Overpaying a player once is OK, as long as you learn from it
By David Pinto - SportingNews Feb 21, 6:57 pm EST
Going into the 2008 season, 124 baseball players hold contracts with an annual salary of $8 million or more. Getting a contract of that value generally means a player has shown his worth with great performances or long-term durability. Teams, however, sometimes overpay for past performance.
Eighty-six of those 124 players carried over their contract from the previous season, but some did not produce enough last year to justify the salary paid. By examining these players and their contracts, is it possible to avoid such mistakes in the future?
To evaluate a player’s output versus his salary, “Win Shares” provides a single number of a players value, including batting, fielding and pitching. The Win Shares metric, developed by Bill James, is intended to indicate the number of wins contributed by a certain player.
Win Shares per million dollars allows the ranking of players based on bang for the buck. For the players in question here, we use the average number of win shares per season since the signing of the contract, and the average yearly value of the contract.
For example, shortstop Orlando Cabrera played three seasons on a contract that averages $8 million annually. In that time, he posted 19.6 Win Shares per season. 19.6 Win Shares divided by $8 million results in Cabrera producing 2.45 Win Shares per million dollars—a good number. For the 86 players we are talking about, the average is 1.4 Win Shares per million dollars.
Splitting the players into four groups provides a better way of seeing who is not producing at a level worthy of their contracts. We divided players into batters and pitchers, then subdivided them based on how far into their deals they are—short term (one or two seasons in) and long term (three or more).
Bottom five short-term pitchers
5. Randy Johnson, Arizona Diamondbacks: 0.3 WS/million. Johnson needed back surgery during the ‘07 season. He is throwing well in spring training so far, so it’s possible he can bring up that number in the second year of his contract.
4. Vicente Padilla, Texas Rangers: 0.2 WS/million. He played most of the season, accumulating 23 starts with a 5.76 ERA. He struggled with elbow problems most of the year.
3. Adam Eaton, Philadelphia Phillies: 0.2 WS/million. This was just a bad deal. Eaton never was very good and sustained a strained middle finger tendon in each of his previous two seasons. With the Phillies, he posted the worst ERA of his career.
2. Chris Carpenter, St. Louis Cardinals: 0.0 WS/million. Carpenter made one start in ‘07 and eventually had to have Tommy John surgery. He’s not expected back until mid to late ‘08 at the earliest. He’ll basically provide no value for the first two years of a five-season contract.
1. Jason Schmidt, Los Angeles Dodgers: 0.0 WS/million. Schmidt made six starts in ‘07 and pitched very poorly, posting a 6.31 ERA. He missed the rest of the season after shoulder surgery. He has two years left on his contract and threw pain free in his first bullpen session of the spring.
Bottom five short-term hitters
5. Nomar Garciaparra, Los Angeles Dodgers: 1.2 WS/million. He could not sustain his solid ‘06 campaign and fell even further off his poor ‘05 numbers. The Dodgers are rid of this contract after this season, though.
4. Derrek Lee, Chicago Cubs: 1.1 WS/million. A great ‘05 season earned Lee a big contract for ‘06. Lee’s low rank here is based on a 50-game season in the first year of the contract. Based on ‘07, he can make this deal look a lot better over the next three seasons.
3. Jim Edmonds, San Diego Padres: 0.95 WS/million. Edmonds saw both his on-base average and slugging percentage take a nose dive for a second year. The Padres acquired him from St. Louis in the offseason and hope for some kind of rebound in the final season of the deal.
2. Hideki Matsui, New York Yankees: 0.9 WS/million. Once an iron man, injuries limited him to 194 games over the last two seasons.
1. J.D. Drew, Boston Red Sox: 0.85 WS/million. Drew actually stayed healthy in ‘07, but his slugging percentage was off about 75 points from his career average. Drew has four seasons left to improve his standing.
Bottom five long-term pitchers
5. Jason Isringhausen, St. Louis Cardinals: 1.1 WS/million. Isringhausen is effective, but closers just don’t deliver that much in terms of Win Shares because of the few innings they work.
4. Ben Sheets, Milwaukee Brewers: 0.9 WS/million. He signed a four-year deal after an outstanding ‘04 season. That was his third year in a row throwing 200-plus innings, but he hasn’t qualified for the ERA title since.
3. Pedro Martinez, New York Mets: 0.6 WS/million. Injuries wiped out most of the ‘07 season and caused him to post the highest ERA of his career in ‘06.
2. Mike Hampton, Atlanta Braves: 0.4 WS/million. He enters the last season of his eight-year contract having not pitched since ‘05.
1. Carl Pavano, New York Yankees: 0.08 WS/million. He signed a four-year, $40 million contract after the ‘04 season, but a series of injuries have limited him to 19 starts and a 4.77 ERA with the Yankees.
Bottom five long-term hitters
5. Adrian Beltre, Seattle Mariners: 1.3 WS/million. He performs better than one may think, averaging 17.1 Win Shares in his three seasons with the Mariners. He just didn’t live up to his breakout final season with the Dodgers, the basis for his big contract.
4. Manny Ramirez, Boston Red Sox: 1.3 WS/million. Yes, Manny is a great hitter. But the price tag is just too high. Note that the Yankees’ Alex Rodriguez over the length of his previous contract averaged seven more Win Shares per season than Ramirez. If you take their WS/million out to the next decimal point, Alex beats Manny 1.34 to 1.27, but still doesn’t reach the average of 1.4 WS/million. These numbers reflect superstars receiving a premium for contributing to lots of wins. It’s those extra wins that put teams over the top and into the playoffs.
3. Garrett Anderson, Los Angeles Angels: 1.2 WS/million. This is simply a case of a team valuing batting average more than on-base average. Anderson doesn’t get on base very often for a player with such a good batting average.
2. Jason Giambi, New York Yankees: 1.2 WS/million. His average is brought down by poor seasons in ‘04 and ‘07. He also was limited to 139 games in both the ‘05 and ‘06 seasons. Still, he has had four great years with the club—on-base averages more than .400 and slugging percentages well over .500, hitting 151 home runs.
1. Ken Griffey, Jr., Cincinnati Reds: 1.1 WS/million. His contract seemed like a sweet deal at the time for the Reds. Griffey, however, played 140-plus games in a season just twice in eight years. He has hit 195 home runs for Cincinnati after hitting 209 in his final four years for the Mariners.
Hitters vs. pitchers
Note that pitchers, in general, are a poor investment. When you rank the players by Win Shares per million dollars and divide them into four even tiers, or quartiles, you get the following counts of pitchers and batters:
Nearly 53 percent of the pitchers in the study finish in the bottom quartile, compared to 5.8 percent of batters. However, many of these were in the first year of their new deals, so they have a chance to bounce back.Code:WS/million quartile Pitchers Batters First (highest) 5 16 Second 3 19 Third 8 14 Fourth (lowest) 18 3 Total 34 52
What lessons can we learn from these contracts? Pitchers produce much less than hitters, so big contracts are not the best idea for pitchers. Maybe the Twins knew what they were doing in trading away Johan Santana.
Pitchers with any injury history are bad gambles. Johnson, Pavano, Schmidt, Carpenter, Eaton and Martinez fit this mold.
The hitters are more complicated. Great hitters simply demand a premium. It’s tough to argue that the Ramirez and Rodriguez contracts were mistakes, despite less bang per dollar. But signing older players with a history of declining productivity doesn’t work. Garciaparra, Edmonds and Anderson prove that older hitters just aren’t worth a lot of money.
David Pinto writes and edits BaseballMusings.com and is a regular contributor to Sporting News. (Writer’s note: Special thanks to Cot’s Baseball Contracts for the contract and salary information.)