Markakis: And Yet Another Contract.
I am almost getting tired of writing about these. Yesterday, after a weekend full of rumors indicating that the two sides were close and a deal inevitable, Nick Markakis and the Baltimore Orioles officially agreed to terms on a six-year, $66.1 million contract.
Markakis was entering his first arbitration year so this contract buys out all three and three free agent years, with a mutual option on a fourth. That’s a lot of open market years and before even looking at the numbers, the value of the salary is sending me alert bells that this is going to be a team-friendly deal.
The projections want to knock some of Markakis’ offensive improvement in 2008 off and peg him closer to his 2007 level, which for a six-year projection seems fine to me. We also want to scale back his plate appearances to account for the possible, perhaps even likely given the contract’s duration, chance that he will miss time at some point. Assuming Markakis sticks in right field, we also have a decent sample size to now estimate his defense, +2 runs per 600 PA, and given his young age, it shouldn’t deteriorate much over the time period in question.
That leaves us with a calculation of +20 runs for replacement, +2 runs for fielding, -7.5 for position and about +23-24 runs for hitting. Totaling those yields ~37 runs above replacement, 3.7 wins and 16-17 million in value. 10% for long term security and the free market six year total is $90 million. Of course, given the 40/60/80 nature of arbitration, the Orioles are not buying Markakis at six years worth of value, but rather at 4.8 years. Given that, the expected value for the contract is $72 million. Actually less than I first thought. It’s still a good deal for the Orioles, but it’s not much of a steal and given that Markakis gets to wrap up a tremendous amount of financial security, you can hardly fault him for taking a slight discount. All in all, looks like a win-win.
Matthew Carruth is a software engineer who has been fascinated with baseball statistics since age five. When not dissecting baseball, he is watching hockey or playing soccer.
Thank you for doing the contract breakdown. It also helps fans of other teams see how their GM is doing compared to other GMs. It also helps people new to baseball sites that use statistics to follow along better.
I’m new to the site and wow am I impressed with the analysis provided here. I’m about to graduate w/ a degree in Sport Mgmt but I coulda just came here and saved $50k!
I’m about to start a degree in sports management, and if what you say is true, it looks like I’m ahead of the curve.
I think one needs to DOWNSIZE the $$$ value of projected wins to reflect the banking depression and economic reality, say a level closer to $3-3.3M per win
so from 2008 Manny’s 7.8 wins would have made him worth say $24-25M
cause if Garland thinks he is getting anywhere near $12M in 2009 or Ollie Perez thinks he is worth anything near $12M a year then I have some swamp land downunder for sale
I’d like to see the math that says that Manny was worth 7.8 wins.
Love the player, love the contract. Finally seems like someone has a plan in Baltimore, and they’ve got their outfield of the future set.
I agree with you Matt, that the actual value is lower than I would have expected. Off the top, it looked/sounded like a very team-friendly deal, though not one you can blame the player for taking.
Frankly, I think this is a case where the projections might be too conservative given Markakis’ age and constant improvement. I think there’s a good enough chance that he either maintains his 2008-level of offense or even improves on it further to end up making this contract a steal for Baltimore.
Furthermore, because of how we always scale back playing time to account for possible future injury, Markakis can blow this valuation away simply by staying healthy and logging an addition 50-100 PAs per season.
I’m curious why Markakis surrendered so many open market years, especially given that he was set to hit the market at a young enough age that he could have been in line for a mega-deal along the lines of a Teixeira. The per-year might have been okay for financial security reasons but if I were him, I would have limited it to four years plus an option.