Extending Big Papi

Since being acquired in 2003 as a free agent, David Ortiz has turned into, arguably, one of the most important figures in Boston Red Sox history. If you look closely enough, maybe you could have predicted Ortiz’s success upon leaving the Minnesota Twins organization. Maybe. Really, though, he looked more like a platoon player, a guy extremely limited defensively, who might be able to give you solid-enough production out of the DH slot versus right-handed pitching.

Ortiz’s game countered everything the Twins organization believed in, and upon reaching Boston – a front office much more forgiving of his skill-set – Ortiz flourished once given a starting job. Further, Ortiz’s playoff heroics and penchant for, seemingly, always getting the clutch hit have only served to enhance the legacy he’s built in Boston.

According to FanGraphs, Ortiz’s performance worth approximately $61 million in surplus value (market value minus actual salary) in his first five years with the Red Sox. In other words, he was producing like a superstar player while being paid like an average one. Only recently has Ortiz’s increasing salary caught up to (and surpassed) his level of performance. In 2008 and 2009, for instance, Ortiz was paid $26.6 million while producing at a level worth about $13 million on the free market.

This season, however, after another extremely slow start (.143/.238/.286 through April), Ortiz seems to have found some of his old form. His walk rate (16 percent), power (.279 ISO) and average on balls in play (.287) are all up from the past two seasons, though his strikeout rate (30 percent) has increased dramatically.

Ortiz signed a contract extension with Boston in 2006, a deal that would pay him $12.5 million annually from 2007 through 2010 (with a $2 million signing bonus). Well, it’s 2010, and with a $12.5 million club option (no buyout) sitting on the table for next season, the Red Sox have a major decision to make.

Ortiz has made it clear that he wants to return to Boston, but not on a one-year option. He wants a multi-year extension. Does Boston want him back? If so, how much should he be paid?

First, we have to attempt to figure out what kind of production we can expect out of him going forward. Check out his similar batters through age-33 via Baseball Reference and compare they did in their age 32-34 years versus their 35-37 years (Ortiz will be 35 next season):

Player Age 32-34 WAR Age 35-37 WAR
Carlos Delgado 10.2 3.1
Fred McGriff 3.9 6.3
Willie Stargell 18.1 5.6
Mo Vaughn .7 -.4
Jason Giambi 8.7 5.8
Willie McCovey 8.9 7.1
Gil Hodges 9.1 1.7
Total 59.6 29.2

Note: I used Rally’s WAR for this, also located on Baseball Reference.

Buyer beware, certainly. Only McGriff improved in his older years and on average these guys went from 2.8 WAR players (per year) in their age 32-34 seasons to 1.4 WAR players in their age 35-37 years.

Ortiz will be 35, he’s big and slow and he has to produce at a high level offensively because he’s relegated to the designated hitter role. His skills have already shown some signs of erosion and he’s not the offensive force that he was in his prime. Further, his comparables – essentially, big left-handed first base/DH types – have shown some pretty steep decline upon entering their mid-to-late 30s.

Our own projections here at THT are similarly pessimistic:

Year BA OBP SLG WAR
2011 .235 .341 .443 .6
2012 .229 .337 .427 .2
2013 .219 .321 .400 -.4

Matt Klassen also looked at this issue recently at FanGraphs. Klassen estimated Ortiz as a 2 WAR player and used $4.4 million for the value of a marginal win in 2011. From our cursory observations and our THT projections, I think a 2 WAR projection may be a bit high for someone of Ortiz’s age and skill-set. Let’s give Ortiz some benefit of doubt, while hedging our bets a little, and call him a 1.5 WAR player in 2011, decreasing by .5 WAR each season following 2011.

OK, so we have an estimate of his on-field contributions; now we need an estimate of how much the Red Sox would be willing to pay for a marginal win. Assuming we’re at $4 million this year, a $500,000 increase for inflation is justifiable. However, we must consider that we’re talking about the Red Sox here, a team that, due to its market size and annual position on the win curve as contenders, may be willing to pay a bit more than the going rate for a win.

The issue, of course, is how much more? An entire article could be devoted to attempting to answer the question. Instead, let’s quickly run-down some of the variables in play here:

  • Market Size – A team’s market size is going to have a large impact on how much revenue each additional win adds. The Red Sox play in in a large market, with rabid fans who sell out every game. They can pay more for a marginal win.
  • Location on win curve – As perennial contenders, the marginal value of a win increases for the Red Sox because of its impact on their playoff odds. Two wins that improve a team from an 88 to 90 wins add more revenue than two wins that change a team’s win-count from 75-77, because of the increased impact on said team’s playoff odds.
  • Marquee value – A player like Ortiz likely adds additional off-field revenue because of his cult-hero status; things such as increased jersey/merchandise sales and improved marketability of the organization.

These issues are covered in-depth in Vince Gennaro’s Diamond Dollars, which is highly recommended. 

Let’s say, just as an estimate, that the Red Sox are willing to pay $6 million for a David Ortiz marginal win in 2011. Evaluating Ortiz as a 1.5 WAR player means the Red Sox would be justified in signing him to a one year deal worth $9 million, $3.5 million short of his option. How about if Ortiz wants three years?

Year WAR $/WAR Value
2011 1.5 $6M $9M
2012 1.0 $6.5M $6.5M
2013 .5 $7M $3.5M
3 years 3 - $19M

Signing Ortiz to a three-year, $19.5 million extension ($6.5 million per year) would seem like a defensible deal, from Boston’s perspective. Of course, it probably wouldn’t be enough to sign Ortiz, who would be taking a $6 million annual pay cut. These numbers, of course, are certainly subject to change, based on your valuation of Ortiz’s on-field contributions and how much you figure the Red Sox would be willing to pay for a free-agent win.

It may not be too difficult to predict what the Red Sox will do, if recent history tells us anything. Boston has endured messy breakups with all three of its most recognizable players in recent years; Nomar Garciaparra, Pedro Martinez and Manny Ramirez. The Red Sox have shown that they are not going to pay for past performance; only for what can be expected in the future.

If Ortiz has reasonable expectations and the Red Sox have some loyalty to Big Papi for what he’s done for the franchise, an extension could be worked out. If Ortiz’s longterm expectations are high and he isn’t willing to return on the one-year option, don’t be shocked to see him wearing a different uniform in 2011. It would be disappointing for many fans to see Ortiz playing his home games anywhere but Fenway Park, but the Red Sox aren’t likely going to go out of their way to keep him in town.

Print Friendly
 Share on Facebook0Tweet about this on Twitter0Share on Google+0Share on Reddit0Email this to someone
« Previous: History of the doubleheader, part III
Next: All’s bad that ends bad(ly) »

Comments

  1. Nikolai Volkoff said...

    Let him eat cake and walk. Just another lying cheat who used ped’s and had to wear those wrap around shades in the interview(s) to cover the guilt in his eyes when questioned. Another in a long list of sox players who “flips out” every time he is called out on strikes, ortiz and his foolish looking chinstrap beard won’t get his 3 or 4 year expected contract from any team as team’s are shunning those older players,
    see j. dye, etc.
    one dimensional player and body type that ages faster than leaner body type players.

  2. Mike said...

    Mike Lowell, too, was way overpaid relative to his projections.

    I’m not sure Varitek was, actually.  $10 million for 2 years is not bad for a catcher who can put up an OBP around .315.  League average, for all positions, is .330 to .335.  It also wouldn’t surprise me if the Red Sox did have some sort of metric that helped them assess Varitek’s ability to manage pitchers.  Nor would it surprise me if he came up at above-average at such an analysis.

  3. Richard Gadsden said...

    Of course, the Red Sox did overpay one player for his past performance – Jason Varitek.  Was that just a misjudgment, or does ‘Tek represent a particular type of player that Boston is prepared to overpay for.

  4. Rob Gee said...

    Spot on analysis. Ortiz is also cooling off but it seems you could have predicted that given his K rate.

    There’s also the marginal cost of carrying a platoon caddy for him (.540 OPS against LHP). I actually wonder how Francona is missing this obvious path toward keeping his swing sound and the lineup productive. It’s likely a loyalty thing, but one where the front office has no choice but to let Papi walk. And then, who in their right minds would give him a three year deal?

    Richard –

    Without a catcher in the system, Varitek was needed. He’s the exception to the rule because of the position he plays.

  5. Myron Logan said...

    Good points all-around, folks – I was on vacation and didn’t get to respond.

    I think Boston will overpay slightly for Ortiz, simply for his past track record (not to mention, he still has a pretty good chance to be very good over the next few years).

    That said, I think the Nomar/Pedro/Manny sagas show that they aren’t likely to keep Ortiz around if his demands are unrealistic.

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>