Saturday, March 12, 2005

Of Blue-light specials, Big-Ticket Items, and Buyer's Remorse

In our last post, you'll recall, the Fan Satisfaction Survey had the Red Sox rated as the fifth least efficient major league franchise when it comes to turning dollars into wins. Ben Murphy's year-end efficiency report for 2004 at Baseball Prospectus essentially confirms this finding, rating the Red Sox the seventh least efficient team in terms of its spending, "trailing" only the Diamondbacks, Mariners, Mets, Royals, Yankees, and Rockies. This has my curiosity piqued; where (if anywhere) is the leak in the Red Sox system, and why should we care as we nurse the vestiges of championship afterglow?

I'll get to that second question eventually, but to try to address the first I've set up a little statistical thought experiment. This is my first greased-elbow foray into combining sabermetrics (which I understand a little) and economics (which I understand even less). Consequently the tools I'm using are crude when compared to a sophisticated study like Harper's. All of which is to say a) I'd appreciate any suggestions on how to refine this experiment and b) allow the knowledge that you're dealing with a neophyte to temper your phrasing of any such suggestions.

First, I've taken the average payroll of the eight playoff teams ($98,666,863, using figures drawn from Murphy's study) and their average number of wins, 96. I realize this is a small sample size and that that average payroll probably exceeds what two-thirds of the major league teams are paying. But it didn't make sense to me to figure in teams that drastically overpaid for wretched teams (Arizona) or teams whose relative efficiency didn't really translate into notable success (Cleveland). Next, I switched those 96 wins to 288 win shares, and used that figure to determine how much, on average, a 2004 playoff team spent on each win share. Rounded off, this comes to $342,583 dollars per win share. If it makes a difference, I ran the numbers for the eight 2003 playoff teams as well, when more lower payroll teams participated, and the average amount spent per win share was remarkably similar ($330,000, give or take). Using the 2004 figure as a rough-and-tumble benchmark, then, we can figure which players were, relatively speaking, overpaid for their contributions and which were underpaid.

I've figured dollars spent per win share for every player on one of last year's eight playoff teams who earned ten win shares or more, using the win shares provided by the good folks at the Hardball Times and salary figures provided by baseball-reference.com. Here are the ten best bargains from last year's post-season participants.

Player (Team) Win Shares $ per win share

Lew Ford(MIN)2213,636




Cesar Izturis(LA)2514,340




Justin Morneau(MIN)1015,000




Chone Figgins(ANA)2016,000




Johnny Estrada(ATL)1916,447




Brad Lidge(HOU)1721,176




Mark Bellhorn(BOS)2123,333




Marcus Giles(ATL)1823,889




Carlos Silva(MIN)1424,286




Joe Nathan(MIN)1627,500




Juan Rincon(MIN)1227,500


No surprise that Minnesota dominates the list, but it is a little unexpected to see two Atlanta Braves here. Perhaps their continued stranglehold on the NL East is less mysterious than it first appears. You'll notice, too, that most of these guys, while more than mere role players, are not the marquee names on their respective teams. With the exception of Izturis, we're looking at "fringe all-stars" at best, and it stands to reason that you'd have to shell out more for the big names since part of their salary is a surcharge for previous achievements. Here's another list, the dollars per win share for every player producing more than 25 win shares for a playoff team.

Player (Team) Win Shares $ per win share

Cesar Izturis(LA)2514,340




Johan Santana(MIN)2759,259




J.D. Drew(ATL)34123,529




Adrian Beltre(LA)37135,135




Albert Pujols(STL)40175,000




David Ortiz(BOS)25183,500




Lance Berkman(HOU)32203,125




Scott Rolen(STL)38226,974




Hideki Matsui(NYY)30233,333




Jim Edmonds(STL)36259,259




Johnny Damon(BOS)27296,296




Vladi Guerrero(ANA)29379,310




Gary Sheffield(NYY)31419,355




Derek Jeter(NYY)26715,384




JUDO CHOP!(NYY)30733,333




Manny Ramirez(BOS)27833,333

Bear in mind that the eight playoff teams spent, on average, $342,583 per win share. Here again, Minnesota looks shrewd; the Twins only had one bona fide all-star, and their return on him from a financial perspective was twice as good as the next most efficient all-star, J. D. Drew. The three MVP candidates in St. Louis weren't merely astoundingly productive; they provided better than average bang for the buck as well. The same can be said of Johnny Damon and David Ortiz for the Sox, and Hideki Matsui for the Yankees.

Of course the Yankees also overpaid, relatively speaking, for Sheffield, A-Rod, and Jeter. Scratch a little deeper, beneath the ten win share threshold, and it gets worse. Jason Giambi was paid 1.5 million dollars per win share, and this wasn't even the Yankees' grossest inefficiency. Kevin Brown earned $1,746,031 per win share, and that wasn't the Yankees' grossest inefficiency either. Mike Mussina earned $1,777,778 per win share. We're all aware of how stifling the former two contracts proved last year, but Mussina seems to have received a free pass when he was every bit as disappointing as Brown, dollar for dollar.

I began, though, by asking about the leaks in the Red Sox salary structure. Manny is clearly one, and this explains Theo Epstein's otherwise baffling desire to trade one of the best right-handed bats in the American League. It's not that Manny isn't productive; it's that his contract renders it nearly impossible for his production to make budgetary sense. To bring his contract into line with the going rate for win shares, he needed to post 66 win shares last year. To put this in perspective, the most productive season on record in terms of win shares is Honus Wagner's 59 in 1908.

Other leaks? Curt Schilling made $545,455 per win share, somewhat inefficient but not extravagantly so. Varitek was slightly inefficient, receiving $405,882 per win share, although it could be argued that his intangibles make up the $60,000 per share difference. The primary culprit? The now departed Pedro Martinez received just over a million dollars a win share, and Derek Lowe received $750,000 per win share, another substantial waste in relative terms.

So, again, why should we care? Consider the contracts of Jason Varitek and Edgar Renteria, each making roughly 10 million bucks this year. To "break even" in terms of efficiency, 'Tek and Renteria would need to post 29 win shares each. Last year they eached earned 17. Ten million dollars a year only makes financial sense if you're getting an MVP candidate. I like both these guys, but they'd have to drastically and improbably improve to earn what they're going to be paid next year. When you give out those kind of contracts, you need to find a lot of 2004 Mark Bellhorns to bring your budget back into line.

2 Comments:

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