Wednesday, January 06, 2010

Matt Holliday Signs: Compared to Bay and Who Is Left

As most already know, the Cardinals have resigned Matt Holliday to a massive, seven year and $120 million deal.

On the heels of Jason Bay's five year, $83 million deal with the Mets, there are undoubtedly going to be comparisons made between the two. With Bay about 15 months older than Holliday, the Cardinals end up committed to Holliday one year deeper into his career than the Mets are to Bay. The average annual value of the Holliday deal is $17 per season, while the Bay contract averages $16.6 million per year.

Who did better - the Mets or the Cardinals - is something we won't know for a long time. What we do know is that both are paying their players contracts which are near their market value, and for many years. Matt Klaassen over at fangraphs does a good job breaking down the contract, repeats a concept which I think most baseball fans should be familiar with:

It has been said before, but it’s worth repeating: paying average market value for a win isn’t necessarily a “dumb” move, but it isn’t “smart” either. It’s “average” …on average. Moreover, straight market value isn’t the only factor to consider in this particular case. Leaving aside the possibility that the actual value of a win might actually be lower this offseason (dropping it down to $4.4 million, the market value of a 4.5 WAR player over 7 years drops to about $109 million), seven years is a long time for a corner outfielder in his thirties.

Neither team got a discount for guaranteeing many years on their contracts. Both require their players to maintain their level of performance (or close to it) throughout the life of their contracts in order to come out "even". Both will likely lose.

For what it is worth, here are Dan Szymborski's ZiPS projections for Matt Holliday for the next seven years. Once again, this is not a prediction as to EXACTLY how Holliday will perform -- rather, it is a simulation of how Holliday and players like him will age over a given period of time. A look at the progression, and how Matt Holliday is likeliest to perform in 2015 and beyond, is enlightening:

2010 .308 .387 .528 143
2011 .304 .384 .517 139
2012 .302 .381 .512 137
2013 .296 .375 .504 133
2014 .290 .370 .493 129
2015 .284 .364 .472 123
2016 .280 .358 .460 118
2017 .276 .354 .451 115 (option)

What does this all mean? Well ... for one thing, it might mean that, in a year with no marquee talent and with so much talent available in the middle tier, that it was foolish to pursue EITHER Holliday or Bay. Why pay Holliday or Bay their market value for five or seven years, exposing yourself to the risk they drop off in production or become injured, when you can get Johnny Damon or any other corner outfielder to do almost as well on a very short, safe contract?

Here are some of the remaining free agent outfielders, courtesy of Cot's Contracts:

Rick Ankiel STL
Johnny Damon NYY (A)
Jermaine Dye CWS (A)
Vladimir Guerrero LAA (B)
Reed Johnson CHC
Austin Kearns * WAS
Mark Kotsay CHW
Jason Michaels CLE
Xavier Nady NYY (B)
Gary Sheffield NYM
Fernando Tatis NYM (B)

Not that any of these players are the equal of Holliday or Bay -- but what if they provide half the production at a quarter of the cost? If Holliday is a 5-win player who costs $120 million, would Vladimir Guerrero or Jermaine Dye be a better deal as a 1 or 2-win player if we only committed $10 million to them?

It will be interesting to see how the rest of the offseason pans out, and where the many mid-level players end up -- and what they get.

Other free agents of interest:

Russell Branyan SEA
Carlos Delgado NYM
Adam LaRoche ATL
Orlando Hudson LAD
Felipe Lopez MIL
Miguel Tejada HOU
Joe Crede MIN
Pedro Feliz PHI
Ryan Church ATL
Jack Cust OAK
Ryan Garko SF

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