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2016 MLB Team Surplus Values

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Gotta earn your keep...

Denny Medley-USA TODAY Sports

If I had to peg myself as a type of investor, it would probably be a value investor, looking for an asset under-priced by the market. That same philosophy was one of the core tenets of Moneyball (finding undervalued players) but it doesn't perfectly apply to surplus value. All players aren't free agents at the end of each year, so you are only able to find value in free agency through what's available. Also cheap assets usually aren't found in free agency either but instead homegrown through the drafting, trading, and internationally.

However it's the goal of every MLB team to get more value out of their team than they pay for. Efficiency might not be found on the open market, but even the Dodgers would love to field a 95-win team on a $50M payroll. Teams normally accomplish surplus value through the first three years of a player contract where they are under the minor league minimum (except for Super Two players). Even in arbitration there is the old 40-60-80 rule that first year arbitration players generally get 40% of their open market value, second year arbitration get 60%, and third year arb players get 80% (though that rule may no longer be applicable).

Surplus value is an easy concept. It's the value a player performs (or the club receives) above their salary. A player getting paid $20M is expected to perform more than a player receiving $10M, generally. This is a bit murky though when you include pre-arb players. The expectations for Kris Bryant are still sky-high regardless of if he is making $652,000 or $20M. That though is a bit outside the idea of surplus value. For surplus, we only really care about performance vs salary, agnostic of expectations outside the fulcrum of payment vs performance (the more you make the more you need to perform).

So I've collected the salaries of 1026 MLB players (~35 per team), found their wins above replacement (as measured by FanGraphs), and calculated each players surplus value based on the cost of a win.

So caveats:

  • I guarantee you this is not 100% accurate in every single measure. I'm sure some of the salaries are off by just a bit. Normally the bigger salaries are fine but there's probably a guy who made $510,000 instead of $507,000.
  • Most major trades have been accounted for. For instance the Cubs don't get credit for April-July Aroldis Chapman, only the Chapman fWAR they actually got. Unless salary was explicitly mentioned as being traded, the contracts were split among both teams.
  • Batters must have had a minimum of 50 plate appearances and pitchers a minimum of 10 innings pitched. The only caveat here is that big money contracts where the player didn't reach the minimum playing time threshold (ie: Andre Ethier) still count.
  • Pitchers only got credit for pitching. Sure, some pitchers produce value through hitting but how much of their contract is towards pitching vs hitting? It wasn't fair either to those pitchers who didn't hit. There are probably some starters who got lumped in as relievers since they made several relief appearances, and vice versa.
Again, I promise you it isn't perfect. 1,026 player rows with several interconnected column is a big spreadsheet to manipulate but I would be surprised if much changed drastically even with 100% accuracy.

First here are the Royals thirty four:

*Daniel Nava's salary should be $687,500, slightly increasing his surplus value

Jarrod Dyson, man. He was both the best player on the team and the most 337 plate appearances. I don't think it's surprising to see Chris Young at the bottom. He was very bad this year and wasn't cheap. Right behind him was Eric Hosmer. If this was last year, Hosmer would have been much closer to the top, but instead his poor performance coupled with a nice salary raise lead to him appearing at the bottom. Interestingly Mike Moustakas was worth exactly his salary this year due to his injury halting his production right at 0.7 fWAR.

Now for the much larger data set, a breakdown by team and position.

By Team (click to enlarge)

At the top are four playoff teams in the Cubs, Red Sox, Cleveland, and the Dodgers. Between them is Houston, a team that was talented to make the playoffs but some inconsistencies kept them out of it. Many (most) of the teams at the top quartile are playoff teams save for Houston and one other: Miami.

The Marlins had a bunch of cheap, above average players and two stars. One who unfortunately passed away just recently (Jose Fernandez) and another that is cheap-ish now, but is going to get expensive soon (Giancarlo Stanton).

Second from the bottom are our Royals, right in front of a team that spent ~60% more than them on payroll but got about a 10th of that in surplus value.

The correlation of team wins to surplus value isn't extremely strong but it's got some value. Mainly derived from the the correlation between fWAR and wins. It's a bit watered down because this isn't just fWAR to team wins but how a team spent to get those wins.

By Position

I think we all knew that DH isn't exactly a place where teams could spend efficiently. They provide no defensive value (negative actually) so there isn't much room for error with the bat. The same goes for first base as well. I am surprised though that catchers are that low. The bar for productive catcher isn't that high. You just basically need to play the position okay and don't hit like a total disaster. Notice of course too the large gap between first base and the next position; almost $215M.

Starting pitching is first and by a wide margin. My theory on this is thus: while starting pitchers are highly volatile, there are more of them than any other single position (besides relievers - who have a much lower impact). Through excess comes opportunity of accrual.

Best/Worst Players

You'll see that it's not just the guys making the league minimum that provide top surplus. Yes the top three are making close to the minimum but there is also Mike Trout and Josh Donaldson making $10M+, and Jose Altuve, Manny Machado, and the recently departed Jose Fernandez making a few million.

Yeah I'm sure you could have named a couple guys on this list. Bad players, dead money, and sunk costs seem to summarize most of this list. Prince Fielder is never going to play again, Alex Rodriguez retired before the season ended, Jered Weaver can't throw above 85 MPH, and Mark Teixeira just retired.

Best Groups

The Mets rotation as a whole provided a ton of value. They were highly productive (when healthy) and inexpensive. However that tower was built on shaky grounds and had troubles and questions for the long term.