Carlos Beltran as Evidence of the Changing Market

In the winter of 2011, Carlos Beltran hit free agency. He was heading into his age-35 season, but he was also coming off a pretty great walk-year, as he posted a 152 wRC+ in 598 plate appearances, the best single season wRC+ of his career. Even with declining defensive skills and a sub-par UZR rating, he still racked up +4.3 WAR, 15th best in baseball among outfielders. And, because of a clause inserted in his contract, the Giants were not allowed to offer him arbitration, so he hit the market as a no compensation free agent.

And he got 2 years and $26 million. Heath Bell got $27 million that winter — granted, it was for three years instead of two — but the market still gave Heath Bell more guaranteed money than Carlos Beltran two off-seasons ago. Since then, two teams have paid to get rid of Heath Bell, and I think it’s fair to say that the market missed on that deal. But the market also clearly missed on Beltran that winter, as he was one of the most productive hitters signed that off-season and got a fraction of what the premier free agents were landing. That wasn’t a recessionary winter; that was the winter that saw Albert Pujols and Prince Fielder land deals for over $200 million apiece and $100+ million commitments for both Yu Darvish and Jose Reyes.

Now, Beltran is two years older, and heading into his age-37 season. His new walk year wRC+ is 132, still very good, but not at the level he was at the last time he went into free agency. His defense has continued to decline, and now his walk-year WAR is just +2.0. Still, the Cardinals made him a qualifying offer, so this time around, any team signing him would have to forfeit a draft pick in order to do so.

Two years older. Not as good of a player as he was. Compensation attached. This time, 3 years and $45 million.

There might not be a more clear sign of the changing economics of MLB than Carlos Beltran. Sure, the market occasionally misses on players and we shouldn’t expect Beltran to sign bargain deals every time he hits free agency just because he did last time. But this is a significant bump in valuation, despite the fact that Beltran is objectively worse by just about any measure you want to look at. If this version of Carlos Beltran is worth 3/$45M and the loss of a draft pick, what would this market think the Beltran of two years ago was worth?

There is just so much money in baseball right now that we have to be careful when comparing deals being signed now to deals signed in the past, even the recent past. I noted this briefly in the write-up of Robinson Cano’s contract this morning, but Cano getting $240 million in 2013 is nothing like Alex Rodriguez getting $252 million in 2000. Since the first A-Rod deal was signed, total MLB spending on player payroll has risen from under $2 billion and is likely going to be pushing $3.5 billion when opening day payrolls are calculated next spring. Even with the wage suppressing mechanism of delayed free agency in place, MLB’s spending on player payroll is going to double in less than 20 years. Baseball is in an economic boom.

You probably know all this already, of course. The TV revenues have been talked about ad nauseam, and it doesn’t take an economist to look around at some of the contracts being signed this winter and say “hey, teams sure do seem to be spending a lot.” But I like the Beltran example as a reminder to evaluate contracts in the market they were given. Beltran was underpaid last time he hit free agency, and he probably was just overpaid this time, but any player who is currently ambulatory should probably get a raise over his prior contract, Barry Zito excluded. Prices are going up, and they’re going up pretty fast.

But enough of Beltran as a sign of baseball’s riches. Let’s at least spend a paragraph or two talking about Beltran as a player, and now, Beltran as a Yankee. Pretty much every projection I’ve seen for 2014 has him as a roughly league average player. Carlos Beltran, as great as his career has been, is probably currently overrated. It’s not that average players don’t have value, but they probably shouldn’t cost $15 million a year for three years, plus the loss of a draft pick, especially for their age 37-39 seasons.

As a part-time OF/part-time DH, Beltran can still help a contender, and probably help them for the next two years, though I wouldn’t be so sure about year three. But $15 million a year for an above average hitter/below average defender combo pack? When guys like David Murphy, David DeJesus, and Nate McLouth are all signing for around 2/$11M? Sure, those guys all need a platoon partner, and there’s value in not having to use two roster spots to fill one starting job, but OF/DH is the easiest place to run a platoon. You need four or five outfielders anyway, and it’s generally a good plan to have a few who are right-handed and a few who are left-handed, so building a relatively effective job share at those positions just isn’t that difficult.

There absolutely should be a premium value added to players who don’t have platoon splits — and thus don’t have to be pinch hit for in high leverage situations — and can play everyday regardless of who is pitching. But I don’t know that the premium should be 300% of the going rate of a pretty decent strong side of that platoon. Not having to have a guy on the bench to pinch hit for David Murphy isn’t that valuable.

So, yeah, I think the market missed on Carlos Beltran again. He should have gotten more as a free agent last time around, and less this time through. I like what the Yankees have done in replacing Robinson Cano’s spending with multiple pieces of value instead of one mega-contract, but this part of the plan looks like a bit of a waste of cash. Maybe he’ll age extremely gracefully and be worth the money, but after telling Robinson Cano that they wouldn’t pay for his late-30s, I’m not entirely sure why they saw it necessary to pay this much for Carlos Beltran’s late-30s.