(Note - I apologize for the lack of posting here lately. A lot has come up lately on the home front, and I've been swamped. I have a few free minutes today, though, so I want to divert you away from the inactivity here, and direct you attention towards the inactive stance the Twins have taken this winter on the free agent market.)
The Minnesota Twins are renowned for their seemingly apathetic stance towards the free agent market. Instead of throwing around the money for the top free agents like most other teams, the Twins seem content to sit on their hands and watch other teams spend money. This is infuriating for many fans, and the phrase "not committed to winning" usually starts to be thrown around this time of year.
Is this fair? Would awarding a player like Placido Polanco with $6 million a year be a sound economic decision? More precisely, would the free agent in question bring in enough money to offset his price tag?
The best way to solve this problem would be to reduce both sides of the equation to wins. The performance side will be simple because of the WAR (Wins Above Replacement) statistic. BaseballProjecion has a database of historical WAR for just about every player to every wear a major league uniform, and their numbers will be used.
Nate Silver, a Baseball Prospectus author in the book "Baseball Between the Numbers," goes through a team's revenues and estimates how much a team makes (over both the long- and short-terms) from winning a single game. I won't give away all of his methadology -- all baseball fans need to read the book anyway -- but I'll provide an overview of his process. Silver examines the seven different ways a team can make (or lose, as is the case with revenue sharing) revenue: ticket sales, concession revenue, club seat and luxury box sales, postseason revenue, merchandise sales, local media broadcast sales, revenue sharing. When added together, a team makes a grand total of $1,196,000 per regular season win.
This figure can be subtracted from a player's contract to evaluate whether or not the player is bringing in more money than he is being paid. Even though they span across two front offices, let's take a look at the Twins' performance over the past few years and attempt to find out whether or not they are over-paying for their free agents.
While Reyes was a steal in 2006, the Twins obviously bit on two stinkers in Batista and White. For the '06 season, the Twins paid $4,300,000 for a total of 0.6 wins. Clearly, not a strong showing from Terry Ryan.
2007 Free Agent Signings (numbers over whole season)
Name - '07 WAR - '07 Projected Value - '07 Actual Salary
Jeff Cirillo - 0.8 - $957,120 - $1,500,000 Luis Rodriguez - (2) - ($2,392,800) - $392,000 Ramon Ortiz - (0.2) - ($239,280) - $3,100,000
Total plus/minus value: ($4,318,640)
Uffda. Ryan continued his legacy of signing expensive veteran players, and only Cirillo proved to be worth his value over the full course of the season. The Ortiz signing looks especially ill-advised. For the '07 season, the Twins paid $4,992,000 for a total of -1.4 wins.
2008 Free Agent Signings (numbers over whole season)
Name - '08 WAR - '08 Projected Value - '08 Actual Salary
Luckily for the Twins, the majority of these contracts were ditched onto other teams. Hernandez was traded to Colorado Rockies, and Lamb finished the '08 season with the Milwaukee Brewers. Still, the Twins paid $11,850,000 for -1.6 wins, which should be inexcusable.
2009 Free Agent Signings
Name - '09 WAR - '09 Projected Value - '09 Actual Salary
Nick Punto - 0.7 - $827,200 - $4,000,000 Bobby Keppel - 0 - $0 - $550,000 Sean Henn - (0.3) - ($358,800) - $550,000 RA Dickey - (0.3) - ($358,800) - $525,000 Luis Ayala - (0.7) - ($837,200) - $1,300,000 Joe Crede - 1.6 - $1,913,600 - $2,500,000
Total plus/minus value: ($8,239,000)
Again, uffda. Of the six significant signings the Twins made last offseason, all ended up being poor business decisions. Now, to be fair, the price of a free agent is always high on the open market. As Silver found in his article in "Baseball Between the Numbers," teams pay around $1.75 million per win on the free agent market, which is over half a million more than they bring in. Should free agent spending be discouraged?
Truthfully, there may be other reasons to splurge on a pricy free agent. Besides the inherent value of reaching the postseason, a team may be pushing for a new stadium deal, or a new TV contract, and a short-term loss will more than be made up for in the future, in some cases.
It's also worth mentioning that a free agent is worth more to some teams than he would be to others. To a team that would be able to reach the postseason without considering this free agent's contributions, a free agent wouldn't be worth as much as he would to a team that needed every win a free agent could provide.
The 90th win of a season is usually regarded as the most important. Historically, if a team can reach this plateau, they will have a much higher chance of reaching the playoffs, which would come with a healthy boost of additional revenue. If a free agent could help a team reach this 90-win mark, he may be considered to be more expensive than other teams may think.
Now, all this isn't to say that Twins fans should be satisfied with the team sits on their hands during the Winter Meetings, but perhaps we shouldn't be as upset when dozens of incongruous deals are given during this time. If the Twins can save some much-needed money by not being as active during the winter season, perhaps we should tone down our disappointment.
Comments (5)
Interesting take written by DavidTF,
December 19, 2009
I totally thought you were going to go a different route with this one, something like this:
The market always starts high. The best thing for the Twins to do is to ensure that they don't overpay. Players like Mark DeRosa are asking for 3 years, 27 million, but DeRosa isn't going to sign with anyone until bigger names like Figgins and Beltre sign with teams. Given that the Twins have limited resources and are investing more and more money into their minor league system (which is itself a better way to build a franchise), then they would be foolish to potentially overpay someone before the market stabilizes.
In any case, the WAR/salary comparison was very telling of just how atrocious the Twins have been at bringing in free agents. Still, both of these arguments (letting the market stabilize, historically bad signings) seemingly still demand competent action from the front office. The team needs at least one more piece, and could use more.
And there is the "Winner's Curse" to consider. The winning bidder of an auction involving several bidders will undoubtedly be over-paying for the free agent.
But you're right. Competent decisions are needed, and that is something the Twins have historically lacked.
Great article!! This really shows how cheap this organization has been over the years and it never works. Johan Santana said it best the team always thinks about the future. Well with Mauer, Morneau, Cuddyer, Kubel, Span, Hardy, and Nathan the time to win is NOW!! It is amazing to me that GM Bill Smith is not taking this off-season more seriously. He is the worst GM in baseball and the Pohlad family is so cheap it makes me sick.
Thanks for the comment, Jack, but I disagree on several fronts. First, it's hard to think of Smith as the worst GM in baseball, especially considering the fact that the Pirates are, in fact, still in existence.
Also, the Pohlads aren't cheap, but pocket the money they make, as just about every other person would do. Additional money invested into the organization does not guarantee either success or a profitable return on that investment.
+0
You get what you pay for written by Twinkiefan99,
December 20, 2009
What the stats show me is that by consistently trying to find a "bargain" the twins have thrown a lot of good money at bad players- roughly 25-30mil over 4 years. That is enough to have signed one decent player who could have been a difference maker. The key is that while trying to save money, they have actually been wasting money. A better approach would be to sign only 1 free agent a year- but make him a good one and pay him what he is worth. Then, fill in the rest with guys in the organization.
As far as the Pohlads/Smith goes, the major mistake of the past 3 years was the decision to trade Santana for an unimpressive set of prospects rather than just keep him for the year - probably make the playoffs in 2008- and take the picks you get when he walks away.
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The Bloguin Network allows advertisers to promote their products and services to our ever-growing number of visitors. We offer both site-specific ad placements as well as the ability to run a network-wide campaign. If you're interested in working with Bloguin to meet your advertising needs, please contact us.
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The market always starts high. The best thing for the Twins to do is to ensure that they don't overpay. Players like Mark DeRosa are asking for 3 years, 27 million, but DeRosa isn't going to sign with anyone until bigger names like Figgins and Beltre sign with teams. Given that the Twins have limited resources and are investing more and more money into their minor league system (which is itself a better way to build a franchise), then they would be foolish to potentially overpay someone before the market stabilizes.
In any case, the WAR/salary comparison was very telling of just how atrocious the Twins have been at bringing in free agents. Still, both of these arguments (letting the market stabilize, historically bad signings) seemingly still demand competent action from the front office. The team needs at least one more piece, and could use more.