Albert Pujols poised for bounce-back year

27 Comments’s Alden Gonzalez reports Los Angeles Angels first baseman Albert Pujols will be ready for Opening Day after having off-season surgery on his right knee. The word “certain” appears in the headline, referring to the probability of Pujols appearing in the Opening Day lineup. Pujols should see some spring training action by the middle of the month if all goes according to plan.

Pujols hit 30 home runs with a .285 average, .343 on-base percentage, and .516 slugging percentage — all career lows for the veteran, entering his 13th year. However, it was mostly just his April that dragged him down. During the first month, he didn’t hit a single homer and posted a .570 OPS. He hit his first homer of the season on May 6, and from that point until the end of the season, he posted a .934 OPS, a number more in line with our expectations.

Some have soured on Pujols, citing his age (33) and vanishing unintentional walk rate, which fell to five percent last year after hovering between nine and 11 percent through 2010. Given what he did after April last year, though, there is no doubt he can continue being one of the best hitters in baseball.

New tax law could affect MLB trades

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Jim Tankersley of the New York Times notes that a tax law passed by Republicans could affect trades in Major League Baseball. The law added the word “real” to a certain line of tax code that now only allows real estate trades to qualify for tax immunity. Previously, certain assets like trucks and machinery could have been traded tax-free.

A perhaps unintended consequence of that change could mean baseball teams could have to pay capital gains taxes when they trade away and acquire players. MLB’s chief legal officer Dan Halem said, “There is no fair market value of a baseball player. There isn’t. I don’t really know what our clubs are going to do to address the issue. We haven’t fully figured it out yet. This is a change we hope was inadvertent, and we’re going to lobby hard to get it corrected.”

Tankersley wonders how players would be valued for the purposes of this tax law:

Mr. Verlander, for example, was clearly a more immediately valuable asset to the Astros than the three prospects they traded to get him. He gave up only four runs in his five regular-season starts for the team, then won four straight starts to begin the playoffs. In very simple terms, he brought value to the Astros in a trade, and had the new law been in place last year, the team would have owed taxes on that added value.

But what, exactly, was that value? Was it the size of his contract? Mr. Verlander earned $28 million last year, while the players traded for him drew minor-league salaries. Was it the additional wins he brought to the team? Statisticians estimate Mr. Verlander gave the Astros nearly two more wins last season, a value that, depending on the statistician, could reach $20 million. Or was it some calculation of the total future value Mr. Verlander will bring to the team, minus the total future value it gave up in the prospects it traded away — and possibly adjusted for the amount the team will have to pay Mr. Verlander?

Complicating matters further is that teams value players differently, and one player might help a certain team far more than another team. A struggling club with a surplus of starting pitchers might trade one to a playoff contender in desperate need of one, in exchange for position players who could improve a struggling lineup. In that case, both teams could, reasonably, be considered to have gained value in the trade, and thus would owe taxes on it.

Republicans said they weren’t trying to hamstring sports teams, but that’s exactly what they might have done here. It seems likely that the law will eventually be amended to exempt sports teams, given that leagues like the MLB and NBA are enormous and worth so much money. Whether that will be done in a reasonable amount of time is another question entirely.