Hector Olivera: Cost Matters

Today, Jon Heyman of CBS Sports gave us an update on the state of matters involving Hector Olivera. The Braves may actually be closer to getting him than we had previously believed. I will explain.

First, let me quote from Heyman’s article:

"PEORIA, Ariz. — The Braves, who recently met with top Cuban free agent Hector Olivera, may up their original bid a tad but aren’t expected to get close to the $50 million figure bandied about (nor certainly the $77 million mark rumored in one place) and may be counting on their attractiveness as a team with a Cuban-born manager, Fred Gonzalez, a Cuban-born bench coach, Carlos Tosca, and other nonmonetary things."

Okay, let’s first set aside the “non-monetary factors” for a bit. That discussion will come later. Let’s get to the real hard currency details first.

The Competition

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Here are the pros and cons for each of the competitors:

MIAMI – Bid is said to be in the $50+ million range. Duration unknown, but most likely 5 or 6 years. Enormous Cuban community influence – largest population outside of Cuba. Said to be interested in bringing Olivera to the majors right away, but there’s no obvious position for him. His preferred positions are 2B or 3B, and those are tied up for 2 years each (Martin Prado, Dee Gordon), which presumably would be the most productive years for Olivera. There is no state income tax in Florida.
SAN DIEGO – Bid is said to be in the $50 million range. Duration unknown, but most likely 5 or 6 years. Outside scuttlebutt involves a lot of wonder about where that money would be coming from. Has second or third base available for Olivera, though means displacing either Jed Gyorko or Will Middlebrooks. Taxes place San Diego at a disadvantage.
LA DODGERS – Bid said to be $77 million, but that’s either (a) outright wrong, or (b) includes their luxury tax (40% in 2015; 50% for the years thereafter). A 5 year/$52.5 million contract would cost the Dodgers $77.7 million overall; A 6 year/$51 million contract would cost them $75.7 million. The Dodgers would bump Juan Uribe and place Olivera at third base. Fellow Cuban Yasiel Puig roams the outfield, though like San Diego, the Hispanic influence in Southern California comes from Mexico, not Cuba. Oh, and the tax thing again.
OTHERS – Apparently there are others, but they are being pretty quiet.

One more thing about the Dodgers: they have allegedly asked for a second MRI test – one that they conduct at their own (or approved) facilities. That suggests a perceived risk that is not compatible with a $77 million bid – hence one of the chief reasons I do not believe that number… at least not as presented. Another thing it does, of course, is to put the Dodgers into the “Not trusting” category… which could bump them to the bottom of the pile regardless.

That MRI request is also a little silly given that a physical is routinely required – by everyone – before finalizing a contract. If the Dodgers are that concerned about Olivera’s arm, then they should either punt or insure language that specifies the criteria by which they can either reduce or void the contract.

But of course, the agent also doesn’t want to take the chance and have his prized player turn up with a problem that would drop his client’s value to something rapidly approaching zero.

Either way, that could be irrelevant.

Atlanta’s Bid

Let’s assess where Atlanta is with all of this. Previously, we had learned that the Braves would more comfortable in the $30-40 million range. That doesn’t sound very competitive, but it almost certainly involves a four year deal, which could bump up the average value.

There’s a couple other trump cards that Atlanta can play as well, though:

Cutting Alberto Callaspo. He is under contract for $3 million this season. The Braves haven’t exactly been excited about either his conditioning or his play so far this Spring, so regardless of where Olivera signs, Callaspo could be released within the next 2 weeks – a move that would obligate the Braves to pay him only a month’s salary, or about $500K. Savings: $2.5 million.
Trading Chris Johnson. With Olivera, the Braves would still have up to 5 players that can play third base (the aformentioned Señor Callaspo, Philip Gosselin, Jace Peterson, Olivera, and Johnson. Bumping Callaspo would be a no-brainer. Bumping Johnson would take more effort, and probably half of his salary… perhaps a little more. He is due $6 million, $7.5 million, and $9 million through 2017 (plus a 2018 buy out $1 million). Spending $10-13 million to trade him still saves the team between $10.5 and $13.5 million per year.

Thus while the “comfort zone” might be $30-40 million, Atlanta could “buy back” around one-third of those monies by reducing the number of infielders that they need to pay.

Now Olivera is looking more like something of a bargain, eh?

Called – and Raised

Heyman suggests that the Braves are willing to raise their bid.

This suggests two things:

They did so, or promised to do so – that would be consistent with the purpose of having an agent meeting on Friday
The agent also likely expressed a willingness to give strong consideration to a bid increase. There would be no point/purpose of the Braves pushing up their offer otherwise.

Here’s where those “non-monetary” intangibles come into play. Olivera’s transition to a new country, a new city, a new role would certainly be helped with “father figure” mentors such as Gonzalez and Tosca. This should also help his performance on the field.

Based on the meeting Friday, I now have to believe that the Braves might be the winner in this sweepstakes if all other things are equal. Now in reality, of course, all things are never equal; but Atlanta is apparently trying to bid just enough to get close enough to make things equal enough to get this done in their favor.

So is the new number 4 years and $38 million? $40 million? Do they give him a fifth year? Even as I have complained about any deal for the nearly-30-year-old Cuban, he is effectively a “young” 30, given the limited action in recent years and shorter seasons overall. A fifth year could certainly swing the deal… even if only at $45 million or so.

I imagine that the weekend is being used to get best-and-final offers and to allow Olivera a chance to mull where he’d like to live. With all this above, though, I’m thinking Atlanta is now a lot more likely than not.

I expect we will know on Monday or Tuesday.

Next: Spring Comings and Goings

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