Tuesday, August 18, 2009

Getting Your Money's Worth: New York Yankees

There's been a lot of web noise recently regarding some enthusiastic support for Mark Teixeira as a front runner for the American League's Most Valuable Player award. It's important to note that VOC is by no means a good indicator as to likely or deserving candidates for this award: pure worth is the only indication. If a player worth 40 million dollars gets paid 40 million, he's the MVP (or at least a strong candidate), at a VOC of 0. I think that's an important disclaimer for all teams, but particularly for this money-gusher of a franchise.

So do the Yankees get their due? I don't mind saying I was surprised. Chart get!

(click to enlarge)

Of the teams where I was anticipating writing a paragraph or two describing a VOC of 0 as still being a winning franchise if the team spends enough, the Yanks outdo me. I'd still believe they're probably in the bottom half of getting their money's worth, but hey, it's a lot of money, and while studying the reasons they are in the black, I learned something interesting: in many ways they are financially more prudent than many teams spending much, much less. Let's start with this guy:

SP Chien-Ming Wang
2009 Salary: 5.0 million
2009 Performance: .55 million
2009 Anticipated Performance: .55 million (season ending surgery)
2009 VOC: -4.55 million

Before drawing up the numbers, this is one of four team numbers I was anxious to see (not coincidentally, these are the players I discuss!). I was really quite surprised that despite his really legendary failures this year, Wang ended up being almost exactly at replacement level. How on Earth did this happen? This is how.

The Yankees end up often not spending as foolishly as other teams because the money is almost meaningless to them. Taken out of the equation, they can evaluate on a case by case basis and are never afraid to pull the plug on a player who isn't living up to their expectation, regardless of salary. Of course they don't want to sign a 25 man roster of Carl Pavanos, but a 5 million sunk cost doesn't phase them in the least. They simply move to a replacement level option or to the free agent wire or to a trade. But in all manners of speech, they move on.

Cheaper teams (see Royals, Kansas City) will give high paid albatrosses every possible chance to succeed and then some(see Guillen, Jose), and will have that player dig such a hole that it's almost impossible to get out of. If Guillen hadn't left the clubhouse this year, he'd value at -12.0 million. If Chien-Ming Wang played for the Royals, he'd Jose Lima his way to a -15, hurting himself more in the process, before they pulled the plug. But the Yankees gave him some work in the pen (where he put up a bit of good value, actually) and then shut him down. It reveals teams like the Royals as the very definition of penny-wise and pound-foolish.

SS Derek Jeter
2009 Salary: 20.0 million
2009 Value to Date: 22.70 million
2009 Projected Value: 31.43 million
2009 VOC: 11.43 million

Statistically-inclined analysts get a lot of flack for their abuse of the quintessential Yankee regarding his defense, so when the chance comes to acquiesce, we should probably take it. G&C predominately uses UZR as it's defensive measurement, but Dewan plus/minus agrees on this point as well: Derek Jeter has steadily improved at defense the last two years and is now playing the best of his career.

Whether this is an indication that the average shortstop has just fallen off a cliff or Jeter has actually made these adjustments himself is completely immaterial. We will compare a man to his peers, and Jeter is looking really good right now. The man clearly loves the new Yankee stadium and is the single most valuable member of this team, and a legitimate MVP candidate. For a legend nearing the end of his career, this is the time to honor him: when he actually deserves it the most.

3B Alex Rodriguez
2009 Salary: 32.0 million
2009 Value to Date: 12.10 million
2009 Projected Value: 16.10 million
2009 VOC: -15.25 million

It's hard to call this contract a turkey, despite it's ludicrously high, almost ridiculous numbers, for the reasons mentioned above. He obviously can't live up to this number this year because of the high margin of time missed due to injury, so there's no fair game in lambasting the fellow. He's actually been the 5th most productive member of this team, which accounting for the missed time, is truly remarkable.

If Pujols has this contract, he's of mid-level value, and he's been healthy and just butchering the ball. But that's the problem with the contract itself: He absolutely has to be that good, for that long, to make himself worth it in the truest sense, and this gives an idea of just how hard that is to do at the very top level of income.

And lastly, the man of the discussion of the hour ....

1B Mark Teixeira
2009 Salary: 20 million
2009 Value to Date: 17.20 million
2009 Projected Value: 23.82 million

Again, the Yankees just want the big production, and don't care where it comes from or how efficient it is. Teixeira is in all likelihood not going to get any better than this. He's been remarkably consistent for most of his career, and is just a better paid, more visible example of himself. This is cliche by now, but it's cliche because it's true: Mark Teixeira is a very good player. Mark Teixeira is not even the MVP of his own team, let alone the American League.

(click to enlarge)

On these big contracts, if they are going to zero out by the time the curtain closes, you are mostly counting on big production in the early years, closest to the player's prime to carry the weight of the backend years. Mark Teixeira is in the first year of a monstrous, long deal. Mark Teixeira is also 29. There's reason to believe he'll age a lot better than Giambi did in pinstripes (even though Jason actually nearly validated his contract) because of his better athleticism and defense, and accounting for inflation it wasn't as expensive of a deal, but Yankees fans should just get accustomed to the fact that a lot of this will be sunk cost in about 6 years. You just have to hope that general inflation keeps up with his decline.


  1. Awesome post man :-)

  2. I assume you are getting the value numbers from Fangraphs. If not, I would be interested to know where they came from. But if so, I think there is a flaw with this article. Namely, it values all the players' contracts at the free agent rate, whereas many of these players have not reached free agency (or, in some cases, arbitration). But I could be wrong -- if so, please correct me.

  3. I'd love to see one of these posts on the Angels if you have time. Thanks.

  4. The graph is also flawed because it has players on it that are no longer on the team. Meanwhile, it has players that have been added after others have been released. (So it's not the team at the beginning of the season, but it's not the current team, either)

    I'd like to see this graph with the current 40-man roster (ie: With Jose Veras, Angel Berroa, Brett Tomko removed, and the others added)

  5. How is Burnett so far in the negative? His current value is already near 11M which projects to about 15M and his contract is for 16.5

  6. And he should finish solidly in the positives at his current pitching trend.

  7. This is great and all, but clearly does not speak to A-Rod's actual value to the team. VOC can tell a lot, but anyone who has actually followed the season knows that what A-ROD has meant to the depth of the lineup and their offensive production cannot be measured solely by his stats.

  8. George Brett FavreAugust 20, 2009 at 8:56 AM

    I think the last commenter is wrong. This chart, provided it is understood, shows the EXACT value of AROD to his team.

    Consider: he's the highest paid players in the league, misses half a season, and is still more valuable ($16M+) than probably anybody on the Royals except for Greinke.

    It's more a testament to the size of his contract and what exactly he has to produce (value) to match that contract (over cost) to make it worth it.

    The "cannot be measured soley by his stats" line is classic. ;)

  9. Any analysis that shows Mariano Rivera as a negative to the Team is hopelessly flawed, no matter what the premises.

  10. Penny Wise Pound SmokinAugust 20, 2009 at 1:28 PM

    Yep. Any analysis that shows that my favorite player is getting slightly overpaid is definitely worthless. What is this dumb chart about anyway? Seriously Alex Godriguez and MARIANO are negatives to their team?!>!!

    Kill me now.

  11. MO and ARod are not negatives to their team, all the charts say is that the market value of their production is lower than what they are being paid. If you want to talk about how much of a positive/negative they are, you can only look at their value by itself. VOC just gives an interesting idea of what the Yankees are spending compared to market value.


  13. I think George Brett Favre is absolutely wrong. How can you say that there is no truth to the statement "value cannot be measured solely by his stats"? They can't! Can you measure A-Rod's contract value based on his impact on Mark Teixeira? No. Can you measure A-Rod's contract value based on the fear he strikes in pitchers, making them make more mistakes not only to him but to other batters? No. He's of incredible value to this team.

    And he didn't miss half the season. He missed a month. He's been playing since May 8. Get your facts straight and don't exaggerate.

    Here's my view on this. Often, players will get contracts over-valuing their statistics because many times that's the kind of money it takes. The Yankees gave Teixeira such a huge contract ONLY because they didn't want him going to Boston, and they had to significantly beat whatever the Red Sox were going to offer him. Market competition often overinflates contracts. It's not just what he's worth to the team that you have to look at. It's what he's worth to your team AND what he's worth to not be on the opposing team that you have to take into consideration. The options aren't Mark Teixeria on the Yankees and Mark Teixeira not on the Yankees. The options they faced were Mark Teixeira on the Yankees and Mark Teixeira on the Red Sox. And to them, it was worth the money to have the former. Same with A-Rod. That is where this chart is skewed.

  14. In individual sports like tennis or golf, you only get paid of you perform. The better you play, the more you win and the more you earn. I wonder if team sports will ever get to a point of paying for current performance, not for past performance. The Yankees should pay Cano a motza for what he's doing this year and trim A-Rod back. Pettite is probably the nearest to that situation the way his contract is set up. They should ALL be like that.
    Team like the Yankees would still have the capacity to pay their players more than other teams, because they have a bigger market (for crowds at games, for TV rights and for merchandise), but someone like Pavano couldn't get as much as he did for being pathetic, while Wang would have been better rewarded for his great seasons. It will be very sad for Wang if his career is effectively over now due to his injuries, before he got the chance to be paid as a 17 game winner.

  15. Regarding a player like A-Rod, it's also worth asking how value is related to dollars? Does this formula assume that twice the production is worth twice the dollars? In real life, when you have limited room on the roster and on the playing field, twice as much production is worth vastly more than twice the money, both in contributing to the bottom line (winning) and in how the market responds to premium commodities.

  16. I think relievers like Rivera are always under valued. I believe they should make as much as a number 1-2 starter. They come in and nail down 30+ saves a year and the starter gets all the credit. There are only a few of these guys that do this year after year. If a save is worth 1/2 a win than some of these guys are worth 20+ wins a year.

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