Royals Hand Underwhelming Kennedy Overwhelming Contract

You could say the market has agreed upon a price for mid-level innings-eaters around 30 years of age. The Kansas City Royals reportedly agreed on Saturday morning to sign right-handed starter Ian Kennedy to a five-year deal worth $70 million.

It’s a big contract, a surprising contract, but one that falls right in line with similar deals inked by Mike Leake (5/80), Wei-Yin Chen (5/80) and Jeff Samardzija (5/90). Looking back at our crowdsourced contract estimates, it’s clear that nobody expected this class of durable, mid-rotation starters to get paid the way they did:

Largest Differences Between Crowdsourced, Actual Contracts
Player CS_Yrs CS_$ CS_AAV Tru_Yrs Tru_$ Tru_AAV Yrs_DIF $_DIF AAV_DIF
Chris Davis 5 100 20 7 161 23 2 61 3
Zack Greinke 6 156 26 6 207 34 0 51 8
Ian Kennedy 3 36 12 5 70 14 2 34 2
Wei-Yin Chen 4 52 13 5 80 16 1 28 3
Jeff Samardzija 4 64 16 5 90 18 1 26 2
Mike Leake 4 56 14 5 80 16 1 24 2
David Price 7 196 28 7 217 31 0 21 3
Ryan Madson 1 5 5 3 22 7 2 17 2
Ben Zobrist 3 42 14 4 56 14 1 14 0
Joakim Soria 2 14 7 3 25 8 1 11 1

It’s not the biggest “overpay,” relative to the what the crowd expected, but it’s close. Samardzija, Leake, Chen, and now Kennedy all received an extra year or two, and an extra few million dollars per year more than the crowd expected, adding up to each starter receiving between $20 and $30 million more than what folks thought.

But Kennedy’s contract leads the way, in terms of surprise. Thought was, Kennedy would get something like three years and $36 million. He got an extra two years, opposed to the extra one that the rest of the group received, and a larger AAV. When the crowdsourcing took place, an extra question was included, asking the crowd whether it thought Kennedy would accept the qualifying offer, a one-year deal worth just over $15 million. Nearly 40% of the crowd expected Kennedy to take the qualifying offer, more than double the number of people who thought Leake or Chen might accept. If Kennedy rejected the qualifying offer, there was fear among many that no team would be willing to concede a draft pick to sign Kennedy, even at the terms of 3/36.

Reason being, Kennedy simply hasn’t been as good as his peers. Last season, he allowed the highest OPS among any qualified starter, and whether you go back more years, or look toward the future, it’s tough to find any way to include Kennedy in the same class as Samardzija, Leake or Chen:

Five-Year Contracts for Mid-Rotation Innings Eaters
Name Age 15_tWAR 3Yr_tWAR Proj_WAR
Ian Kennedy 31 0.3 3.2 1.3
Jeff Samardzija 31 1.9 7.8 2.7
Mike Leake 28 2.4 7.7 2.2
Wei-Yin Chen 30 3.5 8.6 3.3
Past WAR: 50/50 split between RA9-WAR and FIP-WAR
Projected WAR: 50/50 split between 2016 ZiPS and Steamer

Last year, Kennedy was a replacement-level pitcher. In 2013, Kennedy was a replacement-level pitcher. He should be expected to do better than that, but odds are that Kennedy’s true-talent level lies a bit above a +1 WAR starter, with the most optimistic of projections putting him around +2 WAR, in the present. The contract runs for five years. Even if you start with Steamer’s more optimistic 2.2 WAR projections, it’s hard to justify, in a vacuum, Kennedy being worth $70 million:

Ian Kennedy’s Contract Estimate — 5 yr / $50.9 M
Year Age WAR $/WAR Est. Contract
2016 31 2.2 $8.0 M $17.6 M
2017 32 1.7 $8.4 M $14.3 M
2018 33 1.2 $8.8 M $10.6 M
2019 34 0.7 $9.3 M $6.5 M
2020 35 0.2 $9.7 M $1.9 M
Totals 6.0 $50.9 M

Assumptions

Value: $8M/WAR with 5.0% inflation
Aging Curve: +0.25 WAR/yr (18-27), 0 WAR/yr (28-30),-0.5 WAR/yr (31-37),-0.75 WAR/yr (> 37)

The estimate comes in $20 million shy of the actual contract, and that’s not including the loss of a late first-round draft pick, likely valued somewhere around $10 million, and the fact that there’s an opt-out for Kennedy after two years, which shifts the needle even more towards Kennedy’s side. If he’s good, he’s gone after two years, and if he’s bad, the Royals are saddled with his salary for the duration.

Of course, moves are to be evaluated in context, and each team’s situation is unique, as well as each player’s situation. There’s more to every deal than the dollars and years.

For instance, maybe the Royals just aren’t too concerned about the loss of the 24th overall pick in the draft? The window of contention might not be open for too much longer with this roster. Lorenzo Cain, Eric Hosmer, Mike Moustakas, Wade Davis, Alcides Escobar, Edinson Volquez and more will all be free agents by 2018, the same year in which Kennedy’s opt-out resides, and so perhaps they just care more about maximizing their chances of winning again during that two-year window, rather than maybe winning down the road. It’s a reasonable thought to have, and you’ve got to applaud the World Series champs, a team that’s always been ran on the tightest of budgets under owner David Glass, for opening up the pocketbook in an effort to continue Going For It. Kansas City’s Opening Day payroll is going to be something like $130 million dollars, up $20 million from last year and up $100 million from five years ago.

At the same time, if Kennedy is bad, as he’s been in two of the most recent three seasons, then Kansas City might have a replacement-level albatross on their hands in the very near future, and it’s the kind of move that might keep the Royals from retaining one of their star players in a couple years, when the franchise isn’t coming off the high of a World Series victory and swimming in extra postseason revenue.

The Royals needed a pitcher. They needed a pitcher who was likely to give them plenty of innings. Banking on the health of Kris Medlen, Danny Duffy and, to an extent, Yordano Ventura, is a frightening proposition, and the Royals wanted to mix in some certainty. In terms of innings, Kennedy will give them that certainty, but at one point due the value of a pitcher’s ceiling, and his floor, outweigh his durability?

Kennedy has thrown plenty of innings lately, but most of them haven’t been good innings. The big problem, for Kennedy, has been the fly balls. He doesn’t induce any grounders, and way too many of the flies have been leaving the park. True, Kaufman Stadium has a massive outfield that suppresses homers, and true, Kansas City has an incredible outfield defense that turns would-be fly ball hits into outs. But Kennedy recently pitched his home games in PETCO Park, a stadium just as pitcher-friendly as Kaufman, against teams that batted with a pitcher in their lineup, and even the greatest outfield defense in the world can’t turn fly balls that land halfway up the bleachers into outs.

Jeff recenty ran through all the pros and cons of Kennedy as a pitcher, and while it’s hard to be overly pessimistic, it’s equally difficult to come away feeling encouraged, and that was before we knew the terms of the deal. On the surface, it seems like an overpay. Kennedy isn’t Samardzija, or Leake, or Chen, and yet he gone Samardzija/Leake/Chen money. But the Royals needed a pitcher, and Kennedy’s a pitcher, and the Royals are better today than they were yesterday. Is the rotation good enough to contend again? Only time will tell, and maybe Dave Eiland can work his magic again, reuniting with Kennedy from their days with the Yankees. It sure looks like an overpay, but maybe that isn’t the point. We always want to see teams boost up their payroll after a World Series run, and the Royals have done just that. They’ve got another two years until things could get ugly again, and doing everything they can to keep this run going. It’s hard not to like the decision to commit to that, and to spend some money. It’s just a little harder to like where the money went.

We hoped you liked reading Royals Hand Underwhelming Kennedy Overwhelming Contract by August Fagerstrom!

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August used to cover the Indians for MLB and ohio.com, but now he's here and thinks writing these in the third person is weird. So you can reach me on Twitter @AugustFG_ or e-mail at august.fagerstrom@fangraphs.com.

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Noah Baron
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Member

I actually don’t think it’s that awful of a contract. It’s odd how FanGraphs has kind of jumped right off the DIPS theory bandwagon to simply assuming that two seasons of data is enough for us to conclude that Wei-Yin Chen is a DIPS-beater and that Ian Kennedy is an under-performer.

I am not convinced. Kennedy is not an awful defender and can hold baserunners. He’s also a fly ball pitcher, which makes it especially unlikely that he’d have some sort of BABIP problem in my mind.

For the past two years, Kennedy has had peripherals that suggest a roughly 3.50 ERA pitcher (as long as you understand the finicky nature of HR/FB rate). For someone like that to get 5/70 doesn’t seem all that ridiculous.

KwisatzHaderach
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Member
KwisatzHaderach

Yeah, I don’t think it’s ridiculous, but they still paid him like a league average pitcher and he hasn’t been one. Not a terrible deal at this point, but still an odd one. Going from a lousy outfield to probably the best outfield in the game will help him, and his HR/FB should drop a lot from last year’s bonkers number. He was pitching with some injuries early last year as well. I expect he can produce a sub-4 ERA for the Royals and he is durable at least. You’d just think they would have got him at a discount. The Royals needed him though. If their defense can make him look good, they can hope he’ll take the opt-out.

tz
Member

I think the Royals would be thrilled if he’s good enough over the next two years to risk a new contract vs. guaranteed money at age 33. But like you said, he’s the kind of pitcher the Royals can make look good, so it’s not entirely impossible.

KwisatzHaderach
Member
Member
KwisatzHaderach

Yeah they should be thrilled if he does, because there’s just no surplus value here. If things go well, he’s worth what they’re paying him. If they just go as Kennedy’s recent numbers would lead you to expect, this is an overpay.

Anonymous
Member
Anonymous

When do free agent contracts ever contain surplus value?

tramps like us
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tramps like us

he had the best defensive weapon of all last year-the San Diego ballpark.

KwisatzHaderach
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Member
KwisatzHaderach

And now he’ll have Kauffman Stadium, which is at least as good. They did move the fences in a little at Petco last year. There were a lot more home runs given up there than in Kauffman last year. And the difference between the Royals and Padres defensively is pretty large.

jdbolick
Member
Member

In fairness, hasn’t that shift coincided with gaining access to the Soft%/Med%/Hard% splits? It’s inarguable that over the last three season Kennedy has consistently ranked among the worst starting pitchers for inducing soft contact whereas Chen was one of the best in 2015. Chen has also nearly doubled Kennedy’s IFFB total over the last two seasons. I still look to swinging strike rate and walk rate before anything else when evaluating pitchers, but the ability to induce soft contact and avoid hard contact is certainly meaningful.

Noah Baron
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Member

My point is that I think they’ve gone a bit overboard with the love-fest for Soft% and Hard% data, especially for pitchers.

Tom Dooley
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Tom Dooley

Exactly how much less overboard should they have gone and what is that conclusion based on?

JakeT
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JakeT

It’s also inarguable that over the last three seasons, Chen has (extremely) inconsistently ranked among the best and worst(!) SPs for Soft%. His 2014 mark was only somewhat better 18.4%, and 2013 he had a sub-Kennedy 12.9%. It’s possible that we’re seeing improvement on Chen’s part, but I wouldn’t want to make that definitive conclusion based on this.

As ironic as this sounds, my gut goes with xFIP/SIERA in this case, and it’s not that big of a stretch to put Kennedy in with this “class” of pitchers (as opposed to what the article implies). The Royals are certainly betting on it.

In relation to that, I’m curious if there’s a post on the year-to-year correlation of these Soft/Hard percentages (haven’t been following Fangraphs as much as I should recently).

Tom Dooley
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Tom Dooley

Exactly how much less overboard should they have gone and what i

Tom Dooley
Member
Tom Dooley

Sorry for posting while bourboning.

So if you and the Royals are betting on xFIP and SIERA, do you also expect Chris Young to be terrible this year?

JakeT
Member
JakeT

I didn’t phrase that particularly well. I meant that the Royals are betting on Kennedy being similar to this class of pitchers, not that they buy into those metrics. I don’t claim to have any information about how they evaluate players.

As for Chris Young, I specifically said “in this case” to defend myself from people trying to aimlessly apply reductio ad absurdum on me. We’re talking about one player that has a career ERA-/xFIP- of 102/101 and the other at 92/116. Nice try.

jdbolick
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Member

It’s true that Chen’s results have been less consistent, and yet he allowed significantly less hard contact than Kennedy in each of the last four seasons. That’s not likely to be random.

Noah Baron
Member
Member

It might not be random, but it also might be something accounted for in xFIP.

We already know that xFIP views ground balls much more favorably than fly balls. I’d wager that many ground ball pitchers with excellent soft% contact rates aren’t actually DIPS beaters, precisely because DIPS theory already credits these pitchers for inducing ground balls.

Chris Young is actually a good example. Did you know that Chris Young actually had the 10th highest Hard Hit% in baseball last year (min 120 IP)? Yet it didn’t seem to hurt his ability to beat his peripherals now, did it?

Noah Baron
Member
Member

The issue I have with people claiming that Chen is a DIPS beater BECAUSE he induces weak contact is that they aren’t actually looking at his record.

In Chen’s 4 big league seasons, he’s been worth 9.5 fWAR and 12.3 RA-9 WAR. Some people (a lot of people on FanGraphs, unfortunately), think this is because of his ability to induce weak contact.

Lucky for us, there is actually a tool on FanGraphs for us to verify this. It turns out that 2.8 win difference is mostly a result of holding runners on base, which accounts for 1.8 wins (under the value section of his FanGraphs page). Limiting damage on balls in play has actually only accounted for 1.0 wins, or roughly 30% of the difference between his fWAR and RA-9 WAR.

jdbolick
Member
Member

It might not be random, but it also might be something accounted for in xFIP.

It isn’t. Furthermore, Chen and Kennedy have very similar FB% rates, so the formula isn’t going to distinguish between them on that count.

jdbolick
Member
Member

In Chen’s 4 big league seasons, he’s been worth 9.5 fWAR and 12.3 RA-9 WAR. Some people (a lot of people on FanGraphs, unfortunately), think this is because of his ability to induce weak contact.

I think you’re being unfair here, as I haven’t noticed people proclaiming Chen to be a master of inducing weak contact, but rather that he has some above average ability to do so that adds to his value. And as far as this comparison is concerned, Kennedy’s extremely low soft contact rate is more meaningful than anything Chen does. When they make contact, batters hit Kennedy hard consistently.

JakeT
Member
JakeT

Does Chen actually have even above average ability for weak contact? Filtering for pitchers with 500 IP between 2010- we get that Chen is 94th out of 146th in Soft%. Those last 3 years he went 12.9% to 18.4% to 21.9%, so yes he may have improved, but do we have enough information right now to conclude that? This is why I’m asking if there’s been an article on how well Soft% stabilize. August’s column on Chen changing speeds could be an explanation, perhaps a more in-depth study (including looking at whether Chen does this in previous years) reveals the answer.

Kennedy’s low Soft% doesn’t seem to be a concern in and of itself. Using the same filter as above, browsing the lowest Soft% pitchers, they don’t seem to significantly over/underperform their xFIP. With a career xFIP- of 101 (93 and 95 in the past two years), that’s all he really needs to be league average.

I think what I’m trying to get at here is, not that these two are equal (heck, Chen did sign a bigger contract at face value), but it’s not that tough to put them in the same conversation, at least until we get more studies about Soft%/Med%/Hard%.

evo34
Member
evo34

Check Kennedy’s avg. strength of batter faced last season. Well above league average.