Contract Year Fallacies

The bigger problem is though the conventional wisdom certainly exists, there seems to be a double standard for how it’s applied.  There’s no rhyme, nor reason; and it’s applied inconsistently and often in hindsight.  For example, Alex Rodriguez has unfairly been given the reputation of being both “unclutch” and unable to handle the pressure of playing in New York.  Based on his so-called playoff “failures,” many could’ve easily assumed that, prior to opting out of his landmark 10 year $252M contract in 2007; he would’ve performed below his performance baseline due to the added pressure of playing for a new megadeal.  He didn’t.  In fact, he put together one of the most successful (and most “clutch”) seasons of his career.  Instead of recognizing his outstanding achievement, many attempted to alter that “unclutch” perception to fit this idea that his performance was solely the result of a contract push.  After all, the only thing A-Rod loves more than A-Rod is money.  (That was sarcasm, by the way.)  That perception was further intensified when he put together an All-Star, but not MVP quality season the next year.  In reality, he just happened to produce a great season at the right time.  As a result, he happened to benefit.

Another example of this conventional wisdom’s inconsistent application is one Sheehan describes himself:  Adrian Beltre.  Ever since Beltre put up his monster 10 WAR season for the Los Angeles Dodgers in 2004; signed a massive five year $64M contract with Seattle; and promptly went on to disappoint Mariner fans for half-of-a-decade, many have assumed he was a player largely motivated by money.*  In 2010, he solidified his reputation as a “contract year player,” by putting together the second best season of his career as he was entering free agency.  Of course, as Sheehan points out, people have chosen not to acknowledge Beltre’s contract year failure from 2009; when he produced a .305 wOBA.  Rather than acknowledge their theory is incorrect, “contract year player” believers have created excuses for why he didn’t perform as they’d anticipated.

* What else could explain it, right?  Well, other than healthy dose of regression toward the mean, but that’s besides the point.

Later, Sheehan discussed the role recent performance plays on the creation of unreasonable expectations by the fans, media, and team management.

“This is about the frustration felt by fans when a player who has muddled through some seasons suddenly finds himself playing better, and more often, than he has before — with a new contract months away. It’s about the frustration felt by a new team when that player fails to meet the expectations of the walk-year performance and the new, inflated salary. It’s an emotional point, rather than an analytical one, and highly cynical — it essentially states that money motivates players in a way that nothing else does.

The conversation in this regard has always been driven more by anecdote than by data. We remember not only the stars that raised their game on their way to a payday, but the scrubs who had their one shining moment. The player, however, isn’t so much the problem as MLB management, which so often looks for any reason to believe…The concept that players play best when motivated by potential free agency is as much a tale of managerial failure as it is one of player psychology. Front offices want to blame the player for failing to meet their expectations, rather than consider that the expectations were out of line.”

Sheehan’s correct here.  Front offices often blame players for failing to meet their expectations, which frequently are not only unreasonable, but also flawed in their construction.  Rather than basing expectations on a player’s true talent level, management often does so on a small sample size of plate appearances or innings that aren’t truly representative of their abilities.  Not uncommonly, a team will overpay for a player based on a torrid two or three month stretch because of an unfounded belief that a player has either turned a corner or realized his potential.  Does this happen occasionally?  Yes, but rarely.  In most cases, it’s an aberration.  While a player can remain hot (or cold) for a period of couple of days to a couple of months, said player’s performance will eventually regress back toward the mean.  It’s inevitable.  When it does, management is left frustrated with an overpaid asset they incorrectly and foolishly evaluated.  Kenny Rogers’s performance with Texas in 1995 versus his performance over the life of the four year contract he signed with the Yankees is an excellent example of this concept.

Another factor that rarely gets brought up when discussing the good, bad, and ugly of free agent deals is age.  As recent baseball research has found (and by recent, I mean the last 35-40 years), a player’s prime typically lies within the age-25 to 29 range.  While some players are afforded the luxury of becoming free agents during this period, most are not.  In fact, the average age player reaches free agency for the first time is between 30 and 32.  Though said players are no longer within their prime, they’re still in the healthy and productive portions of their respective careers.  As such, with a little help of lady luck, some players end up putting together outstanding (or even, career) seasons just prior to free agency.  Despite the long standing knowledge of when a player’s prime typically occurs, this doesn’t stop many GMs from stepping feet first into the veritable land mind field that awaits them after signing a player in his early 30s to a long-term deal.  Not surprisingly, most players fail to provide enough on-field value to justify the cost of their contracts.  Many (and this is especially the case for those playing in big markets) are accused of not being able to handle the bright lights of a big market.  While this may be a factor in a small number of cases, in most it’s a matter of a player’s skills being robbed by Father Time.

In conclusion, there are many potential factors that go into a player’s performance other than just monetary compensation.  While the allure of a bigger contract may motivate a player to work a little harder in the offseason, it doesn’t guarantee that additional effort will translate directly into improved performance.  Injuries, poor luck, mechanical issues, etc. can all derail a player’s well laid out plans for success.  Players can’t turn performance on or off like a light switch.  It’s just something that happens.

5 thoughts on “Contract Year Fallacies

  1. Tnredneckyankeesfan

    The argument of a player's prime years being 25-29 is going to be reinforced further as baseball does a better job of testing for steroid and amphetamine use.

  2. Mike46

    Contract year improvement explains why Jose Reyes is having his best season of his career and possibly explains why Rafael Soriano is having such a bad season. Soriano's contract allows him to slack off for the first 2 years. I might be wrong about Soriano, but lets just see how he performs next year and in 2 years (final year of his contract). Braylon Edwards, notorious for his dropped catches, just had his best season in terms of fewest dropped passes.

    • Mister D

      But isn't THIS a contract year for Soriano? He can opt out and go for bigger money at the end of the season, and go back to being a closer, right?

      • Mike46

        This season is not a contract year for Soriano. His contract year is in 2 years. He's almost definitely not going to opt out after an injury plagued season and since he's not going to get bigger money next season than the $11 million he's scheduled to make next year even if he didn't get injured. Check out his contract.

  3. dar34

    I wasn't trying to disagree with Chip. And like I said it is my pet theory. Brought out to be fed when I see a guy that I hated to see signed playing poorly. I am sure that if the numbers were looked at, it would fall apart as quickly as Contract Year performance. And even if you could show it to be relevant, how would you use the data to find the guys who aren't going to quit working as hard.

    The only thing that I find more reasonable in "post-signing Slide" than "Contract Year" performance is that improved performance implies that a guy was dogging it up until that point. Whereas "post-signing slide" implies that a guy relaxes because he is finally set for life. It is the thing that a lot of us would do, if we were guaranteed $8mil a year for the next 7 years, let alone $15-20mil.

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