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Why the timing of Strasburg's MLB debut is so important

The only question that really matters with the Nationals right now (and the one I've heard everywhere I've been this spring) is this: When will Stephen Strasburg be in the majors?

I'm not going to be able to answer that question definitively here -- even if team officials know exactly when it will happen (and I suspect it is still at least somewhat fluid) they are keeping it a closely guarded secret -- but I will venture a guess. And even more importantly, I aim to cut through all the speculation and incorrect assumptions about the contractual and economic issues that play into the equation.

The bottom line: The Nationals have a strong incentive to keep Strasburg in the minors until at least late May, in order to delay his reaching free agency and arbitration eligibility.

That's not to say the Nationals will do that. But doing so could gain them an extra year of Strasburg's services and save themselves a significant amount of money. I also do not want to imply that only financial issues play into this decision. There are also obvious developmental reasons to send Strasburg to the minors for a few weeks or a couple of months. Doing it this way would be smart baseball management.

Here's how this works:

First, the breakdown of Strasburg's four-year $15.1 million contract, which began in 2009: He received a $7.5 million signing bonus (paid in three installments, two of which have already been made), plus salaries of approximately $100,000 in 2009 (a pro-rated portion of the major league minimum), $2 million in 2010, $2.5 million in 2011 and $3 million in 2012. For the purposes of determining his future compensation -- or his "tender amount," in industry jargon -- the key number is his total earnings in 2012, which is calculated to be $4.875 million. (That's the $3 million salary plus one-fourth of the signing bonus, or $1.875 million.) This number will be important later.

Strasburg's contract covers him for the next three seasons, which are known as his "zero-to-three" years, referring to a player's service time. But Strasburg will remain under team control beyond the life of the contract -- until he reaches free agency. And that's where it gets a bit complicated.

Delaying Strasburg's free agency is fairly simple. A player needs six full seasons in the majors to become eligible for free agency, and a full season is defined as 172 days. However, a zero-to-three player who is optioned for fewer than 20 days gets those days added back to his service time at the end of the year. To simplify: The Nationals need to keep Strasburg in the minors for about three weeks to prevent him from having six full years of service time at the end of 2015, thus retaining his rights through 2016. It's not being cheap. It's being smart. And every team does it.

Under the above scenario, Strasburg would be tied to the Nationals for four years beyond the life of his current contract -- 2013, 2014, 2015 and 2016. Three of those will be arbitration years. (I'll take it on faith that, by virtue of the fact you are reading this blog, you understand how the salary arbitration system works. If not, Google it.) But the nature of the fourth year would depend on whether or not Strasburg will have qualified for arbitration as a "Super Two" player at the end of 2012.

You probably know how Super Two status works, but in a nutshell: The top 17 percent of players who have fallen short of three full years of service time in a given year become eligible for arbitration as Super Twos. There is no predetermined date when a player gains or loses Super Two status; it depends on the service times of every other player in that service class. But typically, a team can safely block a player from gaining Super Two status by keeping him in the minors until late-May of his rookie season.

(The San Francisco Giants famously miscalculated on this in 2007, calling up Tim Lincecum on May 6, which wound up being about a week too soon to prevent his Super Two status in 2010. The cutoff for Super Two eligibility in that particular year was two years 141 days, and Lincecum had two years 148 days. As a result, Lincecum will make $9 million this year in salary/signing bonus as a Super Two, instead of the $700,000 or so the team could have paid him as a zero-to-three player, had they kept him down an extra week in 2007. We'll return to the Lincecum example in a moment.)

For the Nationals to be safe with Strasburg -- and prevent him from reaching Super Two status in 2013 -- they would probably need to keep him in the minors until late-May. If they do this, Strasburg would be considered a zero-to-three player in 2013, saving the Nationals a lot of money. This, too, happens all the time and is seen as smart management. The Baltimore Orioles did it last year with Matt Wieters, who is to catching what Strasburg is to pitching, and whose call-up came on May 29.

But there is an additional catch in Strasburg's case because his contract is a major league contract. According to the collective bargaining agreement, a player under team control cannot receive a pay cut of more than 20 percent from the previous year. Here is where Strasburg's 2012 compensation -- that $4.875 million figure -- comes into play. Because of this rule, the Nationals would have to pay Strasburg at least $3.9 million in 2013 (that's 80 percent of $4.875 million) if he fails to attain Super Two status.

Now, let's take a major hypothetical leap here and apply Lincecum's case to Strasburg's. Let's further assume Strasburg turns out to be as good (and more to the point, as accomplished) as Lincecum -- a humongous assumption, given Lincecum's unprecedented accomplishments (two Cy Youngs before reaching arbitration eligibility). Finally, let's also take a guess and extrapolate Lincecum's third and fourth arbitration years from his first two.

Prorating the signing bonus in the new contract he signed last month, Lincecum will earn $9 million and $14 million in 2010 and 2011, his first two arbitration years. We'll be conservative and say those figures will rise to $18 million and $22 million in 2012 and 2013, his remaining arbitration years. (The actual figures will depend on several factors, including how well he peforms.)

If, for argument's sake, Strasburg is as good as Lincecum, and thus is compensated equally via arbitration, his first three arbitration years will earn him $9 million, $14 million and $18 million. If Strasburg reaches Super Two status, those first three arbitration years would be 2013-15, with a fourth arbitration year in 2016, in which (in our little hypothetical universe) he would make the same $22 million as Lincecum.

But if Strasburg fails to attain Super Two status (and assuming the Nationals keep him down for at least three weeks to delay his free agency), his three arbitration years would come in 2014-16, with a zero-to-three year on the front end, in 2013.

So, using our made-up numbers for Lincecum and applying them to Strasburg, here is what is at stake for the Nationals:

*If Strasburg reaches Super Two status, he gets: $9 million in 2013, $14 million in 2014, $18 million in 2015 and $22 million in 2016, for a total of $63 million in those four years.

*If Strasburg fails to reach super two status, he gets: $3.9 million in 2013, $9 million in 2014, $14 million in 2015 and $18 million in 2016, for a total of $44.9 million.

In other words, it could be worth about $18 million to the Nationals -- or a little less than what they are paying for two years of Adam Dunn -- to delay Strasburg's debut until Memorial Day.

Two quick thoughts:

One, this franchise has survived for five years without him. What's another two months?

And two, you may want to get your tickets now for the June 4-6 weekend series at Nationals Park against the Cincinnati Reds.

By Dave Sheinin  |  March 18, 2010; 9:24 AM ET
 
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Next: Everyday Adam Dunn

Comments

Perfect explanation for this, Thank you!

Posted by: SkinsDiesel | March 18, 2010 9:42 AM | Report abuse

Fantastic analysis, Sheinin! That's good baseball writing.

Posted by: Jeff_Jackson | March 18, 2010 9:47 AM | Report abuse

Dave - Terrific post. I had been on top of the 172 day MLB service point, but had messed up by being dumb enough to forget that last year was year 1 of His contract and had thought his 4 year deal took him through his first year of arb. Even chided Kiilgore on this - my bad.

For what it's worth, in my 41 game season ticket group, the 3d pick of the draft for games, by one of our more enthusiastic and knowledgeable members, was 6/4. Another sharp member grabbed 5/23 O's in the advance sale. 5/23 would be 134 days of MLB service this year, and typically the cut for Super 2s used to be around 140 days, with last year I think the first in a while that it was around 138 days. A later pick (24th) was 4/17, which may be the first time the Nats will start their 5th starter at home and is < 172 days left (right after I mentioned the 6 year issue to him). So yes, in our group, there has been a lot of Strasburg Day speculation.

Posted by: jca-CrystalCity | March 18, 2010 9:47 AM | Report abuse

Fantastic post! Not many places a baseball geek can go to get this kind of analysis. I'd been wondering about the "full year" criteria, thanks for that.

My one beef w/ Rizzo so far was when he said GMs don't think about this when deciding when to call up players. First of all, like hell they don't. And second, if you don't, you better! That is a lot of money and your job is to manage that money and get the best you can for it. Come on Rizzo, shoot straight with us.

Can't wait to see the Reds in June!

Posted by: Avar | March 18, 2010 9:49 AM | Report abuse

Excellent research and explanation by Dave Sheinin. Keep up the great work.

Posted by: clandestinetomcat | March 18, 2010 9:49 AM | Report abuse

Thank you, Dave, for this. I'm sure you're hoping certain of the vest-pocket GMs that hang around here were paying attention, but if not, I wouldn't "brue-d" over it.

Posted by: MikeH0714 | March 18, 2010 9:59 AM | Report abuse

Speaking of financial matters, haven't seen this discussed here, but Adam dropped into his article today this:
The Nationals had reason to act on Dukes on Wednesday. If they waited another day, they would have had to pay Dukes's entire 2010 salary. Instead, because Dukes has fewer than three seasons of major league service, they will owe him only 30 days' pay.

Still puzzled though by Rizzo's references to a "more cohesive" clubhouse. Based on quotes so far, we know only that Elijah "was often louder than most teammates in the clubhouse, but not to the point of becoming burdensome." Was it then only that his sensitive teammates were afraid he was going to erupt, or is there more that hasn't been told? Adam? Dave? Boz? Anyone?

Posted by: CapPeterson1 | March 18, 2010 10:19 AM | Report abuse

Dave - Thanks for the thorough rundown, defintely thinking the 4-6 June series against the Reds because it is a weekend series at home!

Posted by: markfd | March 18, 2010 10:23 AM | Report abuse

Thanks! So it will be the Reds weekend. Aroldis vs Stras

Posted by: GoingGoingGone | March 18, 2010 10:23 AM | Report abuse

I think at this point, who cares if there was a specific incident that caused Dukes release, there probably was not or it would have gone public at this point... but, having a potential disruption bubbling under the surface at all times has to wear out the people who are around that... just think about your work place, if you work with someone you feel like at anytime could angrily erupt at your boss, your co-workers, your customers, or you... I imagine you would feel the tension and would be pleased at the day that person left your work place for good... especially if that person wasn't carrying their weight!

Posted by: Ghost7 | March 18, 2010 10:26 AM | Report abuse

"My one beef w/ Rizzo so far was when he said GMs don't think about this when deciding when to call up players."

Of course they don't think about this, because it's a given. As Sheinin points out, EVERYONE does it. So Rizzo was being truthful when he said financial matters do not factor into when they will bring Strasburg up. They don't. It would be like some company saying that having to pay taxes doesn't factor into their plans for how they're going to make money. It's only news if they say the opposite.

Posted by: TBCTBC | March 18, 2010 10:26 AM | Report abuse

Wouldn't you assume they do the same with Storen? Who if he was a starter, looks as if he would be almost as good.

Posted by: periculum | March 18, 2010 10:28 AM | Report abuse

Great analysis!

It'll be June if all goes well in the minors. But what if he struggles, earning himself a 6.xx ERA and a losing record? Perhaps that isn't likely, but we're assuming here that he's the second coming of Cy Young ...

Also, what if he struggles up here in the bigs? Does he get sent back down? How does that affect the numbers?

Posted by: chrisduckworth | March 18, 2010 10:30 AM | Report abuse

Looks like the Nats just reacquired another "closer" in the wings in Zech Zinicola. Another guy in the Syracuse bullpen.

Posted by: periculum | March 18, 2010 10:35 AM | Report abuse

The only thing that isn't clear to me now is the EXACT DATE of Strasburg's supposed call-up in "late May" that would determine how much the Nats would wind up paying Strasburg in the future. Seeing as Sheinin only used "late May," I guess nobody knows it right now, right? WHEN will that exact date be determined?

Posted by: Juan-John1 | March 18, 2010 10:40 AM | Report abuse

my head just exploded

Posted by: joemktg1 | March 18, 2010 10:52 AM | Report abuse

Great post. So nice to have it all laid out.

If Rizzo cut Elijah Dukes yesterday instead of today to save 75 grand, you better believe they'll keep Strasburg at Syracuse until the end of May to save $18 million. If they don't they're actually hurting the team because that $18 million is going to come out of his allowance for getting decent players to back up his ace.

I'm much less concerned about the $18 million than about having Strasburg in DC in 2016 though. I'll gladly trade several starts at Nats Park this April and May for that.

Posted by: Section222 | March 18, 2010 10:58 AM | Report abuse

"And two, you may want to get your tickets now for the June 4-6 weekend series at Nationals Park against the Cincinnati Reds."

Building on this, if Strasburg opens the season for Potomac on Thursday 4/8 and they hold strictly to the every fifth day start for him - which shouldn't be hard in the minors even with off days and rainouts, since they can always bump some other pitcher to put Stras in - THE DAY will be Sunday June 6th. Get your tickets now.

Posted by: TBCTBC | March 18, 2010 10:59 AM | Report abuse

We're Not Worthy!! BRAVO!!!!!
Probably the most insightful article I've ever read here. Nicely done. And Thanks!

Posted by: dovelevine | March 18, 2010 10:59 AM | Report abuse

my head just exploded

Posted by: joemktg1 | March 18, 2010 10:52 AM
________________________________________

Reading the explanation reminded me of Rodney Dangerfield in "Back to School." After surviving one question (In six parts...) from the economics professor...

"I feel like I just gave birth...to an Accountant!"

Posted by: TimDz | March 18, 2010 11:03 AM | Report abuse

Juan-John, there is no exact date.

If the point is to avoid him becoming a Super2 (and that is the point, not for nefarious reasons, but that is the point), all anyone can do, even the Nat's front office is estimate.

Three years from now, determining who is eligible to be a Super2 will based based on:
1 - All Players have have 2 years of MLB service, but not 3 years or more.
2 - Then, take all those players, and rank them in order of the greatest number of days of service during the season 3 years ago.
3 - Then, take the top 17% of those guys,based on days of service 3 years ago, and they become Super2's.

So, it's been commonly felt that waiting until late May gives you a very high likelihood that your player will not become a Super2 and thus not be eligible for arbitration until the following year.

So, Mr. Sheinin hypothesizes that Strasburg will perhaps be called up for the series at home in early June.

Posted by: Sunderland | March 18, 2010 11:04 AM | Report abuse

"The only thing that isn't clear to me now is the EXACT DATE of Strasburg's supposed call-up in "late May" that would determine how much the Nats would wind up paying Strasburg in the future. Seeing as Sheinin only used "late May," I guess nobody knows it right now, right? WHEN will that exact date be determined?"

The super 2 date won't be determined until it is, because it's not a fixed date. It's dependent on what all the other teams do with their players who fall into the same class, since that's what will determine who's in the top 17% of service time. So it's basically an educated guess on the team's part to figure out how late they need to wait to make sure he's not in the top 17%. As Dave pointed out, the Giants blew this with Lincecum.

Posted by: TBCTBC | March 18, 2010 11:05 AM | Report abuse

Sheinin, a nice 'under-the-hood' rundown of what's in play when any player is called up, not just the high-priced ones. Thanks.

@Juan-John: There isn't one specific date, since the service time % is calculated at the end of the season. That's why the rough 'last week of May, first week of June' is discussed.

Posted by: BinM | March 18, 2010 11:15 AM | Report abuse

OK, thanks @Sunderland and @TBCTBC. Makes sense, even though my head also hurts from all the permutations. You'd think MLB would want to make it a little simpler... :-)

Posted by: Juan-John1 | March 18, 2010 11:16 AM | Report abuse

my head just exploded

Posted by: joemktg1 | March 18, 2010 10:52 AM | Report abuse
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||

Yeah, but in a GOOD way.

Posted by: gilbertbp | March 18, 2010 11:17 AM | Report abuse

Good stuff, and I promise to study it in more detail after work. Mostly, I'm hoping that Strasburg ends up being good (and injury free) enough to make all of this really matter.

The most frequent question may be when Strasburg joins the Nats, but the immediate question is whether they can get some respectable pitching between now and then. I favor the minor league start, but it would be really nice if the season is not a write-off by the time Strasburg makes his debut with the Nats.

Posted by: KenNat | March 18, 2010 11:19 AM | Report abuse

>>Reading the explanation reminded me of Rodney Dangerfield in "Back to School."


That scene with Sam Kinison still floors me. Hysterical.

Posted by: dovelevine | March 18, 2010 11:26 AM | Report abuse

chrisduckworth:

Have you seen him pitch?

Posted by: cassander | March 18, 2010 11:26 AM | Report abuse

Thanks, Dave, for a great post. Although I have a throbbing headache now ...

Posted by: SilverSpring8 | March 18, 2010 11:30 AM | Report abuse

That scene with Sam Kinison still floors me. Hysterical.

Posted by: dovelevine | March 18, 2010 11:26 AM
_____________________________________

SAY IT!!!!! SAY IT!!!!!!
OH OH OOOOOOOOOOOOOOOOOOOOH!!!!!!!!!

Posted by: TimDz | March 18, 2010 11:44 AM | Report abuse

Looks well thought out Sheinin, however I DISAGREE!!!

Posted by: Stu27 | March 18, 2010 11:46 AM | Report abuse

Man, a great writer and a policy wonk to boot?

You ever think about filling in for Cilliza?

Posted by: JohninMpls | March 18, 2010 11:57 AM | Report abuse

the nats payroll is still anemic and any move trying to help their financial gain sits the wrong way with me, if you're gonna roll out the 27th ranked payroll (in a massive dc market no less) why not have the 4th cheapest tickets as well, maybe then somebody will show up when we don't play the phils or sox, maybe spending some money would be able to get a better team and more fans, crazy I know, but maybe, especially since it seems strasburg is our best pitcher right now and perhaps even our best player keeping him in the minors if he is ready for the show is a continuance of the awful relationship the lerners have been cultivating with fans, sometime I'd like to not lose 100 or even 90, crazy huh?

Posted by: bford1kb | March 18, 2010 12:30 PM | Report abuse

Terrific piece. The real deal and so far beyond the superficial junk that gets written about a team. Baseball is, after all, a business. As a Nats fan, they should make the right business decision--which happens to be the best baseball decision for the team.

Posted by: JamesFan2 | March 18, 2010 12:39 PM | Report abuse

ouch - my head hurts

Posted by: Nats1924 | March 18, 2010 12:43 PM | Report abuse

My head doesn't hurt, but only because of the MEGO (my eyes glaze over) effect.

Posted by: natsfan1a1 | March 18, 2010 12:51 PM | Report abuse

Great post, thanks. I understood some, but certainly not all of that before. Now, if I read slooooooowly and carefully, I can grasp it.

I am in the "keep him down on the farm until late May, early June" camp. It seems to make sense for the player, the club and the owners. I am as sick of the Lerner's cheapness as anyone, but this makes too much sense on too many fronts not to do it.

Posted by: NatsFly | March 18, 2010 12:59 PM | Report abuse

I'm very happy to hear that Zech Zinicola has been returned to the Nationals after being selected in the Rule V draft last winter.

He pitched wonderfully for 'AA' Harrisburg last season (1-1, 1.74, 8.7/3.9/7.0) before struggling at Syracuse (7.56 ERA in 26 games).

Not suggesting he was ever Drew Storen-esque, but many thought he was the heir apparent to Chad Cordero.

He has the potential to be a strong arm in the bullpen, perhaps as a 7th inning guy.

The Blue Jays tried to trade for the right-hander so they could send him to the minors but the Nationals declined, preferring to have Zinicola back instead of acquiring another player.

This doesn't mean much in 2010, but I still believe he's going to be a quality major leaguer.

Posted by: rushfari | March 18, 2010 1:02 PM | Report abuse

Please spare us! Just play ball. We are not solving a world crisis or O'Bbbbama care. Just enjoy the game. In seven years or whatever, the whole team will be different. Why I enjoy going to the ballpark....you don't have to listen to announcers analyze everything. What happens, happens. Enjoy it. Have a beer and a hot dog.

Posted by: Pete433 | March 18, 2010 1:07 PM | Report abuse

Yes but do you know what game against the reds he is going to pitch?

Posted by: Cartaldo | March 18, 2010 1:09 PM | Report abuse

That was Deep.

Great post Sheinin.

Posted by: tommy11599 | March 18, 2010 1:10 PM | Report abuse

whoa! is there a powerpointe with this?

Posted by: woosah | March 18, 2010 1:20 PM | Report abuse

I'd say the Reds series might get sold out, with a lot of no shows on two of the games, guess which two.

Posted by: cokedispatch | March 18, 2010 1:21 PM | Report abuse

"Yes but do you know what game against the reds he is going to pitch?"

As I said upthread, if he starts the PNats opener and pitches every fifth day after that, it would be the Sunday game against the Reds.

Posted by: TBCTBC | March 18, 2010 1:38 PM | Report abuse

Yes. It makes sense. Besides, the Nats are going nowhere in 2010. Still the worst team in the NL East.

Posted by: JohnRDC | March 18, 2010 1:46 PM | Report abuse

Question about the Super 2. If waiting to late May is considered safe to avoid the Super 2 issue, why wouldn't all teams take this approach (and thus, late May wouldn't be a safe date)? I understand $18 million isn't on the line in every case, but given the salary for an average player ($2.5 million?), I would think that all GMs would apply this delaying tactic to avoid the Super 2.

Posted by: PastBoy | March 18, 2010 1:51 PM | Report abuse

Baseball and PowerPoint? Oh no, you didn't! ;-)

This is a very simple game. You throw the ball, you catch the ball, you hit the ball.

Posted by: natsfan1a1 | March 18, 2010 1:52 PM | Report abuse

This is one of the best posts ever to the NJ and an example of what MAY save newspaper-style reporters. Of course, if Sheinin hadn't posted for the post, he could've posted anywhere else, including his own blog - but THIS is talent, insight and analysis. This is worth reading and worth the subscription price (of course, the dot com price is zero)!

Posted by: mo_dc | March 18, 2010 2:03 PM | Report abuse

Great post. Very well-written, and you've carefully and thoroughly explained a complex situation.

Posted by: Section220 | March 18, 2010 2:19 PM | Report abuse

Please spare us! Just play ball. We are not solving a world crisis or O'Bbbbama care. Just enjoy the game. In seven years or whatever, the whole team will be different. Why I enjoy going to the ballpark....you don't have to listen to announcers analyze everything. What happens, happens. Enjoy it. Have a beer and a hot dog.

Posted by: Pete433 | March 18, 2010 1:07 PM | Report abuse


See, the problem is that some of us, you know, care.

Posted by: Section220 | March 18, 2010 2:23 PM | Report abuse

This is the best breakdown of a matter I've read in the press in a long, long time, congratulations. Political coverage should be clearly laid out.

Posted by: gbooksdc | March 18, 2010 3:45 PM | Report abuse

PastBoy has a good question. Wouldn't the floating Super 2 date be affected by many teams holding back their top players to try to avoid Super 2 status? Or are there enough guys starting in the majors at the beginning of the season because they won't command a huge sum in arbitration that it really won't matter?

Can Dave or Adam, or one of the business of baseball wonks on this board answer that?

______________________________

If waiting to late May is considered safe to avoid the Super 2 issue, why wouldn't all teams take this approach (and thus, late May wouldn't be a safe date)? I understand $18 million isn't on the line in every case, but given the salary for an average player ($2.5 million?), I would think that all GMs would apply this delaying tactic to avoid the Super 2.

Posted by: PastBoy | March 18, 2010 1:51 PM

Posted by: Section222 | March 18, 2010 3:50 PM | Report abuse

When the staff ERA is 8+ and NO ONE is coming to the games, he'll be up. CBA be damned.

Posted by: bundy44 | March 18, 2010 5:24 PM | Report abuse

Shiner, I'm floored that was like reading war and peace. Excellent explanation to a very complicated buisness decision. No media body in this town that could even begin to explain the SS buisness situation and you did it with flying colors.

Now you did forget to mention that by Mid-May they should be solidly 15 games out and 20 games under. Night after night of empty blue seats even with all of the free give-aways should have Uncle Ted and StanK singing a different tune.

Posted by: TippyCanoe | March 18, 2010 9:44 PM | Report abuse

Holy Smokes. I thought I knew baseball stuff til I read this. We need to bookmark it for future debates here.

Also, LOL:

"my head just exploded

Posted by: joemktg1 | March 18, 2010 10:52 AM
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Yeah, but in a GOOD way.

Posted by: gilbertbp | March 18, 2010 11:17 AM"

Posted by: NatsNut | March 19, 2010 3:59 AM | Report abuse

An excellent analysis,Dave. It was a little difficult to stay with you at the beginning, but the article was more fascinating as it went on. I really apppreciate the writing that you, Mark Zuckerman, and Adam Kilgore are doing.

Posted by: upperdeck4 | March 19, 2010 8:34 AM | Report abuse

Of course it's about money. What else is it about? To not have Strasburg and Storen on the team in April and relegate Storen back to Harrisburg when he had a 0 era in Harrisburg last summer-what else could it be about?

Posted by: natswatcher | March 21, 2010 7:34 PM | Report abuse

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