THE BOOK--Playing The Percentages In Baseball

Great post.

The Wells and Hafner contracts are part of the reason I started doing “Contract Retrospectives” (click the link on my name), and for the very reasons you lay out above—it’s easy to criticize a contract _after_ it’s gone sour, but what about at the time.

Now, I do think that the Wells and Hafner contracts were too big given a simple Marcels. But they weren’t terrible. I think CLE paid for Hafner to be a 3.5 WAR player when he was more like 3, and Wells to be about 4.8 when he would have been more like 4-4.3. And, of course, that adds up (especially over 7 years!).

But as you say, if those players would have played at reasonably forecasted levels, while they contracts would have been a bit too big, no one would have said anything specially given that Hafner and Wells are perceivced as “good guys.” (No, that doesn’t really increase their value, but would have made the press happier.)

I love JoPo/Poz as much as the next blogger, but I also have to say that he’s never thought much of J.P. to begin with, so this just gives him an opportunity to unload a bit. I’m not saying J.P. is a great GM or anything, and he does seem to hurt himself by having incredibly thin skin. The Adam Dunn “incident” didn’t help J.P., either. Yes, that was a dumb thing for J.P. to do on the radio, although I notice that Poz doesn’t go out of his way to mention that Adam Dunn isn’t even an average player when he has to play the field everyday. Adam Dunn was “underrated” in the same era when VORP was te best player value stat publicly available.

Pretty interesting Devil.  You’ve written two stories on the subject, and both involve the guys we’re talking about here!

Great job by the way.  Excellent recap.

Interesting, but I have a quick question about the analysis. (I’m new here, so please forgive me if this is a dumb question/has already been covered.)

Don’t the equations ignore risk incurred by the team? Shouldn’t there be a discount taken off of the expected return, on the chance that the player won’t become injured/otherwise not live up to expectations?

I suppose that there’s risk to the player that he will outperform the money, and if the two risks were equal, they would cancel out. But that seems like a leap of faith to assume.

The uncertainty of our mean estimate is taken care of as well, via regression toward the mean.

Best thing I can say is for you guys to put pen to paper and try to create your own model.  You’ll find that it probably mimics mine.

Thanks. Sorry if I came across as critical. Just wanted to know if that was something that had been considered.

As for making my own model, I’d be thrilled if it mimicked yours, but I’m pretty certain it would spit out !DIV/0 or my computer would explode.

I didn’t take your post as anything other than inquisitive. 

The basic idea is to think of players in terms of units.  Say that Pujols is 8 units and the average player is 4 units and some crappy player is 2 units.  I’m subtracting 2 units across the board.  You are suggesting maybe to multiply the units by a certain factor and then subtract some other number of units to get at the player’s value.  Maybe you multiply by 80% and subtract 1.6 or something (which is the same as subtracting 2 first, then times 80%).

Whatever it is, you’ll end up with the same answer as me, pretty much.

Try it out…

I’ve criticized Poz before for saying dumb/inaccurate things.  I am not in love with him as much as some folks are.  He is basically a very good writer with a pretty good understanding of sabermetrics and usually a pretty sober and clear mind when it comes to baseball commentary and analysis.

I would like him more if he admitted that he didn’t know certain things or found out the things he didn’t know and wanted to write about. 

Instead, he sometimes writes stupid and/or incorrect things in an attempt to be sabermetric.  This isn’t the first time and it is one reason I am not all that crazy about him and I don’t go out of my way to read his articles and his blog.  He is probably one of the best mainstream writers out there, but Tony LaRussa is probably one of the best managers out there, if you know what I mean…

Hey Guys,

The Rios contract got me thinking: what about option value?  Is a player more valuable if you have the option to part ways with them every off-season, or at least reevaluate the player? 

I think I’ve read your thoughts on the subject (maybe it was Dave C.), and it does seem like the most financially advanced teams in the league (aka the Rays) do sign young players like Longoria to long-term deals, wherein the player appears to be exchanging some of what they’d expect to earn as a free agent for more guaranteed money.

True, Option Value, but the Mariners did that with Yuniesky Betancourt.  The Tigers in the nineties locked up a number of players, like Bobby Higginson.  Longterm versus shortterm contracts are another tool in the talent judgment drawer; they don’t answer all the questions unless you’re the Yankees or Red Sox or Dodgers and can pay the market rate no matter what.

Great (and timely) post!  I was just arguing with Evan Brunell over at THT about Rios’ value, saying that he was indeed worth his contract.  He actually quoted Poz (and Buster Onley… heh) to try and prove his point. 

Actually, I think Rios is worth a little more to the White Sox, because he is the only 3.5 WAR player available right now, and he improves their playoff odds a lot.

If you endeavor to judge the prudence of a contract “after the fact,” probably 10% or so of the perfect ones (at the time of signing) will look horrible and another 20% will look bad, and of course, by definition, 50% will under-perform a perfect projection (assuming there is one of course).  All of this by chance alone.

Ditto for the other direction (a perfect contract will look brilliant 10% of the time, etc.).

Not to say that there may or may not be some skill by GM’s in being prescient (at least more prescient than Marcel the Monkey or his ilk) as far as long term performance goes - I don’t know.  I am just saying that if a perfect contract is made - i.e. the player is paid at exactly the value he is supposed to provide (if G-d came down and told you that player’s projection or true talent) - that future value will randomly fluctuate around that “perfect” number such that a small but significant number of contracts will look horrible or brilliant by chance alone and an even larger but also significant percentage will look better or worse after the fact.

IOW, judging a contract by anything other than what was known at the time it was executed is a terrible way to judge the prudence of those contracts and hence the competence of the GM or whoever approved or negotiated them.  And anyone who does that is really missing the boat.  Not to mention the fact that if you do that, it is easy to cherry pick ones to suit your thesis (as opposed to, say, looking at the “after the fact” numbers for ALL of certain GM’s contracts).

Just wanted to acknowledge devil’s write-up on the Wells contract....thought of it and its logic immediately when reading Neyer’s link-to and rehash-of the Poz article. I was actually kind of surprised that Neyer didn’t offer some sort of criticism himself; when you look at the numbers (even in significantly less depth than the impressive breakdown in the Contract Retrospective), it’s pretty clear the contract was at least a half decent idea at the time based on the information at hand.

Barely anyone said “boo” about the Wells contract at the time.  It was signed before (just before?) the economy went to hell and at the time it was looking like FA salaries were going to keep doubling every year.  The consensus was “Vernon is a great player and by 2010, 17M just won’t be a big deal.” Then Vernon immediately started to suck and salaries suddenly stopped rising.  These two things together are what makes it look so bad.

Even those who were critical of his contract at the time weren’t calling it “hysterical,” as Poz alleges; it was seen basically as a fair deal or maybe a bit of an overpay.  The BBTF thread of the deal barely got any comments, which is an indication that it wasn’t much of a surprise.  It looks bad today, but anyone claiming they thought it was disastrous from the get-go is probably full of shit.

Also remember that Ichiro a few months later got 5/90 and then Torii would later get 5/90.  So 18MM per, for a great-fielding good-hitting OF was the norm.  The older guys got 5 years, and the younger one got 7 years. Imagine if Andruw Jones would have signed the Wells contract one year before he totally tanked.

The question to ask is: how much would you have paid Wells for 7 years?  If the answer is anything less than 70MM, then that’s basically a lie.  Given that Ichiro and Torii later signed for 5/90, the least you can offer Wells would have been 7/90. That’s really what it comes down to.

Torii Hunter is an excellent comparison.

Hunter was 31 years old and had hit .279/.335/.487 in the previous three seasons.  He got 18M/year for 5 years.

Vernon was 27 years old and had hit .282/.338/.493 in the previous three seasons.  He got 18M/year also, but for 7 years.

I think that in order to know that the first one would work out great and the second one would work out disastrously, you would have to be psychic.

Ryan, well fantastic work!!

Again, if projections are perfect, half of all projected players will overperform and half will underperform, by definition.  I don’t know the numbers, but I would guess that (again, if all projections were perfect at the time they are made) maybe 10% of all projections will turn out horrible on one side or the other.  And again, that is if God came down and told us each and every player’s exact true talent at any point in time.

The point I am trying to make, which I made already, is that judging a contract after the fact based on how the player has done is a really poor way of doing so, especially if you cherry pick players who have greatly over-performed or under-performed their projections/contracts.

If a player vastly over or under-performs his contract and his projection and you want to give a couple of points of credit or demerits to the GM for anticipating or not anticipating that anomalous performance (as compared to a credible projection), that’s fine by me, as long as those are VERY few points (of credit or blame).

Personally I would give no points one way or another…