Picking this off-season's most overpaid, underpaid free agents
With the last of the winter’s major free agents having finally found a home, we wanted to take a look at how the dollar values we projected for those players matched up against the contracts they ultimately signed. What follows is a survey of every free agent to sign a contract worth $50 million or more this off-season, as well as the final signee, Ian Desmond. Players are presented in order of how much each was under or overpaid according to our "What's He Really Worth?" system, from the biggest bargain to the biggest mistake.
Our calculations begin with the established market value of a marginal win (one Win Above Replacement, or one full point of WAR)—estimated by ESPN’s Dan Szymborski as $6.5 million for the 2015 season—and a player’s projected WAR (baseball-reference.com version, known as bWAR) for the 2016 season based on a 5/4/3 weighting of his last three seasons. Using 5.4% annual inflation on the market value of a win and simulating annual decline for players in their thirties by subtracting 0.5 bWAR per year for hitters and 0.8 bWAR per year for pitchers (the latter effectively adjusting for the higher risk of catastrophic injury among pitchers), the system then projects a player’s annual value in wins and dollars forward until it reaches a replacement level season. In each case, I reserved the right to tweak a player’s projected 2016 bWAR total or alter his rate of decline based on deeper analysis of his most recent seasons.
Because the length of an individual player’s projected and actual contracts often differed, the difference between each player's projected and actual value—and thus how much they were overpaid or underpaid—is based only on the years covered by the real-life deal. For example: Yoenis Cespedes merited a contract longer than the three-year deal he received from the Mets, but we’re only concerned here with how closely the total value of that contract compares to his projected dollar value over the same span. It is also important to recognize that this system is a blunt tool. The projections can change significantly with a small adjustment, and any attempt to predict the future should be taken with a large grain of salt.
Our $308.6 million projection for Heyward was actually adjusted down from the figure the system spit out on its own. Based purely on his bWAR from the last three seasons, we projected him to be worth $361.3 million over the next ten years and stay at or above replacement level until his age-40 season in 2030; he could have justifiably received a 14-year contract. But keeping in mind that many baseball people believe Heyward is overrated by bWAR, I decided to look past that stat, which is the most bullish on Heyward of the three major WAR statistics.
To temper Heyward's projection, I turned to Baseball Prospectus’ Wins Above Replacement Player and FanGraphs' WAR, both of which led to a 2016 projection of 5.1 WAR rather than bWAR’s 5.7. Running the formula with that lower figure resulted in a projected value of $330 million over the next 13 seasons—almost an exact match for Giancarlo Stanton’s contract with the Marlins ($325 million over 13 years). I then cropped that projection to ten years, recognizing that no team was going to hand out a 13-year deal. Even having adjusted things downward, Heyward is projected to be worth $269.1 million over the next eight years, meaning the Cubs got him for 32% less than his projected value.
The reason Heyward is so valuable is that he’s just now entering his age-26 season and has several years of his prime remaining before decline takes hold. In my calculations, I projected him to maintain that 5.1 bWAR through his age-28 season before factoring in a decline, making his next few seasons extremely valuable. How valuable? If Heyward uses one of the two opt-outs in his contract (after the 2018 and '19 seasons), the Cubs will have paid less than half-price for his services in the interim. He will make $58 million over the next three seasons and $78 million over the next four, but our system projects his value over those spans to be $110.5 million and $147.4 million, respectively.
Alex Gordon, LF, Royals
Projected: Eight years, $140.2 million
Actual: Four years, $72 million
Underpaid by $23.6 million
The raw numbers say Gordon will be worth $170.1 million over the next nine years, a span concluding with his age-40 season. Again, we’re dealing with a player who gets a considerable boost in WAR from his play in the field. We’re also dealing with a player entering his age-32 season coming off an injury-shortened season in which his performance in the field and on the bases wasn’t up to his usual standard.
Again, I felt the need to adjust his projection down a bit. Instead of the 4.4 bWAR projection for 2016, I lowered his 2016 projection down to 4.0 bWAR, or what his 2015 performance projects to over 150 games. Doing so drops his value to $140.2 million over eight years, with $95.6 million of that coming in the next four seasons. Based on that, the Royals got a 25% discount on his services over that span and probably saved even more by not having to go past that fourth year, his age-35 season. This was a clear hometown discount.
Ben Zobrist, 2B, Cubs
Projected: Six years, $78.8 million
Actual: Four years, $56 million
Underpaid by $9.9 million
Like Gordon, Zobrist is a player who has always fared well in WAR calculations but is well into his thirties and coming off an injury-shortened year in which his performance in the field and on the bases flagged, prompting a downward adjustment in our formula. Unadjusted, the All-Star utility man was projected to be worth 3.7 bWAR in 2016 and $120.3 million over the next eight years, but that would take him through his age-42 season.
What I chose to do here was pro-rate Zobrist's performance after he was traded to the Royals in July—a point by which his surgically repaired knee should have been fully healed—over 150 games. That yields 3.0 bWAR, which I used as the 2016 projection. Re-running the numbers has Zobrist worth $78.8 million over the next six years and $65.9 million over the next four, suggesting that the Cubs got a 15% discount on their new second baseman.
Not finding the market to his liking and wanting to return to the Mets, Cespedes signed a three-year deal with an opt-out after 2016 that will allow him to enter a much weaker free-agent market—essentially a pillow contract. That was a huge break for New York, which couldn’t afford the $150 million deal Cespedes was expected to demand and that our system suggested he would easily justify.
Still, the Mets are paying Cespedes very close to what he is worth. Using the same projection that gave us the $170 million contract above, Cespedes should be worth $84.2 million for the next three years and $30.1 million in 2016 (he’ll make $27.5 million this year, $10 million of it coming via a signing bonus).
Desmond went completely off the map, not only signing a one-year pillow contract worth just $8 million, but also agreeing to move to leftfield, significantly undermining his value both to his new team and upon his re-entry to the market come the fall. As a shortstop, we projected Desmond to be worth $20.6 million in the coming season, but the move to left makes him less valuable in two ways. First, it moves him off his primary position (where he was still a solid defender despite some early-season yips) to one he has never played in the majors. Second, it moves him to a position with a much higher offensive standard, meaning that his bat will be less valuable overall. It’s not a given that Desmond will be underpaid in 2016, so I’m listing him here as the dividing line.
Mike Leake, RHP, Cardinals
Projected: Six years, $76.3 million
Actual: Five years, $80 million
Overpaid by $3.7 million
Leake is entering his age-28 season, is coming off a career-high in bWAR (his second-best season was 2013), has been adding velocity steadily over the last five seasons and is moving to a far more pitcher-friendly ballpark than his old one in Cincinnati. Given all of that, I didn’t project him to start declining until his age-31 season, which resulted in a projected value of $76.3 million over the next six seasons or $75.5 million over the next five. That makes his new deal with St. Louis the most cost-effective pitching contract on this list.
As a percentage, Upton’s new contract with the Tigers is actually closer to matching his value than Leake’s with the Cardinals. Upton is projected to be worth $127.2 million over the next six years, making his new deal a mere 4.4% overpay; Leake’s comes out as a 6.0% overpay. As for his opt-out after the 2017 season, Upton will make $44.25 million over the next two years but is projected to be worth $50.7 million in that span, so what was already a good deal could look even better if Upton decides to leave Detroit early.
Jordan Zimmermann, RHP, Tigers
Projected: Five years, $88.4 million
Actual: Five years, $110 million
Overpaid by $21.6 million
I initially tabbed this contract as a hometown discount from Zimmermann (a Wisconsin native) when he signed on Nov. 30, before the free-agent market had developed. That was based on a comparison to the contract he was expected to land rather than to the one he most deserved. In actuality, it stands as an overpay relative to Zimmerman’s projection, but it did prove to be the least expensive deal signed by any of the four major free-agent starting pitchers to hit the market this off-season (Zimmermann, David Price, Zack Greinke and Johnny Cueto).
One thing the Tigers nailed here was the term. Our projection system has Zimmermann hitting replacement level in his age-35 season, but his contract expires after his age-34 campaign. This is a 24% overpay, but still seems like a reasonable gamble for a team trying to cash in the last few quality seasons of Miguel Cabrera and Justin Verlander and win a championship for superannuated owner Mike Ilitch.
This was much more of an overpay before I adjusted the numbers. Unaltered, our formula projected Price to be worth just $120.4 million over the next seven years. That calculation started with a 4.9 bWAR figure for 2016, but Price has improved in each of the last two seasons and compares favorably to Nationals ace Max Scherzer, who showed similar improvement in his late twenties and was even better in his first year after free agency at the age of 30. I therefore adjusted Price’s projection to begin with a repeat of his 2015 bWAR in 2016. That swelled his value to $191.1 million over eight years, or $188.13 million over the next seven. As a percentage, that makes his new contract significantly less of an overpay that Zimmermann’s (15% to 24%).
Price’s new contract also has an opt-out after the 2018 season. He is due to make $90 million in the three seasons before that, but our formula projects that he’ll be worth $109.9 million in that span, making this a win for the Red Sox if he opts out and arguably a better deal than Zimmermann’s on two fronts.
Our system projects Cueto to be worth just 0.1 bWAR in the sixth year of his new contract, which means that while the terms appear to match up above, a five-year deal would have been a much smarter investment for the Giants and might have made it easier to swallow the nearly 40% overpay this contract represents. All of that said, there is again an opt-out that could change things significantly.
Cueto can leave after the 2017 season, turning this into a two-year, $46 million contract ($36 million in salary plus a $5 million buyout if he opts out and a $5 million signing bonus due to be paid out $1 million annually from January 2017 to January 2021, effectively making $4 million of that deferred money if he opts out). Per our formula, he should be worth $51.9 million for the next two seasons. Cueto will be heading into his age-32 season in 2018; as I wrote when he signed this contract, that opt-out almost seems like a dare, as it would save the Giants $84 million and what are likely to be some ugly years on the back end.
Wei-Yin Chen, LHP, Marlins
Projected: Four years, $40 million
Actual: Five years, $80 million
Overpaid by $45 million
Chen might seem like a good comparable for Leake, who signed a deal with the same basic terms, but the Taiwanese lefty is two years older. So while Leake should maintain his present value through the first three years of his new deal, Chen is expected to lose value starting in year two, resulting in very different projections going forward. In fact, Chen is expected to be below replacement level in the fifth year of this deal, dropping his value over the next five years to $35 million.
Once again, there is an opt-out to keep in mind. Chen can leave after the 2017 season with just $28 million in the bank, $9.5 million of it deferred to Nov. 30 of that year and $8 million of it deferred to June 30, 2018. Our formula says he will be worth $30.8 million for those two seasons, making that a win for the Marlins. If Chen does not opt out, however, he also has a $16 million vesting option for his age-35 season in 2021, one in which we project him to be more than a win below replacement level. Chen needn’t necessarily be good for that option to vest; he only needs to stay healthy and in the Marlins’ rotation (he needs 180 innings pitched in 2020 or 260 in '19 and '20 combined as well as a clean bill of health to end '20 and begin '21).
Our formula may be overly negative about Chen’s ability to be at least a replacement level starter at age-35, but if he beats our projection and is just good enough to activate that option, this contract will be even worse than if he bottoms out in 2020 and leaves that $16 million on the table.
To be fair to Davis and the Orioles, our unadjusted formula projects him to be worth $166.7 million over the next eight years or $157.8 million over the next seven. With deferred money dropping the estimated present-day value of this contract to roughly $147.7 million (per the MLBPA’s calculations), that looks like a win for Baltimore. But given the full history of Davis’s career, I don’t think his last three seasons can be taken in isolation.
To my eye, Davis is an elevated collapse risk because of his pre-2013 track record and his extreme swing-and-miss rates. I decided to re-run his numbers using the rate of decline otherwise used for pitchers (who have a higher collapse rate due to injury) and got the $107.2 million figure listed above. Add a seventh year at below replacement level for Davis’s age-36 season, and that total value drops to $103.4 million, making this a 56% overpay in raw dollars or a 43% overpay using that present-day calculation.
This is another case in which the raw formula validated the investment made by the team but warranted an adjustment based on a closer look at the player’s track record. Using a 5/4/3 weighting of his last three seasons, Greinke should be worth 6.3 bWAR in 2016 and $217.7 million over the next eight years or $196.6 million over the next six. That's close enough to make this an excellent deal for the Diamondbacks. But Greinke’s 2015 performance was clearly an outlier, one I felt was too heavily weighed by the formula. Greinke was showing steady improvement before 2015, but he more than doubled his '14 bWAR total last year. Consider this chart of his bWAR totals from 2012, his age-28 season, to '15, his age-31 season:
I chose to treat that age-31 performance as an outlier and instead follow the path of the line drawn by his age-28–30 seasons. Projecting Greinke at 5.2 bWAR for the 2016 season, his long-term projection went down to $148.6 million over the next seven years or $144.8 million over the next six, which is as long as I thought any team should go on Greinke heading into his age-32 season. The Diamondbacks did well to limit Greinke to six years, but they exploded his price, paying him for a fluke season that is already in the past just as the Orioles are paying Davis for what is likely to be a short-lived peak.
Jeff Samardzija, RHP, Giants
Projected: Three years, $24.3 million
Actual: Five years, $90 million
Overpaid by $77.9 million
To say the Giants are betting heavily on the impact of their park and team defense when it comes to Samardzija is an understatement. Samardzija has spent most of his career in hitter-friendly parks in Chicago, and the White Sox were a terrible defensive team in 2015, ranking 27th in the majors in park-adjusted defensive efficiency. Even still, Samardzija is 31, has been worth more than 2.0 WAR just once in his career and has seen his strikeout rate and velocity decline multiple seasons in a row. The projection above is actually adjusted up from the raw numbers, which pegged him at 1.6 bWAR in 2016 and just $16.7 million over the next two years before reaching replacement level.
Allowing for the fact that Giants aren’t completely wrong about their park and defense (they were second in the majors in defensive efficiency last year), I adjusted Samardzija up to 2.0 bWAR for 2016—a figure he has reached just once in his career—and got that $24.3 million over three years projection, one that drops to $12.1 million if you force him to stick around for five years. He’d have to match or better that 2.0 bWAR figure in each of the next four seasons to be on pace to justify the contract the Giants just got him. I don’t see that happening, making this contract (which contains no face-saving opt-outs) a staggering mistake on the part of the Giants. It is not, however, the worst contract signed this winter.
Ian Kennedy, RHP, Royals
Projected: One year, $4.1 million
Actual: Five years, $70 million
Overpaid by $111.4 million
Kennedy breaks our system by having been below replacement over the last three years combined per bWAR. By that standard, he should have to pay the Royals to pitch for them, making him worthy of no more than a non-roster invitation to camp. I do acknowledge, however, that Kennedy’s durability (he has averaged 31 starts and 184 innings pitched per season over the last three years) and above-average strikeout rates (8.9 per nine over the last three years, 9.3 in each of the last two) undermine bWAR’s evaluation.
Turning to the other WAR statistics, I found that FanGraphs’ WAR is the most favorable to Kennedy, resulting in a Samardzija-like projection of 1.6 WAR for 2016 using our 5/4/3 weighting. Baseball Prospectus’ WARP splits the difference, producing a projection of 0.6. Kansas City has a homer-suppressing ballpark and outstanding outfield defense, both of which are crucial to a fly-ball pitcher like Kennedy, who allowed home runs more often than any other qualified pitcher last year. The Royals have also had success with rejuvenating veteran pitchers under pitching coach Dave Eiland. Still, my optimism is minimal. I’ll thus take the middle figure, BP’s 0.6 WARP, which is just enough to motivate a one-year, $4.1 million contract for Kennedy.
Even still, Kennedy’s contract breaks the system by going five years deep. Subtracting 0.8 WAR annually from a starting point of 0.4 puts him in a hole in a hurry, making his $70 million contract a massive overpay because of his anticipated sub-replacement level performances. Even if Kennedy opts out after 2017, he will have effectively been replacement level over those two seasons (0.4 WAR in 2016, -0.4 in '17), making the $27 million the Royals paid him in that scenario all wasted money. Even the more optimistic FanGraphs-based projection would result in Kennedy being a $10.3 million (62%) overpay if he opts out, and that’s the best-case scenario based on the numbers.
Add in the utterly unnecessary extension the Royals gave Salvador Perez on Tuesday, and Kansas City has effectively wasted not just the money it saved on Gordon, but also an additional $84.15 million that could have been better spent on extensions for the likes of Eric Hosmer, Lorenzo Cain or Mike Moustakas (all of whom are among an approaching 2017 free-agent class) or on re-signing Zobrist.