Buried within Jon Heyman’s (SI) latest writeup on the Roy Halladay trade, we find the following item regarding Yankee super prospect, Jesus Montero. According to Heyman, for Toronto’s 32-year old ace, “[i]ndications are the Yankees offered a package that included top catching prospect Jesus Montero as the centerpiece.” With this information in hand, one can then assume that a deal wasn’t reached with Toronto because the Yankees were likely hesitant to offer either Joba Chamberlain or Phil Hughes, along with Montero (who the Blue Jays reportedly coveted). While we can certainly debate the Yankees’ continued commitment to retaining Hughes and Chamberlain (again), the team’s alleged willingness to include Montero, their most touted hitting prospect, in a deal for Halladay is much more interesting.

The main source of intrigue revolves around the Yankees’ long-term evaluation of the 20-year old Montero as a catcher in the Majors. As stated by Patrick Teale of Scout.com, although “Montero gets unfairly knocked for his defensive game when he has the basic foundations to be more than a serviceable big league catcher someday,” there are some red flags concerning his mobility behind the dish. “He is so big,” notes Teale, “his flexibility and agility aren’t up to par with other defenders and that could be a problem long-term.” This, then, the possibility of outgrowing his current position, is a significant concern for the Yankees, as Montero’s value — particularly his boundless potential as a powerful RBI producer — is intimately tied to his role as a catcher (like center field, it is a premium position). If Montero is projected to be nothing more than a first baseman — we don’t need one of those, obviously — or a designated hitter, which is often very accessible via free agency, then his value to the organization would reduce dramatically.

Perhaps the Yankees think that this outcome is the likelier scenario, explaining why the club would be willing to include the formerly untouchable Montero in a prospect-driven package for the right-handed Halladay. If Montero cannot be the Yankees’ future catcher or first baseman due to both defensive and contractual issues, then, presumably, the Yankees would be more inclined to make him available, especially for a pitcher of Halladay’s caliber (though I think it’s best for the team to employ the “wait and see” approach with regards to Montero’s catching). This appears to be the only explanation as to why the Yankees would actually trade their organization’s acclaimed catching prospect.

That and the fact that Roy Halladay is an extremely good pitcher, of course (and to get, one has to give).

Photo by Al Messerschmidt/Getty Images

Rumors still place the Yankees in the hunt for Roy Halladay. The Blue Jays want Jesus Montero, one of Hughes or Chamberlain, and lesser prospects for the star pitcher. Following the trade of Ian Kennedy and Austin Jackson, this would leave the Yankee farm system almost completely barren of top-end, near-MLB talent.

Roy Halladay is a fantastic pitcher, maybe a Hall of Famer, but he is also 33 years old. He is not a long term solution at the position, and carries with him plenty of injury risk as he becomes a baseball senior citizen. A trade for him would fill the classic Yankees trade: trade lots of long term value for short term value. And this is a terrible idea.

The Yankees are finally running their organization the right way. Their farm system is starting to produce high-quality major league talent. Their major league roster is, for the first time since 2004, completely devoid of albatross contracts (although Alex Rodriguez’s deal has the potential to become one) that bothered them for so long. While there are issues with the 200 million dollar payroll, they are making much better use of it than the late-Torre era teams.

Part of this is because of the Yankee core of players. Soon, the Yankees are going to have to replace Derek Jeter, Jorge Posada, Andy Pettitte, and Mariano Rivera as the team’s HOF-caliber core to lead them to year-in, year-out playoff appearances. While they have been supplemented by outside help, the outside help has fluctuated in value.

With proper roster management, the Brian Cashman’s goal should be perpetual competition. Most teams operate in cycles: they build up, win for a few years, decline, trade away their best players, get a few high draft picks, and reload with the stars that they acquired. This cycle has been a reality for even the well-managed, large-budget teams. The Yankees are about to lose the 15-year core that have allowed them to stay out of this cycle for longer than any team that I can remember. The continue this run of success, the Yankees are going to need to find some more Hall-worthy talent to prop their team up for very long periods of time.

Alex Rodriguez is a Hall-worthy talent. So may be Mark Teixeira and C.C. Sabathia. However, They are entering the decline phase of their careers. While the core-four Yankees have aged remarkably well, we can’t really expect guys who won their first ring in 2009 to do the same. Teixeira and Rodriguez will probably be all-star caliber players for most of their Yankee career, but toward the end they are likely to suffer inevitable declines while being paid quite a bit of money. Teams constructed via long term free agent deals will always have to deal with this problem.

To top things off, the Yankees don’t have the payroll advantage they used to. While their 200 million dollar payroll still dwarfs the next-largest by two or three large contracts, the number of teams that have lifted payroll to the 100 million or more range has increased dramatically. 13 clubs have had payrolls of 99 million or more in the past 2 seasons. The high-dollar club for free agents used to be reserved for just a few teams, but big-contract free agents face a much better buyers market for their services. And the Yankees have shown no indication that they are willing to push payroll higher than 200 million in the near future.

What does this all mean? It means that roster construction needs to look beyond the next season. In order for the Yankees to put out a Series-caliber team every season, they need to balance young players with old. They’ll have a few big productive contracts (Teixeira, CC, AJ, Alex Rodriguez) at the same time as aging ones (Jeter, Posada, Mariano), and pre-free agency young players to balance out the difference. That is exactly why Jesus Montero is so useful: he’ll be cost controlled until some of the slightly younger Yankee stars age.

And here is the catch the Yankees are in: they absolutely have to look long term, because rebuilding won’t be as easy for them. If the team finds itself with a bunch of untradeable, unproductive contracts, they can’t just be Oakland and clean house, get a bunch of prospects, sign some free agents, and jump back in. They’ll have to wait for the untradeable contracts to phase out. This high-budget team Dutch Disease should be familiar to New York sports fans: the New York Rangers had it for years before the NHL salary cap, and the New York Knicks still have it. Poor management combined with a high budget are a deadly combination that can wreck a franchise for a very long time.

Jesus Montero, Phil Hughes, and Joba Chamberlain have some serious star potential. They may or may not be stars, but that caveat is true of any young prospect. It was true of Brien Taylor, and was true of Derek Jeter. Sometimes, you have to place your bets, wait, and see if the result pans out. Because when you bet on a young player and lose, you only lose the opportunity cost of not trading him. When you bet on a 100 million dollar contract for a 33 year-old former Cy Young winner, you’re stuck with the bill, and your future options are limited.

There are a lot of high-risk, high-reward free agents on the market today. The names by now are familiar to everyone: Rich Harden, Ben Sheets, Erik Bedard, Justin Duchscherer and Kelvim Escobar. The Yankees should sign at least one, and maybe two, of these pitchers. For the cost, they are great bets.

A player of the caliber of John Lackey (or A.J. Burnett) will cost at bare minimum 16 million dollars on the open free agent market. A trade for someone like Roy Halladay would at best cost two top prospects and one of our young MLB pitchers. These are steep costs. The money is easy to figure out, but what would the Halladay package be worth? According to Fangraphs, Phil Hughes alone was worth 10 million dollars alone last year, and Halladay’s salary is almost 13 million dollars.

That’s a lot of expense. The pitchers listed above, on the other hand, are probably looking for salaries in the 2-8 million dollar range. The best of the bunch is Rich Harden, who also has the highest price tag, and I am going to argue that the Yankees sh0uld sign him. However, the same argument stands for the other players, including Chien-Ming Wang.

Rich Harden has put up the following stat line since returning from persistent injury in 2008:

While his control suffered a bit in 2009, his K/9 rate didn’t budge. In terms of effectiveness, Harden is probably somewhere in the middle of his 2008 and 2009 seasons. However, those seasons also demonstrated that we probably cannot count on Rich Harden to play more than 140 or so innings over the course of a season. The silent fact about Harden is that although it seems as if he’s been around forever, the man will be entering his age-28 season, and therefore is still in his physical prime.

Let’s assume that Harden has more 2009 in him than 2008, and pitches a 130 ERA+. That would put his ERA somewhere around 3.40, which I think is reasonable. The Yankees would have to make up the 60-70 innings that Harden misses versus an option like John Lackey by playing a replacement pitcher, likely Ian Kennedy, Joba Chamberlain, Phil Hughes, Chad Gaudin, or Zach McAllister. Let’s assume that these talented young players are not all they are cracked up to be and put up a mildly successful ERA+ of 95 when filling Harden’s playing time. Doing some basic math, we can then calculate what value our Frankenstein hybrid pitcher gives us. Let’s compare this to two separate options: John Lackey pitching 200 innings with an ERA+ of 120, and Roy Halladay replicating his 2009 performance with 240 innings and an ERA+ of 150.

John Lackey: Richard Harden’s 130 ERA+ in 140 innings + Replacement’s 60 innings of 95 ERA+ [(130 * 140/200) + (95 * 60/200)] = 119.5 ERA+

Roy Halladay: Rich Harden’s 130 ERA+ in 140 innings + Replacement’s 100 innings of 95 ERA+ [(130 * 140 /240) + (95 * 100/240)] = 115 ERA+

So, let’s compare the two options. Rich Harden and the Yankees replacement pitchers essentially equaled John Lackey’s expected production, assuming Lackey even reaches 200 innings for approximately 7 million dollars less money and no long term commitment. And while the group doesn’t measure up to Roy Halladay, the Yankees 115 ERA+ that they would get in the same number of innings for 4 million dollars less does not include the value of keeping at least three top young players long term.

Rich Harden, and the others, have a lot of risks attached to them. And they don’t provide the type of game-changing, complete game dominance that Roy Halladay brings to the table. But the Yankees already have C.C. Sabathia to help them do that, and need a strong supporting cast behind him. I think that Jesus Montero, Phil Hughes, Austin Jackson, and Joba Chamberlain are all going to be productive major league players. By betting broadly, and keeping our long-term risks hedged, we won’t be decimated by Roy Halladay being paid 20 million dollars at the age of 39, or stepping on 3rd base wrong while running the bases in June, or just not pitching well for a season.

I’d also like to point out that I tilted the assumptions toward Lackey and Halladay when making ERA+ and innings assumptions. Halladay’s career ERA+ is 133. Lackey hasn’t pitched 200 innings in the past 2 seasons. And in addition to that replacement-level group of starting pitchers, the Yankees would fill many of those innings with leveraged, matched up bullpen innings from a very good group of relief pitchers.

Part of the reason that the Yankees are not going out and getting Matt Holliday (and why Johnny Damon played with the Yankees for 4 years instead of Carlos Beltran) is that they committed their roster and ability to win to a very small number of players. A broader group, thanks to a cheap set of young, effective players, is much more effective.

Get Harden. Keep your depth. Spend the money elsewhere.

The main issue at hand, at least from a financial perspective, with regards to a Roy Halladay trade is whether or not the 32-year old right-hander would require an extension upon being moved. Such a contingency would be extremely costly for a team, especially after parting with high-end prospects from one’s farm system. After witnessing the way in which the Johan Santana trade unfolded, most believe that Halladay would demand a new and expensive contract, although there have been reports stating that he is eager to test free agency. Based on a article today, however, in the NY Post, it seems as though extending Halladay is also a point of contention within the Yankees front office.

According to Joel Sherman, “one faction of the Yankees front office has advocated trying to trade for Halladay, but not extend his pact. That way they would get Halladay on a very good contract for 2010 ($16 million) and then offer him arbitration after the season to secure two draft picks as a way to recoup some of the prospects given up in the trade.” The merits of this idea are certainly worthy of consideration, as the Yankees would maintain some semblance of financial flexibility after the trade, and could theoretically replenish their organization’s development system by refusing to offer an extension and collecting compensatory draft picks once Halladay rejects an arbitration offer and signs elsewhere via free agency. The practicality of this particular plan is questionable, however, in that history tells us that Halladay would most likely demand a market value extension prior to being traded (especially from the Yankees).

Of course, in the Yankees “front office,” there are those who probably think such an extension is a good idea after giving up a tremendous group of prospects and young players — it’s the other “faction” — though, in my opinion, if I were forced to choose, I might be more inclined to agree with the group Sherman outlines rather than the latter.

What about you? Where do you stand on the extension issue?

Photo by Peter Thompson/National Post

There’s a bunch of Tweets and stories from Jordan Bastian of MLB.com that shed some light on what the Blue Jays will likely be looking for in a prospective Halladay deal. First, he has a story up on MLB.com saying that the Blue Jays are likely to lose Catcher Rod Barajas this off season. They plan on offering him arbitration, but it appears he has a multi-year deal elsewhere. He also quotes Blue Jays GM Alex Anthopoulos on his Twitter, saying this in reference to the Barajas situation:

“We’re going to keep the dialogue open. But, right now, I don’t see there being good chances of Rod coming back.”

He later Tweeted that Travis Snider has been told he will have to earn a spot on the Jays’ roster during spring training, leaving the possibility of another opening in the outfield on top of the hole left by Alex Rios last year. Finally, he sums up the info with a quote from the Blue Jays GM

Anthopoulos: No. 1 need right now is at catcher, but Jays are also looking for help in the outfield.

My first impression is that this is an attempt to draw the Yanks in to the bidding, having a plan in place for their Catching position next year that could very well be bringing Barajas back on a 2 year deal. But any good GM has a series of contingency plans, so there’s nothing really ’skull and dagger’ about that. I’m admittedly suspicious when New York beat writers are breaking Red Sox-related stories regarding Halladay, but I’ll take all of this on face value for purposes of this discussion.

This means a few things right away. First, the Red Sox are not as good a match as we initially thought. Casey Kelley is too far away and the don’t have any good catching prospects anywhere near the level of what the Yanks have to offer. The Phillies are an excellent match, maybe the best of all. They could do a Drabek/Brown package and blow everyone else out of the water. But are they willing? Coming as close as they did this season, and being a pitcher (or two) short of winning it all, you’d have to think they are. But Phillies GM Ruben Amaro has shown a willingness to go for lower cost options, opting to pass on Halladay and go for Cliff Lee last season at the trade deadline. His two top prospects may be more than he’s willing to give for one year of Roy Halladay, and I would understand that completely.

We can start drawing up our own various packages that suit the Jays needs while avoiding giving up the kind of multiple high ceiling talents and/or players on the current 25 man roster that most Yankee fans want to avoid for a single year of Halladay’s services. Offer a package that fits their needs directly, but without giving up Joba or Hughes. The Yanks have multiple players at each position of need for the Blue Jays, all of whom are close to MLB ready. A package could consist of some combination of Jesus Montero or Frankie Cervelli, Austin Jackson or Brett Gardner or Melky Cabrera, and one of our AAA arms like Zach McCallister, Ian Kennedy or Ivan Nova. I’m not going to speculate on specific packages since they instantaneously become Pinatas, and I’m sure we all have opinions on which combination is too high and which is too low to get it done. But the point is we are a good fit for the Blue Jays needs both in terms of position(s) and MLB readiness.

So the question becomes, would you be willing to give up a bat like Jesus Montero (with some other useful MLB players) for an arm like Roy Halladay? If just one high upside prospect gets it done, then I’d have to think the answer is yes. But now that Josh Johnson has become available, the decision gets tougher. Lets say Montero+ package gets you Roy Halladay, but a Montero+Joba/Hughes could land you the 26 year old Josh Johnson. Which one would you go for?

Bob Elliot of the Canadian Slam Sports site is reporting that Roy Halladay has pre-approved a deal to the Bronx, while ruling out some other locales. He reports-

“I don’t know who Toronto will wind up with,” a major league executive said Friday. “I don’t know when he is going and I don’t know where he’s going.

“But I do know that Halladay has told the Jays he’ll approve a trade to the Yankees.”

(snip)

A Minnesota Twins official confirmed in July that Halladay would not approve a deal to the Twin-Cities and Texas Rangers president Nolan Ryan said in September he was told Halladay would block a deal to Arlington, Tex.

Halladay has never said yeah or nay to the Yanks and still hasn’t, but this third party news clears the decks for Halladay to follow the path of Cone and Clemens.

Not surprising, but this should answer any question about his willingness to play in New York.

Via MLBTR comes this piece from Jeremy Sandler of the National Post. In it, Sandler brings us a few tidbits regarding the Blue Jays’ asking price for their 32-year old ace, Roy Halladay. While most of what Sandler has to say isn’t at all surprising—for instance, stating that Toronto desires “young, salary-controlled players” in exchange for Halladay is like saying the sky is blue—one of his assertions is particularly notable in that it details what the Jays want from a trading partner, specifically.

According to Sandler, “[t]he Jays want a major league-ready arm and bat, both young and affordable enough to stay in Toronto a while, plus prospects for Halladay.” Sandler admits that a package of a “major league-ready arm and bat… plus prospects” for a player with only one year left on his contract is a “high price” for any team to pay. The human cost outlined here becomes even more substantial if an extension is also involved. Now, I could see certain teams parting with one or the other, a major league-ready arm or a major league-ready bat, while offering high-end prospects, but I doubt the Jays will get exactly what they want (an arm and a bat, plus prospects), despite Sandler’s claim that “[i]ndustry insiders suggest serious offers in the coming weeks should match Toronto’s wish list.” The Jays’ asking price just seems exorbitant, though you can’t fault them for trying (I’m sure the Twins asked for the same thing when trading Johan Santana).

With regards to the Yankees, I don’t think they could afford Halladay if Sandler is correct (which makes me wonder if he actually is, since most contending teams in need of a pitcher like Halladay won’t be able to meet Toronto’s criteria). Brian Cashman certainly has major league-ready arms to “spare,” with Joba Chamberlain and Phil Hughes, though major league-ready bats seem few and far between unless you believe that Jesus Montero and Austin Jackson are at that stage. According to Jon Heyman (SI), the Jays are said to like Montero, so perhaps they would be willing to take on a package of Joba, Montero, and other prospects, as Montero’s bat is often considered a “sure thing” (i.e., close to major league-ready). Still, as talented as Roy Halladay is, that’s an expensive price to pay for one year of his services (and, if an extension is needed, then the combined cost of a trade and a multimillion dollar contract is enormous).

In my opinion, such a trade could actually create gaping new holes rather than fill those that already exist.

Photo by Getty Images

Roy may be wearing a new red cap

Is anyone else not all that worried if the Red Sox get Roy Halladay?

To be clear, I don’t think it will happen with them for the same reason it won’t happen with us. Despite their recent statements to the contrary, the Blue Jays really don’t want to deal him in division if at all possible. They’ll use both teams to drive the price up and then trade him for the next best package that comes from out of their division. They don’t want to see him in the visitors dugout 19 games next year, possibly pitching 4-5 games against them. The fact that he’s so popular in Toronto makes it an even tougher pill for fans up there to swallow. For most of the past few seasons, having the best pitcher on either team was all that Blue Jays fans had to hang their hat on when facing the Yanks or Sox. Trading him is bad enough, trading him to their rival would really be rubbing it in.

But I just can’t get all worked up if the Sox unload their farm system AND give a 100+ mil extension for a 33 year old (next season) pitcher. I think it’s bad move, if you look at the entire deal and not just the first few seasons. It’s the kind of move bad, desperate teams make and moves like this are a big part of why some teams are bad more often than not. Halladay makes sense for the Phillies, and where they are on the win curve. He’s that one piece that can put them over the top. For the Yanks or the Sox, trading away a Joba/Hughes/Buccholtz plus another top bat to get him, you’re trading away more productivity than you will receive in all likelihood. You’re worse off as a franchise long term, and tomorrow does come around sooner than you think.

Yes, he’s one of the best pitchers around right now. But that’s past performance. The team that signs him will be paying him for what he did with the Blue Jays, and the overwhelming likelihood is that he will not be the same pitcher over the course of his next contract. He’s already been banged up a bit in recent years, and the guys who continue dominate in their late 30’s (especially in the tough AL East) are few and far between. The one guy who we all thought was the exception to the rule was Randy Johnson and he went from dominating the NL West at age 40 (ERA+ 177) to becoming a very ordinary pitcher the very next season in the AL East with the Yankees (ERA+ 112) and even worse the following season (ERA+ 90) with the Bombers.

If I’m going to give up a huge package of prospects, I want it to be for someone who is entering their prime years. Someone who I can project should put up his best seasons here, not have already had them elsewhere. The Red Sox deal for Josh Beckett comes to mind. A trade for King Felix or Josh Johnson would fit the bill. Those I guys I’d break the bank for. For Halladay, I’d only give up one of our young studs. A package of Joba+ a B-prospect? Fine. A Hughes+ filler deal? I’ll live w/it. But not multiple studs who I’ll be watching enter their prime as I watch Roy age. The ‘trade in your division’ stuff cuts both ways for me. Watching Montero hit 40 HR’s while a 36 year old Halladay spends 2 months on the DL will drive me batty,and I’m sure many other Yankee fans as well.

So while a 2010 BoSox rotation of Halladay/Beckett/Lester would be scary, and undoubtedly the best in Baseball on paper, I’ll still take my chances with the young guns we have now. Let Boston have 23 mil per year of dead weight on their books in the out years of the deal, it will affect them more than the Yanks. The Yanks are just exiting a period when they had old, unproductive dead weight on their books year after year and I don’t want to go back there anytime soon. I don’t make this deal for the same reason we didn’t make the Santana deal. I don’t want to pay twice for a pitcher who’s already showing signs of slipping (health-wise) and I think we’re better off in the long run if we stand pat.

From the Daily News:

A source told the Daily News that the Red Sox are “putting on a full-court press” to acquire Halladay, hoping to add the former Cy Young winner to the top of their rotation to go with Josh Beckett and Jon Lester.

“They would love to get it wrapped up before the Winter Meetings,” the source said of the Red Sox.

If the Red Sox make a serious push for Halladay, can it be very long before the Yankees get involved?

Toronto GM Alex Anthopoulos seems willing to deal Halladay within the division, but it will take a big-time package from either the Yankees or Red Sox to land the ace righthander, who would probably require a long-term extension worth more than $100 million to waive his no-trade clause.

Boston would likely have to include Clay Buchholz, the organization’s top young pitcher, and Casey Kelly, the 20-year-old pitcher/shortstop who was drafted in 2008 and signed with the Red Sox instead of playing quarterback for Tennessee.

What should this mean for the Yankees? Almost nothing. I think that as Yankees fans, we need to realize that sometimes, the Red Sox are going to get their guy, and there is nothing constructive that the Yankees can do about it. The Yankees need to make moves that are in the short and long term best interests of their club independent of what the Red Sox do. The Sox threatening to get Halladay does not mean the Yankees should jump in and try to trump a Buchholz/Kelly offer with Montero and Chamberlain. If Brian Cashman feels that trading for Halladay is the right move because he feels Doc would provide more value than the prospects he would give up, then he should make a deal. But emptying your farm system and making a deal that is not in the best interests of the club just to block Boston would be silly. Luckily, Cashman’s actions during the Santana saga suggest that he has a firm grasp upon this concept.

From Mark Feinsand (Daily News):

Halladay wants out of Toronto, but it’s unlikely that he would waive his no-trade clause to be dealt to a team unless he was able to sign a long-term extension – something only a select few teams have the resources to do, most notably the Yankees and Red Sox.

It would likely take a bigger package for one of the division rivals to land Halladay, but if they have the opportunity to do so, the belief inside the Yankees organization is that it would be well worth it to pair the righthander with CC Sabathia atop a rotation that would then feature A.J. Burnett – who considers Halladay to be a mentor – as its No. 3 starter.

A source with knowledge of the Yankees’ thinking said the Bombers already have their sights set on signing either Halladay or Cliff Lee if both become free agents after next season. Yankees executives, however, fear that Lee might sign a long-term deal with the Phillies before becoming a free agent, leaving Halladay as the lone target for teams looking for an ace.

Brian Cashman has been hesitant to deal his top-notch prospects in recent years, but after seeing the difference a dominant starting pitcher such as Sabathia can make, ownership may force Cashman’s hand, sending away blue-chippers such as Jesus Montero and Austin Jackson in a package with either Phil Hughes or Joba Chamberlain.

This sounds awfully similar to the Santana sweepstakes in 2007.

I think we’ll have a similar result, too, with Halladay being traded to another team, not named the Yankees. When compared to the way in which the Yankees handled the Santana situation, I see no reason for the organization to operate any differently with Halladay. Halladay is currently a better pitcher, that much is true, but he’s also older and will cost more than what the Mets offered the Twins for Johan Santana. Perhaps it really is best to let Halladay go this winter while keeping one’s fingers crossed that he’ll be a free agent after the season is over.

Plus, I wouldn’t fret over the Red Sox acquiring him just yet (offensive upgrades are their main priority).

Photo by Stephen Dunn/Getty Images