Putting Current Dollars to the Jayson Werth Contract. It Still Makes Sense

Jay Jaffe in Sports Illustrated is trying to figure out what the current batch of free agents are worth.  The first one he tackled was Jacoby Ellsbury.  Turns out he came up with 7 years and 126 million.  Does that sound familiar, it should, because that is the Jayson Werth contract figures.   There are some in the Washington DC and national media that are obsessed with the contract and repeat it dollar figure like it is attached to his name.  I decided to apply the same process to Werth and see if his contract works with an understanding of WAR dollar inflation, his last four years, and his projected next four.

Jaffe, uses a formula to determine contract values that involves the expected cost per win based on WAR.  Due to inflation, a win is worth 5.28 million this year and grows 5% every year.  One might argue that the new TV deal is going in increase the cost per win in the future, but in order to do this exercise you need to make some assumptions.

The next thing he does is anticipate a players baseline WAR which is a weighted WAR over the last four years.  Werth is really hard to figure out  because of his injury last year he only posted a .7 WAR also due to a ridiculously bad UZR fielding rating.  This obviously impacts his weighted average, but that is what happened, so I am rolling with it.  His WAR over the last fours years stacks up 4.9, 2.3, .7, and 4.6 this year.  This projects as a baseline of 3.03 WAR for next year.

The final piece is the expected decline in performance which is calculated to be a loss of .4 per year after the age of 30.  Lets see how this works out.  We are going to assume that he played way over his head this year and will crash down to a more realistic level next year for a player his age.

Age WAR Market Prod
33 4.6 $5.28 $24.29
34 3.0 $5.54 $16.82
35 2.6 $5.82 $15.34
36 2.2 $6.11 $13.66
37 1.8 $6.41 $11.77
Total 14.3 $81.87

The last piece of this puzzle is how much the Nats have committed to Werth and that is a 18 million a year average or 90 million.  So according to this calculation the team is overpaying him a little over 1.5 million a year based on the last five years of the contract.  Lets assume that he didn’t play that far over his head, the Jayson Werth of 2013 is the real deal.  The base year for his performance is this year and not an average of the last four because his first year with 2011 and 12 seasons were not very good representations of him over the last 8 or so years due to his injury and the struggles he had adjusting to his contract and new team.  If we just assume the 2013 season as his base season and a regressing of .4 from here on out the numbers look a little better.

Age WAR Market Prod
33 4.6 $5.28 $24.29
34 4.2 $5.54 $23.27
35 3.8 $5.82 $22.12
36 3.4 $6.11 $20.77
37 3 $6.41 $19.23
19 $109.68

Remember the Nats owe on average 90 million for the last five years of his contract and he looks to be a 20 million dollar player based on the market inflation per win.  Now, the truth is, we have no idea which numbers are right, but we do know that the 2013 season, has put him back on track to validate the faith Rizzo had in him 3 years ago.  Interestingly, this process of decreasing a players production by .4 a year would have actually never predicted Werth’s 4.6 WAR season in 2013.  According to the formula, he should have put up a 3.8 WAR this year.  By exceeding his projected WAR, he added value back to his contract, something he can do again by exceeding 3.4 this season.

One more point to add; the WAR $ market figure is an average.  A win for the Mets or Marlins doesn’t do much for their season.  A win for a competing team like the Nats could mean the difference between the playoffs or not.  This is another way of saying that a win for the Nats is worth a lot more that it is for a rebuilding or middling team.  One of the big criticisms about the Werth signing to begin with was the shock that a team like the Nats would dare sign a big free agent because they were not a winning team.  After two years of winning baseball, I think those types of criticisms are in the past.  Below is a marginal win curve developed of Nate Silver back in 06 when the cost of  a win was less.  What is clear to see is that the Nats are very much in the window of 82 to 90 wins where a win is worth a lot, and that is why the Werth signing still makes sense.

wjh

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