In baseball’s new economy, the numbers either add up or they don’t
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Version 0 of 1. Come the winter holidays in baseball, there is always a bull market in stupidity. Now, after decades of evidence that should cure the sport of its craziness, we are seeing it again. Teams again are giving exorbitant contracts to free agent pitchers who may have trouble providing 50 cents on the dollar for the $100 million-and-up deals they have signed. This past week, Jordan Zimmerman ($110 million for five years) and David Price ($217 million for seven years) have landed the loot. Good for them. But probably bad for the Tigers and Red Sox. On Friday night, Zack Greinke reportedly joined the group with a six-year deal for $206.5 million from the Diamondbacks — but more on him later. Next up, Johnny Cueto. He too should come with a “danger” sign attached. In recent years, baseball has become very confident — perhaps a little too confident — that it can get its arms around the value of a star pitcher’s arm. Free agency, especially for pitchers, has arrived at a strange and incredibly expensive place. An enormous amount of brainpower has focused on the question of what a player’s future value will be. It all appears so mathematical and sensible. Yet the results, at times, seem to border on inanity. Let’s look at Zimmermann’s deal because it illustrates how MLB now sets its prices. By using the game’s standard “advanced metrics,” you can arrive at such numbers without looking nutty. Then, for a counter-balance, let’s look at a simple common-sense approach that considers the players over the past 60-or-so years who were most similar at the same age. Then we’ll see what happened to them over the rest of their careers and estimate what that would be worth in today’s free agent dollars. The fallout of Jordan Zimmermann signing with the Tigers The current methods used by many teams and player agents are often quite similar. Generally, I find them logical and useful. They say that Zimmermann’s deal is “right on the money.” Here’s one version of the formula. Over the past five years, Zimmermann has had an average WAR (wins above replacement) of 3.74. A popular rule of thumb these days is to assume that a player’s WAR will drop by 0.5 every year once he passes age 30, but that a star may deteriorate at just 0.3 per year. Use an annual decrease of 0.3 for Zimmermann. Over the next five years, that projects a WAR of 14.26. Right now, teams are paying close to $8 million for every 1.0 of WAR that they buy in free agency; maybe that’s crazy, but it’s the going rate. Also, that “cost of WAR” goes up a few percent a year. What happens when you multiply Zimmermann’s projected five-year WAR of 14.26 by $8 million? You get $114.1 million. What a coincidence! Maybe that’s a sensible way to compute value. But what if it’s only part of the puzzle? Maybe we should also look at “comparable players” for confirmation or, more vital, some huge contradiction. Here are the 10 pitchers most similar to Zimmermann at the same age: Larry Jansen, Pat Jarvis, Josh Johnson, Ed Figueroa, Lew Burdette, Rick Rhoden, Bob Muncrief, Steve Busby, Charles Nagy and Hank Wyse. I hope no one in the Tigers front office just had a stroke. Over the rest of their careers (assuming Johnson’s career is essentially over now), they played for an average of just four more seasons, had an average record of 42-40 with an ERA of 4.21 and — here’s the killer — an average WAR of 4.7. In other words, a future value of perhaps $35 million. Did the Tigers just pay Zimmermann three times what he will be worth? I don’t think so. A better guesstimate might be somewhere in between. But if I were in a front office, I’d want to use multiple models before I gave out $100 million deals. I wouldn’t just look at some FanGraphs or Baseball-Reference or in-house “projection” of a player’s 2016 WAR and then, voila, pretend that all I had to do was discount that WAR by an annual deterioration rate and multiply by $8 million. In my opinion, it’s not just the Tigers who should be concerned. I think the Red Sox may have gone even crazier. I’m certain they have models, done by folks with advanced math degrees, that justify $217 million for Price. But here are some of the 10 pitchers who most resemble Price statistically at the same age: Johan Santana, Roy Oswalt, Doug Drabek, Tim Hudson, Jake Peavy, Jered Weaver and John Candelaria. That’s worrisome. The 10-some of comparable pitchers, over the rest of their careers, averaged a record of about 51-48 with a WAR a bit under 10.0. That says Price is worth just $80 million — even if you accept the current astronomical prices for free agents. That sure isn’t $217 million. Why the David Price contract should elicit excitement, and angst from Red Sox fans Sometimes looking at “comparable” players actually reinforces your confidence that a monster contract may be justified. For example, who does Greinke most resemble? Tom Glavine, John Smoltz and Mike Mussina, who may all end up in the Hall of Fame, as well as World Series stars Jack Morris, Bret Saberhagen, Bob Welch. Cole Hamels, Justin Verlander and Candelaria. Also, former Cy Young Award winner Peavy. He got almost as much as Price, but at least his contract is extravagant, not insane. As for Cueto, using “comparable” pitchers (including Bob Gibson and Jim Bunning) leads me to an estimate of his future value of more than $120 million. An analysis of Cueto at TheSportsQuotient.com, using current methodology, puts his value at $125 million. As a parting thought, though maybe not in the holiday spirit, what about the top pitcher deal of last offseason, the one that has helped set the market for Price and Greinke: the Nats’ $210 million for Max Scherzer. Scherzer’s comps, after this past season, include Matt Morris, John Lackey, Kevin Appier and Kevin Millwood, plus Bunning, who’s in Cooperstown. What might the Nats get from Scherzer over the next six years by this method? Try 66-68 with a 3.97 ERA and a WAR of about 13. Gulp. Every team that signs a major free agent this winter will have a room full of numbers and projections to back it up. And every agent will have a 50-page book of graphs and stats that will dance and sing. As pen is put to paper to ink that deal, a mood of semi-certainty will settle over the room. Once humans make decisions, a “confirmation bias” kicks in; every new bit of data is bent to validate the decision. That’s great. Unless the guy you just paid $110 million to $217 million to acquire ends up bearing an alarming resemblance to Larry Jansen or Pat Jarvis. For more by Thomas Boswell, visit washingtonpost.com/boswell. |