Death Match: The Wells Trade Versus the Zito Contract

Did you hear that the Toronto Blue Jays traded Vernon Wells and his Massive Albatross Contract to the Angels? Probably. It has received plenty of commentary here and elsewhere, and that should be enough, but then someone asked Dave Cameron how the Angels’ trade for Wells was better or worse a move than the Giants notorious seven-year, $126 million contract with Barry Zito signed before the 2007 season. The Zito contract looked like a bad move at the time and pretty much everyone currently agrees that the Wells trade is, too. But the Nerdosphere demands an answer: which was the worse decision?

The idea when looking at a contract or trade retrospectively is not to judge the contract in hindsight, which is relatively easy and not terribly illuminating. The idea is to try and reconstruct the information we (and the front office making the decision) would have had at the time and judge the decision on that basis. There isn’t any hindsight to be had yet on the the Wells trade, but the Zito contract requires some “reconstruction.” I will do my best to keep things “neutral.” Almost everyone agrees these are two really bad moves, but teams do these things for reasons (even if we don’t understand or agree with those reasons), so when there is ambiguity I will try to give the respective front offices the benefit of the doubt.

Beginning with Zito: the 2006-2007 off-season was a long time ago, literally and figuratively. Although free agent salaries were a bit smaller per win, they also seemed to be increasing at a higher rate. Still, Zito’s contract was astounding (all hail Scott Boras). According to a salary chart from the time (assuming $4 million per marginal win and a 10 percent average annual increase in that price, along with a half-win-a-year decline curve), the Giants were paying Zito as if they thought he was a 5 win pitcher. According to FanGraphs WAR, Zito hadn’t ever been worth that much during a season, and hadn’t been worth more than four wins since 2003. Taking a look at his 2007 ZiPS Projections and converting it to FIP scaled for the time, we get 4.53. Without going through every step here, over a generously projected 220 innings and 33 starts, Zito comes out as a 2.3 WAR pitcher.

If that is where we want to leave things, then this contest is probably over, as that would mean the Giants overpaid by two years and more than $90 million. However, I said that I would be charitable when it was reasonable, and Zito did have a history of his ERA being better than his FIP. If one prefers Baseball-Reference’s WAR, Zito had averaged about 3.5 wins from 2004-2006, and had been 4.7 WAR in 2006. If we use ZiPS’ projected ERA/RA (4.00 ERA, although for calculating WAR [whether using FIP or ERA] we use RA-scale, so 4.38) and the same playing time as above, we get 2007 projection of about 3.5 WAR, which would indicate a maximum market contract of seven years, $69 million. In that case, the Giants “only” overpaid by $57 million dollars, give or take a few.

Can the Wells trade top that? While we’ve been assuming something like an average of $5 million per marginal win (as we need to compare this trade for the Angels with what they could have bought on the open market rather than spending it on Wells), surprising fluctuations in recent years in that market have led us to project a more conservative annual growth in the average cost of wins, so most of us are using five percent. On those assumptions, a four-year, $86 million dollar commitment to Wells (the remaining portion of his own seven-year, $126 million dollar contract) means he is being valued at somewhere between 4.5 and five wins. Wells has only been worth 4.5 wins or more once in his career according to FanGraphs WAR (in 2006). While we estimate his value as about five wins in 2010, the prior year he was replacement level and he was at 1.5 in each of the two seasons before that. His 2011 ZiPS projection puts him at about nine runs above average per 700 plate appearances once converted to wOBA/wRAA. Wells’ defense in center, once well respected, is now considered to be very poor, and while he could move to a corner for the Angels, that would decrease his overall value. Let’s call his neutral position-plus-defense five runs below average. Adding it altogether and adjusting for playing time, a 2.5 WAR projection for Wells in 2011 seems fair. That would call for about a $39 million contract on the open market given the assumptions from above, so according to this projection, the Angels are overpaying Wells by about $47 million.

The Zito contract is still in the “lead,” so far, but the Angels also gave up two players: outfielder Juan Rivera and catcher Mike Napoli, History’s Greatest Monster (according to Mike Scioscia). Rivera had a nice comeback offensively and defensively in 2009, but 2010 saw a return to earth. ZiPS sees him as merely a +3 hitter over a full season in 2011. His defense has generally been considered poor, although both UZR and DRS were very impressed with his 2009 performance in the field. Again being charitable to the Angels, let’s assume his outfield defense is below average (the Fans’ Scouting Report confirms this), and that given his recent performance, he’s likely to be something like a 1 WAR player in 2011, which would make his $5.25 million salary basically a wash.

Napoli is the bigger question. ZiPS saw him as the Angels’ best hitter for 2011, and his projected line converts to 19 runs above average per 700 plate appearances. The question is how much catcher Napoli can be expected to play, and just how bad he really is back there. In limited 2010 playing time behind the plate, one measure found him to be about six runs below average. But even if we assume that he’s so bad that he eliminates the positional adjustment, he’s more than a three-win player after adjusting for playing time. Again being generous to the Angels, let’s assume that he’ll be that bad behind the plate and also need to spend some time at first base and designated hitter. That might take his projection down to 2.5 wins (the same as we got for Vernon Wells above). Even if he gets the $6 million he is asking for in arbitration, that’s still an additional $7 million surplus value that Angels are giving up.

When I first thought of doing this post, I thought it would be somewhat close, but with the Zito overpay still being the clear “winner.” However, after taking account of not only how much Wells will be overpaid relative to his projection, but also the (conservatively estimated) surplus value list by trading Napoli (and assuming Rivera adds none), the Angels $54 million overpay in 2011 is practically indistinguishable from the Giants $57 million dollar overpay in 2007. These projections and estimates aren’t assumed to be precise enough to say that a $3 million dollar difference four years and a very different economy apart is significant. Moreover, if I was generous to the Giants in using RA rather than FIP for Zito, I think I was if anything even more generous to the Angels in my valuation of Napoli (and I didn’t even account for his potential 2012 surplus value) and perhaps also Rivera.

I was originally thinking of titling this post “Two Bad Decisions Enter, One Bad Decision Leaves,” but given the outcome, “Two Bad Decisions Enter, No Bad Decisions Leave” would have been more appropriate. If some Angels fans are made more upset about this trade by this post than they already are, they might be consoled by the knowledge that in four years, they will win the World Series with a non-rostered Vernon Wells watching from the bench.

[Author’s note added Wednesday morning, 8:35 A.M. EST: At the time I wrote posted this, there were no official reports that any extra money had changed hands in Wells trade. Since then, Jon Heyman has confirmed that Toronto did send $5 million to the Angels, but this was not originally disclosed. For posterity’s sake, I’ve left the original post as it was. However, while it isn’t a large amount, it is probably enough to give the Zito deal a bit more of an “edge.” So feel better, Angels fans! World Champions in only three years, right?]