Yanks And Ivan Nova Avoid Arbitration, Agree To 1-Year Deal

As first reported by Jack Curry, the Yankees and Ivan Nova agreed to a 1-year deal today, avoiding arbitration in the process.  The deal is for $4.1 million with some unknown performance incentives and it has been confirmed by the team.  Dollar amount is right smack dab in the middle of the figures that both sides submitted previously. Nova is coming off a tough year in his first season back on the hill after TJS.  The Yankees were shopping him as aggressively as they could earlier in the offseason and he's effectively lost his rotation spot based on his injuries and uneven performance, but with nobody biting on the trade front Nova obviously holds a lot more value to the team as part of the pitching staff.  He's expected to work as a starter in spring camp but will likely settle into a long relief/swingman role as long as nobody gets hurt.  Nova has always had command problems, but he has the stuff to be an effective starter and possibly even a very effective reliever if he can establish some form of consistency.

With Nova signed, Aroldis Chapman is the sole remaining unsigned arb-eligible guy.  Hopefully he and the club come to an agreement quickly.

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Yanks Avoid Arbitration With Didi, Agree To A 1-Year Deal

Three down, three to go.  Via Jack Curry, the Yankees knocked another one off the to-sign list yesterday, agreeing to a 1-year, $2.425 million deal with starting shortstop Didi Gregorius.  Didi filed for a $2.525 million salary last week while the team came in at 2.3, so this final figure is a bit above the midpoint and a small victory for Didi. This was Didi's first year of arbitration eligibility and based on service time he qualifies as a Super Two player, so he could be looking at some very nice paydays to come if he can continue to improve on his solid 2015 season.  After a sloppy start in the field and a slow start at the plate, Didi finished the year with a .265/.318/.370 batting line, 9 HR, 57 runs scored, 56 RBI, 5 defensive runs saved at short, and 3.1 fWAR.  His K rate was below 15% and he hit .294/.345/.417 in the second half of the year while playing Gold Glove-caliber defense.  His performance earned him a spot on MLB Network's "Top 10 Best Shortstops Right Now" list and if he continues to improve with the bat he's going to earn himself a lot more money.

The signing of Gregorius leaves the Yankees with 3 unsigned players remaining: Ivan Nova, Nathan Eovaldi, and Aroldis Chapman.  I wouldn't be surprised to see another one or two of them sign this week.

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Arbitration Update: Yanks Settle With Two, File Salaries With Four

The deadline for teams to come to terms with their arbitration-eligible players or submit salary figures for arbitration was yesterday, and the Yankees were able to reach new 1-year deals with 2 of their 6 eligible players.  They agreed to a 1-year, $4.3 million deal with Michael Pineda and a 1-year, $3.2 million deal with Dustin Ackley.  Those figures were right in line with the MLBTR projections. They did not come to a deal with Aroldis Chapman, Ivan Nova, Nathan Eovaldi, and Didi Gregorius, although it was reported that both sides exchanged figures in all 4 cases.  The most notable figures were Chapman's.  Via Jon Heyman, Chapman filed for $13.1 million and the Yankees filed for 9.  I'm sure they will agree to something in between and it won't be a huge deal, but the idea that the Yankees move in and swung a trade for the best closer in baseball only to turn around and lowball him on his salary is pretty comical.  The team and Eovaldi were also over a million bucks apart, but the midpoint of the 2 numbers is right around the $5.7 mil Eovaldi is expected to get, so that situation should work itself out.

Teams can still work out a deal at any time after filing arbitration figures, so I expect we'll see a few more agreements come before the arbitration hearings start next month.  The Yankees haven't gone all the way to arbitration since 2007 with Chien-Ming Wang, when they won.  It's very likely that they get new deals done with all 4 of their remaining players before the February hearing dates.

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Quick Hit: Six Yankees File For Arbitration

Last night was the deadline for arbitration-eligible players to file, and as expected all eligible players on the Yankees did so.  Thanks to the recent acquisition of Aroldis Chapman, the Yanks are up to 6 arb-eligible guys.  Here's the complete list with salary predictions courtesy of MLBTR:

There's no doubt that the Yankees will come to terms with all of these guys in the weeks to come.  What will be interesting to see is whether they go the extra step and try to sign anybody to an extension.  They've got some worthy candidates in Pineda and Eovaldi, and I could see them working something out with Didi.  It would probably save them a few bucks compared to letting him go year-to-year for the next 3 years, especially if he continues to improve offensively.

I'm sure there have already been discussions about that and every other possibility with all 6 of these guys.  We'll see what happens over the next few weeks and see if the front office gives any kind of indication of where they're leaning with some of the extension-worthy guys.

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Nine players are cashing in on MLB record earnings

Note: We here at IIATMS are proud to welcome UYF to our stable of writers and contributors. UYF has been a long time loyal reader and dedicated commenter. Over the years, this is how we've evolved and this addition makes me quite happy. You see, I asked UYF to contribute a number of times over the last year or two, but it was never the right time. Glad to hear that he said yes (read: we wore him down). Make sure you welcome him!  Thanks, Jason & team.

Prior to this winter, the most FA contracts in a single winter that guaranteed a player at least $100MM was four. This winter two players have already exceeded deals of $200MM:

  • David Price, who signed a 7 year/$217MM deal with the Red Sox
  • Zack Greinke, who signed a 6 year/$206.5MM deal with the Diamondbacks

Two more should, at the very least, be close to the $200MM level:

  • Jason Heyward, was said to be looking for a deal of 8 or 9 years in the $24MM AAV range. That comes to: $192 to $216MM. He agreed to a deal the Cubs last week at 8 years/$184MM and his contract contains two opt-outs.
  • Chris Davis, the home run machine of the Orioles, has already turned down, depending on who you believe, either $150MM or $168MM over 7 years from the Orioles to re-sign. He is said to be looking for 8 years/$200MM.

Five more players have either signed for 9 figures or are projected to sign for $100MM or more:

  • Jordan Zimmerman, signed for $110MM over 5 years with the Tigers.
  • Johnny Cueto, turned down a $120MM for 6 years with the Diamondbacks.
  • Yoenis Cespedes, while there has been no news about specific offers, Jon Heyman projects Cespedes to command a salary of $150MM over 6 years while MLBTR projects Cespedes to sign for $140MM over 6 years.
  • Justin Upton, again while there have been no specific offers in the media, Heyman projects Upton to command a salary of $161MM over 7 years while MLBTR projects Upton to sign for $147MM over 7 years.
  • Finally Alex Gordon, perhaps the least expensive of the “elite” FA outfielder according to Heyman is expected to get a deal of $100MM over 5 years and according to MLBTR projects $105MM over 5 years.

There are potentially nine players who could receive 9 figure deals this winter which is double the amount in any previous winter. That is an astounding number of players and a lot of money.

Where the money is coming from for some of these deals:

  1. MLB National TV Deals with three major networks carry through the 2021 season and MLB will receive $12.4 Billion. Yes that's BILLION.
  2. MLB Revenues in 2014 increased to $9 Billion from $8 Billion in 2013 and are projected to reach $15 Billion over the next few years.
  3. The Red Sox principal owner John Henry is a very wealthy man in his own right, but combine that with his interest in NESN, Liverpool FC, his NASCAR Racing Team and the Red Sox, is it any wonder the Red Sox can afford the type of contracts they have been paying out the last two years?
  4. The Diamondbacks Local TV contract, according to reports, is for 20 years and is valued at north of $1.5 Billion. Estimates of the payouts are for about $80MM per year. Welcome to Arizona, Zack Greinke.
  5. Finally, how could the Cubs afford all their new FA signings? Well, that ones easier to explain than you would think. First, they have some excellent low cost players on their roster that are only pre-arb eligible now, giving them very controllable payroll cost for those players for the next 3 to 5 years. Second, the Cubs are projecting starting their own Regional Cable Network along the lines of NESN and YESNetwork for the 2020 season. And their current TV deal pays them $60MM per year through the 2019 season.

What does this all mean for the Yankees?

Many mid and even small market teams are now able to afford players and their contracts that they, prior to this point, had been unable to afford. This is impacting the Yankees in ways they could not have foreseen just a few short years ago. More teams are now vying for a finite number of elite players. When you combine that with the excessive long term deals and overly expensive contracts for several players past their primes in the Yankees' case, and you have a recipe for the Yankees sitting out the market this year and potentially even in 2017.

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The Slippery Slope of MLB's Deal with DraftKings

There are so many fun things going on this season, that I should glory in a seven game division lead and sing the Yankees' praises. And maybe I will do that next week. However, there has been something sticking in my craw for weeks now and I need to talk about it. The "It" is Major League Baseball's marriage to DraftKings. The deal is, of course, worth millions to the league and its owners and you could even say that it draws more interest to the game from casual fans. But that doesn't make this a good thing for the game. First, some background, both personal and about how we got here. Let's start with the latter. In 2006, the federal government passed the Unlawful Internet Gambling Enforcement Act in response to a growing plague of online gambling sites. As a part of that law, it is spelled out that fantasy sports are not gambling because it is a game of skill and not of chance. The difference spelled out made it possible for sites like Draftkings and Fanduel to state emphatically that what they do is not gambling, but a game of skill.

That distinction makes all the difference because everything those sites do is legal according to the definition. Draftkings states that fact right on its site and Major League Baseball, which has made its bed with Drafkings can hide behind the same distinction. For more detail on the law side of this equation, a good resource can be found here.

On the personal side of this equation is my long life and experience with addiction. I have addictive personalities on all sides of my family since I was a kid right up to the present. They include a mother-in-law, a stepfather, a stepdaughter and small spurts of it with immediate family members.

I have an addictive personality myself. I had to quit drinking the first time I went to college because I was out of control. The few times I've been to Las Vegas, I felt the draw and the pull. I've had to give up playing the lottery and am still battling food addiction. So far, nothing has ruined my life, but it hasn't made it easy either.

As someone who has had the agony of changing the locks because a child was robbing us blind, I see these sites for what they are. The old saying that if it walks like a duck and sounds like a duck, etc. It is a duck.

Let's get to that skill versus luck distinction. Skill says you should start Gerrit Cole the next time he starts. But if, God forbid, he gets hit in the kneecap with a line drive in the second inning, kiss your skill's behind and welcome to the luck side of the equation.

Doesn't poker have a certain element of skill to it? There are better players than others. But it is still considered gambling. Many gambling games have a skill element. A lot don't. But calling a one day fantasy game involving money as a total skill equation is just too slippery for me. Someone might have purchased Mark Teixeira on Monday night and he mashed the ball his first three times up. All three ended up in the glove of a player on the other team.

In my opinion, if you can lose vast amounts of money doing something and can develop an addiction doing so, then that goes beyond a skill game and dives headlong into gambling.

These daily pay games go by the same psychology as used by Las Vegas and the lottery agencies. They let you win a little bit to made it fun and exciting. But except for a very few, you are playing with house money and the house is going to win (while you could lose your own house).

You may think I am being overly dramatic here. And I can concede the point since I am personally and emotionally involved. But that doesn't mean that these games are not creating addicts. For a comedic take (that is sad at the same time), just read this story. For a more clinical and frightening story, read this one.

You may think that the lottery is not a bad thing because only a few people ruin their lives not "playing responsibly." But the truth is, we are turning a blind eye to the few because the majority is able to control itself.

Major League Baseball has a long history of trying to protect itself from the "soil" of gambling. It is why Shoeless Joe Jackson will never be forgiven despite winning his court case! It is why Mickey Mantle and Willie Mays were banished from the game for a while for being doormen at a casino. It is why the all-time hit king will never be in the Hall of Fame and probably not in the game at any point.

How can a business that has worked so hard to protect itself from nefarious gambling issues make its bed with, definition or not, what is probably a gambling site. I can really see season long fantasy games being more skill driven because it spreads out the decision making throughout an entire season. But one game fantasy games are literally a crap shoot. Crap shoots are gambling. Major League Baseball has attached itself to what I feel is a gambling institution--albeit, a legal one.

It is not just that MLB has an advertising relationship with Draftkings. You cannot go to MLB.com or to the MLB Network and not be confronted by that relationship. But MLB is also a part owner of Draftkings!  They are all in, folks.

Adam Kilgore of the Washington Post said it well by stating: "So Manfred is right that the game is legal. But he chose not to grapple with the broader ethical dilemma." And it opens the door, according to Kilgore, to further adventures in sports betting. If that is where we are heading, maybe a remake of Field of Dreams would have something different for Joe Jackson to say.

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The Myth About "Bad" Big Contracts

[caption id="attachment_75237" align="aligncenter" width="597"] Courtesy: NY Newsday[/caption] The prevailing wisdom around the Yankees is that big contracts like the ones Alex Rodriguez and Mark Teixeira have are what is killing the team. In reality, those contracts have been fine and fans in general worry way too much about them.

I never get fans who would rather see the money go into the pockets of the owner than into the players'. The difference in the Yankees over the last two plus seasons is that they've been spending less and the performance on the field has suffered. Sure, Hal Steinbrenner fooled most people with his shopping spree in the 2013-14 offseason. People didn't realize how much money came off the books and that the payroll was only about $120 million to begin that offseason, so the Yankees didn't really go above and beyond at all.

The business model the Yankees used from 2001 through 2012 absolutely worked. The lack of championships are lamented, but the reality is that the Yankees put themselves in the best position to bring home rings every season winning 95 plus games. Short sample sizes in the playoffs happen, but those were some dominant baseball teams that were awesome to watch. You have to build for the long haul of the 162-game season before you can worry about what happens in the postseason.

What we're seeing now with the Yankees is frugality that has hurt the product on the field. Sure, Steinbrenner will sell you that his payroll is almost $220 million and that the team is doing everything in its power to win a championship. It's all a bunch of nonsense. He will also sell you that you don't need a $200 million payroll to win a championship, which is also nonsense. Sure, in theory it's true, but why not use all the resources and advantages that you clearly have? It makes zero sense.

The Yankees have been blown away by the Dodgers by over $50 million in total payroll. According to William Juliano of The Captains Blog, the Yankees are only 11th in payroll and luxury tax as a percentage of team revenue at a little over 45 percent, which is right about the MLB average. From 2003-2005 the Yankees were over 80 percent and from 2006-2008 over 65 percent.

How much different would the Yankees look with Max Scherzer this season? I think they would be the clear cut favorites in this horrid division and going into a playoff series with Scherzer, Masahiro Tanaka and Michael Pineda would give them as good a shot as anybody at winning a championship. Most people scoffed at the idea of signing Scherzer because of the length and the money of the contract, but I don't think Nationals fans are scoffing at his 1.67 ERA and his 72 strikeouts to only nine walks. The reality is that the Yankees could have easily afforded Scherzer, and the likelihood is that he will be so good over the first four to five years of the deal that it will be worth it. Heck, the Yankees didn't even seem to consider guys like Francisco Liriano and Edinson Volquez who were great values.

The 10-year, $275 million contract Rodriguez signed is portrayed as the worst thing ever when really the Yankees have gotten more than their money's worth from it when you factor in what he brings in ticket sales and merchandise. According to Fangraphs' WAR-to-salary dollar conversion rate, Rodriguez has earned $132 million of the $179 million he has been paid from 2008-2013. This is with two big injuries in 2012 and 2013. When you factor in the championship the Yankees won on his back in '09 and off-the-field earnings, Rodriguez has probably covered the $47 million missing. So far this season, FanGraphs has Rodriguez earning almost half of his $21 million salary already.

Teixeira is viewed as another albatross contract that hasn't worked out when Fangraphs has him actually outperforming his contract. Teixeira has been worth $111.7 million since 2009 while he has been paid $107.5 million. This is even with the wrist injury and the fact that he was basically worth nothing in 2013 and 2014. His performance in the first four years (worth $32.7 million in 2009, $20.4 million in 2010, $32.4 million in 2011 and $18.3 million in 2012) covered for his two injured years. Also, Teixeira is off to a fabulous start this year even in the second to last year of his contract.

Also, everybody knows that CC Sabathia's first big contract was well worth it as well with the extension being a different story.

It's no coincidence that the Yankees have been mediocre since they started to put lackluster effort into spending and winning. The only way it will change is if the Yankees completely bottom out -- which is unlikely in this division-- or if fans stop buying the company line. The Yankees are still printing money, folks. Don't worry about their bottom line and start worrying about the lackluster product on the field.

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The Real Problem With Not Signing Yoan Moncada

It's been over 24 hours since the news of the Red Sox signing prized Cuban prospect Yoan Moncada broke, and as I mentioned earlier I'm still struggling to make sense of it from a Yankee perspective.  This felt like it should have been a slam dunk.  This was going to be the big cherry on top of the international spending sundae, the big signing that got the Yankees back in the game of landing top-tier Cuban talent.  That's a game the team has been hesitant to play since signing Jose Contreras, and the call for them to re-engage has grown incredibly loud as we've watched good player after good player sign with other teams over the past few years. Once again the player in question did not sign with the Yankees, and this instance more than any other has generated a ton of negative reaction from the Yankee fanbase.  How could they lose out to the Red Sox?  How could they fail to make the biggest offer?  Why would they spend so much time scouting Moncada only to get outbid?  Why are they willing to spend on guys like Capuano and Chris Young for marginal money and then not willing to spend a similar amount to land Moncada?  What does this say about the Steinbrenners' plans for the team?  Why don't they just sell to someone who is willing to spend?

There are varying levels of legitimacy to all those points, the least of which I think is the idea that not signing Moncada is a "failure."  For all the hype surrounding him and all the talk about what kind of player he could be down the road, Moncada is still just a 19-year-old prospect who's probably years away from making an impact at the Major League level.  He was a lottery ticket just like any other international free agent.  The Yankees did their homework on him and were prepared to spend $50 million to sign him.  That's more than a lot of other team were willing to spend, it just so happened that another team was willing to spend more.  That that happened does not make what the Yankees did in their pursuit of Moncada a "failure."

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Why I'm Only Pretty Sure I'm Ticked They Let Moncada Go

Wow, my timing remains great: I write an ode to Frankie Cervelli one day before he's unexpectedly traded, then a brief supporting a Moncada signing one day before he becomes a Red Sock. Feel free to hit me up for stock or pony tips, because I'm clearly clairvoyant. Anyhow, I'm ticked they didn't get him, but it's very possible I'm wrong: (1) To start with, he seems worth it even if you're not a cockeyed optimist. Even if he's not at the level of a #1-2 overall draftee, and instead is only the 8th-15th best draftee, that's good for an expected 11.5 WAR in his six team-controlled years, and $60m is well-below-market for that. And if he's really a #1-2, his expected production is then easily double his pricetag, given that (as the same linked article shows) you can expect 24-28 WAR in the first six years of a #1-2 overall draftee.

(2) But the Yankees and all other teams declined to bid $70-80m after seeing him repeatedly, and we non-insiders saw him zero times. If he's at the level of a lower first-round draftee (#15-30), his expected six-year production is only 6.5 WAR, which might be worth $60m to the Yankees, but it's a close call. And it wouldn't take major, major holes in his game to make him a lower rather than higher first-rounder. Reports started saying he's more 2B than SS, which alone is a big difference. And we don't know what else they saw: maybe he's got a mildly slow first step in the infield, or maybe he's kind of a punk without the makeup to yield confidence he'll reach his potential. We don't really know -- but that's the point.

(3) Yet the early word-on-the-street tweet-reporting doesn't give me tons of confidence it's explanation #2 (that after a rational evaluation they decided he's a high but not elite talent) rather than #1 (that they blew it):

Marchand: Yanks feeling was they can buy a proven MLBer for $60M or $70M

Hoch: Cashman said there is no debate about Moncada's talent and ceiling, but bidding went farther than Yankees were willing to go.

Matthews: To be clear, it's obvious Cashman wanted Moncada but it seems like he couldn't get Hal to go any higher

I want to believe it's not "proven MLBer" (my post yesterday noted that $80-100m does not get you an MLBer better anywhere near as productive as a top draftee), nor an empty "farther than...willing" declaration. Frankly, they sound like the Royals explaining why they couldn't match $75m for James Shields but could spend $58m on the mediocrity grab-bag of Alex Rios, Edinson Volquez, Kendrys Morales, and Luke Hochevar. So I want to believe, but as with a lot of things in life, what I'm seeing all around me doesn't make it easy to believe what I want to believe.

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One Last Moncada Analysis: Why He's Worth the First Nine-Figure Prospect Signing

A Yoan Moncada signing may be imminent, with Hank Steinbrenner attending Moncada's notable third private workout with the Yankees just days ago, so I'll take this last chance to weigh in on whether he's worth the small fortune he'll cost. My first thought was: No way is a 19 year-old amateur worth the $80-$100m we hear he may get. My second thought was: Come to think of it, I have no idea what a top draft pick is really worth to a team. Team owners prevent American amateurs from earning their true value by agreeing to sign them only in a "draft" -- i.e., a cartel agreement that each player will get an offer from only one employer, not from multiple employers bidding for his services. I'll leave for another day my tirade about how badly baseball owners violate free-market economics and morality by being tied with OPEC as the top billionaires-for-cartelization club. But the point is that the several million it takes to sign a top draft pick is his cartel-depressed price, not his value to his team. If he were draft-eligible, Moncada likely would be the #1 overall pick. While I'm no draft expert, I'm reading that the two top draftees this year are more reliable, but have lower ceilings, than Moncada. My impression is that the team with the #1 pick dreams of fishing for the next Trout, so it more often goes for high ceiling, not high floor – meaning Moncada likely would be a #1 overall draft pick, or maybe a #2.

And a #1-2 draft pick really is worth a lot. A great analysis by Andrew Ball found that, on average, the #1 player in the draft produces 28.5 WAR in his first six MLB years (the team-controlled years), with the #2 player not far behind at 23.9 WAR. The dollar value of those picks is about $90 million and $75 million, respectively – but that's based on 2013 dollars-per-WAR estimates. Recent free agent signings show the cost of a marginal win has risen, easily by 10% over the past two years – which is to say a #1-2 draft pick is worth about $82-$100 million. Marginal wins also are worth more to big-market teams, so a #1-#2 pick is worth more than that $82-$100m to the Yankees and Dodgers – reportedly the two top Moncada contenders. Which is to say that at least some of the billionaires who own MLB teams know what they're doing, at least when it comes to whether something or someone is worth a $100 million investment.

Or look at it this way: What does $80-100 million get you on the free agent market, the other place you could spend this money? Sure, Moncada is a high-risk/high-reward investment -- but so are the 30somethings who command that much as free agents. Remember that the $80-$100m for Moncada includes the MLB "tax," and many of the teams considering Moncada also face luxury tax for free agents (e.g., Yankees, Dodgers), so let's consider what similar sums have gotten the Yankees on the free agent market: (1) it took over $120m ($85m plus luxury tax) to land Brian McCann; (2) $68m, Carlos Beltran ($45m + luxury); (3) $78m, Chase Headley ($52m + luxury). Moving on to other teams' signings, James Shields just cost the Padres $75m, close to Moncada money, but he would've cost a team paying luxury taxes over $112m.

Not one of these $70-120m(ish) free agents will produce the 24-28 WAR a #1-#2 draft pick like Moncada should – and while Moncada is risky, so are these guys. Beltran has a decent shot at a modest comeback, but he was a 0-WAR player last year, so if he doesn't come back, he's identical to a minor-leaguer who never makes it. Carl Pavano and Kevin Youkilis show Beltran wouldn't be the first free agent to provide about 0 WAR for eight-figure pay. If you expand the list to pricey free agents who provided just one good season you get A.J. Burnett as another example of how major-league free agents aren't necessarily less likely than an elite prospect to come with a risk of either providing zero value or proving a one-year flash-in-the-pan. As many folks noted in our Shields/Scherzer discussions: top free agents almost all are in their early-mid 30s, the age at which even a reliable star easily could be 0, 1, or 2 years from a permanent plunge to the replacement-level value that is all most players can offer by their mid-late 30s.

Now, it's possible Moncada's workouts showed enough holes in his game to convince teams he's not actually at the level of a #1-2 draft pick. If he costs only $40-50m, that'll be decent evidence the workouts showed the reality didn't match the "he'd be #1" hype. But if the hype held up, then Moncada does seem worth the money, and for a team with a farm system that's looking better this year, but is a bit lighter on IF than OF/P talent, Moncada seems a good fit too. So, here's hoping.

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