Is it worth it?

added 3/25/2005 by Scott Barzilla

Unless you’ve been living under a rock, you know that the Astros signed Lance Berkman to a six year, 85 million dollar deal. With all of these deals the devil is in the details. Like most deals, it has a team option for a seventh year for fifteen million dollars. The buyout is two million, so the deal is actually worth 87 million if the Astros don’t bring him back a seventh year or 100 million if they do. But what’s a few million dollars among friends?

The burning question with any contract of this significance is whether Lance Berkman is worth that kind of money. Now, I know what you’re thinking because I’m thinking it too. No one is worth that kind of money. In an esoteric way I completely agree, but our economy was formed on the market ideologies of Adam Smith and his ilk, so as the phrase goes, “everyone is worth as much as the market will bear.” Well, let’s take a look at the market. First, I’m going to compare Berkman with other right fielders he could be compared to over the past five seasons.

A Quick Comparison

                    OBP      SLG     OPS+     RC      SAL
Bobby Abreu        .417     .526     144     626     10.6
Lance Berkman      .417     .568     148     611     14.2
Brian Giles        .417     .559     152     631      8.6
Shawn Green        .366     .509     132     556     16.7
Vladimir Guerrero  .404     .601     152     668     11.0 
Magglio Ordonez    .373     .541     133     529     15.0 
Gary Sheffield     .414     .575     159     628     12.0
Sammy Sosa         .386     .607     155     659     16.9
Composite          .396     .560     147     613     13.0

Lance Berkman was removed from the composite and we see that most of his numbers fall pretty close to the composite. He is higher in some areas and lower in other areas. Overall, his salary is a tad above the composite average, but part of the contract is a gamble on the future. So, according to the composite he fits right around where he should be (slightly above). Yet, that is not the only way to look at this list.

Aggregates are nice, but we also could look at median methodology. In other words, where does he rank on the list in salary versus the numbers? Well, we immediately see that he is fourth in per year salary. Let’s see how that compares with the numbers.

                    OBP      SLG     OPS+     RC      SAL
Lance Berkman        (1)T    (4)     (5)      (6)     (3)

I think we can feel pretty good about these numbers as well. Some of you may be wondering why the OPS+ ranking is so low in comparison with the OBP and SLG. OPS+ is calculated by taking the league average in OPS, but it also accounts for differences in home ballparks. Accordingly, it appears as if Berkman has a natural advantage in Minute Maid Park. Therefore, one of the other players could see a spike in their numbers if they played in Houston.

We can feel pretty good about how he compares to right fielders, but most of us don’t think in those terms. Because of this fact, I will also compare him to the best players in the National League. We all know that Lance will be moved to first base eventually, so this would probably be a better comparison anyway. Again, we are looking at the last five years.

                    OBP      SLG     OPS+     RC      SAL
Bobby Abreu        .417     .526     144     626     10.6
Carlos Beltran     .355     .490     111     491     17.0
Lance Berkman      .417     .568     148     611     14.2
Barry Bonds        .535     .782     244     874     18.0
Carlos Delgado     .416     .576     153     634     13.0
Brian Giles        .417     .559     152     631      8.6
Luis Gonzalez      .399     .551     137     601      8.3
Todd Helton        .450     .642     158     827     11.6
Albert Pujols      .413     .624     169     604*     7.0
Jim Thome          .408     .597     158     640     12.2
Composite          .423     .594     158     659     11.8

* Albert Pujols totals were over the course of only four seasons	

Lance Berkman looks considerably overpriced in accordance to this list, but this is why we use median scores. Barry Bonds numbers skew the mean considerably, so we really don’t know what we’re looking at. So again, we see that Berkman finishes third in salary overall. We need to see if his numbers match up to that in the rankings.

                    OBP      SLG     OPS+     RC 
Lance Berkman        (2)T    (6)     (7)      (7)

Even if we’re being generous, we cannot say that Berkman’s salary matches up with where he ranks here. Two things are responsible for this. First, salaries always leapfrog themselves, but more importantly, the Astros are paying Berkman for what they think could happen. Half of the players on this list are clearly on their way down and will be out of baseball by the time Berkman finishes his contract.

The Cost of Time

I have to admit, this is one of my pet peeves. Money is never the biggest factor in baseball. The biggest factor is time. What exactly am I talking about? Well, John Hart figured out years ago that you could give younger players long-term deals and avoid the costs of arbitration. Of course, it is a gamble, but time is always the key element here. Most contracts are okay in terms of money, but the age of the player coupled with the length of the contract make them a bad deal. Time is the key element there.

The time I’m talking about is the time you take to make the deal. The Astros chose to wait until after the Beltran negotiations were done to start on Roy Oswalt and Lance Berkman. That time cost them money. If you don’t believe consider the fact that Carlos Beltran, Carlos Delgado, and Magglio Ordonez all inked deals before Lance Berkman. What was the average amount of those deals per season? Fifteen million dollars. Let me put this in real terms.

Berkman’s Salary  Composite RF  Composite NL  PCT RF  PCT NL
            14.2          13.0          11.8    1.09    1.20

Now, we’re going to assume that his salaries would be the same percentage over the composite. However, we will assume that the deal was done in November instead of March. Let’s see how the numbers would be affected.

Composite RF     Composite NL  PCT RF   PCT NL  Projected Sal
        12.6             10.9    1.09     1.20           13.5	

Those that follow market trends in baseball know that the projected November salary is very conservative. However, over the life of a six year deal you’re still talking about 4.2 odd dollars. The biggest problem with waiting is that salaries are a “follow the leader” game. For instance, Lance’s agent could easily demonstrate that his client is better than Carlos Delgado (over the last couple of seasons), Magglio Ordonez, and world’s better than Beltran.

Waiting until March to sign Oswalt and Berkman is an example of two-dimensional thinking. The idea is that if we pay them before Beltran then there won’t be as much money for Beltran. The reverse is actually true. If you sign Berkman and Oswalt to the November price then you have MORE money for Beltran because they will be signed for less than they would have been in March. That’s the third dimension. You don’t envision your payroll of January 10th but your payroll as of April 5th. You’re not to going to let Berkman and Oswalt go, so you should factor in their salary beforehand anyway.

The time element is crucial in a follow the leader game. The leader will always be paid less than the follower. When the Astros waited to sign Berkman they made the negotiations more about what Carlos Beltran and Magglio Ordonez got then about what the composite average among right fielders or the best in the National League. Berkman got a slight discount because he is not eligible for free agency. His contract is nearly 90% of what Ordonez and Beltran got.

If the Astros thought to sign him in November then the market would be still predicated on what happened the past year. So, he would like fit in at the 90% mark of the right field 13 million average. That would fit his salary somewhere between 11.5 and 12 million per season. I’m sure his agent would have accepted 72 million over six years as an acceptable deal. Anyone that thinks two million per season is something to sneeze at should look at the price of relief pitchers this past off-season. That two million dollars could have gotten the Astros two solid relief pitchers. That’s the cost of waiting. That’s the importance of time.

What about the Future

One of the better tools that Bill James developed was a metric called similarity scores. Essentially, what he did was take every statistic a player had and compared him with like players. For every point of difference he removed one point from 1000. The player with the highest number was the most similar to that number. Similarity scores have a lot of use when looking at potential Hall of Famers. Essentially, if you have Hall of Famers similar to you then your

In this case, we can find the hitters most similar to Berkman at age 28 and use their numbers to predict the future. The beauty of this is that you’re looking at good players and what happened to them after they turned 29. You don’t compare them to Berkman but to themselves. You take the percentage drop off and apply it to Berkman’s numbers. Then, you have a decent projection. Berkman’s contract is for six years so we will see how these players did between ages 23 and 28 and how they did between the ages 29 and 34.

                    OBP      SLG     OPS+     RC
Jeff Bagwell       .407     .536     158     660
Albert Belle       .343     .546     136     567
Wally Berger       .364     .541     143     566
Charlie Keller     .417     .534     160     573
Fred Lynn          .380     .515     139     600
Tim Salmon         .376     .491     125     546
Danny Tartabull    .369     .509     140     541
Mo Vaughn          .379     .505     128     543
Composite          .379     .522     141     575

Okay, now for ages 29 through 34.

                    OBP      SLG     OPS+     RC
Jeff Bagwell       .421     .574     154     816	
Albert Belle       .377     .557     138     637
Wally Berger       .353     .483     129     386
Charlie Keller     .399     .481     135     225
Fred Lynn          .354     .456     124     420
Tim Salmon         .384     .486     125     450
Danny Tartabull    .361     .464     120     357
Mo Vaughn          .370     .490     121     546
Composite          .377     .499     131     480

Our next move is to compare the two composites so that we can come up with a multiplier. When we get the multiplier we apply the multiplier to Lance Berkman’s numbers to get an estimate of where he could be at age 34 after the six years are up. Of course, this is an imperfect science. For one, Berkman’s numbers include only five full seasons where most of the players on top have six seasons before they turned 28.

                    OBP      SLG     OPS+     RC
Composite 1        .379     .522     141     575		
Composite 2        .377     .499     131     488	
Multiplier         0.99     0.96    0.93     0.83

Lance Berkman      .417     .568     148     611	
Projected          .413     .545     138     608

All of the numbers are exact except for runs created. Since Berkman played only five seasons I altered his numbers to reflect that. So, while the totals may not seem like, on a per season basis he sees a considerable dip. Needless to say, he won’t be a lock for the Hall of Fame if he achieves these numbers, but he will be well on his way.

Final Analysis

In terms of pure numbers, Berkman is a much better fit than Beltran would have been. He is legitimately one of the ten best players in the National League where Beltran might not be in top twenty. The Astros bought into the Beltran hype but luckily lost the derby. The Mets will find that the 2004 Playoff Beltran will only come in spurts. The Beltran from September will be there just as often.

In terms of marketing, this a boon for the franchise. Berkman has all the appearances of another future Hall of Famer. If the club is lucky, he will remain healthy and continue to put up numbers. Having three wire to wire Hall of Famers will do wonders for the continued success of the franchise. When you look at the original sixteen clubs you see constant connections to the past. Having players like Jeff Bagwell, Craig Biggio, and Lance Berkman spend their entire career in Houston will go a long way in building a tradition like that here.

Scott Barzilla is the author of “Checks and Imbalances” and “The State of Baseball Management.”