Is Francoeur Worth $4 Million?

Jeff Francoeur and the Braves swapped arbitration figures yesterday, and there is a significant spread between their salary expectations.

Coming off a season during which he hit .239 with 11 homers and a .359 slugging percentage, Francoeur is asking the Braves for $3.95 million. The club has offered the 25-year-old right fielder a salary of $2.8 million.

Is Francoeur worth $4 million to the Braves? The quick answer is yes, absolutely, and it’s not even close. Despite all the flaws in his game and his failure to meet misplaced expectations, he’s still a major-league baseball player. Even during his awful 2008 season, his marginal revenue product (MRP) contribution for his play in the field was approximately $12 million. This may seem like a lot, but all major-league quality baseball players are valuable assets. During the first six years of service, the Collective Bargaining Agreement (CBA) limits player compensation, and that is why we can easily say that many players are worth more than they are being paid.

However, that is not really the relevant question here. We want to know what he can expect to get. After completing three years of service—I’m simplifying here, because the exact criteria are complicated—players are eligible for arbitration. Each team and player submits salary figures that represent options to an arbitration panel. After a brief hearing, the panel decides which side’s figure is most appropriate and the player is awarded that salary: there is no compromise. The no-compromise requirement is designed to encourage the parties to negotiate a solution, or risk the other party’s preferred outcome.

The criteria for determining a player’s worth are set out in the CBA.

(12) Criteria
(a) The criteria will be the quality of the Player’s contribution to his Club during the past season (including but not limited to his overall performance, special qualities of leadership and public appeal), the length and consistency of his career contribution, the record of the Player’s past compensation, comparative baseball salaries (see paragraph (13) below for confidential salary data), the existence of any physical or mental defects on the part of the Player, and the recent performance record of the Club including but not limited to its League standing and attendance as an indication of public acceptance (subject to the exclusion stated in subparagraph (b)(i) below). Any evidence may be submitted which is relevant to the above criteria, and the arbitration panel shall assign such weight to the evidence as shall appear appropriate under the circumstances. The arbitration panel shall, except for a Player with five or more years of Major League service, give particular attention, for comparative salary purposes, to the contracts of Players with Major League service not exceeding one annual service group above the Player’s annual service group. This shall not limit the ability of a Player or his representative, because of special accomplishment, to argue the equal relevance of salaries of Players without regard to service, and the arbitration panel shall give whatever weight to such argument as is deemed appropriate.
(b) Evidence of the following shall not be admissible:
(i) The financial position of the Player and the Club;
(ii) Press comments, testimonials or similar material bearing on the performance of either the Player or the Club, except that recognized annual Player awards for playing excellence shall not be excluded;
(iii) Offers made by either Player or Club prior to arbitration;
(iv) The cost to the parties of their representatives, attorneys,
etc.;
(v) Salaries in other sports or occupations.

The exact rules seem to place great emphasis on the most recent season; however, the “length and consistency” of career provision does open the door for mention of past performance. I don’t know the extent to which arbitrators are allowed to consider the quality of play from past seasons. Still, it seems that Francoeur’s bargaining position will suffer from having his worst season just prior to arbitration.

On his side is his 2007 Gold Glove Award. It is certainly a significant achievement that is eligible for consideration. However, once you bring up defense, his most-recent season is brought to light. And according Plus/Minus, 2008 was a poor defensive season for Francoeur: he made 17 fewer plays than the average right fielder, ranking him 30th in the league.

How about his “public appeal”? Jeff Francoeur has been the team’s most popular players for the past few seasons. Only recently have some fans turned on him; but even with that, he still remains popular. He’s a local boy who excelled when he was first called up, and fans still remember this. But how do you measure his popularity without resorting to press comments and testimonials, which are barred? Attendance likely isn’t going to help, as the team’s attendance fell by nearly eight percent last season. I’m not sure if marketing reports like a Q-Score are admissible, but if they are I think this information is going to have to carry the day if Francoeur is going to win his case.

I have done some analysis of player salaries during arbitration years, but I haven’t gone that in depth. In my book, I report that position players tend to receive 77 percent less than their estimated marginal revenue product during their fourth through sixth years of service (estimated). Based on his previous three-year average of his MRP ($13.78 million), that puts his expected salary at $3.17 million. Based on his past season alone, his expected salary is $2.84 million. The Braves appear to have the better offer on the table.

The estimates I present are rough, but I believe they are biased in Francoeur’s favor. I’m estimating his worth on the median difference in player salaries from their MRPs during four-to-six years of service. Francoeur is only entering his first arbitration hearing and therefore ought to be on the low side of this average.

54 Responses “Is Francoeur Worth $4 Million?”

  1. Zach says:

    I can’t buy into the theory that Francoeur is worth $4 million to the Braves.  He was so bad and so far below replacement level that we could have brought virtually anyone in to take his place and seen an increase in production.  Dave Cameron’s win values show his 2008 season at a -$6.7 million.  He played so far below replacement level that his value was historically negative.  Just about any option would be better than Francoeur, and most of them cheaper, so why would the organization benefit from paying him $4 million?

  2. Jason W says:

    Aren’t “special qualities of leadership and public appeal” and (inadmissable) “Press comments, testimonials or similar material bearing on the performance of either the Player or the Club” somewhat in conflict with each other?

    And you can quote plus/minus or win shares or whatever as much as you want, but does an arbitrator know the difference between stuff like that and things like Gold Gloves, RBIs, wins, and “grit”?

  3. There are two relevent questions, 1) what is he worth to the team? and 2) can the team replace his production more cheaply? The economics of a “replacement player” are strongly predicated on the idea that a very, very cheap utility player or a AAA guy making the minimum can provide at least a minimum level of production. Considering Francoeur’s defensive mediocrity and offensive ineptitude, it’s not entirely outside the realm of possibility that his $12 million value to the team, by marginal revenue product, could be provided by a guy making a lot less than the $4 million he wants in arbitration.

  4. Ron E. says:

    This may seem like a lot, but all major-league quality baseball players are valuable assets.

    Jeff Francoeur is not a major league quality outfielder offensively. Hell last year he wasn’t even a major league quality infielder offensively. The Braves would receive far more value by trading Francoeur for a bag of balls or something similar,  pocketing the $4 million or using it to resign Ohman or Glavine, and playing Brandon Jones, Jordan Shafer, or Josh Anderson in RF this year.

  5. Rick says:

    The average MLB salary in 2008 was $3.15mm on OD. Last year, according to the info on Fangraphs, Francoeur was negative 22.8 runs for an average MLB player. This does not include any defensive stats. He is projected by the three main forecasters, Bill James, CHONE and Marcels, to be at -6.1 wRAA, 4.7 wRAA and -7.3 wRAA respectively. So, what the Braves are offering is not out of line. Now, what Francoeur is asking for is totally out of line. If I were the Braves, I wouldn’t back down on their figure at all. If Francouer performs like he thinks he will, then he will get a bigger bump next year.
    If you want to translate the runs created out. 10 runs above average equals 1 win above average roughly.
    That being said. If Francoeur thinks he has a bad relationship with the Braves now, just wait until he gets into the arb hearing with them. It will be brutal. The Braves job will be to show Francoeur that he is not a good player. That won’t be difficult to do at all. He needs to avoid a hearing like the plague if he wants to have any sort of relationship at all with the FO.
    I’m not speaking as an economist here.

  6. Kyle S says:

    JC, if your model says Francoeur was worth $12 million last year as a sub-replacement player, your model is wrong. Jason Perry could have performed at Jeff Francoeur’s level based on his MLEs had he manned RF for Atlanta all year, and would have cost the league minimum. Unless you think that Jason Perry or any generic AAA right fielder is worth $12 million (which this offseason could have purchased Pat Burrell plus a good relief pitcher, or Milton Bradley plus a decent relief pitcher, or Ryan Dempster) then I don’t see how you could possibly make that claim.

  7. JC says:

    Kyle,

    1) Francoeur’s gross MRP and what he should be paid are two different things. For an arbitration case, what he ought to be paid according to the CBA is what I am trying to find.  Though it is not relevant in this context, even in as a free agent, the labor market for players is likely not to be perfectly competitive. For this reason, some free agents will be paid less than their MRPs, and all non-free agents will be paid less than their MRPs. In the end, I use the gross MRP estimate  to arrive at an estimate in the neighborhood of what the Braves are offering. 

    2) My model is not wrong, it’s output differs from your intuition in this case. I have designed a method underpinned by basic economic theory and the estimation  of the marginal physical product of players. If you would like to point to where the model is making mistakes, I would be happy to hear your suggestions.

    3) If there was one concept that I could remove from sabermetrics it would be “replacement level.” It is a concept that adds nothing to our understanding of player value, and it causes people to believe that marginal players are worth the league minimum. I have explained why this is incorrect, and I have seen no argument to change my thinking on this.

  8. Zach says:

    I think it’s pretty simple.  If Francoeur’s production is negative to the team, then just about anyone coming in making the league minimum would not only produce at a higher level but would cost less.  Francoeur has to produce in order to justify his salary and value to the team.  He doesn’t and therefore is not valuable to Atlanta.

  9. Trebor says:

    Putting aside the replacement level debate, league average OBP/SLG last year was .331/.413. Francoeur produced a .294/.359 line. Even ignoring defense and positional adjustments, it seems very counterintuitive to me that a line so far below league average is worth $12 mil in MRP. I guess the problem is lack of a point of reference for MRP. If there were a table of players’ MRP where I would see that Albert Pujols is worth eleventy hojillion dollars and by comparison $12 mil for Francoeur is pocket change, maybe I could get a better grasp on it.

  10. JC says:

    Pujols’s 2008 MRP = $26.7 million.

  11. Victor says:

    The worst part of all of this is that Francoeur both asked for more and was offered more than these other first year arbitration eligible players:

    Ryan Zimmerman, Andre Ethier, Corey Hart, Conor Jackson, Kelly Johnson, and Casey Kotchman.

  12. dan says:

    Your model says that Francoeur was at least an average player, I think above average. Can you explain that?

  13. greg says:

    That’s ridiculous that you think Francoeur was worth 12 and Pujols was only worth 26.7. The difference between those two players is phenomenal. I’ll take fangraphs values quite a bit more seriously than yours. Pujols:40.7Million, Francoeur: -6.7 Million. Now that sounds quite a bit better to me.

  14. Sky says:

    Francoeur was a pretty bad player last year. Let’s assume there are 100 (500?) AAA players who could have done what he did. Should the Braves have paid them $12MM too? Or was it the fact that Francoeur was the one to step on the field that earns him the money?

    What I’m probably missing is the conversion from MRP to salary. How does that work? And how do you calculate MRP? Is that in the book? Do you take into account a player’s MRP compared to players who produce the minimal level of performance you would expect to see play in the majors?

  15. JC says:

    Sky,

    From #7

    Francoeur’s gross MRP and what he should be paid are two different things. …Though it is not relevant in this context, even in as a free agent, the labor market for players is likely not to be perfectly competitive. For this reason, some free agents will be paid less than their MRPs, and all non-free agents will be paid less than their MRPs. In the end, I use the gross MRP estimate  to arrive at an estimate in the neighborhood of what the Braves are offering.

    See the FAQ for an explanation of player values.

    dan,

    My model does not rate Francoeur to be an average player. He is well below average.  An average player who had played as much as Francoeur would have been worth more.  Keanu Reeves is a below average actor, but his films still generate a lot of revenue, which is why he is paid a high salary.  Baseball talent is a valuable commodity.

  16. Sky says:

    JC, I checked out the FAQ, thanks.  It’s pretty vague, but evidently you’re dividing up each team’s revenue among the team’s contributors.  If Joe Bob plays for the Yankees, will his MRP be the same or drastically different than if he played for the Royals?

    The Keanu Reeves metaphor doesn’t really work.  Fans love him (for whatever reason) so he’s picked to act in good movies (good stories, directors, other actors, big budget, etc).  Good movies, combined with people liking him, results in his movies generating lots of revenue.  His box office draw determines his paycheck (if the movie would be expected to gross $25MM less with mediocre actor, he deserves $25MM more than that other actor.)  That the movie is a hit isn’t important, what’s important is how much more of a hit is is with Keanu in it.

    But your MRP FAQ doesn’t imply you’re giving value to Francoeur because he’s a good draw.  You’re taking the Braves revenue and dividing it among the performances on the field “that created it”.  I put that in quotes, because to a large extent, the Braves could put any 75-win team on the field and have a similar revenue, based on fan base, tv contracts, etc.  So what you really want to do is compare their likely revenue with Francoer versus some shlub who would be happy to sign for the league minimum.  And Francoer’s on-field performance wasn’t any better than what the Braves could go sign for the league-minimum.  So why pay for something that’s not adding to your revenue or win total?  Go sign a player who’s better than Francoeur, improve your win total, and take in more revenue because you have a better team.

  17. Millsy says:

    Are you implying that Bill and Ted’s Excellent Adventure wasn’t a good movie?  Duuuuuuuuuude no way.

    Anyway, I cannot really comment on the $12 million mark, as I don’t have a calculation of my own.  However, I do agree with JC on the matter of ‘replacement level’.  It just doesn’t tell us much of anything.  While there is value in knowing there are cheap guys out there that can perform as well as a crappy player, the idea breaks down at slightly higher levels when the player is in negotiation mode with a team.  The player is always going attempt to take a bite out of profit gained from his work, or he’ll go elsewhere (less so in arbitration, of course).  If you don’t at least negotiate with that, another team will come and offer $1 more and take him away, when you could have had him for $8 million less than his MRP. 

    Plus, there could be even more something to the ‘hometown boy’ love.  I’m not sure how you’d quantify this, but it could increase his value to the team beyond his performance.  That value wouldn’t transfer in a trade to another team, so the Braves would get less in return than they would by keeping him there.  Who knows.  All I can hope is that the Nick Markakis and Adam Jones love in Baltimore is more justified than Francoeur in Atlanta.

  18. Colin Wyers says:

    I don’t think that’s the appropriate comparison though, JC. Francoeur’s level of performance in 2008 was more akin to the sort of actor who plays the part of “Cop #3″ or “Woman With Baby,” the sort of actor you can find a half-dozen of if you pull the fire alarm in half the apartment complexes in New York.

    Baseball is, as you note, an entertainment industry, and what you tend to have – in sports, music and film – is a sharp talent curve, with a few stars and a large number of people just looking to break in. At the bottom point of the talent curve, what you have is more people willing to work for league minimum/union scale/etc. than you have jobs, and very litter differentiation between them in potential revenue.

    I think it’s a mistake in a marginal value scale to assign a value to these fungible parts – realistically if you lose one your revenues are unlikely to change; the cost of replacing them is essentially zero.

  19. JC says:

    Sky,

    That’s not what I do. I suggest reading the chapter on my method in my book.

  20. Hizouse says:

    JC, please forgive my basic question, but what does the “marginal” in MRP represent?  When I hear “marginal,” I am thinking along the lines of “value added.”  So Frenchy produced $12M more revenue than what? than zero?  

    If I determine meat-lovers pizza and a sausage pizza would each give me $12 of benefit or utility, and the sausage costs $1 but the meat-lovers costs $4–I buy the sausage every time.    That doesn’t mean that the meat-lovers isn’t worth $12 to me.    I could buy the meat-lovers and still come out ahead compared to if I did nothing and starved. 

    If I haven’t botched the analogy too much, I think this is what is confusing people: the “value” to an organization vs. the market “price,” and price for X good X is determined in part by reference to the price of available substitutes.  Why pay Frenchy $4M when I can pay Josh Anderson or Brandon Jones much less for equivalent performance? 

     

  21. KY says:

    So, if Brandon Jones were to have taken all of Frenchy’s at bats last year, and produced a little better then Frenchy did, how much MRP would he have been worth?  I think that would clear things up.  I sure hope the number is more then 12 million though otherwise I’m lost.  If Jones would not have been worth more, even while producing more, why not?

  22. Salary says:

    That $4M will top any regular employee salary, even the highest ones http://www.salarylist.com/average-salary.htm

  23. JC says:

    KY,

    Yes, if Brandon Jones took all of Francoeur’s plate appearances (and played as he did in his 149 PAs) he would have had a slightly higher MRP than Francoeur.

  24. Marc Schneider says:

    As I understand it, I don’t think JC is saying that the Braves should necessarily pay Francouer $4 million but that his contribution to the team–however little–was worth $12 million to the club.  It’s an issue of arbitration value, not allocation of resources.    His Keanu Reeves model makes sense because, despite being a poor actor, the fact that he is a professional actor and has some popularity contributes to the revenue from the film.  You could make the same argument, albeit on a smaller scale, for an actor with a bit part.  They all contribute to the revenue of the movie.  In the case of Francoeur, as bad as he was, as the regular right fielder, he contributed x amount to the revenue generated by the team, obviously much less than a better player, but still some.  Again, that has nothing to do with how the Braves should allocate their resources in terms of keeping him or not.

  25. dan says:

    What would an outfielder with a .210/.245/.250 line, with 5 SB or so, and an average glove be worth in MRP if he were to get 600 PAs? Approximately, of course.

  26. Zach says:

    Well then it’s a very misleading and virtually useless article.  Why do we care that he’s worth $4 million if he doesn’t think the Braves should pay him that.  The fact is that we could sign a much cheaper player, who would perform a lot better and be a lot more valuable.  So while he may have contributed in an economic sense it makes no sense keeping him around when he is a negative contributor to the team.

  27. Sky says:

    JC, it’s kind of tough to admit you’re right or feel confident I’m right without having any clue about what MRP is.  I’m curious, however.

    Have you done any research about the increase in revenue caused by increasing win totals, especially the importance of going from low 80s to low 90s?  (Just out of playoffs to just in playoffs.)  That’s an area I think traditional sabermetrics misses the boat.

  28. JC says:

    Sky,

    You’re asking me to answer things that I addressed in a book that was published nearly two years ago. The system is too complex to explain fully in a blog post or comment. Read my book  if you want those questions answered.

  29. John Salmon says:

    The book “Baseball by the Numbers” deals with question #27.

  30. John Salmon says:

    “Between the Numbers”, that is…

  31. Colin Wyers says:

    I have read your book, JC, although it’s been a little over a year. So far as I can tell, you figure a player’s contribution in runs on offense using something like:

    2591*OBP + 1957*SLG-915

    (I had to estimate some of that on my own – the weights are different than yours for reasons I can’t discern. I tried to duplicate the regression you did in R one night so that I could test it against a few other run estimators.)

    You then use that to figure a player’s run contribution to a team – if I’m remembering correctly you figure out how many runs a team scores with and without the contributions of that player, and then prorate out to plate appearances. (As I said, it’s been awhile.) Then you convert runs to wins.

    (I understand that your evaluation of Francoeur includes +/- for defense now, although how you haven’t spelled out how that works. I also recall hearing you’ve moved to LWTS to estimate offense.)

    What I didn’t get, and still don’t understand, is what Hizouse asked – marginal relative to what? What does a $0 MRP player look like? Why is that the baseline?

  32. dcj says:

    dan, I’m not JC but my guess is that he would be in the $7 to 9 million range as a corner OF. In order to get down to zero MRP he’d have to hit .160/.160/.160 or something like that.

  33. JC says:

    Colin,

    Those numbers are way off and you’re missing some things. I’m not sure how you got them. See page 322 note 78 in the endnotes. As for what MRP is, see Scully (1974) or an intro to micro textbook.

  34. Colin Wyers says:

    I’ll try to get to that, JC. (I borrowed the book from a library, and as I said it’s been a while since I read it. )

    Those interested in the Scully paper being referenced can read it here:
    http://www.cbe.csuhayward.edu/~lkahane/MHC349/349read/Scully%20AER%20’74.pdf
    The problem I have with Scully’s – and by extension Bradbury’s – application of MRP to baseball is that they are treating fixed inputs as variable. A baseball team has 25 players on the roster, no more or less, and must bat and pitch/field until 27 outs are recorded (more or less). Nine players from the fielding team must be present.
    Viewing Franceur’s production relative to the Braves simply not having a right fielder or sending someone up to bat in his lineup spot doesn’t tell us anything meaningful, because it’s an entirely theoretical concern divorced from reality. If McDonalds has an employee that doesn’t provide MRP greater than his salary, they fire him; if they can get additional MRP from another employee, they hire one. This isn’t true for baseball – the quantity of players a team can have and field for a regulation game is fixed.
    In short, we can’t presume that a player’s MRP is positive just because he’s employed by MLB; a team can’t simply opt to not have a player for that spot because he doesn’t generate his wages in revenue for the team. It’s possible this is so, but I haven’t seen anything that’s convinced me of this.
    The way I view player salary is to view players as independent contractors that provide a commodity (wins) to a team. That way you don’t run into the problem of inputs being fixed at the team level (although obviously the number of wins available is fixed at the league level).

  35. Paul Holmes says:

    Let’s not get bogged down in “How much was he worth last year?” Yes, Frenchy sucked last year. But his value for this year lies in his potential. If you want to claim he’s going to get paid the wrong amount, deal with how he WILL perform, not how he DID perform.

    Should we expect him to do as poorly this season as he did last? If nothing else, he has regression to the mean going for him…

  36. Colin Wyers says:

    Well no, we shouldn’t expect him to do as poorly next season, Paul. Even absent regression to the mean, we know he didn’t do as poorly in ’07 or ’06, and he’s not of an age where he should be on the downward slope of his career.

    But I really do think that it’s more instructive to look at the entire model, and then if it’s sound, to then go onto the individual player. My biggest pet peeve with certain brands of Internet commenters is in the notion that a model cannot be valid if it disagrees with their preconceptions about a player or two.

    If the model is wrong on the whole, then that should be addressed. If the model is correct, then we should be willing to accept its conclusions about a player even if they disagree with what we think personally – there’s no reason for us to build models if we’re not willing to let them influence our opinions.

    Or, in short, if either I can convince JC or JC can convince me of the rightness of our point of view, then we should be in agreement on Francouer’s value. Once you resolve the underlying principles, everything else should fall into place.

  37. JC says:

    Colin,

    I disagree with your assessment; however, I have been known to be wrong. So, here is where I am at. Gerald Scully is not just an economist who studies baseball, he is a damn good economist who contributed valuable research to many areas during his career (I believe he is now retired).  I think Scully is right and your are wrong.

    Your comment reads like someone who is not familiar with research.   I’m having trouble grasping why you believe that you have made a coherent argument. I don’t know how to even respond to what you have written. Why should I change my mind when an eminent scholar makes a compelling argument that is generally believed to be correct by the economics profession; yet, I can’t even make sense of what you have written?

    If Scully is wrong and you are right, there is a very simple method to get an objective opinion about your idea. In the academy, we submit our ideas as articles to journals. The journals have editors with knowledge of the particular subject area who choose anonymous referees to evaluate the content of the ideas in submitted papers. If it is deemed acceptable, it is then published in the journal. In case you are wondering American Economic Review is considered to be one of the top few–if not the top–journals in the field of economics.  I suggest you write up your critique and submit it to a journal. If you are correct, this is an important discovery that will generate a paradigm shift that will radically alter the way economists view MRP.

  38. John Salmon says:

    Has Francouer ever been given an IQ test? Do the Braves test their prospects? I’m serious. How can somebody with that much talent perfrom at his 2008 level, and not show at least a general trend of improvement over the course of his career? He’s either dumb or woefully stubborn as to his hitting approach.

  39. John Salmon says:

    JC, you need to actually rebut Colin’s argument.  You use both ad hominem and an argument from authority in rsponse to his eminently reasonable views. If one of your students did the same you’d flunk him.

  40. JC says:

    John,

    asd fhufh weuiu uio u awuiaweu aweuh a

    Rebut that.

    I do grade many papers, because I am and authority on the subject. At the end of the semester the state of Georgia asks me, not the student, to evaluate the performance of the student in the class. There is no polite way to say, “you have no idea what you’re talking about” but that appears to be the only thing that I can offer. If Colin wants to come in and argue about step 1 when the rest of the world who has studied the issue in on step 27, it is his job to get up to speed on the basics.

  41. John Salmon says:

    Geez, JC, if you have comments on your site you need to actually engage people, not just say you’re the authority and they’re not.

  42. JC says:

    Yep, that’s me. Never engaging commenters and declaring myself to be a genius.
    Good grief.

  43. Colin Wyers says:

    JC, I am not trying to provide a paradigm shift in MRP. I am simply trying to argue that because of a specific condition – the fact that an MLB team must employ 25 baseball players, no more or less – that only applies to sports teams, the basic assumptions of MRP may not be valid. (I am not even arguing that they do not, simply that they may not.)

    I don’t think this is an unreasonable claim. I don’t even think this is a radical claim – if the government passed a law tomorrow saying that a restaraunt had to have 25 employees, no more or less, when open to the public, wouldn’t that change the way MRP applied to restaraunts?

    If you have to have this written up for a journal to take it seriously, I suppose I’ll give it my best. (JQAS or JSE look like more promising bets than the AER – quite frankly I don’t have the $200 they would want just to look at my article.)

  44. Millsy says:

    I think it’s difficult to grasp what JC is talking about when we argue about it right around the ‘crappy player level’.  The difficulty in baseball is there are many very rich teams bidding.  That competition is going to drive up the price of a player like Raul Ibanez, Tex, etc. to the point where it is that player’s MRP from zero.  Otherwise, there is a surplus.  If the whole replacement player argument is valid, and we expect that fans will show up, an owner would have no incentive to spend more than the minimum on any player.  Just field a team of scrubs…play good teams…and have the largest return while all these silly other teams try to win at baseball.  It just doesn’t really work that way.  If it did, and we assume a replacement level player with 500 at bats is bringing in $12 million like implied in this article, and someone like Tex is (using replacement level as the base) worth $20 million, his actual MRP is $32 million?  Why wouldn’t someone be paying $20 million and one cent? (this, of course, may be a bad example since no one will be able to outbid the Yankees if they really want someone).  But it applied to many other free agent players.

    Would I pay $4 million for Jeff Francouer?  I don’t know…I’m not a sabermetrician or sabernomicist…I havent’ done the work to figure that out.  If he is below what could replace him at cheap, then probably not (unless I expected a big performance increase).  Unfortunately, when players have competitive bidding for them, they’re salary is going to increase above what someone might expect using ‘replacement level’.  This digresses from discussion about arbitration, however.

  45. Cliff says:

    A real world wage situation over the last few years that is possibly analogous to what Colin was getting at is the domestic auto industry.  Every union member was guaranteed either to have a job or be paid to be in a training program.  Thus, the companies could not reduce their costs by laying off employees on a short term basis.
    Here, the union requires a minimum level of pay despite possibly lesser performance and requires that those unable to work get full pay during their disability.  A Company in MLB COULD operate without 25 and without 9 on the field (I think so.  In other leagues it is an automatic out when the batting order place of the non present player comes up).
     

  46. JPWF13 says:

    Yikes, this thread went off the rails….

    “2) My model is not wrong”

    If every player who was better than Francouer in 2008 was paid a minimum of $4mm- I think the total would exceed MLB’s gross revenues…

    I think the problem is that you do not understand the concept of replacement level – and instead simply say stuff like:
    “It is a concept that adds nothing to our understanding of player value, and it causes people to believe that marginal players are worth the league minimum. I have explained why this is incorrect, and I have seen no argument to change my thinking on this.”

    Anyway, the real question is whether or not Frenchy is realy as bad as he played in 2008. Obviously if they think Frenchy 2008 is the “real” one, who will be appearing in 2009/10… (like when the real Jim Presley apepared in 1988/89) then he’s not only not worth $4mm, he’s someone who should be DFA’d ratehr than be offered arbitration.

  47. JPWF13 says:

    “.  Just field a team of scrubs…play good teams…and have the largest return while all these silly other teams try to win at baseball.  It just doesn’t really work that way. ”

    It does for the Pirates

  48. Sky says:

    JC, how about at least throwing out the MRP of an average position player over a full season (150 games, 700 PAs, whatever), an average starter, an average reliever, etc. At least help those of us who aren’t economic scholars see what sorts of numbers your system produces.

    Think of it this way — the more we buy into your thoughts and think your system has merit, the more likely we are to buy your books.

    I’d also REALLY like to know what the margin is in MRP. Can you give an estimated stat line or player name who is marginal in MRP. That is, someone with significant playing time with basically zero MRP?

  49. Millsy says:

    One team does it JPWF.  The truth is, there is more than one team that attracts people to MLB.  If all the teams were going to do that…you’d have some serious trouble keeping revenues alive.  There’s the relative level, which the Pirates don’t do very well at, and the absolute level, which isn’t maintained unless the players are paid what they are worth.  So, I guess the Pirates support your argument the way I phrased mine…but my point was that why wouldn’t every team try to do that?  It’s because the overall revenue would decrease for the league, and the teams must be competitive to keep the revenue flowing.

  50. JC says:

    Mean MRP if PA>600:  $16.7 million
    Mean MRP if IP>200:  $14 million

    Sky,
    This isn’t about selling a book, it’s about writing one. I cannot provide specific details because I am currently writing them up. It is many pages worth of material that I cannot share because they are in progress, too long to post here even after I’ve written them, and I do not own the  rights for distribution.

    But, the main problem I see in the comments is not about the modifications that I have made to the model.  It is a lack of the general understanding  of the model, and that is available in my book . 

    MRP is the additional revenue provided to the team by the player’s play on the field. It is his marginal physical product * marginal revenue.  Again, if you are having trouble with this concept, try Wikipedia. To see how hit applies to baseball, read Scully’s paper.