Long Term Contracts
One of the popular themes in every offseason discussion is the inherent risk of multi-year contracts. MLB has gone through a market correction the past two years with contracts coming down in both annual average value and length. Every year, we see teams trying to dump albatross contracts from players who were supposed to be the keys to their franchise. On the other end of the spectrum, we also have seen the Mariners take the risk-averse nature to the extreme, losing out on opportunities to acquire impact players due to their fear of the bad contract.
Unfortunately, there hasn’t been a ton of research published on the topic. For all the time spent writing about baseball, I find it rather amazing that no one has spent the time breaking down the success rates of long term contracts. I don’t have the time to delve into this topic too deeply, so anybody looking for inspiration on a topic, take this as a suggestion; it’s work I’d love to read.
I was interested enough, however, to do a bit of cursory work. This is by no means thorough and isn’t nearly scientific enough to draw any firm conclusions from. It is relatively interesting, however, so I’m posting it here. I compiled a list of 106 players who, going into the 2005 season, are still signed under a contract that guaranteed them at least three years and bought out some portion of their free agency. Rather than just evaluating players signed as free agents, I also think it’s important to include players who re-sign with their clubs for large amounts of money in exchange for giving up the right to hit the market. I’m sure I missed a few players, but overall, I doubt there are enough errors to change the results much. I divided the 106 contracts into four very ambigous, subjective groups:
Mulligan – the signing club would undo the entire signing, giving up all previous and future performances, if given a chance.
Void Now – the signing club reaped enough rewards early on to still sign the contract, but would opt out of the remaining years if they could.
Good Deal – the player produced enough to justify the contract, and the team is happy with the deal.
Tough Call – Players on the fringes of each category. They don’t fit solidly into any of the categories, and the contract was probably fair, though not a boon to either side.
The breakdown by group is as follows:
Mulligan: 51 total contracts, 48 % of total signed
Void Now: 10 total contracts, 10 % of total signed
Good Deal: 31 total contracts, 29 % of total signed
Tough Call: 14 total contracts, 13 % of total signed
Not a very pretty picture. Half of all the long term contracts currently in effect have led to buyer’s remorse. Less than one-third of them have turned out completely in favor of the signing club. In addition, a decent number of the contracts that currently fit into the “Good Deal” category are recent contracts where the player has lived up to the billing but the contract still has the potential to become an albatross.
It is clear that, over the past five years, owners have been paying far too much for far too many years. Long term, big money contracts are, in general, a bad idea. There are instances when the risks are justified, but it is clear that to build a continuously successful franchise, you must get a large bulk of your contributions from players producing in the first six years of their career.
For those interested, here are the breakdowns by group:
Mulligan
Adam Kennedy
Andruw Jones
Andy Pettitte
Arthur Rhodes
Bartolo Colon
Bobby Higginson
Carl Everett
Chan Ho Park
Charles Johnson
Cliff Floyd
Danny Graves
Darin Erstad
Darren Dreifort
David Bell
David Segui
Denny Neagle
Derek Jeter
Doug Mientkiwicz
Eddie Guardado
Edgardo Alfonzo
Garrett Anderson
Geoff Jenkins
Jason Giambi
Jason Kendall
Javier Vazquez
Jeff Cirillo
Jeff Weaver
Joe Mays
Jose Contreras
Jose Vidro
Kaz Ishii
Kaz Matsui
Ken Griffey Jr
Kevin Brown
Kevin Jarvis
Larry Walker
Mark Redman
Miguel Batista
Mike Hampton
Pat Burrell
Phil Nevin
Preston Wilson
Ray Durham
Ryan Klesko
Scott Spiezio
Shawn Green
Shigetoshi Hasegawa
Sidney Ponson
Steve Karsay
Tom Glavine
Torii HunterVoid Now
Bernie Williams
Bret Boone
Jamie Moyer
Jeff Bagwell
John Smoltz
Luis Castillo
Luis Gonzalez
Mike Piazza
Raul Ibanez
Sammy SosaGood Deal
Albert Pujols
Barry Bonds
Billy Wagner
Bobby Abreu
Brian Giles
Chipper Jones
Curt Schilling
David Ortiz
Derrek Lee
Eric Chavez
Gary Sheffield
Hideki Matsui
Ichiro Suzuki
Ivan Rodriguez
Jason Schmidt
Javy Lopez
Jim Edmonds
Jim Thome
Keith Foulke
Kelvim Escobar
Kerry Wood
LaTroy Hawkins
Livan Hernandez
Mark Kotsay
Miguel Tejada
Mike Cameron
Mike Lowell
Randy Johnson
Scott Rolen
Todd Helton
Vladimir GuererroTough Call
Alex Rodriguez
Carlos Lee
Dmitri Young
Frank Thomas
Jason Isringhausen
Johnny Damon
Jorge Posada
Manny Ramirez
Mariano Rivera
Mark Buehrle
Mike Lieberthal
Mike Mussina
Paul Konerko
Sean Casey
Comments
43 Responses to “Long Term Contracts”
Also from the money doesn’t by you happiness train, here’s what you get, on average last season, from the top 25 paid players in baseball.
Fielders: 18
Avg Fielder Salary: $15,979,6229
Games Played: 122
HR: 26
RBI: 78
BA: .259
Pitchers: 7
Avg Pitcher Salary: $15,11,183
Games: 28
Wins: 12
ERA: 4.06 (take out Randy johnson’s and it is 4.43)
IP: 175
Seems like Derek Jeter would belong in the “Void Now” category, but you’ve got a better idea of the necessary qualifications than I do.
It would be difficult to go into more depth than this, I think, as doing so would require expanding the sample size to previous years, on which contract data is very limited. This could be just about the best possible study, and it certainly makes a strong case for one side of the argument.
you missed on Andruw Jones, Derek Jeter, Torii Hunter and probably Jeter…I think the Cards also like Walker, although he’s obviously not with the team that did the deal…
Its sort of specious to do this, ignoring the fact that the player’s agreement allows for teams to grossly underpay players early in their career. That more than anything causes the market to function in later years as it has. The owners have lined their pockets in relative terms for decades.
The Mariner’s are awash in cash and have been for quite a few years…Their continued disengenousness about their ability to acquire talent is nearly obscene when you consider the commitment the public has made.
Players have every right to get what they can.
I would concur that Andruw Jones is in the wrong category and also Torii Hunter. Hunter’s sign was more of a statement to the fanbase of a changing philosophy than it was about total on field performance, somewhat similar to Ichiro’s value as a total market draw over simply just “normal” a baseball player.
And for that matter, let’s give Jose Vidro a whole year in his new contract before we deem that a falure.
I would move Jeter and Smoltz into the Good Deal slot, given their very solid clubhouse contributions. Dave, excellent breakdown. I am not a big blog fan (and find the users of the PI blog to be complete idiots), however, your insight is right on.
Couple of things: First, I disagree on your Sexson stance, and will post under that heading. Second, the Braves are really wanting to rid themselves of Andruw Jones and his 12 mil salary. He is still only 27 and is a lock for 30 dingers and 100 RBI. What do you think of Ichiro and Jones, with Reed in Left, and Ibanez/Bucky at 1B? (Glaus may still be do-able at 3B.)
(Winn -and another player- would be traded to Atlanta for Jones.)
I was acually surprised to see Ibanez outside of the Mulligan category, especially under the circumstances that the Mariners signed him last year (giving away the draft pick, overpaying, etc.)
And like those before me, I think there are a some players like Jones and Hunter that could be moved into the Void category, but you did say it was a very subjective and rough estimate.
I do have a question though. When considering which category a player went into, were you looking only at their performances given since the contract was signed? Or are we looking at an overall past and/or projected future numbers here? Because I think that might possibly switch more than just a few players around.
from what i can tell jeter is the 3rd highest paid player in mlb. behind arod and manny, but ahead of bonds, randy, pujols… etc. i think that if they could the yanks would take the mulligan (i know i certainly would), but i am sure they are not complaining about jeter being on the team. its just that that contract is far too generous.
Count me among those who have difficulty considering the Andruw Jones signing a complete mistake. So long as we’re giving some of Bobby Cox’s credit to Leo Mazzone, we might consider giving some of Mazzone’s to Andruw Jones.
Like many of the people leaving comments so far, I disagree with a handful of placements in each category, most notably Mike Cameron being in the “good deal” section.
Generally, however, I agree with the percentages and I applaud you for doing so much research to post on a generally ignored issue; the true consequences of long contracts.
One thing that is comforting, however, is that not every player in the “mulligan” department is Jeff Cirillo, Scott Spiezio or Shiggy. There are some good players there with contracts that are a little too large (like Jones, Walker, over half the list really). If we sign Beltre for money based on his 2004 numbers (like the massive contract you proposed in the other thread),and he only hits a perrenial .290 with 30 HR along with great defense, I’d still be pretty happy with that; even for $12 million a season.
Other than possibly Beltre though (not sure if the M’s are going to persue him), I doubt we’ll see any contract offers by the M’s that exceed 3 years… which is a good thing.
I don’t think people realize just how mediocre Andruw Jones has been. In 2004, there was very little difference between Jones and Randy Winn. We think Winn is overpaid at $3.5 million; imagine paying $13 million for that production. Torii Hunter is probably one of the most overrated players in baseball. $8 million for a league average player is not a good idea, regardless of what statement you’re making to your fans.
The Jeter contract is a complete albatross, and there’s just no way you can argue otherwise.
Based on his ’04 season, Mike Cameron was one of the best value signings of last offseason. You may hate his strikeouts, but that doesn’t change the fact that he was, again, a terrific player.
DePo was quoted the other day saying that you might as well base your prediction of player performance more than three years out by throwing darts at a dartboard. Ironically, I heard Pat Gillick at a Mariner fanfest a few years ago say much the same thing. Pat pointed out that a long term contract was very likely to leave either the player or the team feeling cheated. Count me out among those calling for the Mariners to offer a monster contract to Beltran or Beltre.
Dave: I love Cameron as much as the next guy, and I wish he was still patrolling center field for the M’s, but I don’t understand how you can rate Cameron’s season as ‘terrific’ while rating Andruw Jones in 2004 as ‘mediocre’. Jones had the higher OBP: .345-.319, SLG: .488-.479 and played in 14 more games than Cameron. Furthermore, comparing Jones to Winn seems a bit silly. Since 98 Jones has had one year (2001) with an OPS under 800. In Winn’s entire career he’s only had one season above 800. And without looking at the defensive metrics, I have to believe that Jones tramples Winn there, too. I think the M’s should definitely be interested in taking Jones off of Atlanta’s hands. I have no idea what package would get the deal done, but I would much rather see Jones (27 y.o) in our outfield next year than Winn, or, for that matter, Drew. The impact on our non-strikeout pitching staff itself would be worth seeing a few good prospects boarding a plane for the south.
I would rather not see Jones in Seattle’s outfield. For one thing, he’s too expensive by far. For another, let’s look at some stats…
Over the course of Andruw Jones’s career he has put up a .268/.342/.493 batting line. His ‘average’ (I got these by adding up all his full seasons-7 playing centre field and dividing by 7, so it’s not the most accurate figure in the world) range factor and zone rating were 2.84 and .878 respectively. Oh, and his price tag this year is something like $13M.
Randy Winn is a career .284/.344/.411 hitter. He’s played about 500 games in centre over his career, and the two seasons in which he’s played 100+ games there average out defensively to a 2.92 RF and a .898 ZR. He gets paid about $10M less than Jones.
J.D. Drew has hit .297/.391/.513! over his career. He’s played a fair ammount of games in centre, mostly for the Cardinals, but also a few for Atlanta this year. His longest season in centre (he played 97 games there in 1999) he put up a RF of 2.72 and a ZR of .897. I’d expect him to be paid in the area of $11M this year.
Randy Winn is not as good as either of them. Well, that’s to be expected, he’s not even close to as expensive. What’s interesting is how close Jones and Drew are defensively – I know stats don’t tell the whole story, but they do at least give you a clue. Drew can also *hit*.
So, bearing all this in mind, if the Mariners could have:
A) Andruw Jones: A slightly above average hitter with good slugging, and good defence, for $13M and prospects.
B) Randy Winn: Good contact hitter (and a switch hitter to boot), not too much power, and slightly less defense than Jones, for $3M.
or…
C) JD Drew, an excellent, patient hitter, a solid defender, with power to right field, for $11M.
I’d say C. There’s a very good reason that the Braves are shopping Jones…
Taking durability and age (even though it’s only a year difference) into account, I’d put Jones pretty close to Drew on the ‘get’ list. If you can get Drew, for cheaper, fine. But I don’t think we will, and so shipping Winn and a few minor leaguers to Atlanta for the only 27 year old centerfielder with an OPS north of 800 not named Beltran….well, I’d rank that a pretty solid back-up plan. In an ideal world you’d also get Beltre for 3B, Delgado to play first, and Clement as your front-line starter. With some luck in the bullpen, that’s a team that can compete next year.
Randy Winn: $3.5 million, 5 wins above replacement
Mike Cameron: $6 million, 5.5 wins above replacement
Andruw Jones: $13 million, 6 wins above replacement
Seriously, Andruw Jones isn’t that good, and he’s not even close to being worth what he’s paid. There’s a reason Atlanta wants to dump him.
Plus, he’s pretty streaky. Having him on fantasy teams for two years was very painful.
Bernie Williams signed his contract before the 1999 season. Here are his WARP3 totals since then: 11.3, 8.7, 8.8, 8.2, 4.2, 5.1.
For the first four years of the deal, he was excellent. He’s a Void Now, absolutely. But listing him as a Mulligan is just dead wrong.
What, Winn and Cameron aren’t streaky? Winn is either blistering hot or worthless at the plate. And the big marker here for me is age. Jones is 27; Winn is 30; Cameron is 31; Drew is 28. I don’t think we’ll get Drew, so if the Braves want to dump a 27 year old center fielder on our laps in order to retain J.D.–I say let ’em. Have them eat a few million off the contract, if it really worries you. No one is really happy with Winn as the 2005 centerfielder, right? And if Beltran and Drew aren’t signing here, then what is wrong with getting Andruw Jones?
It’ll be very interesting to see if Scott Boras, by virtue (or lack thereof) of representing as many premium free agents as he does this offseason, can reverse the recent market correction all by himself and drown low-self-esteem teams in a sea of red contract ink for years to come.
God help the team that has $20 million commited to Carlos Beltran in 2015.
In a hypothetical ‘Jones for Winn and prospects’ trade, I seriously doubt that Atlanta would send any money over with Jones. They’re going to have enough trouble retaining/signing players as it is, and there’s not much point in dumping salary if you’re still paying for most of it. I’d suspect that a trade like that would also seriously dampen the ‘splash’ that the M’s are supposed to be making in free agency. Randa, Clement, and Jones eating most of the F.O’s cash wouldn’t be considered a particularly worthwhile offseason.
#3, I think you’re missing the point. Sure, players have a right to negotiate the best deal they can, and they are sometimes earning less than their production early in their careers.
However, the point here is whether a smart club even offers those contracts in the first place, not whether players deserve them because of previous service or some unspoken inequity. Equal to the player’s right to seek as much as he can get is the club’s right to offer only what they can afford to give. I use the term afford to encompass both bottom line budget and also opportunity costs.
I’ll take a little issue with both statements. (“tho it’s just quibbling)
Defense has to count for something. The Runs saved by both Hunter and Jones are valuable and not taken into account by VORP. To simply say these two guys are “average” by looking at their offensive numbers is to undervalue a significant portion of their game.
Also in my Torii Hunter point. Generating revenue over what you are being paid is also important and that is why Ichiroo is so valuable beyond his on-field performance. This year with the M’s paying Beltran or Beltre slightly over what their market value will have an effect on first half attendance, you just have to balance that with winning to sustain that. Twins fans love Torii Hunter, to watch him like every player fans latched onto before him (ie. Chuck Knoblach) would have shown the paying customers nothing had changed. While the overall Twin’s payroll changed little, the gate revenues increased, partly due to the idea that the dedication to winning was there and that the front office wasn’t afraid to pay players who helped them do it.
Here we go, Omar Vizquel gets a 3 year contract. This makes me think Beltran COULD get a 10 year deal. What is the world coming to?
The time has long past since Torii Hunter or Andruw Jones were as good as their defensive reputations.
Dave, you forgot to mention that WARP includes defense.
I wasn’t quoting exact WARP figures, since I don’t think all that much of Clay’s defensive evaluations.
I know, but you still weren’t ignoring defense entirely (#22 thought you were just using VORP).
But in comparing them to Randy Winn, as you did earlier . . . .
I will now redily admit to having no clue what WARP is. I can barely figure out VORP (I am confused by what the baseline). Wait, let me get a slide rule . . . .
Again, I’m just quibbling, but there are many, many factors that go into figuring a players worth, not just the final offensive numbers when compared to the league average.
So I guess, I’m saying that it’s more complicated than just a pass/fail test.
Does anyone know where on MLB.com the list where predicting the top 50 free agents will land is located, I can’t find it any where.
#29 – ESPN is the one that does the list, and here it is. ESPN predicts that the Mariners will pick up, out of the top 50, #10-ranked Richie Sexson (he of the questionable shoulder) and #41 Jose Valentin (he of the .216 BA, 30 HR, 70 RBI line in 2004).
Currently, ESPN is 0-1, as they predicted #25 Omar Vizquel would go to Boston; as we all know, he went to the Giants.
Some other notable predictions on the list:
-#1 Beltran goes to the Yankees
-#2 Beltre stays with the Dodgers
-#6 Delgado goes to the Marlins
-#9 Pavano goes to the Orioles (?)
-#11 Drew stays with the Braves
-#17 Clement goes to the Tigers (?)
-#21 O. Perez goes to the Rangers
-#24 Radke goes to the Devil Rays (!)
I’ll be greatly surprised if at least half of their predictions end up holding true.
You have very little understanding of the role of defense in baseall…
shigelojoe,
Half? I’ll be surprised if 5 out of 50 are right.
Hey, terry, with regard to your statement, do you even have a clue what his understanding of the role of fielding (since that’s what’s under discussion here, not “defense”) in baseball is?
#29-30 – FWIW, in 2003 ESPN got 12 out of 50 right (Thome, Clemens, Olerud & Moyer, Matsui Hideki, Byrd, Frank Thomas, Urbina, Trachsel, Ventura, W. Williams, D. Bell). 2004 they got 9 out of 50 (Sheffield, Pettitte, S. Stewart, Ponson, Cameron, Shige, W. Alvarez, Randa, Castilla)
http://sports.espn.go.com/mlb/news/story?page=top50mlbfreeagents
I think Jones wouldn’t be much of a risk at all. Using the Walker trade from Colorado to St.Louis as a barrometer the Braves would be willing to kick in some cash. http://sports.espn.go.com/mlb/news/story?id=1853911
I would push very hard to get Jones. The Braves want to keep Drew, fine I think he’s too brittle for what he’ll want in money. Jones has played a minimum of 153 games in each of the last 8 seasons.
http://sports.espn.go.com/mlb/players/stats?statsId=5681
He’s averaged 29hr’s and 91 rbi’s in Turner Field, a very comparable park to Safeco. Maybe an offer of Spezio, Winn & a couple prospects would land the deal instead of the Braves including cash. They have payrole issues with Hampton’s contract starting to hit their books. Schurholtz is a smart GM, Bavasi may be in over his head in trying to land his stud 27 yr old CF without giving up some quality. We can only hope.
Argh. Don’t take this personally, Mike, but those kind of posts irritate me.
1. The Braves are cash strapped, so they aren’t going to be paying any money to get rid of players.
2. No one is going to take Scott Spiezio.
3. Andruw Jones is not a “stud CF”. He’s a solid player getting paid like a superstar.
4. Turner Field is nothing like Safeco Field. Turner Field is a neutral park. Safeco was the best pitcher’s park in baseball last year.
Dave, I didn’t take it personally, I actually agree with most of what you said. I do feel though that if the Braves are so strapped for cash, even dumping most of Jones’ contract elsewhere would make them happy. I don’t like Jones at 12.5 mil, but I would be interested at 8.5-9. I think the Braves could easily find someone say in NY to pick up most of the tab, but the Yankees did get Hicks to send an awful lot of cash with A-Rod last Spring. The trend is there where teams desperate to move bad contracts will do just about anything to do so, even throw in some cash or take a bad contract back. In this day of the haves & have nots what are big market clubs doing getting money thrown into a deal. And what are smaller market clubs doing throwing money in to help pay the salaries. I believe the way things operated in July were that if the team dumping the contract wanted anything decent in return they would have to help pay the players salary. (I guess Soriano is the reason Texas kicked in the cash they did.) If not, they got some low level prospect that will never make the show. Preying on teams trying to get rid of contracts could be a nice win for the M’s this off season. On Turner Field I was under the belief it was hard on righthanded hitters, and easier on lefty’s much like Safeco, but I stand corrected. Including Spezio in any trade would be a dream, but I know he’s our nightmare.
Quite an interesting premise (the original post I mean). Kind of takes the wind out of the “sign Beltre now and overpay for him” sails. The history of these signings do not look good. Phrases like “gambling”, and “playing with fire” come to mind.
One minor point might help make this not such a scary subject. Dave notes that several of the “good deal” players are still early in their contracts and there is plenty of room for them to develop into albatrosses. Well, by the same token, there are at least a few “mulligans” who have a lot of time left on their contracts and still could turn it around and “prove their worth”. Guys like Kaz Matsui, Jeff Weaver, Bartolo Colon, Javier Vasquez come to mind. There must be more, but unfortunately I’m not familiar with the contracts of most of these guys.
Ok comparing offensive numbers between Cameron and Jones isn’t terribly accurate – Cameron compiled his in a very pitcher-friendly park (although not as pitcher friendly as Safeco), while Jones compiled his at hitter-friendly park. Adjust for park factors, and their offensive seasons are strikingly similar.
Factor in defense (Jones has been in decline defensively for years, and is either league average or slightly worse, whereas Cameron is probably in the top 3 CFs in the game), and Cameron’s true value shows.
If you take Jone’s offensive stats and translate them to Safeco, they’re going to look terrible, and you’d be screaming about paying him the cash he’s due. He may be 27, but offensively he has peaked, and defensively, he’s already in decline. I wouldn’t touch that contract.
Good list. Mike Sweeney should be on that list too somewhere – probably VOID NOW.
I think Andruw fits perfectly into the “Void Now” column. He was overpaid last year and will be overpaid going foward. However, his signing was considered a good deal when it was made (he and his dad went over Boras’ head to negotiate with Schuerholtz by themselves). Regardless of what anyone outside of Atlanta says, the Braves are not desparate to get rid of his contract. That doesn’t mean they’d pass on a chance to rip off Kenny Williams if given the opportunity, but it does mean that any deal that involves Andruw leaving in a salary dump or in exchange for another albatross contract is from a source who dreamed it up themselves rather than someone connected to the Braves clubhouse.
I think the Yankees are choke artists!