Prince Fielder Worth His Weight (just not in projected WAR)

(The following is being syndicated from The Captain’s Blog).

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 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.

9 thoughts on “Prince Fielder Worth His Weight (just not in projected WAR)

  1. Interesting how you say that Fielder was worth it due to the Tigers being favorites in the AL Central, when they already were favorites in the AL Central. They won the division by 15 games last year, and I don’t think the loss of VMart would cost them nearly that much.

    Oh, and I read earlier that like 17 of the home runs he hit last year would not have left Comerica Park. Hell, in order to hit a ball out of that place it has to be “titanic” anyway.

    • Your first point is spot on and probably the biggest reasons I don’t like this deal. They absolutely blew away the competition last season. Even without V-Mart, they win that division by 10 games. They lose a good DH for a season and they decide to spend 200+ million on a terrible fit? That’s just not good baseball operations.

      I appreciate the analysis but I think the supply/demand argument is flawed. On the one hand you are analyzing an individual firm’s demand and on the other a market supply. The fact remains that there was no other team in the league willing to come close to matching this contract. Fielder had leverage but if the Tigers really wanted Prince Fielder they had some leverage too. The market for Fielder had all but evaporated. The Nationals were the “favorites” and they were tens of millions behind this offer. Maybe there’s a reason the Tigers are losing money every year – they’re horrible negotiators.

      At the end of the day, I understand that on the open market Fielder’s value is going to be enhanced. You pay a premium for premium assets. But the demand curve for players like Fielder should have some correlation to their on-field and off-field value and the dollar-to-WAR projections you see out there actually tend to overstate this top-line premium anyway. So when you see a team go out there and pay 40-50% more per win than they should on a player who’s risk profile is substantial, when you further realize that there was basically no other team on the market that could have come close to matching that contract, and even more so that the Tigers really didn’t need this player, you have to question the decision making on the part of Illitch, Dombrowski, etc.

      • You have no way of knowing what other teams were willing to pay. According to some reports, the Nationals were heavily involved, and there’s no reason to think that wasn’t the case. Unless you have inside information, I think the Tigers are in a much better position to determine what the market was like.

        If you want to evaluate the contract on WAR-based projections, which have inherent flaws in the first place, that’s fine, but that’s now how baseball’s economic system works. As a theoretical practice, using WAR to evaluate contracts is interesting, but without a full understanding of how the game’s economics really work, it has very little practical value.

    • VMart was a big loss, but more relevant is the fact that the AL Central runner up may not be .500 again, the Tigers may see regression in other areas, and simply winning the division isn’t the ultimate goal. Adding Fielder greatly improves the Tigers chances of winning at every level.

  2. We should be calculating that value per WAR based only on free agent contracts. Then we would be able to compare that number with new contracts.

  3. $/WAR is normally calculated only for FA contracts, and currently is around $4.5M/WAR, no inflation since 2008. Problem with Fielder’s contract, compared to A-Rod’s and Pujols’ is that based on projections Fielder won’t be worth his annual average in year one of the contract. Normally you hope for some surplus value in years 1-3, roughly equal value in years 4-6 and loss in years 7-9, but Fielder might be loss in years 1-9.

  4. Great piece William. I’m definitely one of those guys that’s done the “Let’s look at Fangraphs and calculate/project his value.” That kind of analysis is not always an accurate because there isn’t a set way to deal with outlier seasons. As a result, projections can be widely skewed.

    Free agents have the right to be “overpaid,” in large part due to the surplus value they provided and weren’t paid for during their reserve clause and arbitration seasons. On the players end, it makes sense. That said, I do have trouble wrapping my mind around the Tigers “overpaying” Fielder for the surplus value he provided in Milwaukee. They’re essentially buying a declining asset they know won’t provide enough value to cover the cost of the contract. Now, had Milwaukee been the team overpaying, it would have been a little different because they’re just settling the score so to speak.

  5. I agree with you, but first guess is for most teams this has a way of evening out. For example, the Tigers may have reaped some excess value on Granderson, so paying Fielders evens things out. That’s not an exact example, and for the Tigers it seems as if they have paid big money to several stars from other teams, but everyone plays by the same rules, so there’s a good chance it evens out.

    More important than the reverse vs. free agency point, however, is the need to look at each team’s situation. It might seem absurd, especially to Yankees’ fans used to winning regularly, but if the Tigers can get one WS (their first since 1984 and second since 1968) out of Fielder’s deal, then the $214 million might be worth it. If I was a Tigers’ fan, I am pretty sure I’d feel that way, and if I was Ilitch, I know I would share that sentiment.

  6. It’s a good point, William. Teams will essentially overpay for ANY high end free agent. You won’t ever get your WAR value for one of those guys unless they ridiculously outperform their trends. You overpay for those guys and underpay your low end FA’s, and young, pre free agency guys. That said, I hate this particular deal because big hitting, fat 1b types tend to fall off the cliff very, very quickly (see Mo Vaughn and many others including his father). You may only get 1 or 2 years of good production out of Prince. I’d say he’ll probably be virtually useless after 32, meaning you’ll be carrying a useless, $20M+ player for 5 years. That’s insane.