Max Muncy and the Dodgers Lock it In

Max Muncy is a Dodgers success story. He’s compiled 10 (10!) WAR over the past two seasons, walking and homering and standing at second base in ways that would have been hard to predict two years ago. What would have been easy to predict, though, is his salary. As a pre-arb player, the Dodgers had absolute discretion over his pay (subject to the major league minimum) and chose to give him $545,000 in 2018 and $575,000 in 2019.

Muncy was scheduled to head to an arbitration hearing with his club. He asked for a $4.675 million salary for 2020, and Los Angeles countered with $4 million. We’ll never know what the outcome of that hearing will be, though, because as Ken Rosenthal reported yesterday, he signed a three-year extension worth $26 million dollars. The contract also includes a team option for a fourth year, at a salary of $13 million, with a $1.5 million buyout (the contract is actually for $24.5 million plus the buyout, which places the option year at $11.5 million net).

At first glance, this looks low. Muncy has been worth 10 WAR over the past two seasons! He’s one of the best hitters on one of the game’s best teams. Look upon his ZiPS, ye mighty, and despair:

In an alternate universe where Muncy was a free agent, $26 million would be absurdly low. He’d be looking at Castellanos money, most likely: $64 million over four years, potentially with fewer opt outs as he’s older. Maybe that’s Mike Moustakas money, then, which makes some sense. He’s a younger, better Moustakas, though with less of a track record.

Of course, we don’t live in that world. The arbitration system constrains player salaries, and it’s particularly onerous for players who break into the big leagues at a relatively advanced age and then get really good, really quickly. The system, you see, is anchored low. It grows quickly — Mookie Betts got $27 million in arbitration this year, which is a discount to what he’d get on a one year deal, but not a huge one. But even Betts started out at a somewhat low figure. He received $10 million his first year in arbitration, and that was after seasons of 4.8, 8.3, and 5.3 WAR.

For players with a similar trajectory to Muncy’s, the floor is a bit lower. For a recent comp, look no further than Tommy Pham. Pham was similarly good over his last two pre-arb years; he compiled 10.3 WAR between 2017 and 2018. He’s of a similar age; he was nearly 31 when he reached his first year of arbitration, while Muncy isn’t yet 30, but both are looking at reaching free agency after their peak years.

Pham received $4.1 million in his first year of salary arbitration. He followed it up with a 3.3 WAR season that was light on defensive value, which lines up well with Muncy’s 2020 projections, and then settled with the Padres on a $7.9 million contract this year rather than go through the arbitration process again.

That’s $12 million over two years, which was a realistic path for Muncy. Sure, he could bet on himself by going year-to-year, but his median path is right around $12 million over the next two years, and there’s value, for someone with under $2 million in salary so far in his career, in locking something in.

That last season at $14 million seems about right. Muncy will be 31 by then, and while ZiPS still likes him quite a bit that year, 31-year-old bats aren’t commanding significantly more than that on the open market without some premium defensive value. Guaranteeing $26 million is awesome, as well: you can buy a lot of custom t-shirts for $26 million.

Of course, there’s value there for the Dodgers, too. Cost certainty is valuable for everyone, and with the Dodgers near the competitive balance cap, knowing the exact contours of their payroll is particularly useful. Want to go nuts and try to extend Mookie Betts? Muncy is going to hit your payroll for $8 million a year while being a useful player. Want to work out a deal with Cody Bellinger during the season? Now you know what your offseason payroll commitments will look like.

There’s value, for many teams, in keeping a player’s payout on a sliding scale. If the player tanks, he’s cheaper. If he’s a key cog, you can afford to pay him more. That’s a good way to avoid albatross contracts and dead money. That’s why extensions generally come at a monetary discount: players value cost certainty, while teams value linking performance with pay (though not at its market value, of course, due to the arbitration system). The team sacrifices that flexibility, the player gives a bit of money, and everyone’s happy.

But in this scenario, everything is roses for the Dodgers. The contract might be less of a discount than your normal arbitration-fueled extension, but it comes with a team option instead. Muncy has enough of a track record, and enough defensive value at second, that they’re unlikely to get burned too badly in any scenario. And the almighty importance of avoiding of a tiny tax, which drives great teams to distraction, is covered.

To talk about that option, we need to talk about Muncy as a player rather than merely as a contract. He’s an archetypical dingers-and-walks hitter, and his plate discipline gives him a leg up on providing value. Think of it this way: with his walk, HBP, and strikeout totals in 2019, he’s giving himself a high floor. If he replicated those numbers and produced a .354 wOBA on contact in his remaining plate appearances, he’d be a league average hitter.

A .354 wOBA on contact is anemic. That’s Kolten Wong, Kurt Suzuki, and Delino DeShields territory. The league average number last year was .384. Muncy could be 8% worse than league average on contact, in other words, and still put up an exactly league average batting line.

Max Muncy, of course, isn’t the kind of guy who creates weak contact. He had a .452 wOBA when putting the ball in play last year, a top 15% rate in baseball. That number stands at .444 for his career, and with an xwOBA of .446, it’s not like he’s subsisting on lucky hits. In fact, Muncy could have pretty bad plate discipline and still be fine. Gary Sánchez, Franmil Reyes, and Domingo Santana all perform similarly on contact, and they’re all above-average hitters despite poor non-contact numbers.

So Muncy has enough discipline that he could be a slap hitter and get by. He has enough pop that he could have a bad eye and get by. But he has neither of those; he’s just the complete package at the plate.

That’s not to say there aren’t holes in his game. He’s a low-contact hitter, and that looks unlikely to change given his swing, which means that he’s reliant on his strike zone judgment to generate walks and avoid strikeouts. He’s extremely passive early in the count, swinging at just 24% of first pitches (25th percentile), which works because pitchers stay away from him (he has a 16th percentile zone rate on 0-0). The calculus works, and it gets him in advantageous counts, but pitchers can still do more to try to crack the code.

So with that in mind (Muncy has a base that can keep him productive even if his contact skills or non-contact skills decline), let’s consider the team option. This isn’t a complex, multi-year choice for Los Angeles; it’s merely a matter of looking at how good Muncy projects to be after the 2022 season and making a decision.

Let’s start by assuming that Muncy’s central projection for 2023 is 2.8 WAR. Then, we’ll take the one-year standard deviation in projections I’ve previously calculated (0.8 WAR) and annualize it up to three years: that comes out to 1.4 WAR. You can come up with your own cutoff for how Muncy would have to perform in order for the team exercise the option: in my head, he’d need to have at least a 2 WAR projection for them to keep him.

With these rough parameters, the Dodgers would exercise the option about 75% of the time. And if they did, they’d be getting roughly a 3.3 WAR player, on average, for $11.5 million. No commitment 25% of the time, and strong surplus 75% of the time? That seems like value to me!

In fact, you could put a number on it. A 75% chance at a mean 1.3 WAR surplus is worth about 1 WAR. Depending on your valuation of WAR, that’s something like $8 million of value to the Dodgers from the contract — maybe less considering how well the team develops inexpensive average players. But even if you think it’s worth, say, $5 million in equity to the Dodgers, that’s a nice little upgrade.

Overall, this deal feels… well, fine. Muncy guaranteed himself a life-changing amount of money. The Dodgers got some cost certainty. Sadly, the general bad feeling of a solid player signing a below-market contract isn’t going to be solved by someone like Muncy.

If you dislike the arbitration system, it’s totally reasonable to dislike the Muncy deal. It’s a symptom of the team control problem; teams own players’ rights for so long, and at such a discount, that they can suppress costs relative to free agency. But this particular deal isn’t onerous; it isn’t another Ozzie Albies situation, where it’s hard to understand what’s happened. It’s market value subject to a constrained market. Max Muncy is an awesome player, and he’s going to cash some checks with a lot of zeroes on them and play for the Dodgers for three or four more years. That’s good enough for me to call this a win-win.