Saturday, April 17, 2010

Market Correction

Today I thought I'd talk about the market correction that I have perceived over the last couple of off-seasons as far as player contracts go. The market correction I'm talking about is a shift away from power to defense, youth, and roster flexibility. The value of OBP also seems to have decreased to a degree, more on that later.

Here is the best example from the off-season following the 2008 season:

1. Adam Dunn's 2-year, $20MM contract. Years ago, a guy like Adam Dunn, who is pretty much a lock for 40 home runs a year and is always on base, would have gotten a lot more money that this, and much larger market teams would have gotten in on the bidding. The fact that Adam Dunn is a defensive liability at both first base and in the outfield is the only thing that could have decreased his value. A comparable player from earlier years would be Manny Ramirez who had hitting ability but very questionable defense. He had been locked up long-term by the Red Sox and getting paid $20MM a year in 2001.

Some examples from the off-season following the 2009 season:

1. Jermaine Dye still remains unsigned. Jermaine Dye is a lock for about 30 Home Runs a year, but by many metrics, is the worst defensive player in MLB -- even worse than Adam Dunn. He's also old, and an injury risk because of that. Jermaine Dye offers no roster flexibility because of his inability to play defense at an adequate level, leading to teams not wanting to sign him. In past years, a "veteran guy" with power most definitely would have been signed, but in this knew front office philosophy that is developing, it doesn't seem to be happening.

2. Vladimir Guerrerro's 5.5MM 1-year contract. While it's true Guerrero is getting up there in years and is an injury risk, if he stays healthy in Texas he should pretty easily hit about 30 Home Runs. The problem with Guerrero is, once again, his lack of defensive ability. He will probably only start around 30 games in the field this year (if that), and will mostly be a DH. He doesn't bring any roster flexibility because of defensive inability. In years past a similar player would have been the aforementioned Jermaine Dye, who was signed to a two-year, 10.15MM dollar contract with an option for a third year that was exercised. While he was not getting paid more than Guerrero, he was definitely getting more security. The problem is that the Rangers don't want to commit to having such roster inflexibility more than one year at a time.

There are more examples I could touch on in both years, but I think I should probably get to my point. The players who are getting paid the most these days are the players who are a perfect marriage of offensive and defensive abilities. These players are guys like Mark Teixeira and Matt Holliday. There are also players with much weaker offensive numbers than those listed above who are getting paid much more, with Mike Cameron being the first example I think of. Players who can't play defense but can hit the ball a long way (Russel Branyan and Jim Thome can be added to those players above) are no longer getting paid.

The most interesting thing about all of this is the fact that the original "Moneyball" philosophy was that Defense was only 5-10% of the game. Interestingly, the same guys who are all about the old "Moneyball" philosophies, such as Billy Beane (OAK), Theo Epstein (BOS), and Jack Zduriencik (SEA) all have been making defensive-minded decisions.

For Billy Beane you have the Coco Crisp signing, and the trade for Kevin Kouzmanoff. Both of these guys are considered great defensively at their positions.

For Theo Epstein you have the attempted trade of Lowell, who has become a defensive liablity, the Marco Scutaro signing, the Adrian Beltre signing, and the Mike Cameron signing. Beltre and Cameron are among the best at their positions, and Scutaro is definitely better known for his defense than his offense.

For Jack Zduriencik you have the Franklin Gutierrez extension, the Casey Kotchman trade, and the Chone Figgins signing. Gutierrez, by all defensive metrics, was the best center fielder in baseball last year. Kotchman is known for his glove, and Chone Figgins not only brings solid defense everywhere, but also brings a ton of roster flexibility with his athleticism.

So basically, the point I'm trying to get at is that it seems these three GMs (and probably more than just them, these are just the three that popped into my head) feel that power is over-priced, and defense is undervalued. Obviously other GMs are are thinking similarly, with the value that is being placed on guys like Guerrero and Dunn. Because of this, they are signing free agents accordingly and feeling as if they are getting most of these guys for well under market value, because they seem to now believe that defense means more than was once thought. This indicates a very large shift in the strategy of the game, and does not bode well for aging sluggers with no defensive prowess such as Alfonso Soriano and David Ortiz.

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