I received an email from long-time commenter Bret:
Having a bunch of trouble commenting these days, not sure if it is the website or my computer or what. Anyway, I thought this might make an interesting post. If the O's could get rid of Markakis contract for nothing like the Jays did with Rios should they? Seems very similar to me in terms of age, production, salaries etc. and the Jays certainly aren't regretting it. You can read my points* under the comments in Steve Melewski's "Frustration in KC" post, I tried to involve him in a discussion and he just dismissed it without an intellectual attempt at justification so I thought you might be interested. Bottom line, I think they should let him go but never will no matter how much he sucks due to community involvement, ties to city etc."
* "I think if you take the community stuff out of it and just focus on baseball, if Markakis was going to be the player he was in 2008 you can pay him big money but it appears that rather than a 6 win player he is a 2 win player and you can't give 15% of your payroll as a mid-market team to a slightly above average outfielder. His BABIP is low, he will play better but he isn't a superstar and over the next few years the O's are paying him like one. Not sure that the best move if the plan to contend is 2013 wouldn't be to clear the salary and use it to extend Matusz, Britton, Wieters, plus the draft etc."
First off, if others are having trouble commenting, please let me know so I can pass along what the issues are and hopefully get them resolved.
Now onto the question. I don't have the post I did handy, but when the Blue Jays waived Rios and he was picked up by the White Sox, I thought it was a better move for the latter than the former. My inclination, therefore, is to view this move similarly (if one takes the framework that they're equivalent). But let's walk it through.
Nick signed the big contract after his great 2008 season, but has fallen off significantly since then and is mired in a fairly deep slump to start 2011. At this point I don't think it's at all crazy to suggest that he's merely an average to slightly above player - as I've discussed previously. Would the team give him a 4 year, $54 M contract after 2011 (even assuming he bounces back and finishes with similar numbers to 2009-2010)? I kind of doubt it.
If Nick is a 2-3 win player - which he has been the last two years - then the going free agent market rate for his production this off-season would have been something like $10-15 M per year. If you then assume that the 27 year-old Markakis won't drop off at all over the next four years (so stays steady at ~2.5 WAR), then even relatively slow salary inflation (say, 5%) would have him worth almost exactly $54 M (what he'll be paid, when you include the buyout of the team option).
That doesn't mean the O's would be wise to lock up that kind of production at those prices, if given a do-over, but the contract isn't exactly an albatross (maybe Nick's production actually falls off and he's over-paid*, and maybe salaries rise faster and he's under-paid). Letting him go for nothing but the extra salary space (which I'm not that confident would be spent too wisely** anyway) doesn't seem like a good idea.
* If you use a half-win decline per year, his production comes out to ~$37 M. That is, he'd be over-paid by about $4 M per year. The team could almost sign a solid middle reliever who has some saves on the back of his baseball card for that money!
** The club should be able to lock up Wieters, Matusz, etc. anyway. At least, I would hope so.
Now, I think there's virtually zero chance of the Orioles letting Markakis go, but that makes it neither a crazy suggestion (it would be close to break-even, assuming the money freed up was spent to bring in talent on a similar WAR per $ basis) nor the wrong move for the team, depending on how their path looks. Frankly, if 2011 is a below .500 year and the prospects for 2012-2013 don't look good, moving Markakis (in a trade for young talent - I think he has enough value in the eyes of at least one GM to bring back an actual return) might be the best thing to do. I won't say we're at that point, but I would surely hope that Andy MacPhail isn't one to dismiss the idea outright.
That's a fantastic thought experiment. Two years ago I was extremely optimistic for the future of the franchise, mostly because Nick looked like an All-Star who could become an MVP candidate if he could eke out 25 to 30 home runs one season. Then, he turned into a league average right fielder, Adam Jones became a league average centerfielder and Matt Wieters has yet to become more than a league average catcher (though that could be changing). When you're young core is league average, it is tough to have a team that is much better than... league average.