Projecting 2013 Free Agent’s Average Annual Salaries With WAR

The Yankees kicked off their offseason with the re-signing of Hiroki Kuroda on Monday. The hot stove is officially warming up, and we’re going to see things really kick off the first week of December, when the GM meetings are held in Nashville. Surprisingly, we already have 20 new contracts this offseason. Be it re-signs, extensions, or just plain signs, there is a large enough sample-size to start a discussion on how much players are will be paid in this current market.

Based on WAR, it’s possible to calculate how many millions of dollars a player was paid per the wins above replacement that they produced in the past. In 2012, Robinson Cano put up the second best fWAR in the American League at 7.8. Knowing that he earned $14 million dollars, you can divide his 2012 salary by his total seasonal fWAR and find that he was paid $1.8 million per win. As we’ll see going forward, the Yankees got a steal from their second baseman.

Using this price per win above replacement does have it’s flaws. WAR itself can do a poor job of analyzing defense, and many accuse fWAR of misjudging pitchers. Then there are market problems, such as positions being valued differently from year to year. For instance, this 2013 season has very few middle infielders, and there’s a good chance that teams will big each other up to acquire a guy like Marco Scutaro. The market also overvalues positions in the long term, in particular relievers, who appear vastly overpaid by this system.

Taking all of this into context, the way markets values wins usually evens itself out in the end. Though the idea of dollars per win above replacement isn’t a perfect science, it’s a nice rough estimate to kindle a discussion.  When doing so, keep in mind that players may be coming off breakout seasons or they may have dealt with suspensions, and in these cases we may expect them to outperform their expected WAR and earn more money. Likewise, aging players or injured players may see their performance decrease in the future.  Everything must be viewed in a context, but as long as you know who the player is and what he’s done, the average annual salaries that we can predict give us a good benchmark.

With the 20 players that have already signed new contracts or extensions, I’ve found the players new average annual salary in the chart below. Next to this, you’ll find the average fWAR for the last two baseball seasons. Using these two figures, I’ve found how much they’re being paid per win above replacement.

Player Team Contract Value AAV Average fWAR Dollars Per WAR
Hiroki Kuroda Yankees $15.00MM $15.00MM 3.1 $4.92MM
David Ortiz Red Sox $26.00MM $13.00MM 3.6 $3.66MM
Melky Cabrera Blue Jays $16.00MM $8.00MM 4.4 $1.82MM
Torii Hunter Tigers $26.00MM $13.00MM 4.0 $3.29MM
Joel Peralta Rays $6.00MM $3.00MM 0.9 $3.33MM
Scott Baker Cubs $5.50MM $5.50MM 2.8 $1.96MM
Jeremy Guthrie Royals $25.00MM $8.33MM 1.6 $5.21MM
Jeremy Affeldt Giants $18.00MM $6.00MM 0.6 $10.00MM
Brandon League Dodgers $22.50MM $7.50MM 1.1 $6.82MM
Bartolo Colon Athletics $3.00MM $3.00MM 2.6 $1.15MM
Jonny Gomes Red Sox $10.00MM $5.00MM 1.8 $2.78MM
Hisashi Iwakuma Mariners $14.00MM $7.00MM 0.8 $8.75MM
Maicer Izturis Blue Jays $10.00MM $3.33MM 1.5 $2.30MM
Gerald Laird Braves $3.30MM $1.65MM 0.6 $3.00MM
Dioner Navarro Cubs $1.75MM $1.75MM 0.2 $11.67MM
Jake Peavy White Sox $29.00MM $14.50MM 3.7 $3.92MM
Oliver Perez Mariners $1.50MM $1.50MM 0.5 $3.00MM
Juan Pierre Marlins $1.60MM $1.60MM 0.6 $2.67MM
DeWayne Wise White Sox $0.70MM $0.70MM 0.5 $1.56MM
Shawn Camp Cubs $1.35MM $1.35MM 0.5 $2.70MM
Average $11.8MM $6.56MM 1.8 $4.23MM

Over the last two seasons, Hiroki Kuroda has averaged 3.1 fWAR per year. I’ve assumed that the Yankees expect him to continue this in 2013, and thus he’s being paid $4.92 million per win above replacement. After doing this with every player above, it would roughly appear that the 2012-2013 market has set the price of a win above replacement at $4.23 million.

As I mentioned previously, the market has always set the price on relievers very high. You’ll see that both Jeremy Affeldt and Brandon League are being paid absurdly high for their win production. Though the media largely gasped when they signed such big deals, the market has always been strong for bullpen pieces. The Yankees have been no stranger to this either, paying Rafael Soriano $14 million per win above replacement and Mariano Rivera $10.7 million over the last two seasons.

The two PED suspended players took major hits in salary. Melky Cabrera averaged 4.4 fWAR over the last two seasons, however he only earned an average annual salary of $8 million. Bartolo Colon averaged 2.6 fWAR, and he only received $3 million for 2013. Both of these players have ranked within the three lowest dollars per win this offseason. Though the sample size is two players, it looks like most teams are taking these PED’s charges fairly seriously in the market.

So how accurate is this $4.23 million mark? Can we actually expect other players to receive the same? Matt Swartz of FanGraphs did some work on the subject back in February. Amongst noting the positional differences, he found that teams from 2007-2011 paid an average of $4.5 million per win above replacement. That’s remarkably close to the $4.23 million that we’ve found for 2013. So let’s go ahead and assume that this is the current market value, and apply it to the average fWAR of players still available in free agency.

Player Average fWAR Projected AAV
Zack Greinke 4.55 $19.2MM
Josh Hamilton 4.25 $18.0MM
Michael Bourn 5.25 $22.2MM
Anibal Sanchez 3.80 $16.1MM
BJ Upton 3.70 $15.6MM
Nick Swisher 3.85 $16.3MM
Edwin Jackson 3.30 $13.9MM
Dan Haren 3.95 $16.7MM
Ryan Madson 1.70 $7.2MM
Angel Pagan 2.85 $12.0MM
Shane Victorino 4.60 $19.4MM
Mike Napoli 3.80 $16.1MM
Joakim Soria 0.90 $3.8MM
Ryan Ludwick 1.55 $6.6MM
Rafael Soriano 0.75 $3.2MM
Shaun Marcum 2.10 $8.9MM
Russell Martin 2.60 $11.0MM
Stephen Drew 0.95 $4.0MM
Andy Pettitte 1.70 $7.2MM
Mariano Rivera 1.40 $5.9MM
Ichiro Suzuki 1.50 $6.3MM
Eric Chavez 1.20 $5.1MM

Again, we’ve used player’s average fWAR for the last two seasons and multiplied it by the $4.23 million we found above. Arguably the top free agent on the board, Zack Greinke, is averaging 4.55 wins above replacement a year. If a team expects him to continue this, he should receive a contract with an average annual salary of $19.2 million based on the current market. However, keeping who he is in context, Greinke will probably be bid up because he is the top available pitcher, and I would expect him to receive something north of $20 million in the end.

A player like Josh Hamilton may see the opposite effect. Although he’s calculated to receive an $18 million average salary, he’s facing a number of injury and character related questions. From the rumors, the market doesn’t seem too hot on risking big money on him. You’d normally expect the top position player to receive a bidding war, but I wouldn’t be surprised if he received something a tad less than the expected $18 million.

Michael Bourn is the perfect case of defense poorly translating into dollar per win predictions. Using these figures, the outfielder is expected to receive the most average annual salary on the board, and we all know that won’t happen. The reason is that the market doesn’t value defense as much as it values pitching or hitting. A lot of Bourn’s value is locked up in his stellar defense, which seems to have simultaneously been overvalued by WAR and undervalued by the market. Either way, he’ll be earning much less than $22.2 million a year.

I’ve included quite a few ex-Yankees up there as well. Nick Swisher is expected to receive $16.3 million, Andy Pettite gets $7.2 million, and Ichiro Suzuki gets $6.3 million, which are all rather respectable numbers. Russell Martin gets $11 million, which is another case where defense has rewarded him too much. Both Rafael Soriano, who’s at $3.2 million, and Mariano Rivera, who’s at $5.9 million, can expect to see more money because they’re relievers.

Some other names to look at are Stephen Drew, who the Yankees are linked to, receiving $4.0 million, though he’ll probably get slightly less with his major injury problems. Joakim Soria is expected to get $3.8 million, though I could see him receiving a bit more because he’s a reliever. Mike Napoli has also been linked to the Yankees, and his $16.1 million will definitely be less because of his awful 2012 season outweighing an incredible 2011.

The point of this all isn’t too produce exact amounts, but to get a rough benchmark and add context to it. I’d prefer a more objective way, but there’s not much else we can do to predict how these negotiations will go.

Mike is the co-Editor-in-Chief of It's About The Money. Outside of blogging baseball, Mike is also a musician, a runner, and a beer lover.

8 thoughts on “Projecting 2013 Free Agent’s Average Annual Salaries With WAR

  1. Paco Dooley

    Seems to be some confusion on Soriano. He is not at $8.9MM, he is listed at 3.2. That is a stark illustration of how much he was overpaid, assuming that the table values are the correct ones. Regardless of which is correct, it is also an excellent illustration of why the market should not give him a contract anywhere near what he wants…

    • Corrected that, thank you. And happy Thanksgiving.

  2. David in Cal

    I believe this blog calculated an Average $/WAR by averaging the individual $/WAR figures. This method gave a lot of weight to Affeldt and Navaro. These two players had very high $/WAR because their WAR was so low.

    A better average would be to take Total $/Total WAR (or Average $/Average WAR.) This version of an average would be $3.64 million, rather than $4.23 million.

    • Paco Dooley

      Great point – the average ratio is not equal to the average of the ratios. The two ask different questions. In one case, we are asking how much teams are paying, on average, for a win (the average ratio), whereas in the other case we are calculating the average win-scaled salary (the average of the ratios).

      Neither is likely to be correct for calculating salaries of players since player value is not a linear function of WAR (very high WAR players have higher marginal values etc).

  3. bpdelia

    Quite a few interesting cases there. For instance haren will almost certainly be forced into a low value pillow contact. 7 million maybe. He is the clearly largest high risk huge reward guy in the list.,it’s probably time to admit the industry has a different value metric for RELIABLY CONSISTENTLY good relievers. All the talk about reliever volatility meaning relievers are over paid might actually prove the opposite. Relievers are so volatile that the tiny group if reliable too flight relievers receive a stability premium. Meaning that the industry values great relievers more in the 7 million per fwar range. Finally it’s clear the industry thinks that fwars bsr and uzr components are totally inaccurate. If you value Bourne as, at best a 3 FWAR batter his case will tell us slot about what the industry thinks the actual war value of defense and baserunning is. To me Bourne, Hamilton, and Haren are the three most interesting and enlightening free agent data points of the offseason

  4. Good stuff. I never really understood why relievers get so overpaid though. I mean sure you can spend millions per year on a closer or some well-known set up guy, but doesn’t it make more sense to spend less and still get effective (undervalued) pitchers and then use the saved money to improve your team elsewhere?

    • bpdelia

      To me Matt that’s the problem. A middling team should never buy a big money reliever. But for contenders a bad pen can crush a season. Considering trade deadline top reliever trades are highway robbery, a contender should always look to have two consistent reliably excellent relievers., skimp on loogys, save on middle relievers but a contending team must reliably have two late inning top notch relievers. For a legit contender the 2million dollar overpay is justified to save yourself from having to trade top prospects for high leverage relievers in,July. Consider it a security blanket premium. The volatility make guys like papillon, Rivera, etc worth the premium, not vice versa.

  5. WIN METHOD

    WAR has to be one of the most convoluted and useless systems ever devised. WAR is meaningless and in reality tells nothing about any player that would make judgement of said player valuable in any way shape or form. WOW! What an utter waste of manpower.

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