Did the LA Angels overpay for the St Louis Cardinals slugger? How much is Prince Fielder worth? Analysis of the MLB free agency mega contracts
The winter 2011 MLB free agency period is already proving to be one of the richest in history. First, former Mets shortstop Jose Reyes signed a six-year, $106 million deal with the new-look (and new-name) Miami Marlins. Then the annual Baseball Winter Meetings were capped off when first baseman Albert Pujols decided to depart St. Louis ? his home of 11 years ? to sign a massive ten-year, $254 million contract with the Los Angeles Angels of Anaheim. What's more, as the second largest contract in the history of the sport, it will add to the coffers of Pujols' controversial agent, Dan Lozano. While free agent Milwaukee Brewers slugger Prince Fielder has yet to sign anywhere, he likely has a payday of somewhere between $150 and $200 million coming his way.
All three players are among the game's elite and will be thrilling for fans of their new teams to watch. When healthy, Reyes is an electrifying speed demon with a knack for stretching singles into doubles and doubles into triples. Fielder possesses prolific power, hitting 30 or more home runs in all but one of his full seasons in the Majors, and superlative plate discipline, reaching base via the walk in over 15 percent of his plate appearances over the last three seasons. And Albert Pujols is a once in a generation talent ? one of the greatest players ever. Over the course of his 11-year career, the three-time MVP has averaged 40 home runs per season, he has posted a .328 batting average, and his 1.037 on-base plus slugging percentage (OPS) is 70 percent better than the league average.
Yet just because all three players are elite does not mean their contracts will work out favorably for their teams; it is indeed possible to "overpay" even a great player. Using advanced statistics, we can determine, with some degree of accuracy, how well Reyes and Pujols must perform to justify their contracts.
"Wins above replacement," or just "WAR" for short, is a sabermetric statistic which attempts to represent a player's value in terms of how many wins they provide their team relative to a "replacement player." The WAR stat provided by the website FanGraphs.com combines measurements of offensive efficiency, fielding, and baserunning, as well as a positional adjustment so players at different positions can be compared. The hypothetical "replacement player" that is used as the baseline against which players are measured is determined by calculating the average production of all players who make the league-minimum salary of $400,000 ? players for whom teams need not expend any marginal resources ? and comparing it to the average production of all players in the league. Although the stat is not without flaws, due primarily to the unreliability of its defensive component, it is nonetheless a useful innovation for expressing with a single number how much a player contributes in all facets of the game.
WAR also allows us to determine the cost, in dollars, of adding wins to a team through free agency in any given year. In recent seasons, the number, which is trending upwards, has hovered around $4.5 million per win. Thus, from the General Manager's perspective, a contract that pays a player more than $4.5 million per WAR produced could be said to be a bad deal; a contract that pays a player less than $4.5 million per WAR produced would be a good deal.
Knowing this, if we set the cost of a win at $5 million to account for inflation, we can estimate that over the course of his six-year, $106 million contract, Jose Reyes will need to produce approximately 21 WAR ? or 3.5 WAR per season ? to justify it financially. Reyes has a career average of 3.7 WAR per season, including seasons that were shortened by injuries. Indeed, injuries will be Reyes's and the Marlins' biggest worry over the next six years, as in each of the last three seasons he has lost significant time to lower body injuries. For a player who relies heavily on his speed to be productive, such injuries could be a major drain. Nevertheless, despite missing 36 games due to a balky hamstring in 2011, Reyes still managed to post 6.2 WAR. This is Reyes's true talent level, and entering his age 29 season, there is no reason aside from injury to assume that he couldn't repeat this performance again in 2012. In fact, reaching and surpassing 21 WAR will be a breeze for Reyes if he can maintain this level of production for the next few seasons before entering his decline years. As with all free agent contracts, the Marlins are making a bet on a player's future, but in this case it is a bet that has a good chance of paying off.
Perhaps surprisingly, it is Pujols's contract with the Angels that is the bigger gamble of the two. At just over $25 million per year, he would need to average about 5 WAR per season over the next decade. For the Albert Pujols who has averaged 8 WAR per season over the last 11 years, this deal would be a bargain. But his last two seasons should raise some red flags. In 2010, Pujols was worth 7.5 WAR, down from 9 the year before. In 2011, he dropped all the way to 5.1 WAR, thanks in part to a fractured forearm he suffered in June. He has also been nagged by chronic elbow trouble since 2007, and at almost 32 years old his decline years are imminent (if they haven't already begun).
Here, Yankees third baseman Alex Rodriguez's largest-ever ten-year, $275 million contract is an instructive historical reference point. A-Rod inked the deal in 2007, before his age 32 season, like Pujols. Moreover, A-Rod was a similarly productive player to Pujols prior to signing the deal (each player has won three MVP awards in their respective league). Since signing, though, he has battled injuries to average just 4.7 WAR per season for a total dollar value of 82 million. Meanwhile, he has been paid more than $110 million over this span. Going forward, his play is unlikely to match his pay.
For the same reason that giving Pujols such a massive deal for so many years is a risky proposition, giving Prince Fielder the rumored ten-year, $200 million dollar he covets would be even riskier. True, at just 27 years old the portly first baseman figures to have several years of prime production ahead of him. Yet the reality is that players with Fielder's body type do not have a history of aging well?just look at Mo Vaughn. This is why Fielder would be best suited on an American League roster where he could move to designated hitter when his defense at first base becomes too much of a liability, and why a team would be much more likely to at least break even on a six or seven-year deal in the range of $130 to $140 million.
It is the very nature of free agency in baseball that star players sign their big free agent deals in or around their prime years and are locked up through their decline years. The logic of this from the team's perspective is that they hope to get surplus value from a player at the beginning of a deal while accepting that they must overpay at the tail end if they expect to make a competitive bid for that player's services. The Angels are betting that the real Albert Pujols is the 7+ WAR player from before 2011 who will experience a gentle decline, not the 5 WAR player from 2011 who has already declined.
Ultimately, only time will tell, but if I had to bet on one of these players to outperform their contract it would be Reyes.
Source: http://www.guardian.co.uk/sport/blog/2011/dec/22/albert-pujols-la-angels-prince-fielder
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