More From Antonetti: The Hafner Contract

The elephant in the room, or, if you will, on the payroll.  I am a big Travis Hafner fan — today.  There is a good argument that he was the best hitter in baseball from 2004 to 2006.  He married a Cleveland girl, he lives in Cleveland, and he gave more than just lip-service to "wanting to stay in Cleveland."  It doesn't really matter to me how much he loves the fans or the city of Cleveland or his teammates or the organization. Maybe he just loves his wife, and maybe his wife just loves Arabica.  I don't know, and I won't pretend to know.  What I do know is that lots of players talk about loving their teammates and/or loving the fans and the city and/or wanting to stay, and many of them leave soon thereafter; I need not name names.  Hafner doesn't say a whole lot, and he made no pronouncements about his intentions and didn't play the PR game.  Rather, he signed his name to a contract in which he left tens of millions of probable earnings on the table in order to remain a Cleveland Indian for four more years.

I say all this to make clear what this part of my conversation with Chris Antonetti was not about.  I'm not mad about the contract.  I supported it at the time, and as I re-examine my logic in supporting it, I find very little worth revising.  This is not to say I don't suspect that the Indians are victims of their own error in judgment rather than simple misfortune.  I do suspect it; from an outside perspective, it would be irrational not to suspect it, but I don't assume it.  Regardless of blame, however, it is fair to say that as of today, this contract is an albatross as large as any club currently has on its books.

Antonetti seemed a little surprised at the amount of detail I wanted to go into on this subject, and indeed, we spent more continuous time on this one subject than on any other.  He seemed hesitant at first but eventually seemed to understand that I was trying to be thorough.  As Evan intimates in his Hafner profile, beyond simple consternation, there has been far too much speculation on this subject — essentially, what did the Indians know, and when did they know it?  Did they drop the ball on due diligence, did they throw caution to the wind, and did they ignore his early-2007 slump?  Did they let this happen to us, or did it, well, just happen to us?

To my knowledge, the Indians have never gone on-record about these details before, or at least, the details have not been published.  I don't know that either the Indians or the local newspapers realize how interested the fans are in understanding exactly how all of this unfolded — and not just the obsessed and fairly sophisticated crowd here at LGT, but basically all serious fans.  Nothing is "too inside-baseball" when it comes to your hometown team's biggest contract ever and biggest (apparent) bust ever (so far).  Newspapers don't run a lot of lengthy Q&A features, but I think this is a clear example where the more typical story —  lots of paraphrasing as the writer shapes his take on the subject around a few choice quotes — really does not do the subject justice.  I don't expect this to settle any debates, but if there's going to be more handwringing, let it at least be based on the facts.

I was hoping you could take me through the timing and the process of Hafner's contract, how the negotiations interact with the medical screening and due diligence. Obviously you have records on the player going back several years before you ever get to this point.

Yes.

So the contract is being negotiated. It's spring of 2007. How much screening have you already done at that point? He comes into spring training, is there a physical at that point?

Yes, we have an exit physical at the end of each year, so he would have had a physical at the end of the 2006 season, inclusive of any relevant imaging, and he would have also had a physical at the beginning of spring training.

How extensive are those physicals compared to the eight-hour ordeal Kerry Wood described?

Well, it depends upon what's warranted on exam. They're a little bit different than the physical for a contract, which we still performed on Travis Hafner. So we had an exit physical, an entrance physical, and then another comprehensive physical once terms were agreed to. Everything is contingent on that extensive physical, and that extensive physical was completed on Travis.

Do you ever get resistance from players under contract, in terms of how extensive the medical screens are? Since you guys do things more extensively ...

Well, the physical at the end of the year is not necessarily four hours. If there is something symptomatic, then we get it examined and try to get it assessed. Very few players play through any season at 100 percent without some sort of medical condition, whether that's an injury, a pulled hamstring, a sore shoulder, it can be wide-ranging. So what we try to do is assess where they are physically and medically, at the end of each season. If there are any reasons to be concerned, then we'll do follow-up examinations and imaging studies if necessary. It's prospective in nature. It's trying to determine, okay, where is a player now, are there things we can do proactive in the offseason to make sure if he does have any deficits or any issues, that we can manage them as well as possible, to prepare him as best we can for the upcoming season. That's really the intent of the exit physical primarily, and the entrance physical is the screen that determines, is there anything currently we need to know?

Still, do you ever get any push-back from players on that?

Not really, no.

Travis ended the 2006 season injured, and so there would have been an exit screening at that point, and then spring 2007, there's an entrance exam. I'm sure you did some work in the off-season on what kind of contract you wanted to talk to Travis about, but your discussions with him in the spring on a contract were bearing in mind the results of those two physicals.

Yes, we were cognizant of what ...

... of whatever was in those.

Yeah.

So, was it your understanding at that time, that you'd look at him and say, "This guy's perfectly healthy, except maybe that elbow thing, and we don't really have any significant health issues."

Yes, I think that's fair to say.

So that at that stage of the discussion, your offers to him were not being substantially limited by any particular injury risk to him, above and beyond the injury risk to every player.

That's correct, with the contingency that any contract agreement would be conditioned upon a full and exhaustive physical, and that had yet to be completed.

But by that point, the terms are already in place, so there isn't as much opportunity to go back and say, "Well listen, now that we've seen your physical, we value you 15 percent less."

Oh, there is that ability, yeah, there clearly is that ability. That has happened in the past, or in some cases, it could cause us to completely just table negotiations at that point, because we were no longer comfortable with the risk level, or there was something unexpected that was found on the physical. That did not happen in Travis' case.

That didn't happen.

No. When we signed Travis, our expectation would be that he would be healthy for the duration of his contract. Again, he was healthy at that point; obviously we know that everyone has an injury risk, but he was healthy at that point.

So then, moving forward to July, for some reason, he's having an off-year, that's fair to say, yes?

Mm-hm.

And for some reason, he decides to reinitiate the talks.

They were never really "closed" per se, they were more "tabled," and if their side felt it was worth revisiting, we preserved that ability to do that.

But it's fair to say that he and his agent suggested that the talks might be un-tabled at that time.

Mm-hm.

So at that point, you're looking at his performance having declined. How much did that enter into your thinking in terms of the scale of the contract? I mean, obviously it's the most significant contract in the team's history, how much did his slide in performance enter into your thinking in terms of what was going to be offered and committed?

We were certainly cognizant that he wasn't off to an exceptional start, but I think the other thing to keep in mind is, he was very productive in April, there was no reason in April and May to conclude or think that he wasn't productive, I think his OPS was well over 900 through the end of May that year, or right around 900, and anything around that is probably normal fluctuations over the course of 200 plate appearances. And the bulk of the negotiations were completed, pending the physical review, prior to the announcement, so there was some lag time. But I think in April that year, he had over 1000 OPS, and May he was within what would be a normally expected performance for him, if I'm remembering correctly.

Yeah, I think that's about right, although he maybe wasn't as good in May as you're thinking.

[He looks it up.]  April that year, he hit .338 with a .471 on-base and a .550 slug, for a 1021 OPS. May that year, he had a .394 on-base, 455 slug and 849 OPS.

Yeah, but looking back — and it's easy to have hindsight, I understand, but looking back — you could say, well, he was being pitched to as someone to be terrified of, and his batting average on balls in play was pretty high in April. It looks like he had a bit of a lucky month, but that his baseline performance was already dropping at that point. Would you disagree with that?

Again, you have to be cautious to take any sort of meaningful adjustments of 80 or 90, 100, 200 plate appearances, especially when a player has I think at that point probably had 4000 at-bats, that establish a pretty good baseline of performance between his minor league career and major league career.

So the team's view in general at that point, when you're negotiating the conditional agreement, would have been, "This player's not really changed, he's still basically the same hitter that he was over the past few years, and this will pass."

At that point. And there are also the understanding that we're still dealing with humans, that there was probably some additional pressure he placed on himself, having turned down a very significant contract three or four months ago, and the extent that was weighing on him is difficult to measure, but that certainly could have been a contributing to the struggle, or to the perceived struggle, that he was less productive or [that] there was some sort of diminished ability from the previous years.

But barring injuries, you guys didn't consider Hafner to be a significant performance risk.

No, we did not.

Would it be fair to say that barring injuries, even right now, you don't necessarily consider him a very high performance risk?

That's our expectation, that we still think he has a lot of attributes that will lead him to being a very successful hitter. And now, hopefully, physically, he has the ability to allow those skills to play out.

So you guy guys really feel, right now, that if his shoulder can be made healthy, that he will be if not an elite hitter, at least one of the better hitters in the league.

That's our hope, that's our expectation now. Again, we need to see if we can get his shoulder to be 100 percent, he has a checkup this week.

So the last piece of this is, you've got your conditional deal, how extensive is the physical at that point? We're now basically at July of '07.

Very extensive, and there are separate physicals. There's a physical that we do, and there's a separate physical that an independent doctor does from an insurance standpoint, a whole separate component, and again, on neither of those two exams did anything come up that would be concerning for us about projecting what Travis' future performance would be.

Was there any particular attention paid to his shoulder?

At that point, at those levels, there's particular attention paid to everything. Our process is very exhaustive.

Was it as extensive as it would be for a free agent signing?

Oh, absolutely, yeah. Whether it's an internal extension or external extension, our process doesn't deviate for medical risk. Our risk tolerance would be different — obviously if we're signing a guy to a non-roster invite or a very low guarantee, we may tolerate more risk — but the risk assessment itself doesn't change, and the process for arriving at that risk assessment doesn't change, for any contract of significance. If we're signing a guy to a minor league contract where our exposure is relatively little, we don't have the same extensive process that we would for a major-league free agent. But the process for Kerry Wood and Travis Hafner is very comparable. There's some small differences between pitchers and position players, just because of the nature of what they're asked to do, but beyond that, the process is very similar, and as extensive.

You've said that you feel that your medical process is about as exhaustive as any team in the game.

At least that we're aware of, yeah. That's not necessarily a standard we hold ourselves to - we hold ourselves standard to being the best and cutting-edge, regardless of what other teams are doing.

And now, what I'm understanding you to say is that the exam that Hafner was given at that exact point in July of '07, just prior to the announcement of the contract, was as extensive as any that you ever give. And in fact, there were two such exams, given by two different doctors.

Well, I can't speak to the thoroughness of the independent doctor; they go through their own determination, their own process, but obviously it satisfies an insurance company that's making a very significant decision on this player's risk.

And you're saying, the result was that you had absolutely no reason to adjust your valuation of the risk and value of that contract.

In our judgment, we didn't have reason to be concerned about adjusting the value of his contract, based on anything we saw in his medical examination.

So then, you must feel perfectly good about that whole process.

Yeah. There are obviously different degrees of outcomes in any decision you make, and I think what we try to look through and look back on the process, and how complete and how effective the process was, irrespective of the outcome. You could have a very good process and still bad outcomes. I'm not saying that's necessarily the case in Travis' case - again, our expectation and our belief is that he's gonna come back and with his physical issues behind him will go back to being a very, very productive major league hitter.

Well ... come on, I think you could say that it has not worked out at least on the medical side the way you hoped it would.

Oh, certainly, so far, that's correct, yeah.

So then, would it be fair to say that, with the management team currently in place, if faced with the exact same set of circumstances again, you go ahead and sign that same contract?

With the information we had at that point? Yeah. Yep. I think that's fair to say.

So from the day you signed the contract until now, a season and a half later, realistically, the contract that that player could command on the market has gone down precipitously, and yet you would look back at that and say, "There's nothing about that experience that would make us change our process at all."

With the information we had at point, no. Yes, I would say that. I would say that's correct. We are comfortable with the process we had to arrive at that decision.

I'm trying to get my head around your comfort.

You're never, ever going to get certainty, there's never certainty.

I understand that on an intellectual level, your comfort with it, but I would think that to some extent, you have to be motivated to be really scrutinizing that process, given that the outcome so far has been disappointing.

And we have scrutinized that process.

But you've concluded that the process was as good as you thought it was?

And as good as we could have done with the information we had at that point. I think you can get into bigger questions about team building, about committing significant dollars in a market our size to a player at that end of the defensive spectrum. That's a different strategic question than what we thought of the process arriving at the decision and the risk associated with signing Travis to a long-term deal.

Has the organization shifted in its thinking, in terms of what positions to be investing long-term money and major risks?

I think it's important to look at the context of the market, and who knows how this off-season remains to be played out, but if Travis goes back and is healthy, and has a very productive year, his contract all of a sudden is undervalued.

Undervalued? You think?

He's scheduled to make anywhere between 11-five and 13 million I think, between now and the end of the deal, depending on the year-to-year salaries, and if he goes back and has a thousand OPS, that's an undervalued contract on the market. Potentially. Again, this off-season, we have to see how there may be a dramatic shift in the offseason. But as of October 31, 2008, it would be. Who knows, at the end of this market, no contract of double-digit value may be deemed to be a good value.

©2009 Jay Levin

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