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Tuesday, November 15, 2011
How do you (quickly) compare contracts of differing lengths and amounts?
The non-quick way is to do what I did here. That chart shows how to infer the wins you are paying for, based on years and length of contract. For example, in that chart, it says that if you sign someone who is a true talent 4 WAR player entering the 2008 season, any of these salaries would be equivalent:
yrs total perYear
1 $17.6 $17.6
2 $34.5 $17.3
3 $50.5 $16.8
4 $65.2 $16.3
5 $78.0 $15.6
6 $88.7 $14.8
7 $96.5 $13.8
8 $100.7 $12.6
Notice what happens if you simply add the number of years to the average annual salary:
yrs total perYear function
1 $17.6 $17.6 $18.6
2 $34.5 $17.3 $19.3
3 $50.5 $16.8 $19.8
4 $65.2 $16.3 $20.3
5 $78.0 $15.6 $20.6
6 $88.7 $14.8 $20.8
7 $96.5 $13.8 $20.8
8 $100.7 $12.6 $20.6
Here it is for a 2-WAR player entering 2008:
yrs total perYear function
1 $8.8 $8.8 $9.8
2 $16.1 $8.1 $10.1
3 $21.4 $7.1 $10.1
4 $24.3 $6.1 $10.1
It starts to break down when you get to true 5 WAR players or above, but it only breaks down if those superstars sign a 3-yr deal or shorter:
yrs total perYear function
1 $22.0 $22.0 $23.0
2 $43.8 $21.9 $23.9
3 $65.1 $21.7 $24.7
4 $85.6 $21.4 $25.4
5 $104.9 $21.0 $26.0
6 $122.6 $20.4 $26.4
7 $138.2 $19.7 $26.7
8 $151.1 $18.9 $26.9
9 $160.5 $17.8 $26.8
10 $165.7 $16.6 $26.6
In all cases, the “function” column is pretty stable.
So, there was a discussion about using the contract a player signed to get his value. And of course, how to compare players of differing years.
Therefore, I will offer that we simply do:
Annual Average Salary + Years Signed
A 3yr/36MM$ salary (value of 3+12 = 15) is equivalent to a 5yr/50MM$ salary (value of 5+10=15).
Nice and simple.
If a player is negotiating with a team, if he says “I need one more year”, then the team can just say “Then you have to take 1MM$ a year less”.
Nice and simple (as a starting point).
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