The Milwaukee Brewers have lost two members of their bullpen in the free agent market: Francisco Cordero and Scott Linebrink. Both signed four-year deals, with Cordero going to the Reds for $46 million and Linebrink going to the White Sox for $19 million.
Once again, I am astounded at the dollars that teams are handing out to relievers. The contract for Cordero is simply awful. If the Reds are trying to be taken seriously by flashing some dollars, then flashing their money is all they are accomplishing. Cordero is an excellent reliever, but I don’t see how the Reds can justify spending $11.5 million/year for four years on a pitcher about to turn 33 for a team that doesn’t appear to be built for success in this timespan. Adam Dunn and Ken Griffey are gone after 2008 and Arron Harang and Bronson Arroyo are due big raises. I understand that there may be help coming from the farm, but I do not think that expectations are rosy enough to justify spending big money on a closer just yet. If the Reds put that money in other places, I believe the team would be more competitive in the near term.
Even if the Reds could use this final piece, I still think it’s a bad deal. I have Cordero producing $19.6 million over the next four seasons—$26 million
more less than he’s being paid. Now, it’s pretty clear that my model isn’t predicting well for “closers.” And while I’m a believer in efficient markets and willing to acknowledge that I might be underestimating closer value, the current closer premium is excessive. And I think that Scott Linebrink’s contract supports my contention.
I have Linebrink’s four-year deal valued at $17.1 million—two million less than the salary he is actually getting, so it’s not too far off from my model. (I don’t like the signing either, because I don’t like signing relievers to long-run deals for other reasons.) However, my model estimates that Cordero is worth only about $2.5 million ($0.6 million/year) more than Linebrink. The main difference between the two pitchers is that Cordero normally pitches in the ninth, while Linebrink pitches in a set-up role. And even if I grant that the later innings have more impact on the outcome of the game than earlier innings, Linebrink’s value ought to be governed by opportunity cost, not where he’s pitched in the past. There are plenty of teams out there that could have picked up Linebrink and made him a closer. Though the White Sox plan to use him in the set-up role, they need to compensate him for the forgone closer dollars he is passing up.
I’m not saying that we can pin down the exact value of relievers here, but it does reveal the difficulty in valuing pitchers according to their roles. Middle relievers and starters limit the need for closers and teams can shift pitcher roles with ease. But, what I am certain of, is that the Reds are going to regret this contract, even if Cordero pitches well. And I think there is a decent chance that he collapses, as relievers often do. He’s got a big contract, and even if the Reds decide to trade him, I will not be surprised if the team has to send along some cash to cover part of his contract.