Leverage Is A Fallacy

In the real world of baseball, the Orioles recently agreed to terms with Yovani Gallardo on a $35 million contract. Then they ran their classic bait-and-switch physical, cried “shoulder,” and leveraged Gallardo down to a $22 million guarantee. This is not the first time the O’s have killed a player’s leverage. Usually they go on to sign with another team for much less money.

You’d be hard pressed to find any 30-year-old pitcher without some kind of radar blip in their shoulder or elbow. In his prime, Gallardo threw 93 mph. This was back when 93 mph rated among the hardest throwing starting pitchers. Now he throws 90. There’s a pretty decent chance that whatever’s wrong with his shoulder is already assimilated into his game. Furthermore, given the contracts signed by Ian Kennedy and Mike Leake, decline appeared to already be priced into the original $35 million figure.

Gallardo and his agent should have anticipated the Orioles. They should have laid groundwork to co-opt the false leverage gained by the Orioles with the physical. Before any figures are exchanged, it’s the agents job to say, “we know you’re going find something when you run your physical. Let me be clear, we aren’t renegotiating.”

That statement doesn’t mean what it says. Here’s the sub-text. If you, the Orioles, find something in my client’s physical, we’ll budge. A little. Like a very tiny bit. Maybe we’ll accept a small percentage of the contract as very easy to trigger incentives. It depends what it is too.

Put another way, do you think Scott Boras would have taken a $13MM reduction in guaranteed pay? Doubtful.

So, how does this apply to fantasy trade talks. It’s this ever-important concept of leverage. Gallardo seemingly had few alternatives to the Orioles. Maybe the Rockies. Perhaps a return to the Rangers. They all looked like dubious options. He had no leverage, right?

Look at the Orioles rotation. Gallardo is now the “ace.” For a so-called contending club, that rotation is rather dog poopy. It was a good two or three wins worse without Gallardo. Maybe even worse if the seventh and eighth starters were really negative WAR guys. The Orioles needed Gallardo every bit as much as he needed them.

In any serious fantasy trade discussion, this mutual need is usually a prerequisite for a deal. Sometimes, a talk is purely about opportunism – you notice an owner is selling low on a player so you hop in despite no direct need. Those don’t usually work out.

When both parties need something from the other, leverage is just an excuse to artificially lower a valuation. Take this scenario from last season. I was rebuilding and had an unkeepable Aroldis Chapman. The saves category was such that both top teams had much to gain by adding Chapman’s saves – somewhere around four net points on their rival.

My prospective trading partners opted to stand pat rather than meet my asking price of a quality keeper. One owner in particular frequently sent me low ball offers, saying I had no leverage since I couldn’t keep Chapman. I stuck to my guns, he stuck to his.

I never did complete a trade. Now I’m preparing to cut Chapman on Saturday night (our keeper deadline), and it’s fine. As I recall, an $8 to keep Brandon Crawford was the best offer I received. Much as I like Crawford, I’d be cutting him for $8. I prefer to bet on Eugenio Suarez’s ridiculous baby ball park.

By not caving, I set the ground work for future trade talks with both owners. I won’t take a trade simply because I can’t keep a guy. In the end, both owners decided they didn’t need my saves. They were ultimately right, one owner ran away from the other in September. No amount of saves would have changed things. That wasn’t apparent in July or August, but no point being sour over it.

Leverage is what you make of it. If you allow it to be a factor in a trade talk, it will devalue your player. If you simply start a negotiation by highlighting how very little you care about this so-called leverage, then you can (mostly) remove the entire thought process from consideration. By taking such a stance, you risk short circuiting talks before they even begin. Don’t worry about it, you’re only weeding out owners who were trying to opportunistically take advantage of you.

Here are a few common scenarios when you should not fall prey to the leverage argument:

• You own X quality players at a position but can only start X-1.
• Your player has some kind of exceedingly minor injury concern.
• Your rival says “I’m interested in this guy, but I don’t need him.”
• Your player is too expensive to keep, and you aren’t contending.