Additional thoughts on the Jonathan Papelbon trade (Drew Storen fans won’t like it)

I wrote a quick analysis of the Jonathan Papelbon trade yesterday. You can read that here. In short: the pitching staff is stronger and price was right. Here are some additional thoughts.

1. Drew Storen needs to get over it. Storen clearly expressed his frustration with the trade during his comments after yesterday’s game. I understand Storen is a fan favorite and many fans feel the same way. I like Drew Storen too, but I’m afraid I can’t joint the chorus of fans who think Storen is entitled to pitch the 9th inning and the 9th inning only. Bottom line: this trade makes the Nationals a better team and that’s the only thing that matters. I understand Storen wants to pitch the 9th inning. That’s fine. Tanner Roark probably wanted to remain a starting pitcher. Anthony Rendon probably wanted to stay at third base. Players can have preferences, but they’re not entitled to anything. This leads to my next, more important, point…

2. The 9th inning is overrated. The current generation of pitchers (Storen included) grew up in a world where closers were venerated and every other reliever was treated as a second class citizen. Many fans seem to have this view as well (although the tide is shifting thanks to the sabermetric movement). A Nats fan on Twitter today equated this trade to Storen being benched. This is complete nonsense. Storen didn’t lose his job. His job is to pitch out of the Nats bullpen and get opposing hitters out. He has a same job, but in a different office in the same building. Pitching in the 8th inning requires the same level of skill as the 9th, and Storen has an opportunity to excel in this role. Yesterday, I cited the 2014 Royals as an example of a team with multiple “closers” who dominated the playoffs last year by having three lights-out relievers pitch the 7th, 8th,and 9th innings. Critics of this trade are focusing way too much on the 9th and not enough on the 8th inning where the Nats are considerably stronger on the mound. Of course, many critics of the trade also pointed to Storen’s financial situation, which leads to my next point…

3. Storen will still get paid. Many have argued Storen will suffer financially from this trade, as closers are compensated higher than “middle relievers” during arbitration and free agency. Well. Tyler Clippard, the Nats “8th inning guy” received $8.3 million this season–his final year of arbitration–despite being “demoted” to middle relief in 2012, where he only acquired one save in 2013 and 2014 combined. In fact, Clippard is 9th highest paid reliever in baseball this season. In total, five of the top 10 paid relievers in baseball earned their pay as setup men. The narrative is shifting as a new generation of general managers appropriately value performance more than a hallow statistic like saves. In any event, Storen has already acquired that “proven closer” label–to the extent teams still value that distinction. His first half this season puts him in that fraternity of relief pitchers ignorant general managers pay big money to pitch the 9th inning. Also…

4. This move is temporary. Papelbon is signed through 2016, which makes it likely Storen will be traded this offseason, probably to a team that needs a “proven closer.” As stated above, Storen is likely to command a elite relief pitcher money through arbitration, which makes it likely Rizzo will move his salary for assets controllable beyond 2016. If this sounds familiar, it’s exactly what happened with Tyler Clippard. Fans won’t like it, but the Yunel Escobar trade worked out well for the Nats. Rizzo has a good chance to fill holes in his roster this offseason by moving Storen, who will have a high trade value should he perform in the second half like he did in the first. Speaking of which…

5. I expect Storen to pitch well in the 8th inning. Storen pitched well as the “7th inning guy” last season prior to his assignment as the closer late in the 2014 season. Yes, Storen will need to adjust his mindset. But–and I mean this in the nicest way possible–if a move to the 8th inning causes Storen to mentally implode, he’s probably not the guy you want on the mound in the 9th inning of the World Series.

Finally, one note about Papelbon–you know, the guy the Nats actually traded for yesterday…

6. Papelbon really wanted out of Philadelphia. The financial details weren’t known yesterday when I wrote my review of the trade, but Papelbon is guaranteed $11 million dollars next season. Prior to the trade, Papelbon had a vesting option that would guarantee $13 million if he finished 14 more games this season, which seemed highly likely over two months of baseball. If money were Papelbon’s primary motivation, he would have stayed in Philadelphia and let his option vest. Instead, he accepted $2 million less to come to DC. All day yesterday we heard reports of “demands” by Papelbon to waive his no-trade clause to Washington. At the end of the day, Papelbon wanted this trade as badly as the Nats.

Analysis: Jonathan Papelbon traded to the Nationals

Many of you hate this trade. I understand. You hate Papelbon and don’t want to root for him. You like Drew Storen and hate the fact that Papelbon bumped him to the 8th inning.

But this is a good trade for the Nationals and you should be happy. This makes them a better team today than they were yesterday, and the price was reasonable.

First things first, Drew Storen will be fine. He’s a pro. He was a good pitcher last season in a setup role and he will be again. This isn’t a punishment for Drew. This is simply a move to make the Nats a stronger team. And no, Storen won’t be traded this season. This team needs him. In fact, this trade is more about gaining Storen as a setup man as much as it’s about gaining Papelbon to close.

Drew Storen did an excellent job as closer. But the Nationals needed help getting to the closer–getting to the 9th inning. After trading Tyler Clippard in the off-season, there was a hole on this roster that was never properly filled. Blake Trienen and Aaron Barrett could have emerged as valuable set setup men this season, but they didn’t. Several pitchers–Matt Thornton, Felipe Rivero, and even Casey Janssen–have done well lately. But the Nats are looking to win the World Series. There’s no better formula than a lights out bullpen. The Kansas City Royals last season were unstoppable in the playoffs because they had three elite relievers for the 7th, 8th, and 9th innings. The Nats are now in an enviable position to have to Storen pitch the 8th and Papelbon the 9th. With Max Scherzer and Jordan Zimmerman set to start games 1 and 2 of a playoff series, the Nats look like they finally have a complete pitching staff.

Nationals fans watched Tyler Clippard get traded from Oakland to the Mets yesterday. The sentimental move would have been for the Nats to trade for Clippard and give him his old role in the 8th inning. Rizzo set his sights higher. There were three elite closers available-Papelbon, Kimbrel, and Chapman-and Rizzo kicked the tires on all of them. In the end he chose the best reliever he could for the most reasonable price.  For the trade itself, it has all the Rizzo hallmarks. He not only filled a critical need, he dealt from strength and preserved his organization’s best assets. Lucas Giolito, AJ Cole, Erick Fedde, Joe Ross and Reynaldo Lopez–the Nats 5 best starting pitching prospects–stay put. Nick Pivetta–the AA pitcher traded to Philadelphia–may turn into a fine pitcher, but this is a loss the Nats can afford.

Importantly, Papelbon will stay with the Nationals through 2016. He’s not a half season rental. Storen may be traded this offseason, but right now he’s locking down the 8th inning. For a team that struggled to get to its closer at times this season, that’s a great thing.

Is the Cable TV Bubble shrinking and did the Nats miss their window?

An article on Sports Business Daily about ESPN’s shrinking customer base caught my attention today. ESPN, by far the most profitable cable channel, peaked in customers May 2011 at just over 100 million subscribers. They are now closer to 93 million, their lowest total since 2007.

This shouldn’t be surprising. Cable TV has become increasing expensive and services like Netlix and Amazon make it easy for customers to receive quality television content without paying $200 a month to Comcast or Time Warner.

To understand the reason for ESPN’s “demise” it’s important to understand the business model of Cable TV networks. ESPN, while unquestionably the king of cable, lived in a palace built on quicksand. ESPN’s model is simple: corner the market on popular live sports programming (like Monday Night Football) and then charge exorbitant monthly fees to cable companies to deliver their network to the customer. The last time I checked, ESPN charged cable companies like Comcast over $6 a month for the right to deliver the ESPN family of networks into your home. The cost of course is passed on to you, which is why you pay so much for cable. Through “bundling” non-sports fans don’t even have the option to avoid paying over $6 a month for a channel they don’t watch. Your grandmother who doesn’t even watch sports still pays over $70 a year for ESPN.

You can see why the model is unsustainable. Other channels sought to mimic ESPN’s success, such as Turner Broadcasting (TBS and TNT) and on a regional level, networks like MASN. This, of course, directly relates to the Nationals, who are currently at the mercy of their MLB-negotiated contract of adhesion, but one day hope to own their own cable rights. The Phillies, Dodgers, and other teams cashed in on the Sports TV Bubble, signing long-term deals with local cable channels who in theory pass on high-subscriber fees to local cable customers—whether they watch baseball or not.

As the price of cable started to outgrow the demand for the product, younger customers started to “cut the cord” in favor of Netlix and cable providers like Verizon started to offer non-sports cable packages. As this trend continues—and it’s hard to imagine a reason why it won’t–the value of sports programming will shrink. There are a few implications here for the Washington Nationals:

-Even if the Nationals achieve their dream of winning their TV rights back from MASN, the rewards of that victory will be less than they were in 2011, the peak of the Cable TV Bubble according to ESPN’s numbers. The Dodgers fueled their outrageous spending spree the past few seasons by signing a cable deal at the peak of the bubble. From the outside, that deal now looks like a disaster. The cable company fueling the Dodgers spending spree is having trouble getting the Dodgers’ cable network on the air as some providers refuse to pay the fee necessary to make the deal profitable. In a future where many young DC residents don’t even have cable, and non-sports fans won’t pay for a cable package containing a newly-formed Washington Nationals Sports Network, it’s almost impossible to imagine a Dodger-sized deal in DC.

-It’s worth noting this trend may impact the litigation with MLB, the Orioles, and MASN. The Nationals are guaranteed “fair market value” under the existing contract, which of course will be less if the value for sports programming decreases. However, the MASN contract situation is so complicated, this is barely worth bringing up. There are so many factors in the MASN case, it’s impossible to predict how the existence of declining cable customers will affect it.

-It’s also worth noting that no one trend happens in a vacuum. Declining cable customers may hurt the overall value of sports programming, but sports programming by itself has never been more valuable to advertisers. The trend in entertainment, as you know, is away from live TV. As customers turn towards Netflix they turn away from ads. Desperate advertisers will continue value programming like baseball games. Pretty soon Nationals fans may be the only people watching TV ads in the DC area on a nightly basis. While the overall trends seem to be hurting the value of sports programming, the situation is far from bleak for teams like the Nats who depend on television as a main source of revenue.

-This is the most important point. As artificial demand for sports TV programming disappears, teams will be forced to compete for your dollar. The Nats will have huge incentive to grow the fan base, rather than sit on the fact that millions are forced to buy the product whether it’s good or not. Teams will fight to get you in the stadium and they’ll be forced to be competitive on the field, lest they lose their TV audience. In other words, capitalism will force the Nats to get better at everything, from quality of play to presentation of the product. Aside from your grandmother’s smaller cable bill, that’s the best possible outcome.