Eight free agents for 2008

It might seem premature to be gassing about the upcoming Hot Stove given that we are in the midst of October baseball, but if you are a fan of any team bar the Indians, Red Sox, Diamondbacks and Rockies then your attention will be swiftly diverting to the offseason and dreams (or nightmares) of those potential free-agent acquisitions. So let’s thumb a nose at those teams still with a chance of Series glory and take a look at the size of contracts we can expect for the top players over the next few months.

The 2006-7 offseason was characterized by a gluttonous binge by owners not seen since the halcyon days of 2001 when Alex Rodriguez emerged with his $252 million 10-year mammoth contract.

As if you needed reminding here is a run-down of some of the more outrageous deals last offseason:

• Alfonso Soriano signing a $136 million, eight-year deal with the Cubbies
  
• Aramis Ramirez inking a $75 million, five-year contract with the Cubs too
  
• Barry Zito shovelling $128 million into the coffers over eight years
  
• And, perhaps the egregious of all, Carlos Lee taking home a nine-figure salary over six seasons.
  

And it doesn’t stop there. Decidedly mediocre players like Jason Marquis, Gil Meche and Danys Baez also hoovered up a shed load of moolah. So, that should mean that the free-agent class of 2007-8 is likely to be proffered some very juicy contracts by the mob of money-mad owners.

Those of you who want the skinny on who the premier free agents of 2007-8 are should check Jeff Sackmann’s piece from earlier in the year.

The tools

To evaluate the likely size of the deal I have used a cool little tool that Tom Tango put together called the Handy-Dandy chart. Provided you know expected 2008 wins above average/replacement for each player (including fielding) you can work out his likely salary over any contract length.

The other calcs we need are how to work out Wins Above Average (WAA) and Wins Above Replacement (WAR). There are two simple formulae we can use (note: David Gassko’s PRC is a better metric for pitcher value but pitcher WAA is easier to compute across years):

Batters WAA = 0.025(1.8*OBP + SLG – 1)*PA
Pitchers WAA = (lgERA – ERA)*IP/90

We’ll use 600 plate appearances and 200 innings pitched as the playing time expectation. Typically the difference between an average performance and a replacement performance is two wins. We use this factor to translate between the two. One other thing to note is that the Handy-Dandy is in 2007 money, so I have adjusted for another year of 10% salary inflation, which seems to have been the norm in recent years.

This, along with my impeccable baseball judgement (!?!) will form the crux of the analysis. We’ll look at eight free agents in total: Andruw Jones, Torii Hunter, Adam Dunn, Alex Rodriguez, Andy Pettitte, Jorge Posada, Barry Bonds and Tom Glavine.

1. Andruw Jones

Eight months ago, before Vernon Wells inked his new deal with the Blue Jays and before Andruw hit .222/.311/.413, it was a close run thing between the pair as to who was going to be the more valuable free agent come the 2007-8 hot stove. Wells cuffed himself to rather tasty $126 million seven-year offering and then batted a Jonesian .245/.304/.402. What size of deal will Andruw bag this offseason?

I wrote about this a month ago and nothing has really changed since then. The approach was quite involved using a series of probability weighted scenarios, but the thrust of the argument was that Jones was simply a touch unlucky and would return to some sort of form in 2008. Here are the contract values I suggested:

Length    $$$
3         51
4         64
5         76
6         84
7         90 

This is based on Jones hitting .265/.345/.500 next year and then declining at about 3/4 of a win a year (slightly more than we’d normally assume because of his rotund frame). He’s only 30 so I’d expect him to sign a six-year deal of around $85-90 million. It will be interesting to see who bites as Scott Boras will look for a much richer package than that.

2. Torii Hunter

Like Jones, Hunter is a grade-A Gold Glove center fielder, but he has historically been less handy with the timber than Jones—although that changed this year following Andruw’s stumble. The penny-pinching Twins thought he had quite a lot of value as they exercised their $12 million option for the 2007 season. Here are his expected wins for last season, this season and his career as well as the THT 2008 forecast (based on our 2007 projections—updated projections will be issued in the new year):

                OBP     SLG     WAA      WAR
2006            0.336   0.49    1.422    3.422
2007            0.334   0.505   1.593    3.593
Career          0.342   0.497   1.689    3.689

2008F           0.32    0.44    0.24     2.24

These numbers are just for hitting so we must remember to adjust for fielding. Although there is no doubt that Hunter has lost half a step following his horrendous ankle injury back in 2005, he is still handy with the glove. We don’t have plus/minus numbers for 2006, so we have to rely on other sources to see what effect his ankle injury had. The fans scouting report pegs him as very good center fielder but marginally behind Jones. PMR reckons he’s a shade below average. MGL’s UZR thinks he is a little better at 11 runs per 150 games (or one win) above average based on data to July.

It’s a tricky one but let’s call him half a win above average in the field. What deal will that secure him? Let’s first establish his 2008 performance baseline. Hunter seriously outperformed in 2007, and I think the THT 2008 number looks a little pessimistic. Personally I’d expect about 3.5 WAR—three wins for hitting and half a win in the field. Given that he is entering his age-32 season and he isn’t exactly a paragon of health, it is likely he’ll sign a shorter deal—I’ll go for a four-year deal which yields a contract of $55 million, which is Johnny Damon territory. When you look at it like that, Hunter may secure a bit more lucre as he is one of the more attractive free agents on the market.

3. Jorge Posada

Many assumed that Posada is a lock to stay with the Yankees, especially as he slogged .328/.426/.543 this season. But with the pinstripes getting the boot from the ALDS there is likely to be a change of guard in Yankee Stadium that could see some of the so-called untouchables test the free agent market.

Let’s face it. Posada is a great hitting catcher and on a short-term deal should provide some value to most franchises. Take a look at his numbers and some 2008 projections:

                OBP     SLG     WAA      WAR
2006            0.374   0.492   2.478    4.478
2007            0.426   0.583   5.247    7.247
Career          0.381   0.479   2.472    4.472

2008F           0.358   0.427   1.071    3.071

Yikes those 2007 numbers are good eh? Posada isn’t in the lineup for his backstop ability; he is there squarely for his bat—he often struggles to throw out base runners and the Fans Scouting Report rates him as an average catcher. I don’t think we can expect a 37-year-old hitting catcher to bat anywhere near seven WAR next year, so let’s assume a 2008 baseline of 3.5 WAR. Posada won’t snare a long deal because of his age, but he could well sign a two-year contract, which will net him a staggering $30 million. He collected $12 million this year, so that is a nice little pay raise. Don’t be surprised to see him take a small discount to play for the Yankees.

4. Andy Pettitte

Although Pettitte ostensibly signed a two-year deal with the Yankees, the second year is a $16 million player option, and there is a suspicion that he’ll choose to opt out and test the free agent market, especially with his friend, Roger Clemens, nearing retirement. If he does he’ll be the best pitcher on the market this winter.

Pettitte hasn’t had a sub-4.00 ERA for a couple of years, but his career ERA is still a very respectable 3.83—perhaps age is starting to catch up with him. His strikeouts were down in 2007—although he was facing superior AL hitters—and his WHIP was in the 1.40 zone.

So what will he be worth if he tests the free agent market? Here are some numbers:

        ERA     lg ERA  WAA     WAR
2006    4.20    4.54    0.8     2.8
2007    4.05    4.33    0.6     2.6
Career  3.86    4.52    1.5     3.5

2008F   3.65    4.3     1.4     3.4

THT’s 2008 projection looks a tad aggressive in light of his 2006 and 2007 numbers. It’s probably safe to assume that Pettitte should clear an ERA of 4.00 and remain a solid #2 starter, for 2.5 WAR in 2008. He also has an uncanny ability to stay healthy—only twice in his 13-year career has he thrown fewer than 175 innings, and although playing time doesn’t form part of our analysis it certainly has extra value.

Aged pitchers like Clemens, Glavine and Maddux tend to get one- or two-year deals. My guess is that Pettitte will look for a two-year agreement. Handy-dandy says that he should be able to trouser a $20 million, two-year deal without too much worry. Perhaps he should take the player option after all!

5. Adam Dunn

So, on to the Big Donkey, as some refer to Adam Dunn. Dunn is your stereotypical power hitter: he isn’t afraid to swing and miss, and when he does make contact it is reasonably likely that he’ll be circling all four bags. Dunn has punched over 40 homers in each of the last three seasons but has batted lower than .250 in two of them. So how many wins above replacement should we expect from him next year?

        OBP     SLG     WAA     WAR
2006    0.365   0.49    2.205   4.205
2007    0.386   0.554   3.732   5.732
Career  0.381   0.519   3.072   5.072

2008 F  0.385   0.538   3.465   5.465

Although Dunn’s 2006 was a shade disappointing, he bounced back in 2007. As he is entering his age-28 season he may see less age-related performance regression than some other hitters, at least in the near term.

Let’s go with his career line and call him a 5 WAR player. Given that he is young no doubt he’ll be shooting for a lengthy deal. Putatively that puts him around the $111 million/six year to $130 million/eight year range, which is punchy. Well, perhaps not when looking through a lens that contains Carlos Lee’s $100 million/six year deal with Houston. However, we must include a few other factors. First, consider fielding. Dunn plays a quite atrocious left field, so that probably costs the Reds over a win a season. Also bear in mind that left field is the easiest position to play, which has less value. To make a fair comparison, assume Dunn is 1.5 wins a year worse with the leather. Second, we must take account for his age and the fact that in his early years he may not decline as fast, although there is a fear that he may decline even faster than usual in his early 30s. Let’s call it a 0.3 WAR annual decline in total.

Altogether Dunn ends up with a $90 million/six-year deal, which is below the Carlos Lee standard. That is fair value for Dunn and exposes the Lee contract for what it was: stupid.

6. Tom Glavine

Like Pettitte, Glavine also signed a two-year deal with a New York ballclub last offseason, the second year being a player option, which he opted out of a couple of days after the Mets were overtaken by the Phillies for the NL East. The economics are a little convoluted: Glavine received $3 million in a buy-out after forgoing a $13.5 million 2008 salary. To be in the money, he needs to bag a $10.5 million deal. Glavine reported that he needed to talk to his family before making a decision, so there could be other motivations behind his opt out. Here are current and projected wins:

        ERA     lg ERA  WAA     WAR
2006    3.82    4.31    1.1     3.1
2007    4.45    4.26    -0.4    1.6
Career  3.51    4.16    1.4     3.4

2008F   3.87    4.26    0.9     2.9

Glavine had a very poor year in 2007 by his high standards. Although he pitched well in 2005 and 2006, when a hurler is over 40 it is difficult to know whether the decline is terminal or a blip. Whatever the conclusion, there is clear downside risk. My guess is that we should value Glavine as a league-average hurler in 2008, which is 2 WAR. That will give him a one-year $9 million deal, which feels about right. Lifestyle played a part in his decision to leave the big apple—expect him to pitch elsewhere in 2008.

7. Alex Rodriguez

There isn’t a huge amount to say about A-Rod that hasn’t already been said. As per the Andruw Jones situation, I also penned an article on this. The conclusion I arrived at was the Yankees need A-Rod, they have the economic advantage (the Rangers still pay a huge slug of Rodriguez’s salary) and they can afford him. This is how much I estimated he is worth:

Years   $$$
3       79
4       106
5       132
6       158
7       181

Look for a couple of years to be tacked on to the end of his existing deal to extend his contract by three years.

8. Barry Bonds

Barrrrryyyyy. Barrrrrrryyyyy. Can you really have a discussion about free agents without including Barry Bonds? No, of course not. Despite whether you think that Bonds’ achievements are tainted there is no doubt that he had one of the best age-42 seasons of all time, getting on base at a .480 clip and hitting 28 home runs. Here are his wins this year and projection for next:

                OBP     SLG     WAA     WAR
2006            0.454   0.545   5.433   7.433
2007            0.48    0.565   6.435   8.435
Career to 2007  0.444   0.607   6.093   8.093

2008F           0.494   0.566   6.828   8.828

Bonds has aged remarkably well and there is nothing to suggest he won’t keep up his torrid pace in 2008. He still has the ability to hit for power and is disciplined about which pitches he takes. As a result, hurlers are still wary of big Barry. But baseball history is littered with players who have suddenly and spectacularly collapsed; Bonds could be one of those. We must also adjust for fielding, and Bonds plays -14 runs per 150 games according to UZR. If you project a conservative 6 WAR (conservative given his age) he’s worth $26 million over a one-year contract. He’ll likely sign a $15 million deal somewhere, which is equivalent to 3.5 WAR. If a club is prepared to put up with all the baggage that Barry comes with, he could be the bargain of the offseason.

Final thoughts

The upcoming Hot Stove promises to be an exciting one, at least until the future of A-Rod. Among the big teams he may hold the key to the market. If he signs an early deal (with, say, the Yankees) we may see a flurry of activity from the other teams as they scramble to acquire talent. It promises to be another irrational winter.

References & Resources
A big thanks to Baseball Reference for all the stats and also to Chris and David who built the THT projections.