Free Agents, Rent-an-Aces, and Moneyball Inefficiencies


Taro's article, a cubicle or two to your right on the virtual 71st floor that is Seattle Sports Insider, puts the problem in Zen-simple relief:


$60 ~ $90 Million: "Theoretical" Cost of what the Cubs PAID for 3 months of Chapman's services.

$80 ~ $110 Million: "Theoretical" Cost of what the Indians PAID for 1.5 years of Miller's services.

$86 Million: ACTUAL Cost of Chapman's services for 5 YEARS. Paid by the Yankees in Free Agency.

Why are Chapman and Jansen getting sub $100MIL offers when you can recoup that value in trade at any point in time during the duration of their contracts? 


It's a tremendous observation by Taro.  That is point A.









Never have you been more fortunate to have Dr. Detecto as your host.  He will propose, for your reading pleasure, a couple of possible answers to Taro's saber riddle.  One that does not involve the concept of "GM's need to figure out what WAR is."  Taro himself rejects this facile explanation, observing a day earlier that we have reached the age in which no single organization is a patsy for all the other organizations...


We could quibble about the $90M cost for renting Chapman, by pointing out the "deltas" between Org Prospect A and whoever steps in behind him.  But you would still be able to "cancel the fractions" and find that July 31 GM's buy rentals at --- > close to the rate they pay for 5-year players.

Partly because!  On July 31st, they pay in prospect currency, and on December 31st, they pay in dollar currency.


Usually when teams pay that $90M* prospect value for a rental player, they get absolutely destroyed in the press for doing so.  Addison Russell PLUS! for Jeff Samardzija ... Wil Myers for Jon Shields ... examples could be multiplied, but you take the point.  Dayton Moore replied to this, after coughing up Wil Myers, by saying:


"We have to start winning games at the major league level, and the way you develop a winning culture is by winning major league games," Royals general manager Dayton Moore said. "It's time for us to start winning at the major league level."


First minor point.  As SSI constantly preaches, the value of winning (and re-branding) is much higher than fans think it is.  As the Royals have demonstrated since the Wil Myers trade.  Their payoff has been huge, huge, huge.  Far higher than would have been the payoff of keeping Myers, watching him play well, but remaining losers.

Moore's point about "burning his Loser bridges" is an interesting side point.  Seattle Mariners fans can rejoice any time the ballclub moves its contention window to, um, "RIGHT NOW."  When a baseball team burns its bridges in a commitment to excellence, good things tend to happen.  Sufficient unto tomorrow are the evils thereof.  Figure out 2019 when it gets here, within reason.


There is a second minor point.  On July 20th, a team can assess its playoff opportunity.  It might be able to discern "One impact player, right where we are weak, is going to be the +3 games that put us in the playoffs or don't."  It's like leveraged innings out of the bullpen.  A shutout inning in the 8th, against the Red Sox MOTO, might be 2X or even 3X the value of a random 4th inning.


A third minor point.  When you pay $60M plus for three months of Aroldis Chapman, you are pretty much guaranteed to get the three months' performance you expect.  When you pay $175M for seven years of Felix Hernandez, you've got to put a multiplier in there for the risk ... he's got, what, an 0.40 chance of delivering 7 more years of elite performance.  Or less.  Therefore if you could bank the 2.32 ERA's for seven years, Felix would be worth $400M, not $175M.


But the major point is this:  FREE AGENT SUPERSTARS ARE UNDERPAID.  Assuming they stay healthy and perform.

Because of collusion and precedent and community peer pressure, a David Price might make only $27M per year when in reality he may be worth $50M or much more, after you add up WAR and branding and culture and all the rest of it.

Even LincStrong used to be willing to use vastly different paradigms when it came to a talisman like Griffey or ARod.  The usual paradigm is warped; the "desperation" paradigm is the reality.

Comes July 31st, we see what players are really worth.  There is no peer pressure not to trade three great prospects for a superstar; it flies under the fiscal radar, in a way that an $800M contract would not.


Takeaway for M's fans?  Stars and Scrubs, baby.  Those aircraft carriers are worth more than you think.  Any time your local club is willing to give lots of prospects and/or lots of $$$ for a difference-maker, feel free to rejoice.  The only cost was to our enemies, who resent the precedent.  

All Hall of Famers are market inefficiencies.  The reductio ad absurdum?  Babe Ruth was worth a lot more than $100,000, now wasn't he.


Well, maybe all that shtick is wrong.  But I doubt it :- )

Oh.  Kenley Jansen for 6/$100M?  It's a no-brainer.  Or it would be, except for the ownership committee's philosophical stance.


Dr D



Taro's picture

Stars are far more valuable than regular players, I agree.

But the paradox is about cost vs trade value, and the wierd 'quantum jump' in trade value between 'good' RP and "elite' ones. Good position players, and good SPs are still worth a lot in trade. 'Good' relievers are NOT.

Chapman costed $86 million in free agency. Not much in terms of dollars OR years late in his 30s. A star player at any other position costs $100s of millions of dollars and years well into their decline phases. For instance, Cano (who is worth far more in raw baseball terms then Chapman) would probably command significantly less in return just because of the money and years involved in his contract.

Somehow, a star RP is worth 80-90% as much in terms of trade as a star at any other position and yet costs 20-30% as much to sign in the free market.

You create a paradox, where from a value standpoint the highly-paid elite RP is essentially "free" or even making you money, for as long as he can maintain a high level of performance and health.


++ But the paradox is about cost vs trade value, and the wierd 'quantum jump' in trade value between 'good' RP and "elite' ones. Good position players, and good SPs are still worth a lot in trade. 'Good' relievers are NOT. ++

Exactly ... and I think when you get a 1-, 2-year setup man who has a great season ... Mark Lowe, David Robertson, Luke Gregerson ... they are throwing the ball great at the moment.  But there is a question about their repeatability.

Mariano Rivera had the bread-and-butter 92-95 MPH swerveball that he could throw in his sleep.  Or Wagner with the 100 MPH fastball.  Or Troy Percival, KRod, Tom Gordon with obviously repeatable wipeout yakkers.  Daimajin had the "thang" along with his command.  (Can't even imagine that guy when he threw 95+.)

Scouts speak in terms of 70, 80 pitches ... plus-plus or plus-plus-plus, a specific weapon that controls a game.


So again you're talking about that 0.95 ROI multiplier for the superstars that you *know* can produce their "weapons" on demand...


No, this isn't a rant on how pro-ballers are so overpaid greed-masters who should be thankful they don't work on the Carrier floor in Indiana, yada yada yada.

But I will offer the opinion that FA SUPERSTARS are rarely underpaid.  To wit:

1. Doc touched on this one his ownself, with the caveat  '..assuming they stay healthy and perform."  Of course, it is the buyer who is assuming the risk in that exchange. Caveat Emptor doesn't quite explain away the buyer's difficult task here.  All due diligence doesn't eliminate the risk of a blown knee, or arm or head.  OF course, TJ surgery (for example) doesn't reduce an arm's future value to Zero.  But (for example) if it eliminated 1.5 years of Jansen mound time, then your investment just became 25% more  expensive, in terms of what you paid for and what you got.  Every longterm contract has that risk evaluation built into it.

2. What a GM is really buying is not 6 years of Jansen, but the delta between what those dollars buy in Aisle 1 (Jansen) or Aisle 14 (somebody else). AND you have to factor in the value of what that cash surplus might buy over in Aisle 16 (Nuts, Bolts and Fisters).  AND you have to factor in the delta between what a Hex Head Fister might bring you, compared to the box of hardware you already have in the box labeled "Miscellaneous Whalens" sitting on the shelf in the garage.  Some of those Whalens turn out to be just exactly what you need. 

3.  Assume that in 3 of the 6 years that you buy him, Jansen CAN'T give you what you what you've ponied up for, which is a LCS or WS bid.  Listen, nobody is paying Jansen for an 82-80 season.  You go 82-80 and you've really wasted that Jansen purchase.  Oh, I suppose he gives you some marketing chops that you didn't have before, but if you're completely out of the race by August then his presence isn't filling the stands.  At least you have a Happy Felix Day every five days (every 10 if you factor in road games), allowing you to fill The King's Court.  So Jansen's value in any one year is impacted by whether your CF has a career worst year or by whether your Tyler O'Neill goes all Joe Charbaneau on the AL as a rookie.  In the real world, and not the theorical WAR one, Nelson Cruz was much more valuable in '16 than he was in '15, despite nearly identical numbers.  That is the reason the White Sox sell a Chris Sales, because he isn't really that valuable to them over the next couple of years.  They are unlikely to challenge AND 16 Sale home starts MIGHT put a total 160,000 more fannies in the stands, maybe.  So when you roll the big dice on Jansen, you're really rolling the little dice on your other guys, too. GM's understand this.  So the market for Jansen is limited to that degree and that helps create the impressionthat he's undervalued.  Jansen gets Minnesota only incrementally closer to the promised land.  So little so, that there is no good point in them buying him right now.  They'll wait, thank you.  And in 4 years, if they are close, then they will overpay for him.  But were the Twins to buy him now, using the Taro Theorem, just to hold him until the sell him to the overbidder in two years they take on all sorts of risks.  Now that $80M gets real costly if he blows the elbow two Spring Training's out. Now you've accrued no real return for him and any future return just got a haircut, too.  

4.   Mike Trout is likely the best baseball player to come around since Mays in '51.  Something like that.  Yet despite that, he's probably not worth the cost of investment to the Twins.

5. Doc, I'm sure you've dealt with charitable foundations. They love to have their dollars be the last dollars in, the ones that complete the financial needs of a project. Jansens are like that.  When they complete the project and meet the need you hired them to do (LCS/WS) then you've got what you paid for.  Two Wild Card spots during the Jansen years aren't enough.  

6.  Zero Wild Card years during the Cano Era isn't enough.  AHA, you say....that's why we HAVE to bid big on Jansen (or Sale, etc) right now; because we risk losing our Cano investment, too.  I'm no stock market wizard, mind you (my investment guys get some fraction of a percent to do that), but I know that saying "I better buy a bunch of Amalgamated Zirconium or my stock is wasted!" is a bad investment strategy.  In almost every way, the Cano/Cruz buys WERE the purchase that would put us over the top....or were supposed to be.  They didn't.  Well, yet. But there is a Rat Hole Philosophy at play if you have to follow up every investment with increasing layers of risk.  Of course, the ultimate payoff for a franchise isn't really the World Series but an increased franchise worth.  From an ownership perspective, anyway.  Seattle's a winner in that game, already.  The Mariners, not the city, of course.  GM's get paid to accelerate that increase, without doing huge damage to the cash in the drawer.   

7.  Right now, in this baseball era, all teams are jumping on the Bull Pen Bandwagon as if a hot-armed Cuban was what got the Cubs the ring.  Hey, the Cubs led the league in ERA (Chapman's 26 innings didn't change that) and were 2nd in runs scored.  They were a WS team anyway. Their WORST starter just had a 1.2 WHIP and a 105 ERA+ and was named Hammel.  What do you think?  Were their chances only 80% or 90% that they win the Series even if they don't go get Chapman?  So you have to be in that special place AND roll the dice to make Chapman's few innings all THAT special.  I know, at that late stage in the season, one inning might make the difference.  That is exactly why Taro thinks you can always get your nugget back on a Jansen investment, and that's a wise strategy.......once you minus the injury risk and the availability of other arms risk and the need risk, etc.  

8.  Did you see the movie "American Sniper?"  I quite liked it.  A lot, actually.  But you can't win wars with a strategy of just investing in more and more snipers.  God Bless the Chris Kyles, mind you.  The Yankees just paid a gabillion dollars for the ultimate sniper, in Chapman.  Jansen is like that, too.  Their baseball value is entirely predicated on the infantry getting them to one place: The one run lead with 3 outs to go.  They are becoming so specialized that you don't even waste them down one run.  But wasn't it James who established that teams win close to 90% of those games, whether they have a Rivera or not.  Teams win (just looked it up) 95% of the games they lead, going into the 9th inning.  With just a two-run lead in that situation they win 93% of those games.  Chapman doesn't change that equation much.  Neither does Jansen.  With a one run lead, however, the number drops to 85%. (  So you're paying Chapman/Jansen for the delta between he and some other guy in THOSE ball games.  What is that worth?  A lot if it is October, I suppose....but then Chapman falls apart anyway :)  BTW, it looks to my eye like Jansen entered 17 games with one run leads last year.  He blew 4 of them.  76%, right?  He did get some wins when he entered tied games, however.

9.  Was the market inefficient because nobody paid $4 for a cup of coffee until Starbucks convinced us that such was the way to coolness (man, I do it, too).  The folks who invested in Starbucks early sure reaped the reward for the market figuring out just what a cup of coffee's true value was ("WSAR"= Wonderful Sips Above Replacement).  Billy Beane retaught baseball the lesson on the "real" value of OBP, momentarily, it seems.  RP's are the new hot thing right now (See KC/Miller/Chapman).   I suppose you get in while they're hot.....but unless they pay-off early, you add the risk of a diminishing market value to the injury risk, etc.  DiPoto has figured that he's on to the new RP strategy.  Buy bundles of them cheap and hope 3 pay-off. 

10.  Will finish with this simple point....that I should have made 90 minutes ago and then went fishing.  SOME FA SUPERSTARS are undervalued, not all of them. Some are overvalued. The risk on a Kenly Jansen $80M investment is substantial, impacted by the performance of Felix, Kuma, Cano, Segura, Tank Charbaneau, Jansen's scapula, Jansen's elbow, and the future need of teams down the line, who may or may not have something really pretty that you may or may not be able to swap Jansen out for.  Maybe it's just better to trade Gohara and Altavilla to the Cubs and get Monty back?  He looks to be a whole long way toward a Jansen.  But then, what have you lost, Altavilla and Gohara being juicy and all?  The risk on a Cano investment was substantially less.  The best FA signing this off-season was Fowler, I think.  He addressed a huge St. Louis need (one they had identified, not me) and h'es a clock-work performer.  Drat it all to heck.  He's the guy I wanted and the Cards were the trade partner I hoped to play with.  Beat again.

The M's might have jumped to a 90-win ball-club, all things going well.  90 might not be enough, considering how badly we need Felix and Kuma to be Felix and Kuma.  I'll bet one of them is a fair approximation of himself.  The insurance arm is next up on my Santi Claus Wish List.  Looks like it will be a Fister-esque guy with a big bow around him.  Is that guy enough?  Maybe....but he's not much worse of a bet than Jansen is.  In my book, anyway.  

Taro's picture

Definetly agree, its a risk/reward balance.

However, $86million to an ace reliever up to his age 34 season is signficantly less risk IMO than $220million to an ace SP into his late 30s. The risk is higher with more IPs, higher age, and more money involved.

Which makes it strange that RP are being traded for 80-90% as much value as other star players (when not considering contract amounts) despite costing 1/3 to buy on the free agent market.

Another takeaway is that giving a non-elite RP a big contract is almost nonsensical in this market.


Your last line is dead on..  "In this market" indicates the new paradigm (which may well change).  DiPoto is playing at the Yin end of the RP spectrum assuming the hidden value is in numbers and "upside."  

Jansens and Chapmans are specialized beasts. Rivera and Eck, were too.  They are dependent on the other 8 innings to develop just right so they may be deployed for what you pay them for.  If the offense tanks and you're down 0-2 going into the 9th, their value isn't much greater than that of The Bartender.  5-8, 8-5, 4-0...all the same equation.  But a starter has an actual ability to impact THAT 9th inning situation.  That's why you pay more for Chris Sale, even with some greater risk (If Sale is hurt half the  year, the 100 lost innings are way more "expensive" than the 35 lost Jansen innings).  In some ways Jansen and Chapman are even more specialized than Rivera and Eck, because the structure of the game is bent toward the bullpen taking over after 5.2 innings.  In the NFL it isn't enough to have a great DE or OLB.  You have to have a specialized pass rushing DE and another at OLB to bring in  in the special situations. The modern RP is the equivalent.  They are layered, one upon the other.  I'm not sure that Jansen or Chapman has changed the outcome of games THAT much, but as the "Nuclear Deterent" they've changed the nature of the flow of the game.  

I"ll bet  you guys knew that our top 6 BP innings guys were dang good lasst year.  ERA+'s of 144, 174, 109, 115, 146 and 114.  Yet, Cishek's $4M were the only thing close to even a mid-level contract.  

Maybe the DiPoto Theorem becomes the next MLB-wide Moneyball Philosophy.


One of the reasons I think Taro has such a strong point, is the relative low risk of superstar relievers.  They're going 60 IP per season rather than 200+.

Tons of HOF-level closers went 15 or 20 years at top level.  Mo, Hoffman, Lee Smith, KRod, Eck, Percival, Fingers, Franco, Reardon, Percival, Wetteland, etc.  That *0.40 multiplier that you so aptly emphasize Moe ... wouldn't that ROI multiplier be at its highest for relief pitchers?

It's interesting that when the first "pure saber" GM took office, Paul DePodesta, his first big move was to overpay a closer.

Taro's picture

Ya, I'm with you Doc. Personally, I feel better about RP durability over SP durability.

I mean, don't we feel better about Diaz's long-term health as a closer than as a SP?


But multiplying the innings of an Eck, Hoffman or Rivera x 2 isn't the equal of a Maddux or Felix.  I'm not sure that 210 innings of Rivera is worth 200 innings of Maddux.  The difference in the type of innings counts.

But it may well be true that betting on 6 healthy years of Jansen is a better bet than 6 healthy years of Odorizzi (for example).  

But the real bet for the M's is who gets us nearest the promised land in '17 or '18?

Edit:  Typos corrected.  I think I had set a record, btw, for most typos in 4 sentences.  Sigh.


Although, a good relief pitcher impacts 50, 60, 70 games per year. Even the best starting pitchers only impact 30 or so. 

I'm not sure if I buy into the idea that more innings is that much more valuable than making an impact in twice as many games or more. Not 3x the salary difference anyways.


A comment in DiPoto's podcast, and a look at an instagram vid shows Felix working out hard with the same guy that Cano rehabbed with last year and that Cruz uses for a personal trainer. Felix, Robbie, and Cruz all using the same guy. I hope the M's are flying James Clifford out to watch and improve the M's system. That's a lot of M's investment wasted if they don't keep working on their weaknesses throughout the long season.


This one:  Comes July 31st, we see what players are really worth.

Dead on, but it is still a little like saying, "Comes the proposal and we will see what diamond rings are really worth."  Well, it's close.

Comes popping-the-question time, you have a "limited" number of buyers badly in need of something to close the deal.  You also have an artificial shortage of just the stuff you need to close that deal.  And you have an effective marketing campaign that says you have to go big or go home.  Comes July 31st, you have a limited amount of teams (just those in the chase), all trying to close the deal and all looking for the best way to have the biggest impact on the next 60 games.  13 starts or 30 relief innings seems to be the way GM's choose to go.  The market is limited to those hot arms on teams that are out of it this year and next. Those teams know what they have and what it's worth right then.   If you are in need and if you don't do something, it doesn't always sit well with the audience you're trying to reach.

I've gone the FA route on diamond rings just once.  It worked out well, getting me to the Fall Classic where I ended up winning it all.  And while I had to give up some pretty prospects (samollians) I was a savy enough GM to not give away the farm.  

I shopped around for just the right  There were more than several available....but it was a seller's market, they knew they mostly had me by the nose:  I HAD to close the deal.

When GM's buy their July 31st "close-the-dealer," they are buying with lottery tickets (prospects), for the most part, not actual cash.  But they are purchasing something with actual value right now.  And that actual value right now is worth substantially more than it is in December because you have the need right now.  And the payoff is so large AND you're close enough to smell it.    All of this Doc pointed out, of course.  

We've talked about the Chris Sale sale and the BoSox purchase of him.  Mostly I thought they got him fairly cheap.  Indications are that Moncada was not the first guy the ChiSox wanted.  It looks like Devers (A-Ball IF) and Benintendi were 2 and 1 on the Chicago list.  Boston said "No thanks," and closed the deal anyway.  We've also not talked about the trades that haven't taken place, Archer and Odorizzi, for example.  Indictions there are that the TBR's were asking too much and nobody was willing to play with them.  Such a position comes with some risk to the Ray's, of course.  Healthy and productive, Archer and Odorizzi will remain hot commodities into the summer.  But healthy and productive isn't guaranteed.  

And wise shopping still pays off.  While Chapman and Jansen have grabbed the headlines, the Giants just bought Melancon at 2/3 the price. For 5 years running, he's been dang near as good.

But wise shopping isn't always available in July, when the heat is on.  Prices go up.  It's like buying gas 3 days before Labor Day.  

So July 31st tells us what players are truly worth on July 31st and in terms of prospects/lottery tickets.

Which was Taro's reason for buying Jansen get all those lottery tickets next July 31st.  Unless Jansen breaks, of course.

December tends to tell us what players are worth in terms of cash on the barrel-head.    And, of course, that purchase has ramifications relating to the other things you now CAN'T buy because you've run short on cash.  There's a lost opportunity cost that goes with buying a Jansen or Chapman.  Is there a better way to spend those dollars?

Beware the risk, I suppose.  

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