Thursday, January 29, 2009

Bargain Basement Zim

Recently, the Nationals and the team's four arbitration-eligible players exchanged contract numbers for 2009. In Ryan Zimmerman's case the team offered $2.75 million, while the player is asking for $3.9 million.

You can see all the arbitration figures submitted league-wide here. The players in their first year of arbitration with the most similar figures to Zimmerman's are Mike Jacobs, Corey Hart, and Jeff Francoeur.

The arbitration process is way more art than science, and players aren't valued as they would be on the free market. On the free market, potential matters a lot; in free agency only past performance counts. On the free market, declining players take pay cuts; in arbitration players almost never see pay cuts. On the free market, at least some teams value defense properly; arbitration is hardly aware of the existence of fielding. Most importantly, in the free market you have 30 potential buyers bidding up the value of a player; in arbitration player values are set by the arbitrator who can only choose between the two salary numbers offered by the team and player, a process that depresses player values significantly.

Bottom line, all these first-time arbitration-eligible players will be underpaid relative to what they would get if they were free to offer their talents on the free market to the employer of their choice, just as you and I can. They aren't as underpaid as they were in their first three years, when with no power or voice whatsoever in salary they all get the minimum or close to it, no questions asked.

But let's adopt for now the logic of arbitration and look at Zimmerman, Jacobs, Hart, and Francoeur historically.

First, let's look at their career wOBAs (a composite offensive stat scaled to look like OBP). One of the great things about wOBA is that it can be easily translated into wins above replacement. If you want to learn how, go here. If not, I'll just do the math for you.
Zimmerman: .345 wOBA (2.39 WAR)
Hart: .345 (2.39)
Jacobs: .344
Francoeur: .318 (1.06)
OK, so other than Frenchy, these guys are nearly clones, right? Well, no. You also have to factor in fielding. Zimmerman plays on the more difficult end of the defensive spectrum, and he plays better defense than any of them.

Let's look at their career UZR/150 stats--this is a stat that estimates the number of runs prevented above or below average per 150 games (more or less a full season of opportunities). In the current run environment, we're down to about 10.2 runs per win, so you can do the easy math translating into wins by moving the decimal point one place and calling it close enough.
Zimmerman: +10.5
Hart: +3.5
Francoeur: +1.3
Jacobs: -9.4
Now let's add in the positional adjustment. The basic idea here is that because it's harder to play catcher or second base than first base or left field, that the same level of productivity coming from the harder end of the defensive spectrum is worth more. The positional adjustments in wins are:
+1.0 C
+0.5 SS/CF
+0.0 2B/3B
-0.5 LF/RF/PH
-1.0 1B
-1.5 DH
So taking Zimm's overall defensive contributions, he's about 3 full wins better than Jacobs and Francouer and about 1.3 wins better than Hart.

Now let's step out of backward-looking arbitration world and think a little about how players are valued in a real market--based on expected future performance.

Here are these four players' 2009 projected wOBAs:

CHONE: .371
MARCEL: .346
Bill James: .363

CHONE: .355
MARCEL: .345
Bill James: .361

CHONE: .336
MARCEL: .318
Bill James: .332

CHONE: .340
MARCEL: .332
Bill James: .360

Without exception, all three projection systems like Zim best. And let's not forget that he's two years younger than Hart and four years younger than Jacobs.

So what does all this mean? Well, I've been saying for some time that now is the time to sign Zimmerman long-term. I guessed that coming off his injury-plagued 2008 that his value would be depressed, and now we have concrete evidence that this is clearly the case.

A solid, healthy season in 2008, and Zimmerman easily could have been in the $5 million territory with Dan Uggla. Garrett Atkins got $4.3 million in his first year of arb last year. Even with his down year in 2008, I would argue that Zimmerman's a more valuable player than either of those guys, if you factor defense properly. If Zimmerman ends up somewhere around $3.3 million this year (about the mid-point of the two arb offers), he'll be a steal.

The team missed it's best chance to sign him long-term at a discount with Jim brought him up at age 20 to a team with no owner. Had he waited till the last week of May 2006 to bring him up, Zimmerman's arb date would have been pushed back a year and the incentive to sign long-term at this point last year or two years ago would have been greater.

We missed that boat. But now we have another chance. Last year we low-balled him with a 6-year, $31 million deal. Zimmerman's not going to take that now any more than he did then. He's looking at the huge payday he's in line for in 2012 when he's due to hit free agency going into his age 27 season. In October, I said the team should be willing to go as high as $9m a year for 6 years. In the current market, looking at how undervalued Zimm is in arbitration, it seems clear that he can be had for less. Six years and $40-45 million could be enough.

Regardless, I still expect Zimmerman to establish himself as an all-star or near-all star player over the next three seasons, and if he does reach free agency, $7-8 million a year won't be anywhere near his price tag.

So once again, I say get it done now. Be happy you're going to get him at an even greater discount, but don't let this moment pass or else it's going to cost the team financially 3 years down the road or else Zimm will be gone.


An Briosca Mor said...
This comment has been removed by the author.
Steve Shoup said...

I think Zimmerman will sign an extension this year. It does just make too much sense not too for either side. For the team they need goodwill for the fans and for Zimmerman some cost certainty is probably a good idea at this point.

Steven I think you are in the right ballpark when you said 6 years at $40-45 million. If i'm the Nats I would get creative and offer a 6 year deal at $36 million with a $4 million signing bonus paid out in the first two years. With salaries of $3M 2009, $4M 2010, $6.5M in 2011 and $7.5M 2012-2014 with a club option in 2015 for $11M or a $2M buyout. That way instead of paying more money in the future when the Nats are acutally trying to sign FA's and retaining their own players they will have an extra million a year to play around with.

Steven said...

You gotta remember, if Zim has the season that CHONE expects from him, his salary's going to nearly double in arb. It doesn't make sense for him to sign a contract that gives him 4m in 2010, because he'll get that in arb even if he plays like crap. But if he's confident in is ability he'll just hold out for more or bide his time.