# The Hardball Times

## Fair Market Value

by Dave Studeman
December 13, 2004

A few articles ago, I wrote about turning the Net Win Shares Value Calculator into a salary estimator for next year. When I wasn't sure what to call it, reader Jonny Morton suggested Fair Market Value calculator, which is just right.

See, free agent salaries can't really be estimated or projected. They're the result of very specific, sometimes idiosyncratic, negotiations between the player's agent and the team. But we can at least use last year's salaries and Win Share totals to compare each deal to the amount of money similar players received last year. Everything else being equal, last year's salaries present a good baseline from which we can calculate the "fair market value" of this year's contracts.

Projecting next year's performance is easier with position players than pitchers, so I'm just going to review the list of position player signings. In particular, I'll use the Runs Created projections included in the Bill James Handbook to estimate each player's Win Shares and WSAR for next year. I'll then enter the specifics of each contract into the Fair Market Value spreadsheet and compare each deal to all free agents who played last year.

Ready? Here we go, starting with the most recent deals:

Steve Finley signed a two-year deal with the Angels for \$7 million a year.

The James Handbook projects 72 Runs Created for Finley next year, albeit in Dodger Stadium. He's created 94, 85 and 86 runs in each of the last three years in the BOB. Did you know that he was one of the unluckiest batters in the majors last year? With the Dodgers, he hit line drives at a .204 clip, but his BABIP was only .254 -- a difference of only .05 (the average difference is .110). I personally think 75 to 80 Runs Created is a decent projection for him, but I'll stick with the Handbook's 72.

On the other hand, MGL's UZR system says he is pretty clearly a below-average fielder. Combine the two, and I get a Fair Market Value of \$5 million. Finley is also 40 years old; I wouldn't have given him a two-year deal. This is an expensive deal for the Angels.

Troy Glaus signed a four-year deal with the Diamondbacks for \$11.25 million a year.

My first reaction was "What are the Diamondbacks thinking? How could a losing team that desperately needs a long-term plan spend money like this?" But Tom Donovan's excellent review of the Diamondbacks' situation makes the situation a lot clearer. I actually think the Arizona ownership is on the right track.

But Troy Glaus? Well, the Handbook pegs him at 107 Runs Created next year. If he plays a decent third base (and no one's yet sure which position he's going to play), that makes his Fair Market Value \$15 million.

Of course, this is all about the injury risk. A four-year deal, without any playing time bonuses, is a risky proposition. But the salary level makes this a good deal for the newly capitalized Diamondbacks if Glaus remains injury free for three of those four years.

Jeff Kent signed a two-year deal with the Dodgers for \$8.5 million a year.

Speaking of risks, Jeff Kent will be 37 years old next year, and the Handbook lists his injury risk as high, too. However, it also projects 87 runs created for the second baseman. Although we could debate his defense forever (both Win Shares and UZR gave him high marks last year), I'm going to give him an average rating. That yields a Fair Market Value of \$11 million.

At his age, Kent could see his production drop precipitously, but this seems like a very good deal for the Dodgers.

Jermaine Dye signed a two-year deal with the White Sox for \$5 million a year, with an option for 2007.

On the surface, Dye and Finley are similar. Dye is projected to create 74 runs next year, though he will make more outs than Finley. From what I've read, he is an average defender these days. Fair Market Value of \$5 million. Fair deal for Dye and Ken Williams.

Dye is only 31, but he's a much higher injury risk than Finley (the Handbook rates him a High Risk, Finley is a Medium Risk). My guess is that there's less certainty in Dye's projection than Finley's. I have to admit that I didn't like this deal when I first read about it, but the Fair Market Value calculator seems to know better than I.

Richard Hidalgo signed a one-year deal with the Texas Rangers for \$5 million.

Now, this deal shocked me. Hidalgo is a very risky signing -- he has more ups and downs than my stock portfolio -- and he batted .197 in the second half last year. But the James Handbook has him at 70 Runs Created next year (at Shea) in 438 at bats, and he truly is an excellent outfielder. Seems crazy to me, but that gives him a Fair Market Value of \$7 million.

Still, Hidalgo is a high injury risk, and his Runs Created could come in anywhere between 40 and 90. This is probably a good deal for Texas -- a calculated risk.

Nomar Garciaparra signed a one-year deal with the Cubs with a base salary of \$8 million and incentives of up to \$11 million if he stays healthy.

Garciaparra is obviously a high injury risk, but the Handbook has him playing in 126 games next year with about 550 plate appearances. That would net Nomar \$9 million, based on his incentives. The Handbook also has him creating 96 runs next year and I'll rate him an average defender at this stage of his career. Fair Market Value of \$16 million. Super deal for the Cubs; clearly worth the risk.

Henry Blanco signed a two-year deal with the Cubs for \$1.35 million a year.

Plus, there's an escalation clause, based on games played, that could more than double his salary is he starts in at least 115 games (the escalator starts at 60 games). If Blanco starts even 60 games, the Cubs will be in trouble. He is an excellent receiver but a terrible hitter. Fair Market Value of \$500,000.

Between Garciaparra and Blanco, the Cubs went from the sublime to the ridiculous.

Damian Miller signed a two-year deal with the Brewers that includes both a team and player option for a third year. If player option is chosen, average salary is almost \$3 million a year.

I'm on record as originally liking this deal, though I think I had some of the dollars wrong. Miller is projected to create 45 runs in 106 games next year. He's also a very good catcher, though I'll rank him "average" in the Win Shares calculator. Fair Market Value of \$5 million. If you factor in the relative scarcity of good catchers, his Fair Market Value rises to \$6 million.

Now, Miller will be 36 next year, but he's listed as a medium injury risk and he doesn't have a lot of the wear and tear that catchers typically have. Oakland offered him two years and refused to give him a third, which is why he moved to Milwaukee. This still seems like a good deal to me.

Ricky Ledee signed a two-year deal with the Dodgers, for \$1.25 million a year, plus minor incentives for playing time.

The James Handbook is, of course, just guessing at any one player's playing time. For Ledee, the guess is 24 Runs Created in 184 at bats. He's evidently a decent, versatile outfielder from what I've read and the little I've seen. Fair Market Value of \$1.4 million.

Dan Wilson signed a one-year deal with the Mariners for \$1.75 million.

Wilson is projected to create 25 runs in 254 at bats, and he's a high injury risk. I guess it all depends on what you think of his fielding. I put him down as "average" and got a Fair Market Value of \$1 million -- nearly \$1.3 million when adjusting for lack of good catchers. Not a terrible deal, I guess.

Todd Walker signed a one-year deal for \$2.5 million, with an option for another year at the same rate.

If Walker accumulates at least 525 plate appearances in 2005, then a player option for 2006 at the same salary level will kick in. The James Handbook projects 564 plate appearances next year, plus 77 Runs Created in 514 at bats. Even if you give Walker a "poor" fielder rating, his Fair Market Value is \$7 million. Plus, he's a low injury risk. This is another great deal for the Cubs.

I don't know why GMs undervalue good second basemen, but they definitely do. If you put Walker on a "Second Baseman" scale, his Fair Market Value declines from \$7 million to \$5 million. Still a great deal.

Cristian Guzman signed a four-year deal with the Nationals for \$4.2 million a year.

The Handbook projects that Guzman will create 74 runs in 602 at bats next year. This is surprising, because he's created 63, 62 and 65 in each of the past three. It seems to me he's more likely to be in the 60's once again. Win Shares rated Guzman very highly in the field this past year, but it's also clear that he didn't deserve that. His Zone Rating was .823, which was second from last in 2004. Admittedly, his home park has an impact on his Zone Rating, but Tango's scouting report also lists him as a slightly-below average fielder.

If you assume he'll repeat this year's batting line in 2004, and that he is an average fielder, his Fair Market Value is \$2 million. If you're optimistic about both his bat and fielding, his Fair Market Value is \$5 million.

Vinny Castilla signed a two-year deal with the Nationals for \$3.1 million a year.

He's 38, he's a high injury risk and the Handbook projects that he would have created 59 runs in Colorado's rarefied air. In a normal ballpark, that's more like 49. Over the last three years, he's created 36, 70 and 88 RC. The Handbook is being pessimistic here, but overly so?

On the other hand, Zone Rating, Win Shares and Tango's fans all agree that he's slightly above average in the field.

If he creates 59 runs, his Fair Market Value is \$3 million. At 49 runs, he's a replacement player.

I think we've firmly established that Jim Bowden is an optimist.

Omar Vizquel signed a three-year deal for \$4.1 million a year, with some of the payments deferred.

Vizquel will be 38 years old next year and the Handbook gives him a high injury risk rating. It also projects 54 Runs Created for him next year. In the field, he is not what he once was, but he is still solid. He's similar to Vinny Castilla, only he plays shortstop and is easier to project.

At those figures, his Fair Market Value is \$3 million. Giving him a three-year deal seems just plain goofy.

And that's all I have for now. I'm sure that the Fair Market Value calculator can be improved (I feel like I say that a lot). But I do think it's good enough to pass judgment on some of these deals. In particular, kudos to the Cubs for two great deals.

References and Resources
For another point of view, you can compare some of these comments to Aaron's free agent review from last Friday.