K-Rod signs with Mets

Last week, we talked about how the market for relief pitchers appeared to be crashing. Today, Francisco Rodriguez and Kerry Wood became the latest to feel the contraction in bullpen spending. K-Rod is signing a contract with the Mets that will guarantee him $37 million over three years, while Wood is close to signing a two year deal with the Indians, who aren’t exactly known for spending significant portions of cash on free agents.

Rodriguez gets less money guaranteed than Francisco Cordero got last year, and I don’t think too many people believe that Cordero is the superior reliever of the two. Perhaps more teams were scared off by the decrease in velocity than K-Rod’s agent expected, but even still, this is half of his rumored 5 years/$75 million asking price heading into the winter. At this point, I don’t think there can be any question that MLB teams are valuing relievers significantly differently than they have in the past.

However, that doesn’t affect Rodriguez’s actual value, so let’s take a look at what the Mets should expect from him in 2009 to 2011.

Marcel projects Rodriguez to throw 66 IP with a 3.40 FIP, but it doesn’t know that he’s switching leagues, so we need to knock that down a bit. We’ll call it 3.25 (the adjustment for a closer is less because they never face pitchers), which of course is very good for a reliever. If we set replacement level for an NL reliever at 4.75, then Rodriguez would be 1.5 runs per nine innings above replacement, which translates into +11 runs per 66 innings.

However, we have to add in a leverage factor for late inning relievers, because the runs they allow are more valuable in terms of wins and losses than a normal reliever. 1.8 is the average leverage factor or a closer, so 11 * 1.8 = 19.8. We’d say that Rodriguez, as a closer, is worth about +2 wins more than a replacement reliever.

At an annual average salary of $12 million, that means New York is paying about $6 million per win. For most teams, that just not feasible, but as we saw, the Mets payroll allows them to have an average of nearly $3.4 million per win across the whole payroll. Considering that they have significantly underpriced players such as Jose Reyes, David Wright, and Carlos Beltran (his contract is a bargain compared to how good he really is), the Mets have the luxury of being able to overpay and still come in under budget while contending.

On it’s own, the contract isn’t great, and he’ll be hard to trade if they ever decide they don’t want him anymore. But in the specific circumstances that the Mets are in, needing a closer and having significant financial resources that most teams don’t, this deal makes sense for them. Not many teams are in the position to pay $6 million per win – the Mets are.