Javier Baez is not Vladimir Guerrero. Baez struggled before his breakout last season at 25; by that age, Guerrero had already established himself as one of the game’s great players. Even including Baez’s leap forward last year, Guerrero struck out about a third as often as Baez has and walked nearly twice as much. He had double the WAR though his age-25 season and 55 more homers. This isn’t meant to denigrate Baez. Vladimir Guerrero was a young star on the way to the Hall of Fame while Baez is an exciting young player with one really good season and some unique, dazzling skills. What brings the two players together is a swing Baez made on Monday against Jameson Taillon and the Pirates.

Javier Baez swung at a bad pitch, a pitch so bad the ball bounced in front of the plate, but he made contact, and the ball made its way to the outfield. Baez reached base with a single. Here’s another view a little bit closer:

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In November, I published the results of my research attempting to put a value on minor league prospects. It seems only natural that a similar study on draft picks should follow.

As with prospect valuations, considerable work has preceded mine in the area of valuing draft picks. Sky Andrechuk, Victor Wang, Matthew Murphy, Jeff Zimmerman, and Anthony Rescan and Martin Alonso have all done similar studies.

The work below is less a replacement of the work already done and is more of a continuation of, and addition to, the study of the subject matter. As to why we might want to know this information, creating an expected value for a draft pick helps us to understand and manage our expectations of draftees’ performance. More practically, teams regularly give up draft picks to sign free agents, receive extra draft picks when they lose free agents or reside in a smaller media market, and drop slots when they exceed the highest competitive balance tax payroll threshold, not to mention that some picks can be traded. Determining a value for these picks helps us better understand the decisions teams make regarding those picks.

In some ways, determining draft pick value is a little more complicated than figuring out prospect value. When determining prospect value, players are placed within the constraints of the current CBA, which provides for a minimum salary for roughly three seasons and suppressed arbitration salaries for another three years after that before a player reaches free agency. Draft picks are confined to the same system, but there is also a signing bonus to consider, not to mention slotting rules that are often manipulated in order to move money around to different picks.

Due to signing bonuses and bonus slots, to arrive at an appropriate value for a draft pick, it isn’t enough to determine the present value of players’ WAR in the majors without getting to a dollar figure. We also have to account for the present value in dollars and then subtract the expected bonus.

Before explaining the methodology for draft picks, we can look at the very similar framework used to get to the present value of minor league prospects. From my “Update to Prospect Valuation”:

To determine surplus value for players, I used WAR produced over the first nine seasons of a career, including the season in which a prospect was ranked. Why nine years? In today’s game, most players don’t hit free agency until after their seventh major-league season. By examining nine seasons, it’s possible to account for prospects who were still a couple years away from the majors when they appeared on a top-100 list — as well as late-bloomers who might have bounced up and down between the majors and minors for a full season.

Of course, not all prospects continue to develop in the minor leagues after appearing on a top-100 list. Some debut in the majors right away. Due to the methodology outlined above, such players might be in a position to receive greater credit for their first nine seasons simply because they were closer to the majors when they were ranked. To accommodate this issue, I’ve spread out a player’s WAR over the final seven seasons of the period in question, distributing 10% of it to years three and four before slightly gradually increasing that figure up to 20% by year nine. To calculate surplus value, I’ve discounted WAR by 3% in years No. 3 through 5 (to approximate the impact of the league-minimum salary) and then 15% in year six, 32% in year seven, 48% in year eight, and 72% in year nine. Spreading out the WAR in this way not only mimics a sort of generic “development curve” but also ensures that arbitration discounts aren’t too heavy.

After that, I applied an 8% discount rate for present value. For players immediately ready to play, the extra value they get from the eighth and ninth year is minimized by removing value they actually provided from the first two years and spreading into later seasons. This similarly ensures that the controllable years of players who take longer to develop or reach the majors aren’t treated the same way as those produced by players who contribute right away. A two-win season in 2019 is more valuable than a two-win season in 2021; and this method helps to strike that balance.

Draft picks aren’t as close to the majors as most minor league prospects are. To combat this problem, I used 10 years for college draftees and 11 years for those drafted out of high school, but kept the rest the same as above.

The other difficult issue for draft picks is one of sample size. When I looked at 15 years of prospect lists, it meant we were looking at hundreds of prospects at nearly every single prospect grade. If we did the same for draft picks over 15 years, we only have 15 players at every pick, which isn’t much of a sample. To compensate for this issue, I took a large percentage of the pick in question, and then a smaller percentage on a sliding scale of the next 12 picks. After all, having the third pick in the draft isn’t just an opportunity to take the third-best player; it is the opportunity to choose between a whole host of players. The Astros taking Mark Appel ahead of Kris Bryant doesn’t make the second pick in the draft better than the first. The Astros could have had Kris Bryant, and factoring in the picks that follow helps represent that challenge.

Smoothing things out a bit helps make sure a small sample doesn’t create a bias around a pick. For example, in the years I studied (1993-2007), the third overall pick often performed poorly, but Eric Hosmer, Manny Machado, and Trevor Bauer were taken with the third pick in the three of the four drafts that followed. It wasn’t bad to have the third pick from 1993-2007. It just happened that those picks didn’t work out well.

First round picks were then adjusted upwards slightly so that the actual WAR of the picks and the adjusted value using the method above matched. The values were then smoothed out to ensure the value of the picks moved downward. The smoothing stopped mattering after the second round. After finding the present-value WAR for each pick (I used $9M/WAR), I then subtracted the slot amount for each pick to come up with a current value.

This is what the first 70 picks look like:

The values at the very top of the draft are going to be context heavy. Sometimes, the top pick is a solid 55, like Casey Mize was a season ago. Other years, it might be Bryce Harper. For context, here is how the first round played out last season in terms of bonuses and slots for the pick.

The draft reveals just how important it is for teams to receive a compensation pick the following season when they fail to sign a pick in the current year. While there is certainly lost developmental time and opportunity in losing a pick for one year, losing that pick permanently would be a major loss, and provide considerably more leverage to the players when negotiating contracts.

Moving down, this is what the picks in the third round and below are worth. For the 11th round and below, the median value is used instead of the average given the potential for a few really good picks out of thousands to distort the value beyond what would be a reasonable expectation for that pick.

In practical terms, that means that for the picks in round 20 or later, you might come up with one average player every three years. For picks in rounds 11-20, a team can expect an average player every two or three seasons. The same is true for rounds three and four combined. It’s hard to find good players in the draft after the first round. There’s as much value in the first 100 picks as in the entire rest of the draft. Teams might opt to pay a third round pick a $3,000 bonus to save money and use it elsewhere. That doesn’t mean that we should expect the same performance from that pick as we would a typical third rounder, but we should expect that the slot money the team uses elsewhere will have a value somewhere close to $4 million.

When considering how teams sometimes shift money around from the second or third round to the sixth and seventh round (and vice versa) or use money to sign players above $125,000 after the 10th round, it helps to know how to properly value every dollar spent. For the first 100 picks, where the bonuses are the highest, every dollar spent generally yields five dollars in value. In rounds 4-5, every dollar should yield about six dollars in value, and in rounds 6-10, every dollar spent should yield 10 dollars in value due to the talent available and the small signing bonuses. Given this information, it appears teams might be better off paying slightly less money in the first few rounds while still getting good talent, and shifting some of that money elsewhere in the first 10 rounds. If teams are shifting money from the first 10 rounds to the back of the draft, they need to feel pretty confident in that player’s ability.

In terms of comp picks in this year’s draft, the Arizona Diamondbacks will receive a pick at the end of the first round for losing Patrick Corbin to the Nationals. That pick is worth something close to $10 million. The six small-market teams will receive picks between rounds one and two that are worth $8 million to $9 million each. The other eight small-market picks after the second round are worth around $4 million each, and the same is true for the free agent compensation picks like the one the Dodgers will receive for losing Yasmani Grandal.

Teams signing free agents who have received a qualifying offer generally lose their second pick, and that pick is worth somewhere between $4 million and $10 million depending on where in the draft the team is picking. The Red Sox’s top pick drops down 10 spots this year because they were more than $40 million over the competitive balance tax. That penalty is only worth around $2 million.

There’s further analysis to be done based on whether a player is coming out of high school or college, as well as whether he is a position player or pitcher, but that work will be left to a later date. For now, I hope this is a useful starting point for further study, and for gaining a greater understanding of draftees’ expected production and teams’ decision making.

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It isn’t hard to justify a player’s reasoning for signing a long-term extension. It isn’t hard to justify Ronald Acuña Jr. wanting to secure his future. In 2014, the Braves phenom received a signing bonus of $100,000 and then spent the next three and a half years making almost nothing. Last season, he made a bit more than half a million dollars. He was set to do the same this season and next before finally cashing in to the tune of somewhere between four and eight million dollars, unless he manages to win an MVP award, in which case it would bump him up closer to $10 million. Earning just over $1 million for his six years after signing as a professional baseball player isn’t nothing, but it’s also not $100 million, and per Jeff Passan, Ronald Acuña Jr. appears set to sign a contract for a guaranteed $100 million over potentially the next 10 years of his professional baseball life. It’s a lot of money, but it also might be the biggest bargain of a contract since Mike Trout’s six-year, $149.5-million contract signed in 2014 or Albert Pujols‘ eight-year, $100-million contract signed in 2004.

Acuña isn’t on the level of Trout or Pujols, and odds are he never will be, but he is already a very good player. Our Depth Chart projections have Acuña as a four-win player today at 21 years old, sitting right next to J.D. Martinez, Javier Baez, Joey Votto, and Matt Carpenter. Dan Szymborski ran the ZiPS projections for Acuña’s next eight seasons; he averaged about four and a half wins per season, putting him right in line with expectations for Freddie Freeman and Anthony Rendon this year. Acuña is already one of the game’s better players, and his age should keep him at that level for the next decade before he declines, so he gave away potentially four free agent seasons and arguably his entire prime for a fraction of what he might have earned otherwise.

There are two paths to walk down when it comes to putting this contract in perspective. The first is to compare the deal to the one just signed by Eloy Jimenez. The White Sox prospect was guaranteed $43 million over the next six seasons despite never playing a day in the majors. If things break well for him and the White Sox, he will make $77 million over the next eight years and give up one free agent season. Acuña, who has already played a season in the majors and performed really well, will make just $90 million over the next eight seasons if things break right and will have given up two free agent seasons. Then it gets worse for Acuña, because $10 million of that $100 million guarantee is a buyout of a $17 million option for a ninth season followed by another option for $17 million. Those option prices are incredibly small when free agents or free-agents-to-be like Manny Machado and Nolan Arenado are making twice that today, not to mention what salaries might be like eight years from now. According to Passan, the most Acuña could make over the next 10 seasons is $124 million. Read the rest of this entry »

Over the last month, a lot of players have elected to forego participation in future free agent classes by signing contract extensions. Ten players within two years of free agency have signed contracts worth more than $50 million, totaling over one billion dollars in future guarantees. The list includes the best player in baseball, two of the very best pitchers in the game, and multiple other MVP candidates. It’s hard to get a sense how much of signing these contracts is due to players trying to avoid free agency, and much is due to teams simply having boatloads of cash and happily paying their star players to stick around. Earlier today, we published Opening Day payroll numbers showing another decline, with these extensions having little effect on current salaries. To help make some sense of all these extensions, there is a survey below that might help answer some of our questions.

The survey is relatively simple one, asking two basic questions about each of the 10 players who signed extensions, as well as one other rumored to have been in talks. The first question gets at how good the player is now by asking what type of contract he would have received had he been on the open market this past offseason. While I could ask how the player did with his extension, the answer can be kind of mushy. Instead, I’ll ask you to project in the future, and based on what you know about the player now, estimate what the player would receive in free agency when he would have become eligible. For all but the the last three extensions, that period is after the current season.

The relevant player pages with projections are linked below, with the survey to follow.

• • Nolan Arenado
  • Paul Goldschmidt
  • Aaron Hicks
  • Miles Mikolas
  • Chris Sale
  • Justin Verlander
  • Anthony Rendon
  • Mike Trout
  • Jacob deGrom
  • Kyle Hendricks
  • Xander Bogaerts

Thanks for your help.

Earlier this offseason, I wrote that even if everything broke right for the free agents who remained on the market, we’d see a roughly one percent increase in Opening Day payrolls compared to last year. At the time, I cautioned that things were not likely to break right for the remaining free agents, and that a similar exercise the year prior ended with a one percent drop on Opening Day. Even worse for the players, that one percent drop last season turned into a 2.5% drop by season’s end. Opening Day payrolls are down again in 2019 by roughly the same amount as last year. If last season’s scenario were to repeat itself, the players will be looking at a half-billion dollar swing in revenues to owners in 2019 alone even if we assume that the split between players and owners was 50/50 two seasons ago.

As we begin the 2019 season, here’s a look at every team’s Opening Day payroll, per Cot’s Contracts, which includes a team’s 25-man roster plus whatever other obligations they’ve accrued to players who are on the injured list or no longer with the club.

The Red Sox, coming off their World Series win and the highest major league payroll in 2018, look poised to repeat at least one of those designations this season with a decent shot at both. The Yankees appear just above $200 million this season after a major decline last season, though the team first crossed the $200 million barrier back in 2005, so it is hardly heady territory for them. The Cubs have seen their payroll rise as they try to augment their World Series-winning core with free agents, though they sat this winter out. The Nationals kept up spending after Bryce Harper’s departure, and Los Angeles looks to be trying to stay under the competitive balance tax for the second straight season after averaging a figure more than $50 million higher the previous three seasons. At the lower end of the spectrum, we see the usual suspects of smaller-market teams and traditionally weak-spenders. Read the rest of this entry »

This morning, Dan Szymborski took us through the back end of the bullpen rankings. Now, we conclude the player rankings (a summary will run tomorrow) with the best bullpens in baseball.

“Relievers are volatile” is something that people say all the time. I happen to believe it is true, and here are two illustrations of how. First, Craig Kimbrel is not in these rankings because he has yet to sign. Below you will find the 15 best-projected bullpens. If Kimbrel were to sign with all but the Marlins or Royals on the list of the 15 worst-projected bullpens, they would appear on this list. Further, he would take any team covered below and put them in second place except for the Yankees, who would still be in first.

The second illustration has to do with the narrow band of reliever performances given the small sample they work under. If we were to consider a good but not great position player projected for three wins, and that player finished anywhere between two and four wins, we might not even notice. At any rate, we’d see that player as having come close to his projected result. If we were to take a good reliever, projected for one win, and that player finished between zero and two wins, that reliever was either really bad or one of the best relievers in the game. It makes breakouts a bit easier, but also takes presumably valuable relievers and makes them a lightning rod for fans. What I’m saying is, don’t get too worked up over these rankings. Look for the potential two-win relievers and dream on them. Bullpens already cause enough stress to fret too much over rankings.

In last season’s awards voting, there were 24 players who finished in the top-six of MVP and Cy Young in their leagues, with Jacob deGrom the only one to finish in the top-six in both categories. Of those 24 players, 10 have signed contract extensions this winter to push free agency further down the road. Ten of the best players in baseball have reached an agreement with their teams on contracts worth roughly $1.2 billion. Five of those players (Nolan Arenado, Paul Goldschmidt, Miles Mikolas, Chris Sale, and Justin Verlander) were set to become free agents after this season. Mike Trout became the first player this offseason to sign a major extension two years from free agency, and now Jacob deGrom has become the second, as first reported by Andy Martino.

The contract is set to pay deGrom a total of $137.5 million over the next five years, but it includes an opt-out after 2022 and a team option for 2024. The deal is further complicated by deGrom’s arbitration status. His 2019 salary was already set at $17 million, and he receives the same amount of money this season but $10 million now comes in the form of a signing bonus, per Joel Sherman’s breakdown, which looks like this.

In one sense, it looks like there is $120.5 million in new money being guaranteed to deGrom, but that $23 million in 2020 is roughly what deGrom would have received in his final year of arbitration. In terms of free agent seasons, the Mets guarantee the equivalent of a $23 million team-option in 2020 and $97.5 million over the following three seasons. Comparing this deal to the one Chris Sale just signed presents some interesting similarities and differences. One interesting similarity is that both deGrom and Sale receive $90 million beginning in 2020 over a three-year period before an opt-out can be triggered. However, Sale has $55 million coming to him after the opt-out compared to deGrom’s $30.5 million, which is a function of two big differences. Read the rest of this entry »

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Coming on the heels of Mike Trout’s humongous contract extension, news broke that Alex Bregman and the Astros had agreed to an extension of their own worth $100 million, with Mark Berman first to report the deal. While the Trout contract is the biggest of all time, the Bregman deal is not without intrigue. Bregman, who was still a full year away from arbitration, is the first star-level player to sign a pre-arb contract extension in nearly five years. The last player at or above Bregman’s level of production to sign a contract like this was Trout, who signed his six-year, $144.5 million contract back in 2014.

Since 2014, the number of contract extensions buying out free agent years has decreased. When Luis Severino signed his deal earlier this offseason, Jeff Sullivan ran the numbers on the quantity of extensions by offseason, providing this graph.

In the five years leading up to the 2014 season, there were about 25 or so extensions per season, and in the five years since, the numbers have dropped in half. Since Severino signed, we have had Jose Leclerc, and now Alex Bregman, but those extension figures aren’t going up a ton this year. It isn’t just that the number of extensions have gone down; the quality of players signing those extensions has declined as well. We saw Trout’s big deal ahead of the 2014 season; the year before, Buster Posey, who was Super-2 arbitration eligible, signed an even bigger contract covering more seasons. It was Andrew McCutchen the year before Posey. Matt Carpenter and Jason Kipnis, who were several years older than Bregman but also coming off very good years, signed six-year deals with options guaranteeing themselves around $50 million each. Read the rest of this entry »