Friday, September 02, 2011

Marginal Value and Why I Don't Care if the Mets Bring Back Reyes

Quickly, who has been the most valuable Met this year?

Has it been Jose Reyes and his league-leading .336 batting average? Did Carlos Beltran have that distinction while he was here? Has David Wright's surge since coming back put him into the discussion?

No, no, and no -- if you are talking money, that is.

When you take into account the salary they are earning, the most valuable Met this season has been none other than Daniel Murphy. No, he does not have the highest WAR of any Met this year -- that distinction goes to Reyes -- but he has provided the most value at the least cost. That makes him the most valuable.

Below is a table with a majority of the Mets regulars, sorted from the highest WAR per dollar to lowest:

[I really hope you can read that.  I will provide the text version of that chart at the bottom of the post.]

Anybody with access to baseball-reference or fangraphs or who watches the game can tell you to a reasonable degree of certainty who is the most valuable player on the field.  But baseball is a business -- just like the other major sports -- and even though you and I might bleed blue-and-orange and think flags fly forever, for those who make the decisions it all comes down to money.  It's not that winning is irrelevant -- but winning almost always depends on having a strong financial position from which you can make moves in the future.

There is a very good (and very mathematically heavy and boring) article over at Baseball Prospectus which takes a look at the true costs and benefits to signing free agents.  In it, the author discusses the pricing of free agents (he calls it "the marginal cost of acquiring a player's contribution on the free-agent market") while also factoring in things such as the length of the deal (ex: a player gives up dollars in the first year for a guarantee of a longer contract at a lower average annual value) and the draft picks lost as compensation.  He provides a great example (I have edited out most of the math):
Which brings us to this next example, where the Tigers surrendered the 19th pick in the 2010 draft to sign Jose Valverde to a two-year deal worth $14 million, which would be worth $22 million if the Tigers exercise a 2012 club option. Ignoring the draft-pick compensation, Valverde’s contract would look pretty good ... he would be worth $18.2 million if you ignore the draft picks.  However, the 19th pick would ... 3.3 wins over the first six years, which ... is $10.5 million in foregone wins.
If you go to fangraphs, you'll see that at the bottom of each page they have a section for each player entitled "value."  In that section, there is listed the players salary, right next to a column which says "dollars."  The dollars column roughly amounts to how much a player providing that much value would cost on the free agent market.  Jose Reyes, for example, has posted 5.3 WAR so far this season, while the market in baseball generally values 5.3 WAR at a price of $23.9 million dollars.  Daniel Murphy, on the other hand, has provided 3.2 WAR which is valued at $14.3 million dollars.

Jose has been better, but Murphy has provided more bang for his buck.

So herein lies the problem:  once Jose Reyes - or any player - becomes eligible to test the free agent market, they are going to find someone to pay them what they are worth.  Or as is often the case, more than they are worth.  At that point, unless there is some kind of hometown discount being provided, that player is no more or less useful to your team than any other.  In fact, he may be LESS useful to your team specifically because you owned him to begin with -- by not allowing him to leave, you fail to get draft pick compensation that you would otherwise have.

For example, if the Mets were confronted with the ability to sign Jose Reyes or Hanley Ramirez, as free agents this winter, my only preference would become who would provide the better DEAL for our team.  I love Reyes, he is my favorite player.  But I'd rather see my team win without Reyes than lose with him.[1]

Back in 2005, when the Mets were on the precipice of their ill-fated dynasty, the world belonged to them.  In David Wright and Jose Reyes, the Mets had lucked into two all-star position players at almost exactly the same time.  Between 2006 and 2008, Reyes posted 6.1, 5.8, and 6.4 WAR.  In the same time span, Wright posted 5.2, 8.9, and 7.1 WAR.  All of those were All-Star campaigns, and in the case of Wright, what had a good argument as an MVP season.
But why did the Mets win so many games from 2006-2008?  It wasn't just because they had Wright and Reyes -- they still have Wright and Reyes.  It was because in 2006, Wright and Reyes made a COMBINED salary of less than a million dollars.  In 2007, they earned around $4.5 million dollars.  In 2008, they raked in less than ten million dollars.  As a whole, they earned approximately $15 million dollars while providing the Mets with value equivalent to what they would have to pay a free agent approximately $163 million dollars for.  That's $150 million dollars of profit.

So what did the Mets do when they had two, young, cost-controlled mega-stars?  They used the extra money that they had to PAY free agents.  They brought in Pedro Martinez, and Carlos Beltran, and Carlos Delgado, and Billy Wagner and so many others.  And for that stretch of time, the Mets were very, very good.  But when the Mets failed to win it all, it wasn't just a sadness that could be remedied next year -- it was the end of an era.  The window was, and remains, closed, for the Wright-Reyes Mets to be anything special.

Take an example of another very good team, last year's Texas Rangers.  They knew that they had a good, cheap nucleus of talent in Josh Hamilton ($5.5M), Ian Kinsler ($4.2M), Nelson Cruz ($440K), and others.  They could afford to pay free agent money to players that they thought would push them over the top -- like Vladimir Guerrero.

Even big market teams like the Red Sox cannot win without cost-controlled, home grown stars.  The Red Sox have players like Dustin Pedroia, Jacoby Ellsbury, Daniel Bard and Jon Lester under cost control -- so they could trade for Adrian Gonzalez and give him a lucrative contract extension, and they could pick up David Ortiz' contract option, and they could afford to make moves even with John Lackey's contract burdening them.

As for us, with Reyes and Wright reaching the point in their careers where they need to be paid what they are worth, it doesn't really matter if they are Mets or not-- outside of our weak, silly, baseball-fan hearts.  They will still be good players, but they will be no better for us than any other roll of the dice that we make on the free agent market.  Can a team built around a Wright and Reyes who are being paid market value still win?  Of course they can.  But the deck is no longer stacked in our favor.

For the next few years, the Mets are going to have to stand by and watch young, practically free superstars like Stephen Strasburg, Jason Heyward, Domonic Brown, Bryce Harper, Mike Stanton, Logan Morrison, Antonio Bastardo, Julio Teheran, Jonny Venters and a host of others provide All-Star if not superstar value for our rivals.  The question is -- do the Mets have reinforcements?  Can the Mets reload?

All of this, finally, brings us back to the table that we posted at the beginning of this article.  Although the Mets don't have any surefire stud prospects waiting in the wings to be our next Wright or Reyes, the Mets certainly do have a lot of cheap players who can provide value in 2012 and beyond. You don't have to be a stats nerd or sabermatrician to understand that having cheap players who can step into roles on a winning club has value.  You just may be surprised to learn how much.

Another way of looking at the above table is to look at the value provided beyond the salary they were paid.[2]  Sorting this way, Murphy is again the most valuable Met.  In third, however, is Jose Reyes, who has provided over $11 million in surplus value despite earning $11 million on this year's contract.  All in all, the Mets have 12 players who have provided more than $2 million in surplus value to the team, and even better, all of whom (except Chris Capuano and Reyes) remain under team control next year.

Add to these names (Murphy, Niese, Tejada, Davis, Dickey, Turner, Duda, Thole, Pagan, Parnell) the list of players we discussed last week in our Organization Report, and you've got yourself an excellent core of players to build around.

Would I like the Mets to resign Reyes?  Absolutely.  Would the Mets be a better team on the field for doing so?  Absolutely -- there is no player out there who can replace the value of a stud, in his prime, All-Star shortstop.  Will it make the Mets better suited financially in the future to compete with the other teams in the NL East?  Hard to say.

The fangraphs values, and the generally accepted practice of attaching a dollar value to the WAR provided by a free agent, are misleading in that relative to the entire pool of players playing major league baseball, all free agents are overpaid.  As the salaries for players with less major league service time are strictly fixed by the rules and by arbitration, they can only wait for their free agent payday. 

The Top 12 Mets in providing value beyond their salary:

Value Beyond Salary WAR per $
IF Murphy $13,562,000.00 7.58
SP Niese $11,784,000.00 6.19
IF Reyes $11,724,000.00 0.47
IF Tejada $5,718,000.00 3.50
IF Davis $5,686,000.00 3.24
SP Dickey $5,179,000.00 0.76
SP Capuano $5,055,000.00 1.00
IF Turner $3,970,000.00 2.50
OF Duda $3,956,000.00 2.42
IF Thole $3,513,000.00 2.14
OF Pagan $2,618,000.00 0.40
RP Parnell $2,188,500.00 1.38

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