| 18 December 2009
(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.
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2006 Free Agent Signings
Name - '06 WAR - '06 Projected Value - '06 Actual Salary
Tony Batista - 0 - $0 - $1,250,000
Rondell White - (1.3) - ($1,544,800) - $2,500,000
Dennys Reyes - 1.9 - $ - $550,000 - $2,272,400
Total plus/minus value: ($3,572,400)
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
Randy Ruiz - 0.2 - $239,280 - $550,000
Adam Everett - (0.1) - ($119,600) - $2,800,000
Mike Lamb - (0.1) - ($119,600) - $3,500,000
Livan Hernandez - (1.6) - ($1,913,600) - $5,000,000
Total plus/minus value: ($13,763,520)
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.
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