Valuing Jose Guillen

Yesterday, at our office Christmas party, a student of mine told me the that Kansas City Royals had agreed to a 3-year, $36 million contract with Jose Guillen. “Can you believe that?” he said. To be honest, Jose Guillen is one of those guys whom I lose track of. I know that he’s been good, had some injury and behavior issues, but I couldn’t even tell you whom he played for last year without looking him up. I couldn’t be sure whether he expected me to say “what a steal!” or “how awful!” So, I just stuffed some food in my mouth, nodded, and gave a surprised look. After finishing my cake, I headed back to the office to get a handle on his value.

Over the past three seasons, 2005 and 2007 were similar, while 2006 was awful. For calculating his projected worth I’ll throw out the latter season, because it was heavily influenced by injury and 2007 indicates that he seems to have recovered. But, let’s not totally forget about it when we look at the final number. Also, some in the media have mentioned possibility of a PED suspension for some alleged purchases of steroids and HGH. However, I don’t think there is much risk of a sanction, because it isn’t clear that he violated any baseball rules at the time. Also, the team wouldn’t have to pay his salary during any suspension he might earn, which offsets some of the risk.

So, in saying this, if Guillen plays as he did in 2005 and 2007, I have him pegged at $13.6/year. Throwing out 2006 is a little under-handed on my part, but I don’t think it’s a stretch to anticipate his worth being near $12 million/year. That is a lot of money, but it’s not an awful deal in today’s baseball market. Joe Posnanski and Rob Neyer are skeptical of the deal, but I think the Royals are paying the price they have to pay for the level of talent that they are getting.

And in the midst of all of these signings, Andruw Jones still waits in the wings. There is no way that his 2007 totally sunk his value. When he finally signs a deal, it’s going to be a good bit bigger than this, because he is younger, healthier, and a better player.

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