Earning the worth of a big money contract

Harlan Ambrose
July 6, 2012

Long-term, big money contracts are a serious gamble. At some point during the contract, the player is likely to disappoint fans with either poor play or an unfortunate injury. But really, the players never have a chance to live up to the hype because the expectations that come with great contracts are often too hard to fulfil.

Carl Crawford, when healthy, was awful for the Red Sox. Prior to signing, statistical predictions suggested he was playing in his prime years. He more than likely would have performed at a very high rate for three or four of the seven-year contract, but a complete assessment can’t be made on him because he’s yet to fulfil his responsibilities with the Red Sox. Having disappointed so much already, many are calling him a bust.

Albert Pujols was the best right-handed hitter in baseball. He was the man pegged to chase down Bonds’ home run record. Instead, after signing a ten-year $240 million dollar contract with the Angels, he’s barely been a replacement level player.

A rebound is likely from one of the best hitters of all time, but the fact that he’s performed so poorly this early means that to this point, the contract has been a disappointment. It is interesting to note, using Bill James’ projector, that Pujols currently has a 22 percent chance of eclipsing Bonds’ home run total.

Johan Santana, one of the best lefties and proud owner of a recent no-hitter, was signed long-term to big dollars. He was paid $22.5 million to watch baseball while he recovered from shoulder surgery in 2011. 

[php snippet=1]

In 2006, Barry Zito signed what was then the largest ever pitching contract. However, after making four All-Star Games and winning a Cy Young, he’s yet to make an impact in San Francisco. Zito was undoubtedly overrated, having never posted an xFIP below four. You can definitely blame the Giants’ general manager for this one, but for Zito to not even live up to minimal expectations is incredibly disappointing for both parties.

There’s a multitude of other examples where players were given exuberant contracts and then went on to perform like they’d been blinded: Vernon Wells, Alfonso Soriano, Jason Bay and so on. Yet if general managers hadn’t chased them so aggressively, they would be leaving themselves open to criticisms because even if one high profile contract works out, it justifies the approach; and fans hate seeing wasted salary space.

General managers are trying to strike a balance between what has been done and what could be done. They are trying to predict how a player will perform, using statistics to measure how they’ve played in other ballparks similar to their own, how they’ve performed against certain pitching, and how they’ve performed in particular markets (e.g. New York versus Cincinnati). There are undoubtedly binders upon binders of little statistical quirks which the public will never be privy to.

Adrian Gonzalez was a particularly exciting addition for the Red Sox, as his swing was perfectly suited to the Fenway dimensions. He showed glimpses of fulfilling that promise with a successful 2011; hammering 27 home runs and 45 doubles (he hit 33 doubles the previous year). Still, no matter how well prepared a general manager is, a big time contract will almost always, at some point, be a disappointment.

In 2012 Adrian has hit only six home runs and compiled a WAR of 0.6 (the previous year’s WAR was 6.6). So unless he goes on an ungodly tear in the second half, he’ll have had a very disappointing second season.

So why do they do it? Why do they give players massive contracts when they know there’s such a high risk of disappointment? And why is it, even when the players perform moderately well, that the fans always feel like they should have done more?

The answer to the second question comes down to expectation.

When news first breaks that a team has signed one of the premier players, fans are overcome by excitement. They’re excited about getting this great player, they’re excited about what he’s done for his previous team, but more than anything, they’re excited about what he could do for them. Even when it’s unrealistic, fans trick themselves into thinking the player will be better on their team then they ever were for their previous team.

But it rarely pans out that way. Players are usually signed in the midst of, or at the end of their peak years, and as such are scheduled to decline. It’s impossible for them to truly fulfil those fans’ inflated expectations. It’s like a kid being told by his father that they’re going to Disney World next week. The day comes, the kid gets excited, and the father breaks the news that they’ll actually be going to a theme park nearby. The theme park is still great, there’s plenty of rides and potential for fun, but because the kid was expecting Disney World, everything the new theme park does is measured against Disney World, and ultimately fails to deliver. When a player shows up in their brand new uniform, fans are expecting Disney World.

Fan frustration is magnified if the player gets off to a slow start. The player feels the pressure of not only having to live up to the dollar value he’s been assigned, but to the expectations placed on him by the fanbase. The more pressure they feel, the harder it is to perform, recover and regain the fans’ admiration.

Pujols’ slow start was heavily scrutinized. Luckily for him though, an incredibly rookie named Mike Trout burst onto the baseball landscape and started tearing it up; playing spectacular defense, showcasing blistering speed and hitting like an MVP. The Angels’ original MVP hope – Albert – was temporarily forgotten as some of the pressure of signing the huge contract was relieved. Since Trout’s debut on April 28, Albert has raised his batting average from .226 to .273. He’s starting to show fans why he was given the big deal, but not all players are lucky enough to receive such a reprieve.

Vernon Wells never had a chance with his contract. The Blue Jays took a gamble that the 2006 version of Wells was who he’d be for a few more years. They were wrong, and he’s since been shipped off to the Angels.

If two-time Cy Young winner Tim Lincecum fails to rebound from his lousy start, the Giants will be thankful they signed Matt Cain and not Lincecum to the big dollars. But truthfully, even if he only rebounds somewhat, it’s likely he’ll get the big contract when he hits free agency because owners will be willing to gamble on what he’s previously achieved.

Why do owners do this? Why do they give players the high paying contracts when there have been so many examples of failed ones?

It all comes down to legacy.

Winning a World Series means you headline a chapter in the baseball narrative.

Making the playoffs is great. Consistently producing a winning team is admirable. But it’s championships which are remembered. It’s championships which last. Unless a team has a unique story to tell, or plays a role in a bigger story (like Mike Bacsik, the pitcher who served up Bonds’ record breaking home run), it’s not going to get much more than a footnote in the annals.

For many owners, money is a temporary issue. Losing money on a player barely registers compared to their other business exploits. That baseball lacks a salary cap further reduces the negative impact of a failed signing. In other words, owners don’t lose a whole lot by paying out the contract, even when the guy is clearly a bust.

So it’s minimal risk for a reward which could deliver them a key position in the history of baseball. These GMs and owners have the chance to be remembered because of their team. In the same way an outstanding individual solidifies the legacy of those around him. When someone special makes an impact in the world, it doesn’t take long before they are asked about their parents and the role they played in their success.

It’s the same for owners. Even if the players get all the on-field glory, their success is a direct result of the owner paying for and assembling the team. A great team will forge its place in history, forever tethering the owner to the narrative of baseball, a narrative which will exist long after their death.

Pujols has a long and expensive contract ahead of him. For him to live up to the expectations of the fans, it will take an effort the magnitude of which has not previously been seen in baseball. Even Bonds ultimately disappointed. But if his signing gives the Angels just one World Series, you can bet Arte Moreno, the Angels’ owner, will have no regrets about the contract.

[php snippet=1]

The Author:

Harlan Ambrose