Wednesday, January 6, 2010

Risk/Reward of the Matt Holliday Signing

Almost by default, Matt Holliday and the Cardinals came to terms on a 7 year/$120 million dollar contract. So much for the Yankees:
The St. Louis Cardinals have agreed to a seven-year, $120 million deal with Matt Holliday, has learned. Holliday will also get a full no-trade clause.

Holliday batted .353 with 13 home runs and 55 RBIs in 63 games with the Cardinals after being acquired in a July trade from the Oakland Athletics. He helped stabilize their batting order by providing a consistent power threat in the cleanup spot behind NL MVP Albert Pujols. When they added Holliday on July 24, the Cardinals led the NL Central by just 1½ games, but by the end of August their lead had swelled to 10 games and they cruised to the division title.


The Cardinals are hoping to use this deal to show Albert Pujols how committed they are to winning. Pujols' contract expires after the 2011 season.

While there is a high level of risk involved with this deal, the Cardinals ultimately decided to pull the trigger because there was no competition and Holliday represents a rare opportunity for the Cardinals to dramatically improve their team:

  • Severely limits payroll flexibility in the future
  • Will Matt Holliday be on the decline by the end of the contract?
  • Did the Cardinals need to give Holliday seven years given how little competition was out there?
  • Full no trade!
  • dynamic 1-2 punch with Pujols; deep and potent lineup
  • teams can no longer pitch around Pujols like they used to
  • increases the Cardinals' chances of retaining Pujols after 2011
  • Are the Cardinals the team to beat in the National League?

Conclusion: The reality of this deal is simple: if the Cardinals win a championship with Holliday and re-sign Pujols, then this deal is a win for the Cardinals. The Cardinals now feature one of the best lineups in the National League and have given the best hitter in the world some much needed protection. From that angle, it's very easy to like this deal. And from Albert Pujols' perspective, it has be great to see the Cardinals spend the big bucks to surround him with impact talent. If you believe that somehow the Holliday signing is linked to Pujols eventually re-signing, then it's very easy to like this deal.

But I have to honest, I'm worried about the future impact of this deal for the Cardinals. If the Cardinals payroll remains around $100 million, then with Holliday on board for $17 million and Pujols on board for roughly $20-$30 million, that would not leave the Cardinals with much room to spend on other players. Can a team with a $100 million dollar payroll win with 40%+ of its payroll committed to two great players? That's the question that Cardinals fans have to be thinking about.

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