Every time a player signs a mega-money deal, there seems to be a very common kneejerk reaction, particularly among saber-friendly analysts. The typical response is to run to fangraphs.com for the player’s WAR-based dollar value and then, using projections, conclude that by the end of the contract, the salary commitment will wind up being a financial burden. Unfortunately, this kind of analysis, which, admittedly, I have probably done on many occasions, completely overlooks several relevant points.
Prince Fielder followed is following in his father’s footsteps by signing with the Tigers. (Photo: Getty Images)
The free agent process isn’t about determining a player’s long-term fair value. Rather, it is the means by which a player can use leverage to maximize his earnings in an effort to make up for the six years he was underpaid because of the reserve clause. Of course, many will point out that the team that signs the free agent didn’t benefit from those six underpaid seasons, but chances are they did reap similar rewards with another player. So, all free agent contracts should be assessed with an understanding that a premium is built into the total value.
Even though WAR provides a solid framework for determining a player’s value on the field, it is not as useful for determining his worth at the negotiating table. Supply and demand are much better determinants of the latter. Using Prince Fielder’s nine-year, $214 million contract as an example, the Tigers’ need (demand) for a middle of the order bat was increased greatly by the loss of Victor Martinez for the season. So late in the winter, however, there was only one viable option (supply) to meet the need. As a result, and because other teams were also interested in the first baseman’s services, GM David Dombrowski had no choice but to up the ante (unless he was willing to enter the season with a compromised lineup). That’s what free agency is all about, and it is within that framework that contracts need to be evaluated.
If Fielder replicates his recent success over the next few seasons and helps turn the Tigers into the perennial division champion in the A.L. Central (which, considering the weakness of the division, seems likely) does it really matter if he underperforms his salary during the backend of the contract? Does Fielder’s potential to put the Tigers over the top in the short term outweigh the anchor he may become later in his career? How one answers those questions is a matter of perspective, but the opinion that counts most belongs to Tigers’ owner Mike Ilitch, who happens to be an 82-year old man worth almost $2 billion. Considering his age and wealth, it stands to reason that the short-term impact matters more to Ilitch. Along the same lines, it’s also worth noting that Fielder’s other prime suitor was the Washington Nationals, who just so happen to be owned by Ted Lerner, another 80-something billionaire (86 and almost $4 billion to be exact).
Detroit Tigers’ Financials, 2001-2010
Source: Forbes
For the last three seasons, the Tigers have been operating at a substantial loss, according to Forbes’ data, so Ilitch has clearly shown a willingness to come out of pocket to supply the Tigers’ deficiencies. Considering the team had a need for a big bat, an owner willing to pay for him, and a realistic expectation of near-term success, Fielder’s immediate marginal value seems to justify his large contract. So, instead of getting bogged down in WAR projections, Tigers’ fans are better off dreaming about titanic homeruns from Prince Fielder…the kind his daddy Cecil Fielder used to hit many years ago…and leaving concerns about the 2016 payroll to the team’s accountants.
Doesn’t the fact that the tigers have operated at a loss potentially argue against your thesis? Sure, Ilitch has been willing to operate the team at a deficit the ladt few years, but presumably there are limits to how far he is willing to lose money for the team (or else they could in extremo sign every free agent on the market). You would be on stronger ground if the team actually had been making lots of money. Then you could make the case that, ‘hey, the tigers have lots of money to put into payroll, so a big contract does not compromise the team down the lown.’
Plus, as Ilitch is old he could, to be blunt, die any time. That means a future ownership will be saddled with the contracts Ilitch signed off on. The next owners may not want to operate at a big loss, and in that case this contract could be a real albatross.
In the end, your argument boils down to: Tigers fans shouldn’t worry, since it’s Ilitch’s money and Fielder’s HRs are fun to watch. OK, that’s as true as far as it goes. But I think that any thinking fan must also consider potential longterm ramifications. Maybe those concerns should not weigh as heavily, I don’t know.
But I bet that this contract will be a disaster in about three years. Then again, I ‘m not a Tigers fan, so I am certainly not worried at all!
The main reason to be concerned about how much money your team spends is because you fear it will impact future moves. With the Tigers, however, it seems as if Ilitch isn’t bothered by incurring losses from baseball because his net worth is so high and they are probably mitigated by increases in franchise value anyway.
Your second point is valid. In fact, what you described is kind of what happened to the Royals when Ewing Kaufman died. Having said that, I am not sure it makes sense for the Tigers to operate under the hypothetical constraints of a future ownership team.
I don’t think my argument boils down as simply as you put it. Rather, what I am saying is the value of players like Fielder are not determined by WAR. They are determined by market forces, team finances, and the immediate need of the club. If I was a Tigers’ fan, I would rather go all-in now than wait for Cabrera to age, Verlander to exit his prime, and yes, Ilitch to die. Considering the Tigers have one WS in the last 40+ years, I wouldn’t be comfortable biding my time when there is an opportunity to go for it all.