How much would I pay Josh Hamilton?
by Glenn DuPaulAugust 29, 2012
This winter, Josh Hamilton will be the biggest name on the free agent market (sorry, Zack Greinke). Hamilton got off to a historic start this season, and all signs pointed to him running away with the AL MVP and cashing in this offseason. He had a crazy-high weighted runs created plus (wRC+) that was well over 200 (league average is 100), in April and May.
Interestingly, Hamilton's plate discipline wasn't very good in those months. Near the end of May, Dave Cameron wrote a FanGraphs article entitled "Josh Hamilton: King of Swings"; which discussed the strangeness of Hamilton's success, despite poor plate discipline, and left us with this dandy of quote:
Logic says this can’t last. As long as Hamilton keeps chasing pitches way out of the strike zone, pitchers have no real incentive to throw him anything in the strike zone, especially when he’s crushing pitches in the strike zone with regularity. But, they’re already throwing two out of every three pitches to him outside of the zone, and he hasn’t stopped swinging at them yet....
I’m not sure anyone should ever throw Josh Hamilton a strike again.
Well, pitchers stopped throwing Hamilton strikes and his numbers plummeted. His wRC+ in June was below average (92), and Jeff Mathis would laugh at his July wRC+ (49). The inconsistency of his play, his addictive past, and his injury history are three majors factors teams could point to as reasons not to offer Hamilton a lucrative contract.
Hamilton's plate discipline hasn't improved in August, but his numbers have significantly. If it wasn't for Mike Trout, with a good September Hamilton would have a legitimate case for the AL MVP award, even with the two bad months.
Hamilton is going to finish this season with some ridiculous numbers, and will be the best outfielder on the market this offseason, but how much (and how long) should his contract be?
Matt Swartz has shown that front offices value outfielders higher than their actual wins above replacement (WAR), especially left fielders, which most likely will be Hamilton's position moving forward. So there's a good chance that some team will overpay for Hamilton. The market that has been established for premium outfielders in free agency, agrees with this idea.
Over the course of Hamilton's six-year career, he's been worth about four to five wins per season. Below is a comparison between Hamilton's first six years, and the numbers of fou-r to fivewin outfielders who have signed big contracts in recent years:
| Player | AVG | OBP | SLG | fWAR | wRC+ | BB/K | 1st Yr FA Age | Contract Signed |
|---|---|---|---|---|---|---|---|---|
| Carl Crawford | .302 | .347 | .463 | 29.1 | 125 | 0.41 | 29 | 7 yr/$142 MM |
| Jayson Werth | .274 | .373 | .485 | 20.5 | 125 | 0.53 | 32 | 7 yr/$126 MM |
| Matt Holliday | .318 | .387 | .545 | 28 | 135 | 0.53 | 30 | 7 yr/$120 MM |
| Josh Hamilton | .305 | .364 | .549 | 25.1 | 136 | 0.43 | 32 | ??? |
A seven-year deal with a total net worth between $120-140 million seems to be the market for outfielders of Hamilton's talent level, and reports say that is the type of deal Hamilton is hoping to receive on the open market.
Holliday's contract has been great so far. He's one of the most underrated players in the game and is clearly worth more than $17 million per season, but at the same time that contract is still young (with four seasons remaining).
But honestly, are there two worse contracts out there than Crawford's or Werth's?
The answer, of course, is yes. Chone Figgins, Barry Zito, Michael Young and Vernon Wells come to mind very (almost too) easily as players who are massively overpaid. But, aren't the Werth and Crawford deals beginning to be thrown around as a similar type of horrible albatross?
I think their two deals have to be cautionary tales for any potential Hamilton contract.
- Werth has been worth (I apologize) just 3.7 WAR over almost the first two years of his contract, and he's signed through his age-38 season
- Crawford has been worth 0.6 WAR over the first two years of his contract. He had Tommy John surgery last week, oh and also last week, he was literally dumped on the Dodgers, because his contract was burning that big a hole in John Henry's pocket.
No team should be crazy enough to give Hamilton a seven-year deal. Even if he didn't have a history of injuries, agreeing to pay anyone (even someone with as much talent as Hamilton) $15+ million, at age 38, is nonsense. And the fact is Hamilton does have an injury history.
Hamilton isn't going to play in 150 games this season; 2008 is the only year he broke the 150-game plateau. Although 2009 was his only season truly decimated by injuries (he played in just 89 games), he has shown that he can be a four-win player in just 120 to 130 games, which is about all a team who signed him could expect.
Free agency does make some teams crazy, though. We saw the deals Prince Fielder and Albert Pujols signed last offseason, and even Matt Kemp and Joey Votto's extensions had some ridiculous length and total value, when they weren't even free agents.
After Hamilton hit four home runs in one game this May, Jeff Passan wrote a column for Yahoo! about Hamilton's contract hopes. In that column he made two priceless statements. The first dealt with Hamilton's "Jekyll and Hyde"-esque dual personality:
The Josh Hamilton who hit four home runs Tuesday night is a player the Texas Rangers would love to sign long term, and considering that sources told Yahoo! Sports they've reopened negotiations with him on an extension, they're trying.And the second quote, which I think is pure gold:
The Josh Hamilton who fell off the wagon in February is a year-at-a-time question mark whom neither the Rangers nor any team in baseball can trust with a huge-money deal.
He is indubitably both men: the American League's representative in the most-talented-player-in-baseball contest opposite the National League's Matt Kemp and the recovering addict who twice has suffered embarrassing public relapses that, coupled with a deep injury history, muddy any prognosis of long-term viability.
Still, it's reasonable for Hamilton to seek the sort of money afforded players of his caliber. Kemp, 27, signed an eight-year, $160 million extension last offseason. A year before that, the Washington Nationals gave seven years and $126 million to outfielder Jayson Werth, who turned 32 less than two months after he signed, like Hamilton will.Hamilton's free agency situation is just unique. Who knows what the future holds for any free agent? But it seems almost impossible to know what the future holds for a player with the immaculate talent that Hamilton has, because quite honestly do his pros outweigh his cons?
The most important thing to remember about free agency: All it takes is one team. One team to covet his talent. One team to dream he stays healthy. One team to crave his star power. Just one to take a sledgehammer to sanity.
Passan also pointed out that Hamilton is in Texas and that Texas knows him and his needs. And I think it would make a lot of sense for Texas to bring Hamilton back, especially considering the fact that teams get "more bang for their buck" when retaining free agents than when they acquire free agents from another team. Texas has shown it is willing to spend big, but I don't see the Rangers offering Hamilton a seven-year contract; their front office is just too savvy to make that type of move. Heck, there were reports last offseason that the Rangers offered C.J. Wilson only something like a four-year $60 million deal.
So, if not Texas, then who?
As Passan said, it takes only one team that wants to catch lightning in a bottle—a team that is blinded by Hamilton's sheer talent and throws logic out the window when the other factors and recent big contract failures are considered. But will any of the large-revenue ball clubs be in the market for Hamilton and become that one team who dreams bigger than others?
- The Yankees won’t be in the market, as they are attempting to dip beneath the luxury tax threshold
- The Angels still have Vernon Wells on the books, so I don't see Jerry Dipoto bringing in another aging outfielder long term, and should be more concerned with locking Trout up
- The Dodgers can't be possibly be in the market for Hamilton... unless they're printing money or something
- The Red Sox just freed up a ton of payroll flexibility and have no left fielder, but they're probably going to use that money on Jacoby Ellsbury and starting pitching, not on Hamilton, especially with what just happened with Crawford
- The Nationals want to be a big market club, but they already have Werth on the books
- The Marlins spent crazy money last offseason, but the likelihood of them venturing down that road again is slim
- The Phillies need outfielders and Ruben Amaro Jr. loves long-term deals, so I guess it's a possibility, but still feels like a long shot
- The Tigers and Giants are possible mystery teams that could maybe make a run at Hamilton
What I do know,though, is what the most lucrative contract I would be willing to give Hamilton, if in a hypothetical world I were the head of a major league organization.
The absolute largest (in both length and dollar value) contract I'd give to Hamilton would be a five-year $80 million ($16 million per season) deal. And I'll tell you why.
Why?
I think there is a decent chance that at age 36 Hamilton could still be a serviceable player. The assumed rate among the sabermetric community for one fWAR (FanGraphs' calculation) is $5 million per WAR. I've heard arguments that the rate could be $6 million or even higher (Matt Swartz states in comment No. 25 on this link that it could be $6.7 WAR, next season). But to be safe, I'll stick with $5.25 million per WAR as my starting point for a potential Hamilton contract extension, based on a five percent inflation rate.
Under these assumptions, if Hamilton signed a five-year $80 million deal he would need to be worth about 14 WAR over those seasons. Hamilton has been worth more than 25 WAR over the last six years (with September of this year left to accumulate more WAR). Projecting baseball players (especially one who will be entering his mid-30s) is not easy, especially one with the injury risk that comes with Hamilton, but I think a projection of 14 WAR is within the realm of possibility.
Here's the breakdown of my projection which assumes:
- Hamilton will be a four-win player, in 2013
- He'll lose a large chunk of one season due to injury
- He'll be a left fielder over the course of the contract
- He'll be a two-win player at age-36
| Year (Age) | WAR | $/WAR | Revenue | Cost | Net Value |
|---|---|---|---|---|---|
| 2013 (32) | 4 | $5.25 | $21.00 | $16.00 | $5.00 |
| 2014 (33) | 4 | $5.51 | $22.05 | $16.00 | $6.05 |
| 2015 (34) | 1 | $5.79 | $5.79 | $16.00 | -$10.21 |
| 2016 (35) | 3 | $6.08 | $18.23 | $16.00 | $2.23 |
| 2017 (36) | 2 | $6.38 | $12.76 | $16.00 | -$3.24 |
| otal | 14 | $79.83 | $80.00 | -$0.17 |
I think not only that this is a reasonable projection for Hamilton, but also it would be a win-win contract for him and the team that signed him. When December or January rolls around, Hamilton will probably end up with more money or more years than this. Heck, Gary Matthews Jr. once signed a five-year, $50 million deal.
The trouble with any contract projection is we'll never know what's going to happen, until it happens; which is part of the reason why this type of analysis is so much fun. How could anyone on the outside know the inner workings of a front office? They are hardly ever public (Moneyball, I'm looking at you), and it seems from the outside looking in that front offices hardly ever act rationally.
Jonah Keri made a great argument on Monday about the Dodgers and a new possible market inefficiency. Maybe teams will follow the Dodgers' path and stop trying to be corporations that want to make large profit while accumulating WAR. Instead they might try to be baseball organizations that simply accumulate WAR, and don't care if it hurts their overall profit.
Who knows if other teams will follow their lead. I also don't know if this idea will have any effect on Hamilton's free agent contract, but it could and that type of unpredictability is what makes baseball so great.
References and Resources
All statistics come courtesy of FanGraphs. All contract info comes from Cot's Contracts.
Glenn is an Economics major at Lehigh University. He works as a Research & Development intern for Baseball Info Solutions. He also writes about sabermetrics for Beyond the Box Score. You can follow him on twitter @Glenn_DuPaul or email him at .(JavaScript must be enabled to view this email address)
the only way hamilton gets more than five years is with an american league team. dh could keep him healthier. first base is also a possibility, since hammy is very athletic and could learn the position. if thats the case, boston could make a run so that their fan base believes the team wants to compete quickly.