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Monday, February 07, 2011

How much should Pujols get?

Posted by David Gassko
Apparently, discussions on a contract extension between Albert Pujols and the St. Louis Cardinals are not going well. It's rumored that Pujols is looking for an Alex Rodriguez-like deal (or even more), a price tag that the Cardinals claim they cannot afford. Both sides have resorted to some posturing in the media, and it's looking more and more likely that Pujols will end up testing the free agent market. If he does, what will he get?

There are two ways to try to answer that question. The first is to use the wisdom of the crowds, and that's something I tried to do last year, asking THT readers to vote on what they thought Pujols' contract ultimately would be. The median answer was something like eight years for $250 million.

The other method is to try to project what Pujols will do over the course of his contract, and assign a dollar value to that. Luckily for us, Oliver provides six-year projections for every player in THT Forecasts, Pujols included. Oliver thinks Pujols will be worth 6.8 Wins Above Replacement (WAR) in 2012, 6.2 in 2013, 5.6 in 2014, 4.9 in 2015, and 4.3 in 2016. It doesn't give projections beyond that, but based on the aging curve through 2016, it seems safe to say that Pujols would lose about 0.6 wins in each additional season.

As for a dollar value, because Oliver sets its replacement level fairly high, I'll use $5.5 million per win for 2011 (i.e. the current offseason rate) and inflate that by 5 percent for every season thereafter. Multiplying everything together, we find that a fair offer for Pujols would be $227 million for seven years or $247 million for eight. That matches exactly what our readers predicted, though you'll have to trust me that I did not pre-select the numbers used to do that. Rather, the wisdom of the crowds works just that well. Eerily, a 10-year contract would imply an offer of $275 million, or the exact same deal that A-Rod got.

Ultimately, both the Cardinals and Pujols' agents have surely run some similar numbers, and both sides know how much he would be worth on the free agent market. The question is, will Pujols be happy with a deal that pays him more per year but less in total than A-Rod? Or will he wait to test the free agent market to see if someone will offer him 10 years?



David Gassko is a former consultant to a major league team. He welcomes comments via e-mail.

Comments

Uncle Bill said...

As much as the man wants, plus an extra 50 bucks for the tip.

Posted 02/07  at  10:12 AM
MikeS said...

How much he actually does get may depend on whether Mark Texiera can play the outfield.

I think an important part of the analysis is where he could land other than St Louis.  He’ll need a team willing to spend that kind of money who don’t already have alot of money tied up at 1B.  The Red Sox and Yankees seem set there unless they move a player to DH or another position.  The Cubs and Mets are big market teams, but seem to be looking more to shed payroll lately after getting burned on a few big, bad deals.  The White Sox have both Konerko and Dunn under contract and don’t have another spot to play him.  He’s probably a little out of their range anyway.  The Phillies are paying Ryan Howard and don’t get a DH.  Maybe the Angels? The Rangers have shown a willingness to spend lately.  Maybe the Twins if Morneau never gets healthy?  Not really the Twins style.  He’s the best there is, but it’s hard for any team to justify paying two guys more than $20M/year for both to play first base.  He just doesn’t seem to have a whole lot of other options right now.

Posted 02/07  at  02:30 PM
Shawn said...

Not only can Toronto can afford him, they have the wealthiest ownership in the majors ...

Posted 02/07  at  10:33 PM
Jason said...

I wonder if Toronto might wait it out for their own Joey Votto to outlast his semi-affordable 3 year contract in Cincinnati. He’s younger than Pujols and if he sustains this level of performance Cincinnati won’t be able to afford him. When Votto got the 3 year deal, rather than the longer contract the Reds were looking for, it looked like a decent indication to me that he wants to pursue other options. (Reds already had him for 3 years before the contract) I don’t follow the Jays at all, but it seems like they have been constantly trading away talent for the last few years, so presumably aren’t currently going all out.

I’d guess Dodgers or Angels or Cardinals(somehow) for Pujols. Maybe even Orioles!

Posted 02/07  at  11:08 PM
Bob said...

Pujols should, and will, be paid $280-285M for 10 years, with $3-4M deferred per year over most (if not all) of the contract.

The StL owners know he’s well worth it over the next 4-6 years…and very likely know he’s too proud to stick around as a mediocre player, IF that’s what he indeed becomes in his late 30’s.

By the way, D.G., whose numbers were plugged into “Oliver”, in the search for Pujols’ comparables? ‘Cause there ain’t many comparables. wink

Posted 02/08  at  06:27 AM
Rick said...

I believe Albert will resign with Cards…I live in the STL area & I know how much they both are tied to the community & each other. His charities are tied to the area too. Albert is basically a simple guy-no prima dona in him that I can detect.

Typical-I think it is his agent that whispers sweet nothings in his ear to look around, but Pujols is his own man when it comes down to it.

I still say they will resign him even if it goes past the Feb 15 deadline and then it would be after the season is over. The only caveat-I would not give him is a 10 yr deal-too long & too many variables in that length of marriage.

As Dorothy said “there’s no place like home” & in the end this is the deal sealer for him.

Posted 02/08  at  10:46 AM
Joe S. said...

My apologies in advance….I may be asking questions that are elementary/well known to the sabermetric crowd. 

Basically, is there a “point of diminishing returns on salary as it relates to WAR or some other statistical measure”?

I got to thinking about this as I was reading about Pujols’ rumored contract demands and how wise it is to be so heavily invested in one person.

Let me give an extreme example.  Let’s say Pujols has an annual 27 WAR (offensive only) and each WAR is calculated out as worth $5 million, therefore, he is theoretically worth $135 million per year.  At that money, Team A can only field MLB minimum salary, 0 WAR players to round out their 9 player lineup.

Team B decides to sign 9 separate players each with a WAR of 3.  They are each signed for $15 million, thus equally (approximately) the same payroll put out by Team A as well as the overall WAR of 27.

Obviously, the opponents of Team A can pitch around Pujols or otherwise try to limit his effectiveness.  Meanwhile, Team B has offensive threats spread throughout the lineup.

Is there a point at which it is no longer fruitful to invest in a one superior product, but more wise to invest in multiple, less superior products.  If so, has anyone attempted to make such a calculation?  If a 3 WAR is worth $15 million per year, is a 6 WAR worth only $24M, a 9 WAR worth $32M?

Thoughts?

Posted 02/08  at  05:07 PM
Grandpa Boog said...

I’m 85 and am stubborn.
Trade Pujols.
Don’t break the piggy bank for just one player.
—Stay tuned,

Posted 02/08  at  07:06 PM
David Gassko said...

Joe,

If pitching around Pujols would limit his effectiveness, then he wouldn’t be worth 27 WAR. If he’s worth 27 WAR, that’s the same as nine players worth three WAR each. Now, you can make the argument that the risk with Pujols is greater as it takes one injury rather than nine to subtract 27 wins from your team but that depends on whether or not you’re risk-averse (in fact, if you’re looking for risk, you’d rather have Pujols, and if you’re risk-neutral you don’t care). Also, 27 WAR is pretty extreme—when we talk about the major league distribution of talent (say, 0-7 WAR), risk preferences play a much smaller role.

Posted 02/08  at  10:15 PM
Jason said...

Pujols is only Werth $30mil/yr because of the outrageous precedent set by the handful of teams who can afford to pay this. It would be foolish for the Cardinals to commit 1/3rd of their payroll to one person for the next 10 years.

Posted 02/09  at  03:02 AM
Paul said...

The Yankees (and to a lesser extent the Phil and the like) have really made life difficult for the Cards.

The ARod contract was literally the Yanks bidding against themselves - so setting an unreal barrier for Albert.

The Phils with Howard set the minimum (roughly 25mil annual salary)

Albert has 2 choices - he can be the highest earner but have a shorter contract (6ish @30), or he takes a more money with a loger contract, but less per year (10 @25).

He isn’t going to get 10@31 to beat ARod’s total, and if he is after that, then i say good luck in FA as is your right.

Posted 02/09  at  04:55 AM
Rick said...

Living in the STL & getting to see alot of his past interviews & watching Pujols play his entire career here I know Albert would not be happy in any large market city. As I stated in another post he is basically a simple guy and he would not like all the media scrutiny that goes with the mega city stuff. His wife does not want to relocate and he is a big family type guy too.

One other thing I don’t know if many of you are aware of, when he first came up to the show there was STL sportswriters talk about his Dominican birth certificate was suspect & some suspected he was approx 2 & maybe 3 yrs older than what it said. Since he has become a mega star in STL & in order to not rock the boat hardly any of these very same writers ever broach the subject anymore.

Could it be the front office may actually believe that he is older than what his original BC says?....very intriguing. They may indeed feel this way but too darn afraid to bring it up and if they do it could really piss him off and defeat any negotiations. Who knows?

Posted 02/09  at  09:39 AM
Bob said...

Joe S.:

The problem with your hypothetical is that *many* MLB-minimum salaried players, on every team, are better than 0 WAR contributors.

Whatever Pujols makes in NO way precludes the StL farm system from producing more Colby Rasmus and Jaime Garcia types (i.e. above-average players makin’ the MLB minimum).

In practical terms, one player worth, say, 8 WAR (like Pujols is in the real world) is *much* more valuable than 3 guys worth 2.67 WAR apiece—-because the Pujols + two random “other guys” is actually very likely to produce more than the 8 WAR of Pujols alone. Even if the other two are making MLB-minimum.

David: Hate to repeat myself, but who’s in the “Oliver” pool to determine Pujols’ likely future career path you cited? It’s actually kinda critical info, since AP has so few peers historically—-in terms of both productivity AND durability. Thanks.

Posted 02/10  at  05:50 AM
Jason said...

I’m not sure I agree that Pujols is worth as much more than “3 guys worth 2.67 WAR apiece” as he is projected to earn. I’m not sure how you chose the number 3, but 30 million dollars as far FAR more than 3 times the MLB minimum. 30 million is more than 10 times the minimum. 30 million is more than 20 times the minimum. 30 million is more than FIFTY TIMES THE MINIMUM! ... I don’t think the Cards could hope to benefit from any kind of back-ended contract, as Pujols is already invoking his rights to refuse trades. It’s hard to imagine what that contract would like anyway, possibly trying to trade him in 5 years with an annual salary of 40+ mil due. I wonder if they could come up with some sort of incentivised contract that adds up to what he’s asking for, but depends on sustaining the supposed WAR you project? Perhaps even team accomplishments demanded by the contract. i.e. for Pujols to get all 300,000,000 these 10 years, the Cards need to reach the playoffs 6 times and reach the WS twice.

Posted 02/10  at  05:31 PM
David Gassko said...

Bob,

I’m not the developer of Oliver, so I could be wrong, but my understanding is that it does not use comparables to build its aging curves. So lack of comps should not be a problem.

Posted 02/12  at  04:44 PM
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