How Much Are Last Year’s Free Agents Worth Now?

The 2015-16 free-agent class was big, full of talent and ultimately resulted in seven $100 million contracts — along with another seven worth $50 million or more. This offseason led to more contracts (a total of eight, precisely) in the $50 million to $100 million range; however, among the entire class, only Yoenis Cespedes received more than $100 million.

As Cespedes himself could tell you, a player’s value can change significantly in a season. Despite having aged a year, Cespedes received $35 million more in guarantees this winter than he did last. While Cespedes had a strong 2016, though, many of his free-agent peers who signed big contracts last offseason have proven to be big disappointments.

First, let’s take a quick look at the contracts signed last year. The table below includes not only the actual amounts of the contacts themselves, but also an estimate of the value said player would have been expected to provide starting with the time he signed. To calculate this estimated value, I began with each player’s WAR forecast from last year’s FanGraphs Depth chart projections, started with $8 million per win with 5% inflation, and applied a standard aging curve. The rightmost column indicates whether the player in question was expected to outperform or underperform the cost of his contract.

There’s about a $94 million surplus among these deal. That said, there were also nine qualifying offers made to the players — which attached draft-pick compensation to the signings — while seven of the contracts included opt-out clauses. Those two factors might wipe out any surplus value.

At this time last year, the numbers indicated that Jason Heyward was a colossal bargain, a four-win player just entering his age-26 season. Heyward, as well as Ben Zobrist and Wei-Yin Chen, made Dave Cameron’s free-agent bargain list. Based on the projections, both Justin Upton and Alex Gordon seemed like decent bets to pay off. Cameron wasn’t buying on Upton, however, placing him among the free-agent landmines along with Jordan Zimmermann and Chris Davis.

The group mostly disappointed in 2016: only Cespedes, Cueto, Price, and Zobrist produced three wins or more in 2016. Here’s how the members of this group did relative to their salaries just for last season.

Cueto and Zobrist paid off handsomely for their clubs, while David Price lived up to his big salary. Zack Greinke was always going to have trouble living up to Arizona’s lofty investment and had difficulties right away. Justin Upton had troubles for much of the season. Wei-Yin Chen, Alex Gordon, and even Jason Heyward don’t appear to have cost their teams much in 2016, but those salaries are also somewhat backloaded, meaning there’s considerably more money owed to those players after disappointing seasons.

Now, as we enter the 2017 campaign, we can re-assess the contracts for last year’s free agents, considering both the money that remains owed to them and the projections for players who’ll receive that money. Then, as above, we can arrive at a projected surplus or deficit starting from the 2017 season.

As you can see, I’ve removed Yoenis Cespedes from consideration with this group. After opting out of last year’s deal, he’s now a member of the 2016-17 free-agent class. I’ve also added another player: injured David Price. If Price were healthy, he would be more or less at the same point as last year, expected to produce value commensurate with the cost of his contract. If Price misses the season, however, that changes the value on the contract considerably. As a result, I gave what might be considered a generous 3.7 projected WAR for Price in 2018 and subtracted half a win every year thereafter. Instead of producing even value on his contract, this version of Price is all of a sudden one of the worst of the bunch. After one season, only Johnny Cueto is expected to vastly outperform his contract going forward, although it really isn’t clear how far forward that contract will go, as he also has an opt-out at the end of this season.

If we add the surplus/deficit from 2016 to the projected one going forward, we can see how much value the contracts have gained or lost compared to last season.

Ian Kennedy looked to be a pretty terrible signing last season, but just by virtue of being mediocre last year, he has exceeded expectations and turned his contract from a big waste to something pretty close to value. The only other player to see a big increase in value was Cueto, who put up a 5.5-WAR season. After that, a David Price who might not exist anymore — plus Mike Leake, Jeff Samardzija, Jordan Zimmermann, and Ben Zobrist — all remain pretty similar in value relative to last year. That isn’t necessarily a good thing for Zimmermann, as he wasn’t expected to be a great value to begin with. After that, Gordon might still approximate something close to value if he meets his projections and, surprisingly, if Jason Heyward remains a three-win player like he is projected this season, he will still come pretty close to paying off the contract, even if he is no longer a great bargain.

In signing players to big free-agent deals, we expect the most production at the front end of the contract, before a player suffers age-related decline. When players don’t perform, like many of the top free agents last season, we see the value of the contracts take a drastic dip. Poor performance like with Chen, Davis, Greinke, and Upton has caused the value of those contracts to decline greatly. An injury to David Price has likely done the same to his contract. No team can afford to skip free agency entirely, but those players are the most expensive, have the greatest risk and produce the least value compared to their cost. The winner’s curse is real.