An analysis of the Jorge Soler deal: I guess it's worth it after all

Despite all of my grumbling about the rumored pricetag for Jorge Soler, I was ecstatic when the initial reports today said that the Cubs had signed him to a 9/30 contract. Then we discovered that whenever he has enough service time to be elgible for arbitration, he can opt out of the deal and go through the usual arbitration process to get a higher salary. After thinking on this for a bit it made me less and less enamored of the deal. Absent lower order terms, the Cubs basically gave Soler a $30m signing bonus, with the added benefit to the player that if he disappoints he'll get cost certainty during those arb years. The Cubs would probably have had him under team control for nine years anyway if this was a signing bonus situation.

Aside from the risk inherent in any prospect, cost control is important. At what point would that money better be invested somewhere else? Yes, the Cubs can afford it and we've been beating the drum for years that the Cubs should flex their financial muscles on the international FA market to use their advantage against other MLB teams. That was pretty much Thoyer's gameplan when they found themselves blindsided by the new CBA. But just because a team can afford it doesn't mean it's a good idea. The Cubs could also afford building solid gold urinal troughs, or signing Josh Hamilton to a $500m contract, which would also be a big upgrade to the roster and Wrigley Experience™ that costs nothing but money. It doesn't mean it's a good idea. Was my intuition wrong though? What would be the breakeven point to sign him?

The consensus among scouts seems to be that Soler is a top-5 talent if he were in the draft. This year's draft was a relatively mediocre one, but there have been numerous studies about expected value of draft picks. I'm going to go with Sky Andrecheck's study from two years ago, not necessarily because it's the best (I have no idea) but because it's the first one I found and I don't have a BP subscription anymore. If there's something wrong with this study or you can suggest a better one I'd love to hear it.

If we consider the drafted Soler to be a high school draftee (not too unreasonable of an assumption), his expected WAR would range from 20.7, if he was the first pick, to 9.4, as the fifth pick. This is TOTAL career WAR, not necessarily just the wins generated during the time the Cubs would have control of him. The Cubs will have control of his peak years so it's fair to say that a solid majority of the production will occur over the course of the deal. We don't know exactly where he would be picked in the draft, so let's split the difference and treat him like a third overall pick, which has an expected career WAR of 12.1.

Soler is projected to go into high-A ball when he joins the organization, and should take three years or so to reach the bigs. The Cubs will then get three years of their negotiated cost control, then three more years of maybe-arbitration. There's also super two to consider but I don't think we need to worry about that given the total WAR above and the usual arbitration percentage discount rates. Super two looks good compared to league minumum, but Soler should already be making 5-6 times that.

We don't have the full details on how Soler's deal breaks down yet, and it's likely that it won't be a uniform $3.3m per year considering a likely reasonable signing bonus and some (typical for every signing) backloading. I don't want to get into trying to break down his WAR by year just yet to figure out arbitration, but the Cubs still do get *some* savings (based on 40/60/80) if he elects arbitration in those years. But let's just look at that $30m right now, since that's what the Cubs owe no matter what. Based on today's ~$5m/win, Soler only has to assumulate 6 WAR between his three non-arb years and the surplus WAR in his arb years. If you take into account the fact that $WAR is likely to go up under the new CBA's draft/international signing rules and the ridiculous new TV rights deals that teams are negotiating, the Cubs need even less production to make it breakeven.

Based on this reasoning it looks like this deal is a win for the Cubs, though not necessarily a huge one. Standard caveats apply – there's an awful lot of hand-waving going on here. It certainly doesn't look quite as good if he's "5th pick talent". And there's obviously still plenty of risk involved (and upside!). As we well know, the one thing that prospects do best is fail. But at least there's good reason to believe that a player with Soler's talent is more likely to fail at failing compared to most prospects.