Nationals Arm Race

"… the reason you win or lose is darn near always the same – pitching.” — Earl Weaver

Contract Value for FA Starting Pitchers; the Cliff Lee lesson-to-be

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Cliff Lee. Photo: Al Bello/Getty Images

As Cliff Lee continues to dazzle in the post season (his most recent effort being his 8inning, 2hit 13k gem against the most potent offense in Baseball, your NY Yankees), rumors of his purported price tag in the Free Agency market continue to reach spiraling heights.  The most common numbers thrown out start at 5yrs, $25M per.  One author at Forbes thinks he may approach $200M for 6 years combining salary and endorsements.

If you are trying to compare talent to contract value, then you have to start with the highest paid pitchers at current.  CC Sabathia is at $23M/year, Johan Santana is at $22.9M/year on average, and Roy Halladay took a slight discount to sign with Philadelphia (and be able to live in his offseason Odessa home 2 extra months of the year and drive to Spring Training) and is making $20M/year on his new deal.  Clearly, Cliff Lee has shown that he belongs at least at the $20M/year scale.  But how much higher makes sense financially for the signing team?

Forgetting for the moment that payroll means very little to a team like the New York Yankees (unfortunately his likely destination), lets talk about the value of the Free Agent contract and whether a team that gives out a $25M/year contract can ever really get their money’s worth.  Baseball is filled with horror stories of huge FA contracts that went bust.  Names like Zito, Dreifort, Pavano, Neagle, and Hampton fill general managers and fan’s heads with dispair.

How bad were these contracts?  I put together a spreadsheet with every significant starting pitcher FA contract that I could find, then cross referenced it by the Pitcher’s Won/Loss record during the duration of the contract.  See below: the table is sorted in reverse order of $/win.  In addition to the major FA contracts, I also arbitrarily added every “Ace” starter in the league, resulting in names like Lee, Jimenez, Price and Buchholz being in this list despite not being major FA pitchers (yet).  Their inclusion illustrates one of my major conclusions below.

Pitcher Team Total Value (includes club options) $$/year Avg Contract Term W/L $ per win
Kei Igawa New York Yankees $46,000,000 $9,200,000 2007-11 2-4 $18,400,000
Jason Schmidt Los Angeles Dodgers $47,000,000 $15,666,667 2007-09 3-6 $15,666,667
Kei Igawa New York Yankees $20,000,000 $4,000,000 2007-11 2-4 $8,000,000
Darren Dreifort Los Angeles Dodgers $55,000,000 $11,000,000 2001-05 9-15 $6,111,111
Russ Ortiz Arizona Diamondbacks $33,000,000 $8,250,000 2005-08 7-22 $4,714,286
Roger Clemens New York Yankees $28,000,022 $28,000,022 2007 6-6 $4,666,670
Carl Pavano New York Yankees $39,950,000 $9,987,500 2005-8 9-8 $4,438,889
Denny Neagle Colorado Rockies $51,000,000 $10,200,000 2001-05 19-23 $2,684,211
Jake Peavy San Diego Padres $52,000,000 $17,333,333 2010-12 7-6 $2,476,190
Carlos Silva Seattle Mariners $48,000,000 $12,000,000 2008-12 15-24 $2,400,000
Mike Hampton Colorado Rockies $121,000,000 $15,125,000 2001-08 56-52 $2,160,714
Chan Ho Park Los Angeles Dodgers $65,000,000 $13,000,000 2002-06 33-33 $1,969,697
Barry Zito San Francisco Giants $126,000,000 $18,000,000 2007-13 40-57 $1,800,000
Johan Santana New York Mets $137,500,000 $22,916,667 2008-13 40-25 $1,718,750
Pedro Martinez New York Mets $54,000,000 $13,500,000 2005-08 32-23 $1,687,500
Carlos Zambrano Chicago Cubs $91,500,000 $18,300,000 2008-12 34-19 $1,614,706
Gil Meche Kansas City Royals $55,000,000 $11,000,000 2007-11 29-39 $1,517,241
Daisuke Matsuzaka Boston Red Sox $103,000,000 $17,166,667 2007-12 46-27 $1,492,754
Kevin Brown Los Angeles Dodgers $105,000,000 $15,000,000 1999-2005 72-45 $1,458,333
A.J. Burnett New York Yankees $82,500,000 $16,500,000 2009-13 23-24 $1,434,783
Roger Clemens New York Yankees $18,000,000 $18,000,000 2005 13-8 $1,384,615
Felix Hernandez Seattle Mariners $78,000,000 $15,600,000 2010-14 13-12 $1,200,000
John Lackey Boston Red Sox $82,500,000 $16,500,000 2010-14 14-11 $1,178,571
Jarrod Washburn Seattle Mariners $37,000,000 $9,250,000 2006-09 32-52 $1,156,250
Chris Carpenter St. Louis Cardinals $50,800,000 $12,700,000 2008-11 33-13 $1,154,545
Kevin Millwood Texas Rangers $60,000,000 $12,000,000 2006-10 52-62 $1,153,846
C.C. Sabathia New York Yankees $161,000,000 $23,000,000 2009-15 40-15 $1,150,000
Roy Oswalt Houston Astros $73,000,000 $14,600,000 2007-11 52-36 $1,123,077
Bartolo Colon Los Angeles Angels $51,000,000 $12,750,000 2004-07 46-33 $1,108,696
Mark Buehrle Chicago White Sox $56,000,000 $14,000,000 2008-11 41-35 $1,024,390
Ryan Dempster Chicago Cubs $52,000,000 $13,000,000 2009-12 26-21 $1,000,000
Derek Lowe Atlanta Braves $60,000,000 $15,000,000 2009-12 31-22 $967,742
Mike Mussina New York Yankees $88,500,000 $14,750,000 2001-06 92-53 $961,957
Justin Verlander Detroit Tigers $80,000,000 $16,000,000 2010-14 18-9 $888,889
Josh Johnson Florida Marlins $39,000,000 $9,750,000 2010-2013 11-6 $886,364
Pedro Martinez Boston Red Sox $92,000,000 $15,333,333 1998-04 117-37 $786,325
Bronson Arroyo Cincinnati Reds $25,000,000 $12,500,000 2009-10 32-23 $781,250
Josh Beckett Boston Red Sox $42,000,000 $8,400,000 2007-10 55-29 $763,636
Daisuke Matsuzaka Boston Red Sox $52,000,000 $8,666,667 2007-12 46-27 $753,623
Ted Lilly Chicago Cubs $40,000,000 $10,000,000 2007-10 54-21 $740,741
Zack Greinke Kansas City Royals $38,000,000 $9,500,000 2009-12 26-22 $730,769
Tim Lincecum San Francisco Giants $23,000,000 $11,500,000 2010-11 16-10 $718,750
Mike Mussina New York Yankees $22,141,452 $11,070,726 2007-08 31-19 $714,240
Matt Cain San Francisco Giants $27,250,000 $9,083,333 2010-12 13-11 $698,718
Roy Halladay Toronto Blue Jays $40,000,000 $13,333,333 2008-10 58-31 $689,655
Derek Lowe Los Angeles Dodgers $36,000,000 $9,000,000 2005-08 54-48 $666,667
Cole Hamels Philadelphia Phillies $20,500,000 $6,833,333 2009-11 22-22 $621,212
Jason Schmidt San Francisco Giants $40,000,000 $8,000,000 2002-06 71-36 $563,380
Brandon Webb Arizona Diamondbacks $28,000,000 $5,600,000 2006-10 56-25 $500,000
Jon Lester Boston Red Sox $43,000,000 $7,166,667 2009-14 34-17 $421,569
Adam Wainwright St. Louis Cardinals $36,000,000 $6,000,000 2008-13 50-22 $360,000
Cliff Lee Cleveland Indians $23,000,000 $4,600,000 2006-10 67-44 $343,284
Ubaldo Jimenez Colorado Rockies $23,750,000 $3,958,333 2009-14 34-20 $232,843
David Price Tampa Bay Rays $11,250,000 $1,875,000 2007-12 29-13 $64,655
Clay Buchholz Boston Red Sox $443,000 $443,000 2010 17-7 $26,059

Comment on Won/Loss records; yes I know that individual pitcher wins are not a great indicator of a starter’s worth.  However, they do reasonably indicate over the course of a longer term period the value of that pitcher to a team.  Perhaps a better argument is free agent dollars per quality start (despite the quality start measuring basically a mediocre start of 3ER or less in 6ip or more by a pitcher, it does generally correlate well to team wins andveven to a “real” quality start of 2ER or less in 6IP or more).  At some point I’ll re-run the analysis and count up QS per FA dollar to see how it compares.

Note for the purposes of this argument:

  • The Contract total value is averaged over the life of the contract, even if the payments are different during different years.
  • The W/L record is for the pitcher over the life of the contract, not necessarily for the original signing team.
  • If the contract is current (i.e., runs from 2009-2012) then I’ve only counted the completed regular seasons.
  • There are no off-season records taken into play.
  • I entered in both Japanese Pitchers (Igawa and Matsuzaka) with massive posting numbers twice; one factoring the posting fee and the other not.  Without the fee Dice-K looks halfway decent but with it he’s overpriced (something all Boston fans probably already knew about their highly paid #5 pitcher).

Conclusions.

- If  you can get 1 win per $1M expended, you are doing about average it seems.  Anything above $1.25M and you are looking at a questionable contract.

- It is difficult to look at any contract below $1M/victory and say that the team made a bad deal.

- The absurdly low $/victory values for David Price and Clay Buchholz demonstrate as clearly as possible the value of the pre-arbitration superstar.  Tampa Bay (who did a similarly shrewd deal with Evan Longoria, buying out the arbitration years and tying the player to the club past the 6-year pre-FA window) now gets Cy Young-quality starts from Price for the next two years at 1/20th his market value.  Buchholz is even more evident; at a pre-arbitration salary of $443,000 for 2010, he went 17-7 and gave the Red Sox #1 starter capabilities.  On the open market he’s worth at least $15M/year at that level of productivity.

- The worst FA contract ever given to a starting pitcher wasn’t one of the aforementioned infamous culprets; it belongs to one Kei Igawa.  The Yankees paid the posting fee of $26M just to negotiate with him, then signed him to a 5 year, $20M contract.  For that outlay of $46M guaranteed, the Yankees have gotten a record of 2-4 over parts of two seasons, and he hasn’t appeared in a MLB game since June of 2008.  Luckily the Yankees can afford it; this kind of FA mistake would cripple a mid-to-small market team for years.

- Jason Schmidt‘s 3yr, $47M deal with the LA Dodgers is the largest $$ bust in terms of a pure FA play, not counting the vagarities of the Japanese posting system.  Schmidt had ironically just finished an incredibly efficient deal with San Francisco, where he went 71-36 over 5 seasons on a $40M contract (resulting in a very good $/win number of $563,380).  Six games into his Dodger career he went onto the DL list with shoulder injuries that eventually cost him the rest of 2007 and all of 2008.  He tried to regroup in 09, failed to make the team out of spring, made a few starts and was back on the DL.  All told, 3 wins in 10 starts for $47M.

- Some of the infamous deals do appear close to the top of this list; Neagle’s $51M for a 19-23 record.  Dreifort’s $55M deal resulting in a grand total of 9 wins and only 26 starts.  Ironically, the highest single season salary was Roger Clemen‘s $28M deal with New York in 2007.  For that money the Yankees got a middling 6-6 record.

- Are there any major FA deals that ARE paying off?  Well, you have to dig deep.  CC Sabathia has won 40 games for the Yankees in the first two years of his $23M/year deal, which is easily the best 9-figure deal.  However, it is early; we need to check back in years 6 and 7 of this deal.  Mussina went 92-53 for the Yankees after he signed his $88M deal in 2001.  Verlander won 18 games this year for his $16M annual salary and looks like a good bet to continue that trend.

- The BEST long term FA deal ever signed has to be Pedro Martinez‘s 6year $92M deal.  He went 117-37 between 1998-2004, won 3 Cy Youngs, had 2 Cy Young runners-up, and in the year 2000 posted an ERA+ of 291, which accounts for the best modern-day single-season pitching performance in the history of the game.

Bringing this back to Cliff Lee; the conclusion is thus; he may earn a $25M/year deal but the odds of his continuing to win 20-22 games/year for the duration of the contract and thus inflating the $/win value will eventually prove that contract to be an albatross (even more so if he misses significant time to injury at some point).

3 Responses to 'Contract Value for FA Starting Pitchers; the Cliff Lee lesson-to-be'

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  1. [...] Nationals Arm Race "…….Nobody likes to hear it, because it's dull, but the reason you win or lose is darn near always the same – pitching.” — Earl Weaver « Contract Value for FA Starting Pitchers; the Cliff Lee lesson-to-be [...]

  2. [...] well serve as a boat anchor for this team in a few years.  I’ve posted in the past about free agent pitcher contract values and clearly a $24M/year AAV is going to be incredibly difficult to earn.  Even if Lee wins 20 games [...]

  3. [...] per win is fantastic in an age when teams try to get FA pitching at $1m/win.  See my “Contract value for FA pitcher” post from last October, which I’ll update this off season with 2011’s season [...]

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