Glavine’s “Hometown Discount”

As expected, the Braves and Tom Glavine agreed to a contract yesterday. This is a one-year, $8 million deal. Supposedly, Glavine was willing to pitch for the Braves for less than what he could have received on the open market. Though Glavine bolsters the Braves rotation, I’m not seeing much generosity on Glavine’s part. Below, I list Glavine’s performances for the past three seasons as I valued them in 2007.

Season	Value
2005	$12.50
2006	$8.81
2007	$7.67
---	---
Avg.	$9.66
WA	$8.86

The numbers indicate that Glavine is getting a salary around his projected worth. His average value over the past three seasons was about $1.5 million more than his contract; however, he’s going to be 42 next year and his performance has been declining. The 3-2-1 weighted average (3*2007 + 2*2006 + 2005) is $8.86 million.

This doesn’t mean that he isn’t giving up something to leave the Mets. He declined a $13 million option with the Mets, which triggered a $3 million buyout; thus, he’s pitching for $2 million less than the Mets would have paid him. I don’t think this is a horrible deal for the Braves, even when you include the first-round draft pick that the Braves must give to the Mets. But, I don’t think this contract is much different from what he would have received in the open market.

6 Responses “Glavine’s “Hometown Discount””

  1. Andrew says:

    I think the 1st round pick makes all of the difference in this decision. A very good college pitcher (Joba, Kennedy come to mind) can be major league ready within a year of being drafter and is cost-controlled. For a franchise that could use another impact player in the farm system after trading away 5 top prospects to Texas, I think essentially trading the 1st round pick to our archrivals is a bad move.

  2. Cliff says:

    JC,

    I have seen some partial explanations of your valuation system. It appears to be based on something like WSAB / VORP , then translated into how many wins does somebody add, then what is a win worth (based on recent market averages paid to players on a WSAB / VORP basis), and then, multiplied.

    However, have you separately analyzed runs saved by pitching separately? Even accounting for the 20% or so advantage in value of a run saved over a run scored, the market still appears to be overvaluing pitching based on scarcity. And what about fielding rusn saved? Are they selling cheaper than pitching?

    My culprit (not original to me): the low inning relief pitchers. Before Bruce Sutter had his arm problems and couldn’t warm up effectively between innings (approx. 1978) most relief pitchers pitched 2 to 3 innings in a stint. Then, they always were off the next day and sometimes one more. The best relief pitchers were getting 60 to 70 appearances and pitching 130 or so innings.

    Now, the best get 70 to 80 appearances and pitch 65 to 90 innings.

    Somebody with a down and out National League club (Pirates?) really needs to go to a 10 , 3 inning relief pitcher model. The extra pinch hit at bats would lift the offense and the relievers would take advantage of the .5 run ERA differntial expected.

  3. jfalk says:

    But isn’t there a Coase Theorem problem here? Isn’t there a Pareto-superior result in which Glavine exercises his option, imposing a $5 million cost on the Mets (his value of $8 less the $13 they’d have to pay him), rather than the $3 million they have to pay now. The net effect of all this is to save the Mets $2 million. Shouldn’t Glavine have a way to extract some of that? For example, he could ask the Mets for up to $2 million extra buyout dollars not to exercise. Or to get the Mets to give the Braves the draft pick back in return for no exercise.

  4. Ron says:

    So where all the very good college pitchers that are ready to pitch in the majors after a year on the Braves’ roster? The Braves are doing just fine with young players. Their major league roster is already full of them. There is plenty of time to restock the minors. It’s worth the modest $8 million price to get Glavine for a year. Not having next year’s 18th pick isn’t going to be crippling.

  5. Jay says:

    A little confused about the draft implications of the Glavine deal . . . because he opted out of a contract, as opposed to being a free agent who simply walked away (a la J.D. Drew to the Red Sox from the Dodgers), do the Mets still get the Braves’ first round pick. Was he actually offered arbitration by the Mets? Could they offer him arbitration after he opted out of a guaranteed contract?

    Keeping or losing the draft pick may change the value of the singning significantly, but I know a lot of Braves fans who are simply happy to see Glavine back in a braves uniform. From a ticket sales, PR standpoint, this is a good day for the Braves.

  6. Jason says:

    Jay – The Mets get a 1st round pick from the Braves. The fact that Glavine opted out of his contract made him an immediate free agent. According to the labor agreement, Glavine was valued at what I think is called a “Class A” free agent, which means that the Braves had to give up a 1st round pick to sign him prior to Dec. 1. After Dec. 1, the Mets could have gambled and offered him arbitration. If the Braves had signed him after he was given an arbitration offer, they will still owe the Mets a first round pick. Glavine could always have accepted such an offer of arbitration, which would mean that the Mets would be forced to sign him for 2008 for whatever the arbitrator decides on.

    I had a discussion with a friend in NY who is a big Mets fan about this last week. He told me that he thought that the Mets would offer arbitration. Not because they wanted Glavine back, but because they didn’t think he would accept and it was the only way to ensure getting a pick from the Braves for him. I guess Wren decided that the Mets were likely to do this and thus there was nothing to gain by playing a waiting game, plus Glavine is notoriously impatient anyway, so since he wanted to return and the team wanted him back, they did the deal.