NFL playoffs are right around the corner, but ’tis the season for a jolt of baseball excitement too, as teams sign new players. The contracts are getting bigger and bigger, supported by growing MLB revenues. Some of the major signings under the tree this year (more here):
- Zack Greinke, 6 yrs, $147 million (Dodgers)
- Josh Hamilton, 5 yrs, $125 million (Angels)
- B.J. Upton, 5 yrs, $75 million (Rays)
- Anibal Sanchez, 5 yrs, $80 million (Tigers)
But before you start thinking playoffs, remember that many big deals don’t work out. Who will be nice and who will be naughty this year?
The Old Lumps of Coal
From the list above, Greinke is 29 years old, Hamilton is 31, Upton is 28, and Sanchez is 28. Not many young players are available through free agency, but are these 4 to 6 year deals for 28 to 31 year olds a good idea? I tackled this question with my friend Jeff Phillips for ESPN the Magazine in early October.
Specifically, we wondered if long deals for 30 year olds made more sense during the steroid era, when players could recover, train, and maintain more easily. There are two sides of the coin: (1) how has older player performance changed, and (2) has older player compensation evolved appropriately. We focused on players in the top quarter of the salary distribution, since that’s where the big money is spent. To measure performance, we examined average Wins Above Replacement Player (WARP)* by age during and after the steroid era:
Uh oh. Although performance for all highly paid players has gone down, older “stars” have turned out to be coal indeed. Looking year by year highlights the post-PED age decline. Average WARP for older and younger stars was remarkably similar through the steroid era, but older player WARP Continue reading