Long-term pitcher contract values

The Cubs have two starting pitchers locked up to long-term deals: Carlos Zambrano and Ryan Dempster. Options aside, both pitchers are signed through 2012. Zambrano is going into the second year of a 5-year, $91.5 million contract. Dempster is just starting his 4-year, $52 million contract. 

Are either of them likely to live up to their contracts? Of course we can’t tell for sure, but a few days ago, TucsonRoyal over at Beyond the Box Score took a stab at calculating whether C.C. Sabathia and A.J. Burnett would live up to their contracts. To do so, he looked to see how pitchers have done from year to year in terms of innings pitched and WAR and came up with a multiplier for each year of age. He admits the numbers are a little biased because he made a mistake calculating the multipliers, but it’s still an interesting exercise, so I did it for Zambrano and Dempster’s contracts. I assumed the 10% increase in win value would hold true on average over the life of their contracts. The results?

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Zambrano has already played out the first year of his contract, so we know what he did for 1/5 of it, while we’re just speculating for the entirety of Dempster’s. No matter. Using this method we come up with Dempster being worth $65.4 million, or $13.4 million more than his contract. And Zambrano would be worth $64.5 million, or $27.5 million below what he’s getting paid.

How much stock should we put in these numbers? Well, probably not a ton. First, there’s the error TucsonRoyal himself mentioned. Second, I would imagine there’s a fair bit of variance in these numbers, so you can reasonably expect a player to pretty far under- or over- perform these predictions. And finally, the multipliers don’t work to predict either Dempster or Zambrano’s career paths so far. 

For Dempster’s part, that might just be because he’s bounced between the bullpen and the rotation, and because of his surgery. For Zambrano’s part, he pitched fewer innings last year (because of injury) than TucsonRoyal’s numbers would have predicted, although it was about right for WAR. It was way off between 2006 and 2007, though. Maybe Zambrano has been a little unlucky the past couple of years and his true talent level is higher than his performance has indicted, or maybe he’s declining earlier than most people, but my sense is he’s probably a bit of an outlier. But the numbers are definitely interesting to play with, and I’m eager to see the next iteration of TucsonRoyal’s work.

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4 Comments

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4 responses to “Long-term pitcher contract values

  1. I’d be interested in how many long-term contracts, say 4 years or longer, are actually “lived up to.” I’m guessing it’s few, but I don’t know. I do think some adjustment is necessary at times in calculating the value of the contract. I don’t bother with it as nobody else does, but take what Dempster did last year, or the years before for that matter. Those are what his contract is largely based on and last year for example he was worth about $20 million and was only paid $5 million. I think that has to factor in somewhere when it comes to teams who re-sign their own free agents. Obviously this isn’t a factor for a free agent who switches teams, but for a player like Zambrano I think it is. Consider how much he was worth from 2001 to 2007 and how little he was paid relatively speaking.

    I’m usually not someone who thinks teams owe their players much, but sometimes I think they do. While Zambrano is being overpaid, certainly some of that is a “thank you” so to speak from the organization for how much underpaid he was prior to free agency.

    Am I making any sense?

    I know there isn’t a way to incorporate this into some kind of system, but for some reason I feel it’s important to look at that too.

    • Bob

      No, I understand completely, and I think that’s one of the problems with declaring a flat “the value of one WAR was $4.5 million in 2008.” First of all, even the people who generated that number would tell you that’s not true, because under their scheme, win values are on a curve – the value of a win is most important where it makes a difference for you making the playoffs or not. Ten more wins would not be worth $45 million to Pittsburgh, because they’d have still been 13 games out of the wild card and 20 back in the division, and the wins likely would not have generated them anywhere near $45 million in revenue.

      But aside from that, there’s also the question of what it takes your team to get your guy. Tim Wakefield has a perpetual $4 million option with Boston because he likes playing there. If another team had wanted him they’d probably have had to pay more than $4 million for him. Kerry Wood gave the Cubs a discount a couple of years ago because he felt like he owed the team after he didn’t live up to his prior contract. Would he have received more in free agency? Maybe not, but maybe. And with Zambrano, the Cubs might have felt they needed to pay him more than he might be “worth” because he wouldn’t stay for less. They might have placed a premium on keeping him because they didn’t want to risk not getting anyone on the market if they let him go, or maybe just out of a sense of obligation. For that matter, they might have placed a premium on keeping him off the free-agent market – figuring that if they overpaid a little before the season ended they would avoid getting in a bidding war later. You can price some of that, and some of it you can’t.

      I think looking at win values is interesting, and I think there’s some use to it – if a guy is going to be worth three or four WAR over the life of a contract, maybe the contract shouldn’t be worth $50 million. But it’s definitely something that needs to be taken with a grain of salt.

      • I’m not sure I’d say to take it with a grain of salt. I do think it’s fairly clear that MLB clubs use similar numbers to value players they want to sign. Take Ryan Dempster for example. The Cubs signed him to a contract that he was worth and appeared willing to let him leave if he wouldn’t accept it. There are many other examples of this, of course, but that one sticks out to me because i spent time calculating how much he was worth.

        I agree there’s a lot of other stuff to consider. Usually I’m not qualified to do so, but I remember talking about Dempster when the season ended last year and I felt the Cubs almost had an obligation to re-sign him. They got about $15 million of value from him for free and sometimes it’s important to reward a great season with a long-term contract and others it’s not.

  2. Tyger

    I don’t think it’s a “thank you” from the organization. Didn’t most think he would made more had he waited two months to the off-season to be a free agent? And I actually think it’s what you said it wasn’t. Specific teams might not think they “owe” it to a specific player, but the baseball salary structure seems to make it so that if a guy “makes it” to free agency after being underpaid, they-as in ALL of baseball, have to now overpay.

    Then, the contracts are further inflated (by how much, I have no idea) by having to lure a player away from the city he’s spent so much time in the past few years (if not for all, of course, then, for most). And this is all “generally speaking” w/ myriad counter-cases, I’m sure.

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