This is a fantastic Q&A with Mark Shapiro who was the Indians GM for 9 years and is now their team president. Go read it all. Great stuff.
I think more people will come. But the challenge is 2.2 million instead of 1.6 million doesn’t change the way we operate. Even that extra 500,000, 600,000 people, even if that’s $10-to-15 more million in revenue a year . . . one win in free agency is $9 million. So you’re not going to change the context. Again, I don’t think people want to intellectualize baseball, and I don’t believe you should have to intellectualize baseball . . . and we’ve made a conscious decision in most of our interviews not to get into these topics and just stay positive and talk about what our aspirations are.
But that revenue swing between 1.5 million in attendance and 2.2 million in attendance . . . meaningful dollars but not dollars that will have us plan dramatically different.
Q: It wouldn’t change the amount of money spent?
A: It would change the amount of spent to 15 million dollars a year. What does that buy you in free agency? Very little. One and a half wins.
Q: How is that figure determined?
A: Our analysts can put a value on what it costs in free agency to sign a player and what that means in Wins Above Replacement and what those players end up costing in free agency and that changes every year. They measure all the players signed in free agency and what their history has been and what they offer going forward and they place a value. The challenge in free agency is you’re often paying for that in the first year of a contract, and in the out years of a contract the players WAR usually goes down because he’s usually past his prime. So it becomes a less efficient contract over time. That’s why free agency is never the best way to build. It’s a good way to supplement but not build.
Q: So $8 million for one win?
A: It’s $9 (million) now. It was $8 (million) two yeas ago. I think at the end of this year they figured out it was nine. And when those wins come in the win curve are important. What does that win mean if it’s the difference between 80 and 81? Very little. But if that win’s the difference between 89 and 90, that could be a meaningful win.
Comments
That is a bit of a funsucker. Guess that high of a cost-per-win is going to dissuade teams from going apeshit with money unless they are on the cusp. Or the Dodgers.
Rice CubeQuote Reply
This makes sense if they’re using a much more conservative estimation of WAR.
joshQuote Reply
If that $9M is even close to being true, then there is absolutely no such thing as an untradeable contract. Anybody making $15-$25M per season was obviously once a great baseball player and to ask a player like that to provide 1 WAR or so in production per season suddenly doesn’t seem far-fetched and the amount of money needed to be eaten goes down significantly.
I’d be very interested to see what that does to Soriano’s trade value now that he had a rebound year and the price of a free agent win is now ~$3M more than we originally thought. Suddenly a useful piece in return for him if we eat his whole salary (or 80-90%) of it doesn’t seem as far fetched.
Aisle424Quote Reply
Aisle424 wrote:
But hasn’t this concept of $9 mil for a Free Agent win been around for a little bit? I thought I remember mb discussing it before.
The price of a win is still $5-6 mil, but if you have to buy it on the free agent market it is more expensive. That seems to be what Shapiro is saying.
WaLiQuote Reply
@ WaLi:
Although actually thinking (ouch) about it, that doesn’t make any sense. The free agent market would dictate the price of a win. A player on your team wouldn’t sign for a $6 mil/win contract if they can make $9mil / win on the free agent market.
WaLiQuote Reply
@ Aisle424:
It’s hard to factor that in. The metrics we’re using are built around a win value of around $5 million. We know the projections are a bit optimistic. 15% or so IIRC. Obviously these guys are using different and perhaps better metrics so it’s pretty difficult to test it. It could be that 1 win by some of these guys is $9 million, but it’s equal to 1.8 wins by the way we do it. I don’t know.
mb21Quote Reply