The Yankees kicked off their offseason with the re-signing of Hiroki Kuroda on Monday. The hot stove is officially warming up, and we’re going to see things really kick off the first week of December, when the GM meetings are held in Nashville. Surprisingly, we already have 20 new contracts this offseason. Be it re-signs, extensions, or just plain signs, there is a large enough sample-size to start a discussion on how much players are will be paid in this current market.
Based on WAR, it’s possible to calculate how many millions of dollars a player was paid per the wins above replacement that they produced in the past. In 2012, Robinson Cano put up the second best fWAR in the American League at 7.8. Knowing that he earned $14 million dollars, you can divide his 2012 salary by his total seasonal fWAR and find that he was paid $1.8 million per win. As we’ll see going forward, the Yankees got a steal from their second baseman.
Using this price per win above replacement does have it’s flaws. WAR itself can do a poor job of analyzing defense, and many accuse fWAR of misjudging pitchers. Then there are market problems, such as positions being valued differently from year to year. For instance, this 2013 season has very few middle infielders, and there’s a good chance that teams will big each other up to acquire a guy like Marco Scutaro. The market also overvalues positions in the long term, in particular relievers, who appear vastly overpaid by this system.
Taking all of this into context, the way markets values wins usually evens itself out in the end. Though the idea of dollars per win above replacement isn’t a perfect science, it’s a nice rough estimate to kindle a discussion. When doing so, keep in mind that players may be coming off breakout seasons or they may have dealt with suspensions, and in these cases we may expect them to outperform their expected WAR and earn more money. Likewise, aging players or injured players may see their performance decrease in the future. Everything must be viewed in a context, but as long as you know who the player is and what he’s done, the average annual salaries that we can predict give us a good benchmark.
With the 20 players that have already signed new contracts or extensions, I’ve found the players new average annual salary in the chart below. Next to this, you’ll find the average fWAR for the last two baseball seasons. Using these two figures, I’ve found how much they’re being paid per win above replacement.
|Player||Team||Contract Value||AAV||Average fWAR||Dollars Per WAR|
|David Ortiz||Red Sox||$26.00MM||$13.00MM||3.6||$3.66MM|
|Melky Cabrera||Blue Jays||$16.00MM||$8.00MM||4.4||$1.82MM|
|Jonny Gomes||Red Sox||$10.00MM||$5.00MM||1.8||$2.78MM|
|Maicer Izturis||Blue Jays||$10.00MM||$3.33MM||1.5||$2.30MM|
|Jake Peavy||White Sox||$29.00MM||$14.50MM||3.7||$3.92MM|
|DeWayne Wise||White Sox||$0.70MM||$0.70MM||0.5||$1.56MM|
Over the last two seasons, Hiroki Kuroda has averaged 3.1 fWAR per year. I’ve assumed that the Yankees expect him to continue this in 2013, and thus he’s being paid $4.92 million per win above replacement. After doing this with every player above, it would roughly appear that the 2012-2013 market has set the price of a win above replacement at $4.23 million.
As I mentioned previously, the market has always set the price on relievers very high. You’ll see that both Jeremy Affeldt and Brandon League are being paid absurdly high for their win production. Though the media largely gasped when they signed such big deals, the market has always been strong for bullpen pieces. The Yankees have been no stranger to this either, paying Rafael Soriano $14 million per win above replacement and Mariano Rivera $10.7 million over the last two seasons.
The two PED suspended players took major hits in salary. Melky Cabrera averaged 4.4 fWAR over the last two seasons, however he only earned an average annual salary of $8 million. Bartolo Colon averaged 2.6 fWAR, and he only received $3 million for 2013. Both of these players have ranked within the three lowest dollars per win this offseason. Though the sample size is two players, it looks like most teams are taking these PED’s charges fairly seriously in the market.
So how accurate is this $4.23 million mark? Can we actually expect other players to receive the same? Matt Swartz of FanGraphs did some work on the subject back in February. Amongst noting the positional differences, he found that teams from 2007-2011 paid an average of $4.5 million per win above replacement. That’s remarkably close to the $4.23 million that we’ve found for 2013. So let’s go ahead and assume that this is the current market value, and apply it to the average fWAR of players still available in free agency.
|Player||Average fWAR||Projected AAV|
Again, we’ve used player’s average fWAR for the last two seasons and multiplied it by the $4.23 million we found above. Arguably the top free agent on the board, Zack Greinke, is averaging 4.55 wins above replacement a year. If a team expects him to continue this, he should receive a contract with an average annual salary of $19.2 million based on the current market. However, keeping who he is in context, Greinke will probably be bid up because he is the top available pitcher, and I would expect him to receive something north of $20 million in the end.
A player like Josh Hamilton may see the opposite effect. Although he’s calculated to receive an $18 million average salary, he’s facing a number of injury and character related questions. From the rumors, the market doesn’t seem too hot on risking big money on him. You’d normally expect the top position player to receive a bidding war, but I wouldn’t be surprised if he received something a tad less than the expected $18 million.
Michael Bourn is the perfect case of defense poorly translating into dollar per win predictions. Using these figures, the outfielder is expected to receive the most average annual salary on the board, and we all know that won’t happen. The reason is that the market doesn’t value defense as much as it values pitching or hitting. A lot of Bourn’s value is locked up in his stellar defense, which seems to have simultaneously been overvalued by WAR and undervalued by the market. Either way, he’ll be earning much less than $22.2 million a year.
I’ve included quite a few ex-Yankees up there as well. Nick Swisher is expected to receive $16.3 million, Andy Pettite gets $7.2 million, and Ichiro Suzuki gets $6.3 million, which are all rather respectable numbers. Russell Martin gets $11 million, which is another case where defense has rewarded him too much. Both Rafael Soriano, who’s at $3.2 million, and Mariano Rivera, who’s at $5.9 million, can expect to see more money because they’re relievers.
Some other names to look at are Stephen Drew, who the Yankees are linked to, receiving $4.0 million, though he’ll probably get slightly less with his major injury problems. Joakim Soria is expected to get $3.8 million, though I could see him receiving a bit more because he’s a reliever. Mike Napoli has also been linked to the Yankees, and his $16.1 million will definitely be less because of his awful 2012 season outweighing an incredible 2011.
The point of this all isn’t too produce exact amounts, but to get a rough benchmark and add context to it. I’d prefer a more objective way, but there’s not much else we can do to predict how these negotiations will go.
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