Every MLB off-season there is a complete frenzy once free agency officially begins and then there is more speculation and rumors than there are legitimate sources to back them up. This off-season is no different and in all actuality is probably worse – and that’s without Albert Pujols, Prince Fielder, and Jose Reyes on the open market. There is one thing different about this free agency bonanza than in years past though – that one thing being the fact that more teams appear willing to offer more money on a per year basis than they are willing to offer a long-term contract (long-term being six years or longer).
What’s so insane about all of this money being thrown around, whether it’s more in up-front salary per year or longer term deals, is that these long-term contracts worth well north of $100 million dollars – and in some cases $200 million (Alex Rodriguez, Albert Pujols, and Prince Fielder) – work out favorably for the organization less than half the time. Alright, more specifically less than half the time means around 23 percent of the time – at least according to the long-term, $100+ million dollar commitments handed out since 2006 (regrettably, that’s as far back as the data is easily accessible and maybe even relevant).
There have been 13 total big money, long-term contracts handed out since the 2006 off-season and only three of the players that received that kind of contract have actually lived up to it so far. So there you have it, your 23 percent ladies and gentleman.
Here’s a look at those 13 players and their contracts:
Now, I’m sure that you’re thinking I have a pretty small sample size – and yes, I kind of do actually. But let’s not forget that $100+ million dollar contracts aren’t incredibly common occurrences. They may feel like it because of all the rumors and speculation surrounding all of the top, or top-ish, players available via free agency every off-season but the truth of the matter is that on average we really only get about two big contacts like this per off-season.
So what does my nifty little chart picture thingamabob mean? Well, the total value column represents millions of dollars (obviously) of the total contract. The WAR column show the total amount of WAR the player has accumulated under that contract, with the average WAR they generate per year next to it. Finally we have the WARVC, which means WAR Value of Contract – or simply put, the total amount of WAR that contract is worth and the amount the player would have to produce to live up to the contract.
(I used fWAR for all of my WAR numbers by the way and I also used Fangraphs’ WAR value calculation to determine the WARVC – with one WAR being worth approximately $4.5 million dollars.)
With that little explanation out of the way, the only three players on this list that are doing a good job (so far) of living up to their contracts are C.C. Sabathia, Matt Holliday, and Cliff Lee. Surprise, surprise we have two pitchers on the list. The jury is still out on Pujols, Fielder, and Reyes but I wouldn’t expect any of them to actually live up to the total value of their contracts. The Pujols and Fielder contracts are simply too long and too expensive to realize the full value of (especially considering Pujols’s contract calls for him to average 5.5 WAR every year over 10 years to break even, and Fielder would have to average around 5.3 WAR per season to do the same). Reyes, if he could stay healthy – which is highly unlikely – could average the nearly 3.9 WAR over the remaining five years of his contract to make it worthwhile, but is still highly unlikely.
Perhaps this partly explains why teams are trying to shy away from the big-time, long-term commitments that teams have made in the past and continue to get burned on when they do (see Crawford, Carl).
Many people feel that the contract the Atlanta Braves handed to B.J. Upton was somewhat high, but in all actuality it is not. They are basically paying him to provide them with 3.3 WAR per season over the next five years, and that 3.3 WAR over the length of the contract would be a wash – they’d break even. So, anything over 16.5 WAR or so towards the end of that contract is an added value bonus to the Braves. Upton has been pretty up and down over the last couple of seasons but truth be told, he’s closer to a four WAR player than he is a 3.3.
Maybe this is actually the way to go – offer a slightly inflated annual salary to a good, or potentially good, player for a shorter number of years and there’s less long-term risk involved. Your organization will no longer be hamstrung by an aging, near lifeless player towards the middle or end of a contract (see Rodriguez, Alex).
While my initial focus has been on $100+ million dollar contracts I can’t help but mention the utter inflation of deals handed out to non-starts this off-season so far. Two of the silliest of those deals this off-season have been given to relief pitchers – or “closers” if that’s what we’re still labeling them. The Los Angeles Dodgers signed Brandon League to a $22.5 million dollar contract over three years, which means they are expecting him to produce upwards of 1.6 WAR per year over those three years. League has only come close to that once in his career, which was in 2010 with the Seattle Mariner when he managed to accumulate 1.3 WAR after a 37 save season. Good luck with that one Dodgers – you may have your own printing press for money but making moronic decisions that reverberate through the rest of the baseball market is just ignorant in my opinion.
The Cincinnati Reds are the other organization that deserves some hand slapping as they gave Jonathan Broxton a three year, $21 million dollar deal. Even if this were the Broxton circa 2007 to 2009 they would still deserve to have the crap slapped out of their hands because relief pitchers are so volatile from one year to the next that it’s simply too big of a risk. The Reds are banking on Broxton staying healthy for three straight seasons and produce upwards of 1.5 WAR for each of those seasons – good luck.
Clearly I’ve gone off the rails a bit with a kind-of sort-of rant about teams over-inflating the market with above market deals for players that shouldn’t be getting them, but I digress.
Back to my initial point…
There are still three players left on the market that will potentially get $100+ million dollar deals – Zack Greinke, Josh Hamilton, and Michael Bourn. Now, Bourn is the least likely of the trio that will get that big contract but it’s certainly not out of the question considering a fair offer for him, an offer that will mostly likely result in the organization breaking even on their investment, is a five year $90 million dollar commitment. Again though, $100 million dollars is not out of the question since his true value hovers just below that mark.
The Philadelphia Phillies are rumored to have a serious interest in him, and they do have a history of handing out inflated contracts (see Howard, Ryan), but he still may not eclipse the deal that Upton got. Bourn may also end up having to settle for a one year contract and try his hand at a long-term deal again next year, as the market for him has just about dried up – it seems like he waited a little too long as the center field needy teams went in other directions to fill that need.
I would consider Hamilton the second least likely of the group to get that $100+ million dollar contract and it’s not because he hasn’t proven he’d be worth it – at least not in years past. The issue with Hamilton is the length of the contract that is scaring potential suitors for his services off. He wants a six or seven year deal and whichever Owner/GM team gives him that deserves to be removed from that organization immediately.
Hamilton’s true value lies somewhere in the three or four year range because of his durability concerns and his age, which at this point go hand-in-hand. I wouldn’t be surprised to see him get a four year, $100 million dollar contract but even that kind of contract an organization likely wouldn’t break even on. Now, a five year and $90 million dollar contract would provide Hamilton with an extra year but less overall money – but it’s this type of contract that an organization should be pushing for so they don’t end up vastly overpaying for someone who has become largely overrated because of his backstory and homeruns.
In Greinke’s case, no matter what contract he signs it will certainly be worth far more than what he will bring back to an organization in overall production over the life of the contract. That’s not to say he won’t live up to the annual value of the contract – alright, he won’t but he’ll at least come close – over the first three years or so but those final three, possibly four, years of whatever contract he gets are going to hurt the organization that gives it to him.
All things considered with Greinke, a six year contract worth $120 million dollars would be considered a very generous contract by the standards I’m working off and he probably wouldn’t even live up to that – but it’d be a lot better than the seven year debacle he’s probably going to get.
There is also a sizable portion of Baltimore Orioles fans that want the team to sign Hamilton and/or Greinke, and to that I say – DON’T. While I want the team to take a chance in free agency or trade, the last thing I want them to do is cripple their ability to do anything financially for the next five or six years – especially when they still have to think about long-term deals for Matt Wieters and an assortment of whatever young pitchers prove worth a deal.
So yeah, free agency in baseball is one big stupid – slightly rigged – game played every off-season with the more well-run organizations having to rely on guile and overall organization wide player development strategies to compete off and on over the years while the large-market behemoths force the overall value of the very best free agents, and those well below them, upwards – thus causing salaries to become inflated to the point where the have’s truly have and the have not’s merely have to suck it up and deal with it.
Wow – all of that just to say what we already know…