The Royals are closing in on a two-year deal to sign right-hander Kyle Farnsworth as a setup reliever, MLB.com has learned.

Also, the Royals announced on Thursday they signed right-hander Doug Waechter as a middle reliever and left-hander Horacio Ramirez as a starter, both to one-year contracts. The Ramirez deal was reported earlier.

Once he passes his physical, the Royals will finalize the deal and sign reliever Kyle Farnsworth to a 2-year, $9.25M deal. Horacio Ramirez signed for a 1-year, $1.8M deal and Doug Waechter got 1-year, $640K contract. The Waechter signing isn’t terrible, he’s got a chance to be a below-average reliever. It’s not a bad chance to take on seeing if he can eat some low-leverage innings. But, throwing a little over $11M at Farnsworth and Ramirez is hard to defend.

Farnsworth is the textbook definition of: Great “stuff” — AKA, he throws very hard — but gets little results. I was truly shocked to see Ramirez get a major league deal. In 2007 Ramirez put together a spectacularly bad season. His line from ’07: 98 IP, 139 H, 86 R, 78 ER, 13 HR, 42 BB, 40 SO, 61 ERA+. He resurfaced last year as a reliever and split time with the White Sox and Royals. He pitched 37 innings out of the bullpen and posted a 101 ERA+. If you made me squint really hard, I could see Ramirez as bullpen fodder, a mop-up guy who comes into the game when the team is either down or up by a large amount of runs.

But, here’s the kicker:

“Our expectation is that Horacio Ramirez will be part of our starting rotation in 2009,” Moore said.

Gah. Oh, Dayton, you are crazy. Ask any Mariner fan who watched him pitch in 2007 about the prospects of Ramirez being a starter. He simply isn’t someone who should be starting for a major league team. I would give Brad Hennessey a better chance of pitching 140 innings than Ramirez.

Back to Farnsworth, Marcel projects him as a 4.80 FIP reliever in 2009. That seems about right, over the last three years Farnsworth has had FIP’s of: 3.77, 5.04, and 5.49. Farnsworth will probably be working the 8th inning in KC, so if you account for some leverage in his valuation, he’s probably going to be worth around +0.5 wins above replacement. Teams are paying about $5M per win above replacement this offseason, so he’s valued around $2.5M per season. The Royals are essentially paying twice for what a replacement win should cost. Meanwhile, Affeldt and Howry are worth around +0.5 wins and that’s without any leverage. If they both work late-inning situations — where leverage is higher — they should be worth around +1 win per.

Here’s some WAR calculations without the leverage scores factored in:

Farnsworth is pretty much the definition of a replacement-level reliever in the American League. I might be biased, but I think Affeldt and Howry are good bets to beat their projected ERA’s. Howry should benefit some from pitching in AT&T, especially against LHB’s which hit 4 HR’s off of him. Between Affeldt and Howry — if you give them a slight boost for leverage — the Giants added about +2 wins to their bullpen for $6.75M total. Howry could hit some incentives in his contract, but that’s still a great buy. Those +2 wins should be valued around $10M total. On the other hand, the Royals are paying Farnsworth $4.6M per season for about a +0.5 wins. That’s not so good. If Farnsworth can pitch like he did in 2005-2006 he’ll be a better value.

Sabes has made some nice bullpen moves this season.