Monday, March 14, 2011

Is it worth it to have a Face of the Franchise their whole career?

Perhaps as a fan of a small-revenue club, this whole post should be taken with an entire shaker of salt. In my beaten down mentality as a Pirates fan, I’m wondering if it is worth it to have a Face of the Franchise player spend his whole career with one team. At some point, it seems with the escalated salaries today that a player is being vastly overpaid for his services rendered.

Is it better to squeeze all the value out of player in his three minimum wage years plus his three arbitration years and then let some other team get saddled with an overpaid free agent contract? Of course the player I have in mind is Andrew McCutchen.

It’s no secret that I’m a huge fan of the first true five-tool talent that the Pirates have had since Barry Lamar Bonds roamed the outfield. His production, at an assumed salary of around $435,000 in 2011, is a steal in baseball salary terms. In fact, Fangraphs recently had an article discussing the top players in the majors in terms of surplus value over the past 2 years. Surplus value is the difference in a player’s Wins Above Replacement (WAR) and the dollar equivalent ($4.25M/WAR average over the past 2 years) minus their actual contract salary. For instance, if a player was worth 8 WAR combined over the past 2 years, his presumed WAR worth would be $34M. If that same player earned $500,000 each year ($1M total), his surplus value would be $34M - $1M = $33M.

Fangraphs anointed McCutchen as their pick, along with Jason Heyward, as the newest potential Surplus Value Stars. McCutchen produced 6.7 WAR over his first 1+ seasons (2009 was not a full season, as he was called up in June).
Let’s assume that Cutch-22 signs a contract extension similar to Grady Sizemore’s contract that he signed back in March 2006 when Sizemore had the same 1+ seasons under his belt as McCutchen. Here are Sizemore’s salaries and WAR’s for each season under that deal:

2004 (partial year, “free” year to Indians in terms of arbitration time) = 1.1 WAR, $3.3M value, $300K salary
2005 = 5.4 WAR, $18.4M value, $320K salary
2006 = 7.3 WAR, $27.1M value, $500K salary
2007 = 5.7 WAR, $23.7M value, $900K salary
2008 = 7.1 WAR, $31.9M value, $3.2M salary
2009 = 1.9 WAR, $8.6M value, $4.6M salary
2010 = -0.3 WAR, -$1.2M value, $5.6M salary

2005 to 2007 represent Sizemore’s min wage years, while 2008 to 2010 would be his arbitration years if he didn’t sign the contract he did. His contract bought out his first FA year (2011) for $7.5M, with a team option for $8.5M in 2012. At the time of signing this deal and even the first few years, it seemed like an absolute steal of a deal. But starting in 2009, Sizemore encountered a series of injuries, culminating with dreaded microfracture surgery on his knee last year.

The Indians have received 28.2 WAR from Sizemore during his first 6+ years with the club, the standard years a player gets before free agency. That WAR translates to a $111.8M value on the open market, yet the Indians only paid Sizemore $15.4M over this time, giving the Indians a Surplus Value of $96.4M. Even if Sizemore did not play a single inning for the Indians in 2011 and they paid him $7.5M for nothing this year, he would still be a ridiculous steal of a contract for them.

But what if Sizemore did not have that deal with the Indians and left them after 2010and then developed an injury going into 2011? That new team would be saddled with a player that could be paid nearly $20M/year, based on his career to that point and similar to a Carl Crawford-type of deal, and not playing up to his fullest potential. Then there would be no Surplus Value, as a $20M player needs to produce 4 to 4.5 WAR to justify that salary every year.

Going back to McCutchen, the Sizemore deal is eminently affordable for any team, even one with limited resources like the Pirates. Normally, I advocate signing hitters to a maximum of 5 year deals, but mentioned that 6 years is possible for a franchise cornerstone. A 6 year deal would buy out the first year of Cutch-22’s free agent years. At that point, I’m wondering if it would be better for the Pirates to release him into the wild and let some other team deal with the possibility of a 30 year old Andrew McCutchen developing knee problems (Jason Bay, Grady Sizemore, Carlos Beltran) or a declining skill set.

In my heart of hearts, I would hate to see McCutchen ever play in any other uniform, but in these wintery economic times that the Pirates have put themselves in, McCutchen may price himself out of our market and his true value to the club. You never want to pay someone in the present for past glories.

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