Smoltz Is Worth It

Yesterday, the Atlanta Braves signed John Smoltz to one-year, $14 million extension. The deal includes two years of options. The first is a $12 million player option for 2009 that vests if Smoltz reaches 200 innings in 2008. The second is a club option for 2010 that is worth $13 or $12 million, depending on whether or not Smoltz pitches 200 innings in 2008. It should be noted that he has pitched about 230 innings in each of the two previous seasons.

According to my estimates from The Baseball Economist, Smoltz’s 2006 season was worth about $16.6 million, so this deal seems about right. Yes, there is a chance of injury, but Smoltz has been very durable since his return to the rotation. He is hardly more risky than any replacement the Braves could have found on the free agent market. Indeed, Smoltz probably would have commanded a larger deal as a free agent, and certainly would not have given the injury out-clauses—this is essentially what the option years are—to another club. It was a good move by Schuerholz to take advantage of Smoltz’s desire to pitch for the Braves. Even it Smoltz goes down tomorrow, it was a good gamble.

I have read some comments from fans that even if Smoltz is worth this contract, that’s a lot of payroll to tie up in one player, especially on a team with some holes. The biggest hole on the Braves organization—not just the big club—is pitching. There are very few arms to wait for from the farm. If Smoltz left, the Braves were going to have to go to the free agent market for a replacement. So, why not pick up one of the best pitchers in the game and pay him what he’s worth?

What does this mean for Andruw Jones, who is hitting the free agent market this offseason? Well, I actually think this is good news. It shows that the Braves are able to spend some money again. And even if the new owner is going to put some restrictions on payroll, the Braves need a center fielder. And like Smoltz, Andruw wants to play in Atlanta for Bobby Cox. That is something that no other team can offer, and I think that Schuerholz may be able to get him for less than any other team. The McCann deal signed during Spring Training frees up some payroll that can be used on other players.

As a fan, I am happy to see Smoltz back. I thought that he would leave after this season like Glavine and Maddux. It’s been hard to cheer against the Mets when Glavine is on the mound. I’m glad I won’t have to go through that with another pitcher.

5 Responses “Smoltz Is Worth It”

  1. Jason says:

    While I remain skeptical about Smoltz’s long term health, the fact is that he’s lasted longer than I thought he would already. This is a smart deal by the Braves and it also gives me some hope that they might be willing to try to keep Andruw, which would be very good. I was really scared that the current owners would cut payroll to the point where the team couldn’t compete any more, but I am pleasantly surprised to see that I was wrong.

  2. Cliff Harpe says:

    JC,

    I like the McCann deal. However, I do not see how it “frees up payroll.”

    Basically, he signed now for what I see as approximate arb eligible numbers. That does avoid the typical inflation in those arb eligible numbers in the future (which ends up a small percentage of a smaller than Andruw or Smoltz contract). Basically, they only got about one or two option years and in exchange guaranteed McCann a big enough contract to be set for life if he has a career ending injury.

    The impact of the option years won’t occur until Smoltz is gone and will be three or four years into any Andruw contract.

    I wonder how much of Smoltz deal is based off Hampton’s insurance. That is, if the Braves got 8 million of that back and expensed 6 of that this year on Smoltz’ contract, then the payroll structure is flat and 2 million is left “in the kitty” for a run at a veteran player at the trade deadline.

  3. JC says:

    Cliff,

    Good point. Here is what I had to say about the McCann deal when it happened.

    In the only guaranteed free agent year the Braves purchased, McCann ought to be worth $16.5 million on the open market. Even if McCann achieves all of the incentives to push his salary from $8.5 million to $11.5 million, the team still comes out ahead. I am even more intrigued with the option year that the club gets in the deal. If they chose, the team can keep McCann around in 2013 for a paltry $13.5 million, which is about $4 million less than what I estimate he’ll be worth on the open market.

    No matter when the cost savings occur, the Braves have some payroll freed up. They can borrow from their future savings. Believe me, the Braves would not have signed this deal unless they thought they were saving money. Otherwise, they would just ride out his reserve and arbitration years.

    I think the “Hampton insurance” claim is a just public relations BS. Before the season, I saw numerous references to the lack of insurance on him. And even after he got hurt, this was reported. Only then did we get a cryptic yet not direct denial of this claim by the GM. Schuerholz said that it is common for teams to have insurance on players and we have insurance on players. There was no direct mention of Hampton. My guess is the insurance JS was referring to is a policy that the team holds on all players. If you suffer X amount of loss from overall player injuries, we’ll give you Y amount. Now, because Hampton eats up some of this, the Braves get something back. However, the team is going to have other injuries, and the team won’t get any more now that the capped amount has been reached. Again, this is just a guess on my part, but I don’t think Hampton’s injury frees up much.

    More importantly, I think this is a signal that the Braves are going to have more payroll flexibility with a new owner. Remember it’s in the owner’s best interest to win games in order to take in more revenue.

  4. Andrew says:

    I think it is in interest for Atlanta’s owner more so than other owners to win because I believe the elasticity of attendance versus winning is far greater in Atlanta than in say Chicago, Boston, or St. Louis. Two years ago when McCann, Davies, and Francouer came up, the team was exciting and sold out games.

    I know in the Baseball Economist you did not address fan favorites or other factors beyond hitting and pitching when determining a player’s worth, but as you said, professional organizations likely have far more sophisticated methods that factor in fan favorites and attendance. Hopefully, this factors into their decisions to resign Smoltz and Andruw since both are clearly fan favorites.

  5. Ron says:

    I’m very happy to see Smoltz resigned. His new contract is very reasonable considering what teams overpaid for far inferior pitchers the last offseason.

    I have a hard time imagining a scenario where the team will be able to resign Andruw though. He should be in line for a contract greater than Soriano got which would seem to be impossible for the Braves.