for arbitration for the first time.  If he goes to arbitration, the Indians and Choo both come to the table with a number they think he should make for 2011.  Then the arbiter decides which number is fair.  That’s it: one side wins and one side loses.  Choo can avoid arbitration by signing a contract.  I’ve written before why I think that’s the wise course for all parties, so I won’t rehash that here.

It’s also worth noting that there are some things that the end of Choo’s pre-arbitration years DO NOT MEAN.  Most importantly among these, it doesn’t mean that another team can outbid the Indians—only the Indians can sign Choo for next year.  If you need it, here is my personal guarantee: SHIN-SOO CHOO WILL BE AN INDIAN NEXT YEAR.  Yes, they could trade him this off-season, but let’s get serious.  That ain’t happening.

Another thing that ain’t happening?  That South Korean military thing.  He’s not going.  He’s made it as clear as he can that if he doesn’t receive an exemption, he won’t go back to South Korea.  He’s in his prime, doing what he loves.  It’s just not going to happen.  And everybody knows it, which means it has no bearing on his contract status.

So the long and short of it is that Choo will just be more expensive than he used to be.  According to Cot’s Baseball contracts, Choo made $461,100 in 2010.*  Like I said, his raise will come in one of two forms: he’ll either sign a contract extension or he’ll go to arbitration.

*In case you’re wondering, we paid Masa Kobayashi $250,000 in 2010 not to pitch. He made more than half as much money as Shin-Soo Choo did.  Scary.

So today I thought we’d look at both of these options and some comparable players mentioned at MLB Trade Rumors.  We’re going to stick with the numbers that arbiters typically look at—HR, RBI, BA, SB, R, and (for good measure) OPS.  For the counting stats, I’ll use a one-year average (per 162 games); for the rate stats, I’ll use career averages to the end of the last pre-arbitration season.  To get us started, here are the players suggested as good comparisons for Choo along with their respective ages at the end of their pre-arbitration service:

HR RBI BA SB R OPS Age
Choo 21 95 0.297 18 94 0.880 28
B.J. Upton 17 76 0.277 36 93 0.793 25
Josh Willingham 25 86 0.266 6 77 0.833 29
Ryan Ludwick 29 91 0.273 6 80 0.857 30
Nick Markakis 21 91 0.299 11 96 0.851 24

Let’s take these comps one at a time.

B.J. Upton was the second overall pick in the 2002 draft.  Did you know that the Rays didn’t draft first every year from 1996-2007?  I sure didn’t.  Anyway, Upton had the pedigree and hype that Choo never did.  His first taste of the majors came in 2004 when he was only 19, but because of some partial years, he didn’t complete his pre-arbitration service time until the end of the 2009 season when he had just turned 25.

From a statistical perspective, the only facet of the game in which Upton outshined Choo was stolen bases.  Choo hits for more power, a higher batting average, and drives in more runs.  The other major difference is their age: Upton was 25 when he went to arbitration last year.  Choo turned 28 in July.  It might be hard for an arbiter to distinguish between the two, but players typically peak offensively around 27 to 30, so Choo’s peak is already half over, whereas Upton still had some potential upside.

Upton and the Rays couldn’t agree to a contract, so they went to arbitration.  The Rays won the case with a $3 million bid.  Upton came to the table with a $3.3 million figure.  It’s hard to believe they’d squabble over $300,000, but they did.  And they lost.  In fact, the Rays have never lost an arbitration hearing, going a perfect 5 for 5.

I guess this is the place where I point out that Scott Boras is no better at winning arbitration cases than any other agent: he’s been successful about 41% of the time, which is exactly league average.

Josh Willingham was originally drafted by the Florida Marlins, and served nearly all of his pre-arbitration years in Miami.  But before he could reach arbitration, the Marlins shipped him to the Nationals after the 2008 season, I assume because the Marlins didn’t want to pay his raise (There is a team that’s cheaper than the Indians, see?).  Apparently the Nationals weren’t eager to go to arbitration with Willingham either, as they immediately signed him to a one-year, $2.95 million contract.

From the table above, you can see that Willingham has similar power to Choo, but nowhere near the baserunning or batting average skill that Choo has demonstrated.  I think it’s safe to say that Choo is better than Willingham, and there’s no way we sign him for one year at $3 million.  Let’s keep looking.

You should remember Ryan Ludwick, at least if you’re a die hard Indians fan.  Ludwick was originally drafted by the Oakland A’s in the second round of the 1999 draft.  Without ever making it out of the minor leagues, he was traded to the Texas Rangers in 2002 in the deal that sent Carlos Pena to Oakland.  In 2003, the Indians acquired Ludwick from Texas for Ricardo Rodriguez and Shane Spencer and gave him his first taste of the majors at age 25.  After being DFA’d twice in two years by the Indians and Tigers, Ludwick finally found a home in St. Louis, where he finished out his pre-arbitration service during the 2008 season.

In February of 2009, it looked like Ludwick and the Cardinals were heading for arbitration: Ludwick was seeking $4.25 million while the Cardinals had been offering only $2.8 million.  At the last moment, however, a one-year agreement was reached that paid Ludwick $3.7 million for the 2009 season.  There were similar antics this past off-season before the Cardinals gave Ludwick another one-year contract, this one worth $5.45 million.

Ludwick is probably the only “comparable” player to Choo who hits for more power: he averaged close to 30 HR per 162 games played for his pre-arbitration career, compared to only 21 for Choo.  And, for what it’s worth, Ludwick is respected as a terrific fielding outfielder.  Still, Choo hits for a higher average with similar RBI numbers.  This is one of those situations where Choo will be undervalued in the arbitration process: Choo’s on-base skills will largely be ignored (his OPS is .020 points higher than Ludwick’s).  Nevertheless, Ludwick’s first deal worth $3.7 million might be a decent gauge of what a “lower-bound” might be in Choo’s negotiations this off-season.

None of these comparable players has numbers that resemble Choo’s more than Nick Markakis.  The two are very similar in HR, BA, and runs, with Choo getting the slight edge in RBI, stolen bases, and OPS.  The only problem?  Markakis was 24 when he finished his pre-arbitration service whereas Choo is 28.  I can’t say exactly how that will affect the negotiations, but my opinion is that it makes Markakis more valuable.  Let me put it this way: would you prefer that Choo put up his numbers at 28 or 24?  I’d lean toward 24.

Anyway, as Markakis finished his pre-arbitration year in 2008, he and the Orioles seemed far apart: Markakis was asking for $5 million while the Orioles were coming to the table with $2.9 million.  In the end, arbitration was avoided and the Orioles locked Markakis into a six-year, $66.1 million contract.  The back-end years are almost not worth mentioning because of the huge age difference between him and Choo, but the contract was structured thusly:

2009 $3 million
2010 $6.75 million
2011 $10.25 million
2012 $12 million
2013 $15 million
2014 $15 million
2015 $17.5 million (club option)

To make a comparison to Choo, you might want to focus only on those first three years.  Not only do I think it’s unlikely for Boras to agree to a long-term contract, but it would be stupid for the Indians to offer one to a player as old as Choo.  Remember how that worked out last time?  No thanks.

So what does any of this tell us about what to expect for Choo?

First, I think it’s safe to say that he’s not going to get Ryan Howard money in arbitration.  Howard won a record-breaking $10 million in his first arbitration hearing with the Phillies.  It’s not that I don’t think Choo is as good as Howard (I think he’s better, by a lot), it’s just that what Choo does (slick fielding, high OBP, good at everything, but not great at anything) isn’t going to show up to the arbiters.  Howard, on the other hand, hit home runs in the middle of the Phillies’ stacked lineup, so he had the gaudy RBI numbers that can grab attention.

Second, I think Choo’s first-year arbitration value is in the neighborhood of $3.5 to $4.5 million.  If the club can’t work out a contract, I would predict Choo gets about $4 million in arbitration.

Third, arbitration is stupid for all parties involved.  I wrote this several weeks ago:

“I would think that a 29 year old outfielder might want some job security.  All it would take is one injury to end Choo’s earning potential were he to go to arbitration (arbitration settlements last for one year only).  If, on the other hand, he signs a three-year deal with the Indians, he would be protected financially in case he were to get injured, even if he did believe he was leaving some money on the table to do so.”

From the Indians’ perspective, avoiding arbitration means you don’t have to tell Choo (to his face—players attend these hearings) that he’s not good enough to make half of what Travis Hafner makes.  Wouldn’t you want to avoid that as your first job if you were Chris Antonetti?

And From ChooBoras’s opinion, you’re likely to get hosed in arbitration anyway.  And regardless, you’d like some security in case you get injured.

It makes so much sense to me to sign a three-year contract.  Which means it probably won’t happen.  So here are three predictions:

  • They go to arbitration.  ChooBoras lose their $5.5 million demand.  Choo makes $3.9 million.
  • They sign a one-year deal worth $4.5 million.
  • They sign a three-year deal: 2011 – $4 million; 2012 – $6.5 million; 2013 – $10.5 million.

We’ll know how it all shakes out before Spring Training.  If a contract isn’t reached by January 18th, both sides must exchange their arbitration figures.  Then hearings begin in the first week of February.  We’ll see…

  • http://www.examiner.com/x-6513-Cleveland-Sports-Examiner clevexaminer

    What’s Choo’s benefit from potentially forcing arbitration for the next 3 seasons? If Choo’s contract does go to arbitration this year and he gets a middle-of-the-road 1 year deal, who’s to say it won’t happen again the next year? And maybe his numbers aren’t as good in 2011 so he actually makes less! Seems more rational to sign for the next three years, for all parties involved. Indians have Choo’s services until MGMT decides to trade him for prospects in 2013.

  • http://waitingfornextyear.com Jon

    You’re preaching to the choir clevexaminer.

    But it’s unlikely that arbitration will result in a “middle of the road” deal. One side or the other will win. Further, first-year arbitration eligibles get paid less than second-year guys (who get less than third year guys). That’s part of the reason any three year deal will have escalators in it. I wrote about the 40/60/80 rule of arbitration once before if you’re interested: http://waitingfornextyear.com/?p=26692

    But I agree. A three-year deal should be able to make both sides happy.

  • http://waitingfornextyear.com Scott

    “A three-year deal should be able to make both sides happy.”

    I’d add the fans in there as a third side. Good stuff, Jon.

  • http://waitingfornextyear.com Jon

    I think you’re right Scott. I hadn’t even thought about that, but signing Choo to a contract could be some good PR for a team that notoriously lets all its players go.

    And, to be clear, whether he signs or not doesn’t have any bearing on the fact that the Indians own his rights for the next three years. But the masses might be convinced to put down the pitchforks for a few minutes if they hear about a new, shiny, three-year deal.

  • mgbode

    what’s next for Choo? how about teaming up with Carlos Santana and taking on the entire MLB? I like my odds with those two.

    anyways, echoing the above in post and comments, 3 year deal makes too much sense not to happen especially when coupled with the Indians arbitration history (no arb hearings in since before Hart, right?)

  • 5KMD

    mgbode:

    Greg Swindell and Jerry Browns in 1991. Hart was there

  • 5KMD

    Sorry, Jerry Browne.

    Got the Brownies on my mind.

  • mgbode

    ok, thanks. so, 19 years w/o arbitration though.

  • JO

    I just think that someone should say that I think offering Shin-Soo Choo a longer contract is not as much of a risk as Hafner because looking at Hafner’s career would anyone be surprised to find out he was involved with PED’s? Short burst of productivity, next to no injuries from someone who has had consistent injury problems since, his decline in productivity coincides with real crackdown on PED’s. Shin-Soo Choo has just gotten consistently better. There is a chance that Choo could get injured or his productivity could go down but I don’t believe it would be as drastic as Hafner.

  • Harv 21

    Nice analysis, Jon.

    One thing you wrote maybe I just don’t get: “my opinion is that it makes Markakis more valuable. Let me put it this way: would you prefer that Choo put up his numbers at 28 or 24? I’d lean toward 24.”

    But arbitrators are attempting to determine current market value for one year, not multi-year potential. Not sure they would or should assume the 24 year old will increase performance that year. He might still be subject to pitching adjustments and performance vascillation, while the 28 year old guy’s performance in his prime might be more reliable bet.

    The other wild card you barely mention: Boras is busy and can cherry-pick clients. He doesn’t necessarily hook up with Choo to squeeze the cash-strapped Dolans for a market value three year deal. Should make everyone at least wonder if this is Kellen Winslow signing with Drew Rosenhaus and drama will ensue. Yes, their contractual leverage is limited but Boras does not mind drama to try and force things. Just dangerous to assume a nice “reasonable” 3 year deal in a smaller market is what Choo and Boras have in mind.

  • http://www.examiner.com/x-6513-Cleveland-Sports-Examiner clevexaminer

    @3 – yeah i think most casual fans, upon hearing we signed Choo for 3 years would finally cut MGMT some slack, not realizing that the team controlled him for the next 3 years anyway. In the words of Michael Scott and his conflict resolution strategy: “It’s win-win-win”.

  • http://waitingfornextyear.com DP

    Just dangerous to assume a nice “reasonable” 3 year deal in a smaller market is what Choo and Boras have in mind.

    It’s probably not, but there isn’t a ton they can do about it if the Indians don’t feel like trading Choo (and they’d better not [shakes fist]). As Jon stated, it’s the risk-reward trade off of assuming Choo will continue to produce and going to arbitration for three straight years and trying to squeeze out every penny with the knowledge that if he gets hurt in 2011 or tanks, his number’s going down; or signing for the last three years the Tribe controls him and possibly not getting as much.

    What’s that they say about a bird in the hand?

  • mgbode

    I assume Boras realizes what the true market value Choo has and signed him now in order to reap the rewards of a possible $20mil/year contract that will come in 3 years.

  • http://www.60bpm.com/ Robbie

    I’m absolutely scared outta my mind at the thought of giving him a long term deal at this point. Trade him for prospects, baby.

    I was actually disappointed watching Hallday throw that no-hitter last night. It didn’t seem right that he wasn’t traded away from the Indians at some point in his career before doing that. The other two winning pitchers from yesterday’s games were.

  • Lee,G

    Nice posting Jon. As a Korean fan here in Korea, I’d like to express my thought. You mentioned about Markakis & Howard. If you look at the WAR(wins above replacement-reference.com),Howard has 2.4-2005, 5.8-2006, 2.6-2007 and Markakis has 3.4-2006, 3.5-2007, 5.5-2008 before they get big money. Now, if you look at Choo’s war number, he has 2.8-2008. 6.2-2009,7.3-2010. I’m not a guy who crazy about awkward number marking Choo ranked 2nd war in AL,but I think that Howard should also compared with Choo. Yeah Howard belted a lot of HR but his BA,OPS not impressive compare with his salary. I still think that Phillies payed to much. I wouldn’t do that.

  • http://waitingfornextyear.com Jon

    Lee,G.

    Totally agree with you on your assessment of Howard and Choo. Like I wrote, I think Choo is actually a better player than Howard. But the arbiters won’t see it that way: they haven’t used advanced metrics in their evaluations of players in the past. Instead they stick to traditional “box score” statistics like HR and RBI (not to mention they completely ignore defensive contributions). For these reasons, if Choo asks for Howard-type money in arbitration, he’ll definitely lose his case. Good for the Indians, not so good for Choo.

    And yes, I also agree that the Phillies paid WAY too much on Howard’s extension. In a few years, that contract has the potential to be a huge mistake.

    Thanks for reading!

  • Lee.G

    Choo wrote a diary from time to time dated back to Aug.3 2009. He mentioned that actually Cleveland offered multi year contract before this spring but they couldn’t reached agreement with Boras. I think that if Cleveland offer 3 year deals somewhat similar to Sizemore, maybe both side could reach an agreement only if Boras respect his client. His best friend in the team is Sizemore and Choo well knew about how good player he is.

  • Lee.G

    Here is what happend during the last nagotiations between Boras and Shapiro based on Choo’s diary dated Apr 8,2010. “Quote, the diffrence between two side was years of contract. Shapiro demanded 5 or 6years contract including FA and Boras demanded 3years or 8to 9years. Boras asked if 5 or 6 years is possible, then why 8 or 9years is not possible? Shapiro replied that although Choo is a essential player regard team’s rebuilding process but we never signed a contract over 8 years Quote” I presumed Boras prejudged that if Choo signed 5 or 6years include FA, Cleveland might trade Choo after 2 or 3years based on previous Lee, Vicor, etc high salary players. So.they just made one year contract. 3 years contract will be safe for both side avoiding contract risks. My personal hope is that Choo staysin Cleveland long times where he grow up and Poul Dolan should more concern about winning team rather than making amusement field filled with prospects or pursuit of trade bate. Welcome Choo who are coming tomorrow in here. Let’s get the gold in Asian games. Go! Tribe!

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  • http://www.jerseyfamilylawblog.com/what-do-structured-settlement-funding-companies-do cash out structured settlement

    Now The Choo good performance from his career.Choo has now produced three full years of major league service, so in his career for the first time, he was a significant pay rise. Ludwick’s value of $ 3.7 million in the first transaction may be a lower limit of what may be a decent indicator Choo’s off-season negotiations.