Valuing Torii Hunter’s Deal

So much for the moratorium on Thanksgiving transactions… I’ve got a few to catch up on, but I’ll start with Torii Hunter. Generally considered to be the best of the three top free agent center fielders—an assessment with which I disagree—Hunter agreed to a five-year, $90 million contract with the LA Angels of Anaheim on Wednesday.

A few days ago, I estimated Hunter’s 2007 worth to be between $12 and $13 million, based on his recent performance and not accounting for aging or expected salary growth. However, that estimate was only for comparison to Aaron Rowand and Andruw Jones. Now that we know the length of the deal, I want to update the anticipated salary projection for Hunter. The projection is based on annual salary growth and aging. The estimate of a player’s starting value is based on the previous three seasons of hitting performance, with a simple adjustment for position that does not account for quality of defense.

For a five-year deal, my model estimates that Hunter should receive $90.4 million; thus, this deal was right on the mark. :-) [UPDATE: I found a mistake in calculating my initial estimate. The correct estimate is $88.7 million---still, not far off from the actual contract.]

Addendum: I’ve had a few questions about the methodology. I am being brief, because the model is complex. The model I am using here is the model I develop in Chapter 13 of my book—in which I go into precise detail—with modifications for the other factors listed above.

6 Responses “Valuing Torii Hunter’s Deal”

  1. Cliff says:

    Then, if Andruw Jones is worth a little more (per your system) then 5 years at $20 million per year is about right for him, right?

    I think the Angels really lost touch with reality. Mathews to Hunter is barely an upgrade offensively or defensively. They need bats. For them Andruw Jones was a better solution.

  2. mraver says:

    Given that your earlier projections (based on 3-year averages) resulted in significantly lower salary values, does your more recent projection reflect an expectation of higher production from Hunter (relative to what the 3-year average suggested) or simply an inflation of salaries (and hence the value of a win) over the length of the deal?

  3. JC says:

    Yes, the big difference is due to the growth in salaries, which have been growing at about 10%/year for 20 years. He is most definitely in the decline phase of his career and I would have him being even more valuable if I did not account for this.

  4. Michael says:

    Cliff said:
    I think the Angels really lost touch with reality. Mathews to Hunter is barely an upgrade offensively or defensively. They need bats. For them Andruw Jones was a better solution.

    You have lost touch with reality if you think GMJ and Torii hunter are equals. I would venture to guess that 25 more xbh (GMJ-47, Hunter-74) and an ops of nearly 100 points higher (GMJ-.742, Hunter-.839) is a huge upgrade offensively. It will be even moreso if GMJ continues his 2nd half slide from last year.

  5. tangotiger says:

    You are suggesting that Hunter’s 5/90 deal is fair, if you consider him to be an average fielding CF, meaning that he was underpaid according to your model. I’ve got him as a 5/80 player, with above average fielding.

  6. Tony says:

    What if GMJ gets busted for steroids (as rumored)? Is there a chance the angels will be off the hook for his contract? If so this could be a very smart move.