A’s Take Giambi Back
Since the season ended, most people have assumed that Jason Giambi was going to end up back in Oakland. They needed some power in their line-up, even after the Matt Holiday acquisition, and Giambi enjoyed his greatest success as a player during his first stint in the Bay Area. The steroids stuff from a few years ago made him something of a pariah among many teams and fans, and his near replacement level performance in 2007 didn’t help his image at all. There just weren’t many teams interested in Giambi, so the presumption was that he’d have to take pretty much whatever Billy Beane offered him.
After seeing Buster Olney’s report of the terms of the deal that seems to be pretty much what happened. Here’s how the deal would break down in terms of valuing Giambi as a player if the rumored terms are true.
$5.25 million base salary in 2009, $1.25 million buyout of 2010 option or $4 million base salary in 2010.
Based on a $4.5 million per win estimate of the going rate for free agents, that would value Giambi as a 1.45 win player for 2009. However, the low salary base (with incentives, surely) for 2010 makes the buyout pretty unlikely to be exercised unless Giambi pulls an Andruw Jones. In reality, the deal is probably more like $11 million over two years, with an out clause for the A’s if Giambi is just unbelievably awful. That values Giambi at something closer to a 1.2 win player.
Giambi’s actual win values, by year, the last three years:
2006: 3.4
2007: 0.5
2008: 2.6
That’s a weighted average of 2.1 wins per year, and he missed half of the ’07 season. His new deal values him at nearly half of his three year weighted average win value. Even factoring in age related decline and a move to DH, that’s some pretty serious discounting. There’s almost no downside to this deal for the A’s – they picked up a +1.5 to +2 win player for 75 cents on the dollar, and if he bombs, it has no long term repercussions.
With Holliday and Giambi joining the organization, the A’s have significantly improved their offense for 2009. The question will be sorting out all the at-bats for the various 1B/DH types, but the depth makes it much more likely that Oakland has an offense that can score some runs next year. The A.L. West continues to tighten.
Dave is the Managing Editor of FanGraphs.
Dave:
At what point is it worth adjusting the estimate for the going rate of a win in the current free agent market?
It would be interesting to see how this off-season’s signings look using the $4.5M estimate, and how they look using a value that factors in the cost of a win as defined by every ’08-’09 free agent signing to date.
Maybe there wouldn’t be a difference. I honestly don’t know. But it certainly feels as though the market has softened considerably over the past few weeks.
We’ve actually already done this. Based on historic inflation rates, we’d have expected the cost per win in this market to be somewhere around $5 million. We’ve already removed the inflation assumption and gone back to last year’s number of $4.5 million per win. And, I think that number is about right.
Everyone is screaming about Burrell being a huge steal. He’s a two win DH and he got $8 million per year. That’s $4 million per win. If he’s the poster boy for the market cratering, then it’s hard to argue that the cost per win is less than $4 million. The high end guys got closer to $5 million per win from the Yankees.
I’d say the cost per win is between $4 and $5 million per win. We could argue over the decimal point if we wanted to, but I’m not sure it matters much.