Tuesday, April 27, 2010
A couple of Howardian thoughtsPosted by Dave Studeman
Wow, this is fun. Lots of analytic discussion about the Phillies' contract extension with Ryan Howard, ranging from Fangraphs' Matthew Carruth saying "...I was tempted to fill this entire article with just me laughing" to BPro's Matt Swartz saying "For Phillies phans, this is actually a great sign." Two very analytic guys with two very different conclusions.
Because Matt Swartz's article requires a BPro subscription, let me recap his very thorough analysis:
- The starting point for free agent salaries is about $5 million per win above replacement (something I intuitively agree with). Other folks appear to be using a figure close to $4 million.
- Salary inflation may be higher over the next six years than it's been in the recent past (probably true, but hard to predict).
- The Phillies know Howard better than we do, and have a better feel for how he's likely to age (a good point, but nothing I'd hang my hat on).
Still, I appreciate the fact that Matt has come to a different conclusion than the rest of the screamin' blogosphere. He's provided something to ponder.
Matt uses WARP3, other people use WAR. When I used to analyze salaries, I used Win Shares Above Bench. Honestly, I don't think the exact system matters a whole lot. Back in 2007, I found that teams were paying free agents $5.3 million per win above replacement. Even with low inflation, I'll bet the figure is at least $5.5 million now.
So, if you assume $5.5 million per win in 2010 and a salary inflation rate of five percent, at what level of production will Howard's contract break even? The answer is that he needs to average between three and four Wins Above Replacement per year for the length of the contract for the Phils to break even. Last year, he produced 4.9 WAR. Can he average three-to-four WAR over the next six years of his career? To me, that is the fundamental question. Personally, I'd put the probability at less than 50%, higher than 25%. I have nothing to back that up, other than my prodigious gut. And I don't mean prodigious in a good way.
Remember the Paul Konerko brouhaha in 2006? Konerko was a free agent after the White Sox won the World Series. The Angels were going to sign him, but the Sox stepped in at the last minute and signed him to a five-year deal worth $60 million. Konerko was 30 at the time, the same age Howard is now. Konerko was coming off a 4.3 WAR year, though he had averaged between two and three a year before that. A lot of us didn't like the deal at the time because Konerko was kind of like, well, Ryan Howard today—just not so much. Didn't seem like he was going to age well. We understood why the Sox did it, however. Something about keeping the fan base engaged. Sound familiar?
Konerko has averaged about 2.4 WAR each year since and he's off to a good start in this, the final year of his deal. At roughly $5 million per free agent win, the deal has been a solid, breakeven kind of deal. Does that mean the Howard deal is likely to turn out well? Not at all, but it's not out of the question.
Dave was called a "national treasure" by Rob Neyer. Seriously. Comments about this article can be sent to him through the miracle of e-mail.