Archive for November, 2006
Well, that’s a rhetorical question that Ken Rosenthal asks to make a point about the O’s offseason signings of Jamie Walker ($12 mil/ 3-years), Danys Baez ($19 mil/ 3-years), and Chad Bradford ($10.5 mil/ 3-years). The answers:
A. The Orioles, coming off nine consecutive losing seasons, needed to overpay each reliever in a three-year contract to attract him to Baltimore, or,
B. The Orioles have lost their minds.
With Mazzone moving to the O’s I’ve started following them again. I grew up in Charlotte, which hosted the Double-A affiliate of the club. I actually threw out the first ball at a game when Cal Ripken was on the team. I view Rosenthal’s question as a good one. I don’t think the O’s are crazy or “overpaying” on purpose.
Baltimore needs better pitching. It’s why they brought in Mazzone last year, and it’s why they are targeting pitchers in the free agent market this year. Here are some rough projected values (based on 10% revenue growth and recent performance) for these three pitchers over the next three years:
Baez: $16 million
Walker: $9 million
Bradford: $19 million
Baez and Walker seem to be getting a bit more than my estimated worth, but these values are heavily influenced by playing time. If the O’s think they can utilize these pitchers differently than in the past, they might get some extra value out of these players that other teams missed (I’m just saying). In total, this value adds up to $43 million, which is pretty close to the $41.5 million the O’s have invested in these players. It’s also an interesting move, because they are targeting relievers, not starters. I wonder if the Orioles feel that the starter market is overvalued, and therefore they decided some extra innings from good relievers. I’m not saying I would have recommended doing what the Baltimore did, but I can at least comprehend their behavior. I guess we’ll see if it works soon enough.
Thanks to Ballbug, for pointing me to the Rosenthal article.
There has been a nice discussion on salaries going on across the web. There are two small things I wish to add to the general discussion, and rather than sprinkle them far and wide, I’ll post them here.
1) The term “inflation” should not be applied to salary growth in MLB. Yes, I know what people mean, but inflation has a very distinct definition: a continuous rise in the price level, which reflects the average prices of all goods and services in the economy. The rise in baseball player salaries reflects a relative change in value compared to all other goods in the economy. They are becoming more expensive in relation to other things we purchase. And look, I understand the innocent mis-use of the term, but given the recent passing of Milton Friedman, let’s at least honor his dictum: inflation is always and everywhere a monetary phenomenon.
2) In absence of some external force or cognitive bias, teams will pay players a salary equal to their net marginal revenue products (MRP). Non-free agents earn less than their MRPs, because their movement within the labor market is restricted. Free agents ought to earn their projected MRPs (there is a lot of variance in these projections) in the competitive labor market, and no team ought to pay a player more than his estimated MRP value, even if it has room in the budget. To do so would be a violation of everything we have come to know in labor economics. Might some team make mistakes based on past rules of thumb? I’ll grant room for some small mistakes, but owners and GMs are pretty smart. I think it’s important to start from the premise that owners know what they are doing (even though it’s not always the case, and we should be on the lookout for mistakes) and try and interpret what is going on.
Given what Tangotiger points out about salary growth in MLB, I’m inclined to think these salaries aren’t as out of whack as I first thought. Furthermore, I believe the potential mistakes that are being made are in regard to projecting players—Soriano and Matthews look like panic moves to me—but that’s me as a fan talking. I would not be surprised if I am proved wrong in the future, more so about Soriano than Matthews; I still can’t understand what the Angels are thinking…unless revenue growth is going to rise at a rate a good bit higher than 10%.
Like most baseball fans, I am shocked by the money going to free agents this off-season. I expected this to be a big year, but these numbers are off-the-chart huge, far higher than I anticipated. Because many of these contracts are long-term deals—Soriano got 8 freakin’ years, which is a totally different problem—I wondered if some anticipated revenue growth would be enough to explain these salaries. Maybe, by the time the contracts expire, the players will have generated value equivalent to the higher revenues the league will generate in the coming years. So, I decided to take a quick look.
I took the 2006 performances of Carlos Lee, Gary Matthews, Juan Pierre, Aramis Ramirez, and Alfonso Soriano, and assumed that these players would perform at the same level for the duration of their contracts (an upwardly biased assumption). I then determined the annual revenue growth rate needed to generate a value equal to the 2006 performance of each player over the course of the contract. For example, I estimate that Soriano generated over $12 million for the Nationals in 2006, far below the $17 million/year average of his contract. But, as revenue rises player performances will grow more valuable. Maybe by the time 2014 rolls around, $17 million won’t seem so expensive.
It turns out that the annual revenue growth needed to justify these contracts is about 10% for all of the players. TEN PERCENT! Heck, even if you assume modest inflation that’s a high growth rate. Now, I can easily buy a year or two of such growth—in fact, revenue did increase by about that much from 2004 to 2005—but this type of growth is
not sustainable very high for a large established business over a long period of time. At that rate MLB will be doubling its revenues in about 7 years. So, what is going on?
Hypothesis 1: All teams are plain nuts. (very unlikely)
Hypothesis 2: All teams are estimating on recent high growth as sustainable. (possible, but doubtful)
Hypothesis 3: A few teams are plain nuts or confused by recent growth. (likely, but not the full explanation)
Hypothesis 4: MLB has been making a lot more money than we thought, and for some reason teams are not restraining themselves the way that they have in the past. (hmm…)
I’ve been wondering about some language in the labor deal that settled some past collusion allegations, which occurred in 2002. Supposedly, this is no big deal, just patching up some minor disagreements. The settlement was small, but I wonder if the players gave up their fight because they had reached some agreement that would prevent future collusion, if it did exist. After all, A-Rod and Manny got big contracts in 2001 because owners thought they’d generate enough revenue to cover them. If the owners then figured out a way to shut off the tap, then these deals would stop. And that’s when the black helicopters swoop in…
Hey, this is way over-the-top conspiracy reasoning, but I am really curious as to what is going on here.
Addendum: Other suggested reasons are welcome.
Further Addendum: In the comments, Tangotiger points out that 10% growth in salaries is the historical norm over the past 20 years.
I meant to post this last week, while I was traveling, but computer problems wouldn’t allow it. This is a breakfast speech I presented in October. It’s mostly autobiographical.
Presented to the Rotary Club of Etowah
October 31, 2006
Good morning to everyone, and I’d like to thank the club for inviting me to visit with you this morning. I haven’t been to Cartersville in a long time, and I’m happy to be here.
So what do I have to offer this group? Well, I thought I tell you a little bit about what it is that I do, and how I ended up with this job. What I do for a living is unique: I’m a baseball economist. What does that mean, and what does economics have to do with baseball? I have to admit that I’m a bit shocked about where my career path has led me, so let me give you a brief history of how I got here.
I was your typical unmotivated high school student. Despite having good parents, I took my advantages in life for granted. I barely lifted a finger in school, satisfied with earning Bs, and purposely not challenging myself. I couldn’t get interested in anything—none of the traditional subjects in school excited me. My one success was winning the 1992 North Carolina High School Debate Championship, along with my partner. Though I was eager to learn, I didn’t know where to focus my energy.
When I arrived at Wofford College in the fall of 1992, I had little idea of what I would major in. I continued on with a mentality that was slightly improved over my high school days, but I wasn’t doing anything exciting. But fate would intervene. Wofford had a very unique registration system that would help me out. It was a mad free-for-all in the gym. The professors lined up behind tables and you ran around to sign up for the classes you wanted: first come, first served. As a freshman, I was in the last group in, and after getting three classes, everything else I had wanted was full. All that was left on my list of courses I might want to take during my college career was economics. The Clinton-Bush election was in full swing, and the economy was a big issue. Though I liked politics, I had to admit to myself that I had no understanding of the economy. I promised myself that I would take one economics class before I graduated. “Great, I guess I’ll get that over with.”
My first economics professor was Matt Stephenson. His white hair, soft voice, and attire fit the economist stereotype. But I soon found his lectures to be anything but boring. I thought the guy was hilarious, and apparently I was the only one in the class. I was often the only person laughing at his dry humor; everyone else thought he was just dry. I soon realized why: I think like an economist, and up until that time, I hadn’t been exposed to this way of thinking. But, I had always thought this way, and I was finding out that the whole discipline of economics was built off of a logical foundation that I had already bought into.
For example, take the economic notion of sunk costs. Any economist will tell you that sunk costs are irrelevant, but students have a hard time believing it. Let’s assume I had bought 2 tickets to Game 4 of the World Series for $1,800 (that was the going rate on E-bay) and a non-refundable plane fare to St. Louis for $1,200 for me and my wife. Two hours before my flight, I look on weather.com to see a 100% chance of rain—heavy rain. Even if they are able to get the game in I’m probably going to have to sit through 5-6 hours of getting soaked. I hate getting wet—so does my wife—and I can still see the game on TV if I don’t go. The question is: what am I giving up by not going? The standard student’s answer is $3,000, which is incorrect. Whether I stay or go, I am out $3,000. My choice is between seeing the game wet or seeing it dry. I can see it dry and that’s a perfectly rational decision. And it would be irrational for me to consider the $3,000 spent. It’s gone, and I can’t get it back (the ticket is non-refundable, and I don’t have time to sell and ship the tickets before the game). When I teach sunk costs to students with similar examples, it drives them mad. That’s not the way we’ve been trained to think. “You have to get on that plane or you’ll be out $3,000!” someone will say. I chuckle, because that was my first reaction. But the more I thought about it, the more I understood.
I was hooked. After a few weeks with Dr. Stephenson, I was an econ major. I would take nearly every course in the subject offered by the department. I became interested in the economics of government—a field known as Public Choice—and would go to George Mason University to study under Nobel Prize winning economist, Jim Buchanan. I wrote my dissertation on how different legislature configurations influence fiscal policy. I have published many academic papers on public economic issues, and I am still an active participant in theses fields—attending conferences, refereeing papers, and writing new papers. That’s pretty odd work for a baseball economist, so let me tell you how I moved off the standard economist track.
My second job out of graduate school was at Sewanee: The University of the South. I was eager to continue my dissertation research, and related projects, when I arrived. Because the department was small, I didn’t have any colleagues working in my fields, and I found my research engines cooling. I had been used to graduate school where I was overloaded with ideas. I began having lunch with a colleague of mine in the math department, Doug Drinen. Though Doug was a mathematician, he had majored in economics as an undergraduate, so he liked talking about economics. But also, we were both huge sports fans. I had known about the field of sports economics in graduate school, but I had steered away from it. One of my former professors, Bob Tollison (now at Clemson), had done a lot of research using sports as a testing ground for economic theories in a field he dubbed sportometrics. Traditionally, economists had only concentrated on the business aspects of the games, but sportometrics used the in-game data. For example, Dr. Tollison was interested in testing how much influence police had on deterring crime. So, he looked at the fouling behavior of players in the ACC basketball tournament after the league added a third referee. He found that the added referee deterred fouling and that it improved the play of the game.
Doug and I would often have lunch to discuss economics questions in sports. Doug was interested, but Doug didn’t let on knew much more about sports than I did. Doug had grown up reading the Baseball Abstracts of Bill James—he owned every single one from 1982 on. Bill James, as many of you probably know, is the founder of sabermetrics, which involves and analytical approach to studying baseball. When arguing who was the best hitter, sabermetricians don’t just look at hits, RBIs, and homers (traditional measures of hitting), but instead first evaluate what metrics tell us about scoring runs, and evaluate them according to objective benchmarks. I had never heard of sabermetrics. Now, when we talked about baseball, Doug could have simply said, “you should really read some of Bill James.” But he didn’t. Instead, he’d roll out James’s and other sabermetricians’ arguments when they applied. It was great fun, and as I enquired further he finally introduced me to James, and let me borrow all of his abstracts. I was jealous.
Remember I mentioned my academic struggles as an adolescent? One day I said to Doug, “If I had known about Bill James when I was 12, it would have changed my life.” As I read through Bill James, I saw we spoke the same language. He’s an economist, despite not having the official title, and I wasn’t surprised to learn that he was an econ major as an undergraduate. When I was twelve, baseball was one of the most important things in my life. My playing days wouldn’t last much past Little League, but I followed the game. Had I known of Bill James, I would have gotten that dose of economics that I wouldn’t get until I was 19. We all reminisce about our wasted youths, and things that might have changes our fortunes, but I honestly think sabermetrics would have made a huge difference in my life.
One of the discussions that Doug and I had was about the designated hitter. He liked it, I didn’t; however, that wasn’t what we were interested in. Some economist friends of mine had published a paper arguing that hit batters were higher in the AL than in the NL, because AL pitchers didn’t bat. What does this have to do with economics? It fits with the law of demand—the higher (lower) the price, the lower (greater) quantity consumed. Pitchers in the NL faced a higher price for plunking opposing hitters, because they faced retaliation when they bat. AL pitchers didn’t have to bat; therefore, they faced a lower price and thus consumed more hit batters. In fact, the evidence fits with the theory. Since the introduction of the DH in 1973, the AL hit batter rate has been 15% higher than the NL’s. However, there is an empirical problem here, one that a few other economists had noticed (including Freakonomics author Steven Levitt). A higher hit batter rate isn’t necessarily caused by a law of demand response. Because pitchers are typically exceptionally poor hitters, the last thing the opposing pitcher wants to do is hit a pitcher when he’s batting. Therefore, the lower hit batter rates in the NL might reflect pitchers being careful not to hit the pitcher when he bats, because he represents an easy out.
Doug and I reviewed these past studies, and we both agreed the data used wasn’t good enough to differentiate the between the two hypotheses. But, because of Doug’s involvement in the sabermetrics world, he knew about a gold mine of data known as the Retrosheet project. Retrosheet is a volunteer project that gathers play-by-play data from every baseball game ever played. The project is far from complete, but we were able to use some of the data to test the reasons for hit batters by controlling for several contributing factors. Also, Doug’s familiarity with sabermetrics and computer programming were integral to the project. Using some advanced econometric methods we were about to tease out the different effects, and we found that the law of demand explanation explained most of the differences in hit batters between leagues.
We presented our findings at national mathematics conference, and, to our surprise, The Wall Street Journal picked it up and wrote a story on it. The New York Times Magazine listed our work as one of its Ideas of the Year in 2004. Here I am, a guy who had planned on developing optimal fiscal policy rules to improve government and possibly aid in constitution formation for emerging nations getting calls from major media outlets about studies on baseball. But thing were about to get even more interesting.
After the 2004 season, Jaret Wright had turned his amazing season with the Braves into a fat free agent contract with the New York Yankees. Some Braves fans were disappointed, but others said not to worry, “Leo Mazzone can fix anybody.” “Pfft!” I scoffed. “There’s no way the pitching coach could be responsible for resurrecting these careers. It’s just a matter of perception. We remember guys like Jaret Wright, John Burkett, and Mike Remlinger, but forget about the guys like Albie Lopez, Odalis Perez, and Jason Marquis.” So, I decided to do something about it. I gathered up a list of every pitcher who’d pitched for Mazzone and for another pitching coach and compared their performances with and without Mazzone. I controlled for factors such as league, age, park differences in preventing runs, etc. I was shocked: Leo Mazzone was shaving about half-a-run of his pitchers’ ERAs. That’s a huge effect. I didn’t think much of it and posted the results of the study on my blog, Sabernomics. Blogs are a funny thing, because you don’t understand who is reading what you’ve written. It turns out a lot of people were reading it, and a follow up study I did for The Baseball Analysts. The New York Times, The Wall Street Journal, ESPN.com, and even Fox Saturday Baseball were talking about my results. It was at this point that I realized that while public economics is fine field for me, the market was sending me a signal: you’re a sports economist specializing in baseball.
By this time, I had already started writing my book The Baseball Economist. Initially, the book was more about the business side of the game. In particular, I was applying different models of competition to demonstrate that MLB imposed little to no monopoly harm on society. But with the success of Michael Lewis’s Moneyball, which offers a great lesson in the economics of technological innovation, I realized that a focus on topics within the game would be more interesting. Furthermore, Freakonomics would soon be published, which made economics the hippest it’s ever been as a discipline. And because most of my research focused on play within the game, I saw that this is where I had the most to offer the sports economics community.
So, the book is a collection of things I’ve been thinking about for the past few years. Some of the ideas I’ve discussed before, others are new. I hope that the book will encourage people to increase their interest in baseball and economics. And regardless of how well the book sells, it was a pleasure to write.
Here are some brief descriptions of topics that I cover in the book. I hope you’ll find them interesting enough to purchase the book.
1) Hit batters and the law of demand – expanding on my work with Doug Drinen
2) Protection – Do good on-deck hitters protect the batter at the plate? This is based off of another study I conducted with Doug Drinen, in which use economics of externalities (actions that spill over onto third parties) to examine the impact of protection.
3) Why aren’t there any left-handed catchers? How the short supply of southpaws has caused their extinction at this one position.
4) What advantage do big cities have over small cities? The advantage exists, but how big is it?
5) Is the rise is offense the result of heavy steroid use by the players? It’s not clear, but there are many potential causes that we must rule out before we settle on steroids as the only explanation.
6) What’s a ballplayer worth? Did you know that John Smoltz was more valuable than Andruw Jones in 2005?
7) What is the best managed organization in baseball? It’s not the Yankee’s or the A’s.
Thank you so much for having me. It’s been a pleasure.
Milton Friedman, one of my heroes, died today at 94. He is one of the few popular economists who was also an academic giant. When I teach economics, it’s amazing how often his name comes up. We were lucky to have him live so long. His memoir, co-authored with his wife Rose, was a joy to read. He’s done so much, I don’t have time to summarize his accomplishments. I’ll just say thank you.
Addendum: Austan Goolsbee explains one of the reasons Friedman was so influential to economics.
What struck me as I talked with my colleagues yesterday was how Mr. Friedman’s legacy among economists is in some ways similar but in some ways quite different from the public view. His manner of research, his personality, even the topics he studied spawned a great deal of the economics we know today — even among economists whose politics differ greatly from his. A striking number of topics he worked on, for example, ultimately developed into other people’s Nobel awards.
One of Mr. Friedman’s major impacts on economics was in establishing a basic worldview. Economics is not a game or an academic exercise, in that view. Economics is a powerful tool to understand how the world works. He used straightforward theory. He gathered data from anywhere he could get it. He wanted to see how well economics fitted the world. That view now holds sway throughout much of the profession.
Mr. Friedman was proof that a great economist could become famous for just talking about economics. But he wasn’t afraid to poke his nose in places where people said economists had no business being. He passed that attitude on to students like Gary S. Becker, who would win the Nobel in 1992, and in the wider profession, especially among a younger set of economists like Steven D. Levitt of “Freakonomics” fame.
Mr. Friedman’s legacy might mean laissez-faire politics to the outside world, but to economists — and especially Chicago economists — it is more about trying to understand how the world works and engaging in a debate about it.
I’m tired of updating the previous post on the subject, so I’ll add another. David Gassko of The Hardball Times comes up with some estimates of potential contracts that take into account Matsuzaka’s value from being Japanese.
Here is what would [be] a fair offer to Matsuzaka:
3 years, $22 million, or
4 years, $49 million, or
5 years, $75 million
While I doubt that Boras and Matsuzaka would ever agree to the first offer, the latter two look pretty realistic. In fact, it had been rumored that Boras would be seeking a Roy Oswalt-type deal, and Oswalt got five years and $73 million from the Houston Astros. If the Sox can bargain him down to a lower price, they might just make a little money on Matsuzaka.
Rumors have it that the Boston Red Sox have paid somewhere between the mid-30s to low-50s in millions of dollars for the right to sign Japanese ace pitcher Daisuke Matsuzaka. That money gives the Red Sox the right to negotiate with Matsuzaka (through his agent Scott Boras) for 30 days. If no agreement is reached, Matsuzaka must return to Japan for a year before being posted again. So, how much is he going to get paid?
A team will be willing to pay a player a equal to his marginal revenue product (MRP)—the additional value he generates in value to the team. A player in the open market ought to receive a salary equal to his MRP; but, a player with who is restricted in his salary will earn less. I’ve seen several reports that the Red Sox will be paying Matsuzaka ace money, but that is not the case. Part of Matsuzaka’s value will be going to the team that holds his reserve rights, the Seibu Lions of Japan. The salary that any team will be willing to pay him will be his total added value minus the amount paid to his old team. Furthermore, because the bid winner has the sole right to sign him in MLB, it only has to pay him enough to make him want to play in the US over playing in Japan. I’m not sure how accurate this report of his salary is, but translated into dollars, Matsuzaka made about $2.8 million last year. Since his team still owns his rights, I’ll assume he’s good for a raise to $4 million in 2007 (I have no idea if this is a good assumption, if you have better information, please pass it along). Now, the Red Sox have to convince him that playing in the U.S. is worth more than the $4 million he would earn in Japan.
Also, it looks as though he’s going for a three-year deal like most Japanese players. Before even paying him a salary the Red Sox will be paying out between $10-$16.7 million a year for his services. Let’s then assume he’s as valuable as Brandon Webb, whom I estimate to be worth about $20 million year. This gives him a salary of between $3.3 and $10 million. He certainly won’t come for the low number, but the high number surely would do it. But I don’t think the Red Sox would be willing to go to the high end. All they have to do is outbid their competition in salary and compensate him enough to not mind living in the U.S.
So, after all this, I’ll stop being fancy and take a stab. I’ll guess that he’ll be getting a $6 million contract from the Red Sox, who will pay a $36 million bid fee to the Lions. In total, the Sox will be on the hook for about $18 million a year. I’m not buying the $50 million reports unless the Red Sox are planning to sign him for more years and he’s willing to work for peanuts. I guess will find out soon enough.
Update: I was way off. ESPN reports it’s a $51 million posting fee. I think one of three things will happen.
1.) Matsuzaka signs for a five-year deal.
2.) The parties don’t reach an agreement. Maybe the Red Sox were only out to prevent the Yankees from getting him.
3.) We are getting ready to see salary escalation so high that A-rod will wish he had an out clause in his contract.
I’m betting on 2.
Addendum: Can someone find a sources that clarifies what happens if Matsuzaka and the Sox do not reach a deal. Some people are saying that he becomes an unrestricted free agent, but the only document I’ve found says that he would have to be reposted next year. Also, I believe he has two more years of service before he can become a free agent in MLB. Is this correct?
If the Sox do not reach a deal by the deadline, Matsuzaka will return to Seibu to pitch next season and the posting fee will not be paid by Boston. Matsuzaka, whose current salary in Japan is $3 million, could then be posted again next year.
Further Addendum: A few other issues that seem relevant. Some people have been discussing whether or not the Red Sox are using their bid to block the Yankees. If this is the case, Bud Selig can intervene and give the rights to the second-highest bidder. However, let’s say that the Red Sox offer him a $6 million/year deal. Boras might argue that a player of this caliber would command a salary of double that to accuse the Red Sox of negotiating in bad faith. However, I think the Sox could easily beat that rap. They would be offering him more than he would earn in Japan, and it’s not the Sox’s fault that the Lions hold his reserve rights. What the Red Sox pay out for him is not the same as his salary. I expect the Sox to play hardball. Matsuzaka has a lot to gain from playing in the U.S. from endorsement deals, so I think it’s going to be difficult to turn down a deal.
Also, are the Red Sox banking on an influx of revenues from Japanese fans and advertisers? Certainly, there will be some money from Japan, but I can’t imagine it would be that large. As I just mentioned, I think the player will reap most of the benefits from endorsements. Following baseball from the other side of the world has to be difficult. Do the Red Sox think they can get NESN on Japanese television? If so, then he probably is very valuable. But if it means that the Sox forgo singing Zito and J.D. Drew by spending $30 million on Matsuzaka, what is that going to do to Boston fans who value winning?
From the article mentioned above:
To calculate Matsuzaka’s financial impact on the Red Sox, Boras said, he will use Hideki Matsui as a benchmark. Boras said he’s heard from Japanese sources that Matsui brings in $21 million per season for the Yankees in advertising and marketing, so he wasn’t blown away by the $51.1 million bid.
That’s bull. I don’t think anyone will be impressed by what Boras as heard. Put some numbers on the table and then that’s something impressive.
It looks like the Sox are trying to buck the trend of signing a Japanese players to three-year deals.
The Sox, meanwhile, likely will try to tie him up for five years, but at somewhere in the $12 million-$13 million range.
This makes a lot more sense—an average of $22 million/year over five years—but it’s still a lot more than I thought he would get.
Thanks to Baseball Musings for pointing me to the article.
I’ve heard from a few people that some comments are not being posted here. I’m not sure why, but please let me know if you have similar problems.
I’m aware that the site is clunky and in need of an overhaul. I plan to upgrade and reorganize soon. Thanks for everyone’s patience.
Addendum: Due to a massive spam attack that has been going on for about a month, virtually all comments are held for moderation. That’s why many of the comments are not appearing immediately. There is no need to repost comments that don’t show up. I moderate the comments as often as I can, but sometimes it takes me a while. If you don’t see something you posted in 24 hours after posting, send me an e-mail and I will look into it.
The big story last night was that J.D. Drew opted out of the remaining three years of his deal with the Dodgers that would have paid him $11 million/year. For 2006, I estimate Drew’s bat was worth $9.5 million. I have him at $6.2 million in 2005, but he was knocked out by a freak HBP accident (it wasn’t his old knee problem, which hasn’t bothered him since his Cardinal days). Drew was on his way to an even better season, and would have put up a $12 million season if he played at the same level over the time he missed. These values account only for offense, and J.D. Drew is an excellent defender. But still, a guaranteed $11 million is a lot to pass up. It’s not like he producing a lot more than my estimates. Given what we have seen in the market so far, it’s looks like it’s going to be an amazing year for free agents.
Estimates from The Baseball Economist.