Business of Baseball: Miggy’s New Deal

April 15: Tax Day!

Miguel Cabrera and the Detroit Tigers agreed to the richest contract in Major League Baseball history just prior to Opening Day of 2014 (OK, MLB had their Opening Day in Australia, but the majority of the league was wrapping up Spring Training).  The deal set off a firestorm in the Twittersphere, with opinions on both sides though most seemed to speak out against the deal.

Some of the attention-grabbing headlines:

Miguel Cabrera’s $292 million deal could be the biggest contract mistake in MLB history: Thank you Jeff Passan at Yahoo for this one.

Miguel Cabrera contract is the worst: Thomas Boswell at the Washington Post is to the point

Miguel Cabrera’s record $292 million contract latest example of how flush MLB is: From Kurt Badenhausen on Forbes.com

Miguel Cabrera deal a disaster for Detroit: Keith Law from the Worldwide Leader

I understand the recent history argument, but of course that forces you to assume Miguel Cabrera is a similar player to those others and that Detroit plans to use him in a similar way.  Keith Law pointed out the Ryan Howard 2010 deal with the Philadelphia Phillies.  Is there anyone who would put Cabrera and Howard on the same tier?  And by signing in the National League, Howard is forced to play in the field for the rest of his career.  Cabrera can transition to DH, reducing on wear and tear (the Tigers already dealt Prince Fielder to allow him to move from 3B to 1B) and allow him to focus on what he does best, hit.

First, let’s take a look at Miguel Cabrera’s career so far.

2003: MLB debut for the Florida Marlins, playing in 87 games at age 20.  Hit 12 HR, drove in 62 and batted 0.268.

2004: First full season, Cabrera smashed 33 HR, drove in 112, scored 101, batted 0.294 and even stole 5 bases!

Over the next 10 seasons, Cabrera has developed into the best player in baseball.  He has played no fewer than 148 games, so questions of his durability thus far appear to be overblown.  He has back-to-back 44 HR, 137+ RBI, 103+ run, 0.330+ average, MVP, Triple Crown seasons (OK, so he missed the Triple Crown in 2014, but his numbers were Triple Crown worthy).  Those who proclaim a regression is in order, and say the contract is a bad deal for Detroit, point to 2 mammoth contracts signed by Cabrera’s contemporaries:

Ryan Howard: Before the start of the 2010 season Howard and the Phillies agreed to a $125MM extension that would keep him in the City of Brotherly Love until 2017.  Howard’s deal was a 5-year extension on top of the remaining 2 years on his previous deal.  Howard was coming off his 4th consecutive 40+HR season, averaging about 140 RBI and 100 runs.  Howard followed this deal up with back-to-back 30 HR seasons.  Over 151 games between 2012 and 2013, Howard hit 25 HR.  Injuries have been the downfall for Howard.

Alex Rodriguez: In 2007 A-rod and the Yankees agreed to a 10-year, $275MM contract.  Rodriguez was coming up an insane 2007 season: 54 HR, 156 RBI, 143 runs, 24 SB, 0.309 AVE.  A-rod followed this contract up with 3 consecutive 30 HR seasons.  Injuries and PED allegations have dogged A-rod since.

During his first 10 full seasons, Cabrera has driven in 1,198 runs, while hitting 353 HR and scoring 1,025 runs.  Ryan Howard has not even had 10 full seasons, so we really can’t include him in any comparisons.  Let’s all admit that Ryan Howard’s contract is money badly spent.  Alex Rodriguez over his first 10 full seasons hit 424 HR, drove in 1,205 and scored 1,226 runs.  A-Rod also added 219 SB and played a more demanding defensive position at SS than Cabrera.  Admittedly, before any PED accusations came out, A-rod was considered a sure-fire first ballot Hall of Famer, and these production numbers bare that out.

WAR (Wins Above Replacement) may not be the ideal baseball statistic to compare players, but it is certainly one that is routinely used.  Here is a great description on how to calculate WAR from Fangraphs.  WAR attempts to take into account all aspects of a player’s game.  This means for positional players you have to include base running and defense, in addition to hitting.  Miguel Cabrera is not going to win any Gold Gloves and he is not fleet of foot, so you understand that he loses some value when it comes to running and glove skills.  He can however flat-out hit, and that is why Detroit is paying him.  So, while we may conclude that during his first 10 years A-rod was more valuable player than Miguel Cabrera, the real litmus test will be the next 10 years of Miggy’s New Deal.  We can still include A-rod in these comparisons, but it is important to look at players Cabrera should be held next to: the best players to ever play the game for more than 20 years, and see how productive they were during their 30’s.  This list is a short list of players I selected; certainly others can be added, and I’d like to know who you would include.

Frank Robinson: During Robinson’s first 10 seasons, he produced a total WAR of 59.7.  He hit 324 home runs, drove in 1,009 runs, scored 1,043 runs and stole 161 bases.  Following the 1965 season, Robinson headed to Baltimore to join the Orioles.  Over the remained of his career (parts of 11 more seasons), he hit 262 HR, scored 786 runs and drove in 803 runs.  He added 44.4 to his total WAR, however, his final 2 years, he played in a total of 85 games and only produced a WAR of 1.0.

Hank Aaron: In Aaron’s age 21 to 30 seasons, he had a total WAR of 74.6.  He had hit 353 HR (the exact number Cabrera has hit), driven in 1,147 runs, scored 1,122 runs and stolen a surprising 123 bases.  From his age 31 season until he retired at age 42, Hank Aaron hit 389 HR, drove in 1,081 runs and scored 994 runs.  His total WAR was 60.7 over those seasons, with his final 3 seasons only adding 2.4 to his total.

Ted Williams: No list of elite players would be complete without Ted Williams.  When you are talking about Miguel Cabrera as the best pure hitter of this generation, you need to include the Splendid Splinter, arguably the greatest pure hitter of all-time.  Williams lost several seasons (1943-1945) while he served in the military, like so many of his contemporaries.  Taking his age 21-30 seasons (7 seasons), his WAR was 67.2, including 3 seasons of WAR over 10 (2 over 11.6!).  He hit 222 home runs, scored 932 runs, and drove in 879 runs.  He also hit 0.406 in 1941, the last player to hit 0.400 in a season.  From 1949 until he retired in 1960, Williams added 299 HR, 960 RBI and 866 runs scored.  His WAR over these 12 seasons was 63.3.

Willie Mays: Much like Cabrera, Mays made his MLB debut when he was 20 years old.  From his debut through his age 30 season, Mays had compiled a total career WAR of 73.2.  Arguably one of the greatest all-around players, Mays hit 319 HR, stole 222 bases, drove in 935 runs and scored another 1,013 runs.  From his age 31 season until his retirement at age 42, Mays added 341 HR (to end his career with 660), 968 RBI and 1,049 runs scored.  Over this period he added 76.6 to his career WAR.  He managed to post 3 seasons with WAR’s over 10.5 during this period.

When we look at WAR (Wins Above Replacement) we can see how Cabrera’s all-around skills compare to the all-time greats.  WAR is not an exact science, and much has changed in baseball over the past 50 seasons (we can talk about expansion, improved fitness, improved travel, the steroid era, and the emerging data analytics field that is sure to revamp how players prepare for games).  However, WAR can give us an idea in terms of the market at the time how these players compare.  Looking at total WAR over their careers, Cabrera is on trend to be one of the truly elite players of all-time.

Career WAR Miggy and stars

You can clearly see that Cabrera tracks above the trajectory of Ryan Howard.  It would seem that we would all agree that the Howard deal was money poorly spent by Philadelphia.  Currently Cabrera tracks along just below the WAR line of Frank Robinson.  Over his final 11 seasons, Robinson averaged a WAR of about 4, which was 50% less than his average over his first 10 seasons (5.97).  However, he was still productive for most of those seasons.  Over the past 6 seasons, Cabrera has had increasing WAR (2.6, 5.2, 6.2, 6.7, 6.8, 7.6).  With a move back to 1B for 2014, Cabrera could see his WAR rise again this year.  Will he produce seasons with WAR of 10?  Probably not, but consistent WAR of 7 for the next 4-5 seasons (40 HR, 130 RBI, 105 runs, 0.330 average) would possibly move his trajectory slightly ahead of Robinson’s and closer to Ted Williams.  While Willie Mays is the only one in this comparison to have a higher WAR over the seasons beyond age 30 then the first 10 years of his career, the regression of the elite players was not to the point that one would consider replacing them.

What does all this mean for the fantasy owner?  If you are in a dynasty league and own Cabrera should you lock him up for as long as you can?  Well, that depends on the makeup of your team and the salary cap implications.  Let’s say you could lock Cabrera up for $45 per year for as long as you wanted.  And you see your team as a contender for the next 5 years.  I see no reason to lock Cabrera into your lineup.  After 2014 he will be able to be used more as a DH, with Victor Martinez’ deal up at the end of this year.  That should reduce the risk of injury somewhat.  I don’t think I would go and extend Miggy for 10 years in fantasy, but certainly 5 or 6 seems like a good window for production.

Was this money well spent by Detroit?  With the new revenue stream from the major broadcasting deal signed in 2012 (and running through 2021), each MLB team is set to receive as much as $50MM in revenue each year from this deal.  $50MM!  That is more than Miami and Houston currently pay their entire rosters.  This money should be infused into signing players and improving stadiums, leading to more money for the teams to make.  Essentially, Detroit signed Cabrera for part of this new money.  If they go and lock up Max Scherzer or another top arm this offseason, they set themselves up to continue to be a competitive team in the AL, and should reap the financial benefits associated with that.