This Is Getting Ridiculous

Kerry Wood was in Cleveland on Wednesday night to take the physical needed before he can finalize a two-year deal with the Indians worth about $20 million.

$10 million a year for Kerry Wood?! And I thought the K-Rod contract was excessive. Kerry Wood was a more valuable pitcher ($5.72 million) than Francisco Rodriguez ($4.62 million) in 2008, but he was limited by injuries during the four previous seasons. Assuming that Wood pitches exactly as he pitched in 2008, I estimate he will be worth approximately $6.5 million per season for the next two years. I reiterate: this assumes that one of the most injury-prone players in the league performs as he did last year. He made $4.2 million pitching for the Cubs last season, and the Cubs didn’t even offer him arbitration. Given his injury history, I think that was probably the right call.

I consider the Indians to be one of the smartest organizations in baseball—in my book I rate Cleveland to be the best-managed franchise in the American League—therefore, this move shocks me even more. What could be going on? I can think of only one explanation: Kerry Wood has been able to demonstrate such good health that teams think he can start. If Kerry Wood can get back to his 2002–2003 form he would be a $14 million/year pitcher over the next two seasons. Maybe his agent has been shopping his potential as a starter.

20 Responses “This Is Getting Ridiculous”

  1. Elton says:

    My gut agrees with your conclusion that $10-12 million for a 70-inning pitcher is too much.  But Baseball Prospectus seems to think the Rodriguez deal is worthwhile for the Mets.  Do they do something like include leverage in their valuation, while you do not?

  2. John says:

    don’t you think this is one of those moves that has a significant amount of PR value to the franchise?  If the Indians spent $4 or 5 million on another mid-low tier relief guy and he turns into Borowski I think the fans in cleveland would revolt considering their last couple of years.

  3. JC says:

    I just glanced over at Jay Jaffe’s analysis at BPro. I didn’t see a number that he calculated, but was comparing his contract to other closer contracts. I think the market is overvaluing closers.

    I don’t think this move as significant PR value.  As a fan, I’d rather my team purchase more wins than names.  If Wood is a closer, then I think it’s a waste of resources.

  4. Mitch says:

    I can’t help but feel that your model is undervaluing relievers, especially those that pitch high leverage innings.  Three scoreless outs in the second inning do not have the same win expectancy as three scoreless outs in the ninth inning.  I’m not well-versed enough in the intricacies of a metric like WXRL to know this, but could adding a dominant late inning reliever, and thus pushing marginal relievers earlier into the game,  be worth 3 or 4 wins a year?

  5. JC says:

    Please see the previous post on K-Rod to read my view on the valuation of leverage.

  6. Craig says:

    JC, it seems to me that your model is significantly undervaluing high-leverage relievers. Last year, Kerry Wood’s WARP was 4.5. I cheated in looking up Nate Silver’s value for this by looking at K-Rod’s PECOTA card. On last year’s card, K-Rod was projected for a 4.3 WARP and a $10.45 million MORP in 2010. I don’t know the intricacies of Nate’s value system, but valuing Wood’s 2008 at $10.45 million seems more accurate than your $5.72 million.

    However, that still supports your conclusion about Wood being overpaid, since that valuation says that he needs to repeat his 2008 season in 2009 and 2010. Given his injury history, those odds aren’t good.

  7. Jason W says:

    One should also note that, apart from saves and ERA, K-Rod had an awful 2008, at least by his standards. Career high in WHIP, BB/9, second-lowest K/9…he has about as good a chance of repeating his 2008 as Kerry Wood does of repeating his.

  8. Rick says:

    WARP uses replacement level players to assign value. Replacement Level players don’t exist for very long in MLB. Their only purpose is to take up space on the bench.

  9. colin says:

    let’s look at Hypothetical Good Closer (FIP = 3.00)

    60*(expected FIP – average FIP)/9 = relief wins above average.

    so.

    60*(3-4)/9 ~ 7 runs above average saved

    RAA + 20 = RAR –> 27 runs above replacement = 2.7 wins above replacement* going rate for 1 WAR (5 million) = $13.5M

    and that doesn’t include leverage, which acts as a multiplier on the RAA figure.  anything between 1.25 and 2 is possible depending on usage.  optimal usage would be along the lines of how Ozzie uses Bobby Jenks, so 1.75 is a good baseline.  7*1.25=12.25 RAA ~ 3 WAR or $15M per year.

    basically, there’s a reason why WPA has been the measure of choice for relievers in the statgeek circles: it more accurately assesses their influence on the game.

  10. Brandon H says:

    What are the odds that the Mets make the 2007 and/or 2008 playoffs if they have KRod in town instead of Wagner? Obviously they are increased as the performances are about equal, but Rodriguez, due to his youth, is slightly more reliable dependent on health.

    That said, even if KRod is worth $5M or so based on your model, what are the added revenues of making the playoffs v. not making the playoffs for a team like the Mets?

    While Wood is a slightly different scenario, the Indians have had a brutal bullpen in two of the last three seasons. They arguably could have been a playoff team in both seasons had they had a decent closer and performed closer to their pythag.

    In any event, I think the closer market is at an interesting cross roads. The Diamondbacks were the first team to register that the ‘saves’ statistic is a product of a players environment when they moved Valverde for Qualls among others.

  11. Sky says:

    Colin, replacement-level for relievers is 20 runs below average.  It’s maybe five.

    But I agree that JC’s analysis seems to drastically underrate the leverage factor.  Here’s what I’ve been doing for KRod, although my replacement-level is a bit high:

    RAR = (4.75 – 3.25) / 9 * 72 * 1.8 = about 21 RAR or 2 WAR, which is going for $10MM on the FA market these days.

  12. Jerry says:

    I think this will end up being an ok deal for the Indians. IMO the most important part a MLB team that whats to win in Oct. is to have a very good bullpen. The teams that win in Oct. all have very good bullpens. You can have ok hitting or ok starters but you have to have great bullpens. If you look at the other options out there for the Indians this was worthth $10 mil. gamble.

  13. JC says:

    Marty DiBergi: Why don’t you just make ten louder and make ten be the top number and make that a little louder?
    Nigel Tufnel: [pause] These go to eleven.

  14. Tim says:

    Your statement regarding closers, it matters more how well a pitcher pitches, not when they pitch…is I’m afraid to say, incorrect.  I don’t know if you’ve ever played baseball, nevermind at a high level, but being able to deal with the pressures of that last inning is simply different than any other inning.  I will agree starters are more valuable as they pitch enough innings and have more pressure as they are responsible for far more of the game, but to compare a middle reliever who is expected to pitch the seventh inning when at least if you blow it your team can still come back is not at all comparable to the pressures of the ninth.  It is absurd and frankly the words of an economist to say otherwise.

  15. JC says:

    “Your wrong” followed by an insult. How is this convincing?  

    Alejandro Pena said the ninth inning is no different than any other inning.  Other closers have stated otherwise. I agree with Pena.

  16. Millsy says:

    There is a unique psychological quality that some pitchers lack.  However, with that said, if you are being paid to play baseball, you should not lack this quality.  I think there is a middle ground here, but I don’t think that premium is worth what these closers are getting paid over the 8th inning guys.  Paying anyone that lacks the ability to handle pressure at the MLB stage would be a mistake in general.

    I agree out there it’s different.  But I don’t think it’s different to the point that it would raise a solid middle reliever’s ERA (or whatever metric people use these days…) too significantly.  The point is, if you’re a quality pitcher, why be afraid of the 9th inning?  All of these guys are mentally tough beyond belief.  Everyone said Brad Lidge couldn’t handle the closing spot because Albert Pujols hit a home run off of him…ALBERT PUJOLS!  Now he’s been described as the best closer in the game.  There are other guys like this out there.  Because of such a short pitching sample…these guys get labeled as washed up prematurely.  God forbid they give up a hit to one of the best players ever.  The significance of the 9th inning is greatly overstated…though it does exist to a point.

  17. tangotiger says:

    Mariano has more influence to how many wins the Yanks will actually win, if he’s pitching mostly in close games than in blowouts.  Ozzie Smith will have more influence in how many runs he saves at SS than at 1B.  The former takes the same number of opps as other relievers, but makes the most of it (like buying stocks on margin).  The latter is given more opps.  In either case, their talent level is tied in to how much impact their skills have: they are being leveraged.  As noted in the other thread, the best/easiest way to handle the reliever is to give each reliever a leverage value that is half-way between 1.0 and whatever leverage index his talent level dictates he would find himself in.

  18. JC says:

    Mariano has more influence to how many wins the Yanks will actually win, if he’s pitching mostly in close games than in blowouts.

    I get that part. He is not entirely responsible for the WP of the game state nor for being put in the situation. A better starter and corps of relievers preceding his appearance can affect the WP. Closers may be a bit more valuable than inferior relievers, I have acknowledged that many times. It’s the “how much” that is the difficult question. Now, you basically have to max out WPA to justify these contracts, and that is giving way too much credit to closers, in my opinion.

    Ozzie Smith will have more influence in how many runs he saves at SS than at 1B. The former takes the same number of opps as other relievers, but makes the most of it (like buying stocks on margin). The latter is given more opps.

    SS have many more fielding opportunities than 1B, which makes SS relatively more valuable than 1B. I don’t get the stock-buying analogy.

    In either case, their talent level is tied in to how much impact their skills have: they are being leveraged.

    Value is tied to the opportunity cost of pitcher skill. Scott Linebrink should have received a contract similar to Francisco Cordero, even though Linebrink doesn’t normally pitch in high-leverage situations. He is similarly talented.

    As noted in the other thread, the best/easiest way to handle the reliever is to give each reliever a leverage value that is half-way between 1.0 and whatever leverage index his talent level dictates he would find himself in.

    That is a way, but it’s not obvious why it is a preferred method.

  19. TangoTiger says:

    That is a way, but it’s not obvious why it is a preferred method.

    Agreed it is not obvious based on my posts here.  I’ve described it in a more deliberate manner on my blog a few times.  The net/net is that it works out as I’ve summarized it here.

  20. TangoTiger says:

    If you click on my name, I have given an illustration at post 300.