Is 5/125 the new 5/55?

Once upon a time, eight-figure annual salaries in baseball were a big deal. Dropping $10 million or more on a player garnered a team plenty of attention—and often just as much criticism. Of course, it still does today, but there are scores of players making that much or more, so it’s less of a concern now.

One thing that always has held true is that paying too much for mediocre or worse performance is undesirable, and paying a fortune for a replacement-level player is an atrocious way for a team to spend its money. Occasionally, a contract length and dollar value will crop up repeatedly in conjunction with under-performing players, serving as a cautionary tale of agreed-upon terms that result in less-than-expected results. It’s happened before, it’s happening now, and it will happen again.

The table setter

In the lates 1990s, the Dodgers had a talented but enigmatic pitcher named Darren Dreifort. After a 1994 bullpen cup of coffee in which he recorded six saves, Dreifort required Tommy John surgery and missed all of the ’95 season. He returned to the bigs in 1996 for another brief run, and in ’97 threw 63 innings of relief, saved four games and posted a nice 136 ERA+.

With Tommy John surgery in the ever-distant past, Los Angeles inserted Dreifort into the 1998 rotation, where he posted an even 4.00 ERA (101 ERA+) and continued to strike out nearly a batter per inning. Mediocre 1999 and 2000 seasons saw him win a total of 25 games with ERA+ numbers 10 percent worse and four percent better than average, respectively.

At this point, free agency loomed. Having invested years in Dreifort’s development, the Dodgers figured he was worth keeping around, so they inked him to a five-year, $55 million contract. Soon afterward, Dreifort imploded.

His 2001 campaign saw Dreifort garner four victories while posting a 5.13 ERA and 78 ERA+ over 94.2 frames before a second Tommy John procedure and flexor tendon repair were necessary. His ’02 season was highlighted solely by right knee surgery to repair loose cartilage. Pitching infrequently when he wasn’t in the shop for MCL, labrum, ACL and meniscus repairs, Dreifort was mediocre over 121 innings in 2003 and ’04. Shoulder surgery in early ’05 wiped out that season and ended his career.

Totaling up his meager contributions from 2001 to 2005, Dreifort went 9-15 with a 4.64 ERA over 205.2 innings of work. He provided something on the order of 0.2 (Baseball-Reference) to 2.3 (FanGraphs) WAR. Being generous and giving him the higher number, that’s $23.9 million per win, several times the typical going rate those days.

You could call Dreifort a bust—and you’d be correct—but he had a worthy successor.

Round two

To be fair, the equivalent five-year, $55 million pact Gil Meche signed with the Kansas City Royals wasn’t nearly as atrocious as Dreifort’s deal. Still, there are enough parallels that the two deals are worth comparing.

Meche made 15 starts for Seattle in both 1999 and 2000, throwing exactly 85.2 innings each year, though he improved his numbers across the board in his second campaign.

IP    ERA   ERA+  HR   BB   K   K/BB
85.2  4.73  105    9   57  47   0.82
85.2  3.78  121    7   40  60   1.50

Meche missed all of 2001 following surgery for a frayed labrum—rarely a good omen—though he came back to have four solid, if not particularly notable, campaigns for the Mariners, with ERA+ values ranging from 83 to 99. He never threw more than 186.2 innings in any of those years, though he went on the DL only once.

Meche was a free agent following the 2006 season, and he found a home in KC with the aforementioned contract, and his first two seasons were more than worth the $11 million average per annum he was receiving. He threw more than 210 frames in both years with 125 and 109 ERA+ marks, respectively, and he earned an All-Star nod in 2007.

Lower back, arm and shoulder woes plagued Meche throughout 2009, limiting him to 23 starts, 129 innings and an ERA over 5.00 (ERA + of 87). The 2010 season was even worse; he was able to throw only 61.2 frames with a 5.69 ERA (74 ERA+) and an astronomical walk rate (5.5 per nine) nearly as high as Meche’s strikeout rate (6.0 K/9).

His long-term shoulder problems having taken their toll, Meche decided enough was enough and retired rather than take KC’s $12.4 million salary obligation for the 2011 campaign. It was a surprisingly selfless decision that few other players have made.

FanGraphs (10.1) and B-Ref (10.2) agree quite closely on Meche’s WAR value over the length of his contract. Considering his terrific first two seasons with the Royals, and that he was paid only $42.6 million over his four years with KC, his $4.2 million per WAR was a reasonable price.

Still, the team paid $18.8 million for Meche’s first 9.2 WAR and $23.8 for the remaining 1.0. Kansas City may not have gotten him had it offered a two-year deal, but that’s obviously where the value lay. Meche’s collapse on the back end of his deal is a glaring warning for franchises investing long-term in pitchers.

However, it’s not just moundsmen who can prove to be more costly that they’re worth.

Merely a platoon player?

As we jump forward a few seasons and way up in dollars, we come to Ryan Howard and the five-year, $125 million extension he signed with Philadelphia early in the 2010 campaign. The deal kicked in last year, paying him “only” $20 million that season and this current one before rising to $25 million in ’14-’16 with a $23 million option for 2017 or a $10 million buyout. So the total years and value could be greater than they currently stand, but we’ll consider only the guaranteed portion of the pact.

Timing is everything, and timing of the Phillies’ huge investment hardly could have been worse. Howard’s 2011 season ended with his making the final out of the NLDS against St. Louis, and in the process rupturing his Achilles’ tendon. The lengthy recovery—made even longer by a related infection—cost him about half the 2012 campaign. And when he returned to the field, Howard wasn’t the same player he was before.

Though he exhibited good pop with 14 homers in his half season last year, Howard produced only a .219/.295/.423 triple-slash line, good for a 89 OPS+. He struck out nearly four times as often has he walked (99:25 K:BB ratio), and his already limited defensive ability was further reduced. Both FanGraphs and B-Ref “credit” Howard with -1.1 WAR for his overall contributions.

Thus far, this season has gone just about the same as last year. Howard was batting .245/.282/.430 through Sunday, with six long balls and a 90 OPS+. His strikeout-to-walk ratio has further diminished to 46:9. While showing a slightly lesser propensity to whiff in this strikeout-heavy era, Howard is either less feared or less patient, as his current walk pace would put his season total only slightly more than half as high as his next-lowest mark.

Howard is 33—an old and injured 33—and he’s unlikely to recover his previous form. And even that form wasn’t as spectacular as his massive power skills led many to believe. Despite consecutive seasons of 58, 47, 48, and 45 home runs in 2006-09, he topped 5.0 WAR only during that 58-homer ’06 campaign.

That’s just how awful Howard has become at all the other aspects of the game of baseball. He’s slow, he’s a poor defender at the easiest defensive position, he’s seen his walk (and on-base percentage) numbers slide, and he’s never been good against lefty pitchers. There certainly are reasonable questions about WAR’s ability to measure defense accurately, but when a slugger loses a good portion of his ability to slug, he’s not worth much.

And that’s the problem facing the Phillies. They’ll be paying Howard to be a top-notch hitter for a five-year stretch, and so far he’s been a below average producer at the plate. It’s impossible to compute the cost per WAR of his contract because he hasn’t accumulated any.

Howard’s situation is a great example of buyer beware, but if it’s still not enough, read on.

A very special case

When the No. 1 pick in the draft works his way to the majors and eventually wins an MVP award, it’s typically an excellent example of great talent on the part of the player, scouting by those who have watched the game for decades and player development by the organization that chose the superstar. With Josh Hamilton, the story isn’t nearly so straightforward.

After he was drafted by Tampa Bay in 1999, drug addiction and myriad other problems derailed his career for an extended period. Hamilton didn’t play baseball at any professional level in 2003-05. However, he made up for lost time by bursting onto the scene with Cincinnati in 2007 after being taken in the Rule 5 draft by the Cubs and being dealt to the Reds.

Hamilton ripped 19 long balls in only 337 at-bats and posted a 131 OPS+. Needing pitching and fearing he might be a flash in the pan or fall back off the wagon, Cincinnati dealt Hamilton to Texas that winter for Edinson Volquez and Danny Herrera. Needless to say, the Reds were wrong.

Hamilton reached 30 home runs and 100 RBIs three times in five years with Texas, captured a batting title, and was a five-time All-Star, three-time Silver Slugger recipient and the 2010 AL MVP. During that stretch, his total base salary was just shy of $23.8 million. Regardless of your preferred WAR flavor (22.2 rWAR, 21.6 fWAR), Hamilton earned a mere $1.1 million per WAR, a tremendous bargain for the Rangers.

Despite his excellent past performance, Texas was another team wary of investing too much much or time into Hamilton’s next deal, so he took his talents to Hollywood, or somewhere in that general vicinity, earning a deal identical to Howard’s in terms of years and dollars.

And now we may be getting an idea of why so many previous organizations were concerned about the long-term health of Josh Hamilton. Small sample size and all that, but there were signs last year that Hamilton was slipping. He’s never been one to take many walks, although last year he had his second-highest total ever, but the 162 whiffs Hamilton recorded in 2012 were 28 percent above his next-highest total and the first time he topped 100 since 2008. Again, in his favor, he did post his highest games-played total since that year.

This season has been about as bad as anyone could have envisioned for Hamilton. He’s batting .216/.271/.351 through Sunday, with five homers and 12 RBI&mash;a year after reaching 43 and 128, respectively. His 2010 slugging percentage of .633 is higher than this year’s OPS of .622, which yields a 74 OPS+, and he has a WAR value of -0.2 (fWAR) to -0.7 (rWAR).

Similar to Albert Pujols a year ago, the Angels have to be hoping their extravagant long-term investment is merely off to a rough start and will break out any day now. At a year younger and only $1 million more in annual salary over half the duration of his deal, Los Angeles isn’t on the hook for nearly as much overall money as with Pujols, but the team can’t be happy about the prospect of spending roughly $50 million a year for what is currently replacement-level performance.

Who’s next?

Teams have to pay a premium for premium talent, in terms of both dollars and years. It’s just the way negotiations go these days. The dollars are huge, but players in their early 30s should be somewhere near their peak. It’s those pesky late-30s/early-40s seasons that really foul things up.

There are numerous stories of players—Alex Rodriguez, Todd Helton, Carlos Lee, Mike Hampton and Jeff Bagwell come quickly to mind—whose last season or two (or more) of a long-term deal were drags on a team’s payroll and performance. One thing we can be sure of is that these types of deals will continue, as free agents typically have multiple suitors for their multitude of talents.

There have been several long-term extensions signed by players, especially pitchers, in the last season or two. It will be very interesting to see how they work out as we approach the end of this decade. If history is any lesson, my advice is to enjoy the present, because the future could be quite painful—and expensive.

References & Resources
FanGraphs.com, Baseball-Reference.com and BaseballProspectus.com provided stats and injury information.

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Comments

  1. Sabertooth said...

    Didn’t Howard’s 2010 end similarly in the NLCS?

    Nice article. I was looking for Gary Matthews Jr and Aaron Rowand in the 5/55 club. I know Rowand was 5/60, but those two seem prototypical examples of spending money pointlessly.

    Thoughts on possible FA contract companion pieces:

    1. Big, bad, but not altogether disastrous (Zito, Soriano, K. Brown, ?). Wait, Brown was a disaster.

    2. Bad old days (Strawberry, Bonilla, ?).

    3. Best of the Biggest (R. Jackson x 2, Bonds x 2, P. Martinez, R. Johnson, ?).

    4. Collusion Era contracts that maybe should have happened, but didn’t (Carew, Garvey, Kingman, ?.)

  2. Greg Simons said...

    Sabertooth – Howard did strike out to end the 2010 NLCS, so that was back-to-back season-ending outs.  At least he didn’t get hurt in 2010.

    Matthews signed a 5-yr/$50 million deal, so his and Rowand’s average out to 5/55.  And, yes, they are great additional examples of money poorly spent.

    Thanks for all the follow-up ideas.  I have another in mind regarding pre-FA players, so we’ll see which road I take.

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