Wednesday, June 02, 2004
Ordonez's Alleged Rejection Of A 5-year $70-million deal
It has been all over the Internet - well, since the Sox aren't all over the Internet, I should say White Sox Interactive and Soxtalk.com - that Magglio Ordonez has rejected a 5-year, $70-million dollar contract from the White Sox. The hub-bub has largely stemmed from a column by Jon Heyman in (New York) Newsday. The article reads:
Very damning. But it's only a Newsday report for now, and we have no idea of the source or the contract that was offered. It could have had incentives, a lot of deferred money, who knows. But my instinct is that Ordonez wouldn't be wise to go into the market having rejected a Guerrero-esque deal with the Yankees largely taken out of it by contracts with Hideki Matsui and Gary Sheffield at the corners. It's likely only the Mets (who just spent a bunch on Mike Cameron) and Dodgers among major market teams might be able to pursue Maggs - and the Dodgers are hampered by Shawn Green's contract. So I think the rumors of Maggs' demise in a White Sox uniform are greatly exaggerated.
This brought me to thinking - what is the right contract for Maggs? Thinking about it analytically, one would want to know what similar right-fielders have made on the market for the value they've provided. I tried to calculated a value for Maggs in terms of $1000's of dollars per run of VORP he is likely to add from 2005-2009. I looked at all right fielders with more than 300 plate appearances from 2001-2003 and got their salaries from the
USA Today salary database.
I then segregated out the players with 7+ years of MLB experience- those who have signed free agent contracts (or at least signed contracts to cover a free agent year). I then threw out the worst contract (i.e., Bobby Higginson making $11 million for less than zero production) and the best contract (Reggie Sanders in 2002 and 2003 - cheap contract, good VORP) to arrive at an average of $302,000 per run of VORP for MLB RF'ers. I then calculated Maggs' projected VORP over the 2005-2009 period - estimating that his 2001-2003 VORP would attrit by 6% per year over the period - which is reasonable, given that Maggs would be 36 at the end of this contract, and it would still give him well above average performance.
The result is a contract of $68 M over 5 years, going from $15.4 million in 2005 to $12.0 million in 2009.
I then compared Maggs' production to Vlad Guerrero's over the same period. Vlad has produced a little bit better over the 2001-2003 period than Maggs (even with his injuries), and Guerrero's PECOTA projections show him attriting by 5% per year - arguable since Guerrero is now in his prime and 2 years younger than Ordonez.
So I took his salary over the period (splitting out his $5 million bonus in $1 million installments over the five years) and divided it by his projected VORP. I then applied that $000/VORP to Maggs' expected production over the same period...and got a 5-year, $60 million contract, an average value of $12 million per year. Anyway, here are the tables:
RF Average $000/VORP
Maggs' Salary Using Projected VORP (Using 7+ Hi/Lo Deleted)
(note- Maggs 2001-2003 Average VORP of 54.3)
Guerrero Salary 2004-2008
(note- Guerrero 2001-2003 Average VORP of 59.0)
Maggs' Salary Using Guerrero Contract
Anyhoo, that's my rough analysis of the Magglio contract - he deserves less money than Vlad, and perhaps a little bit more than Garrett Anderson. The difference between the two - a 5-year, $65 million deal, would seem to be a decent deal, although Maggs making $13 million in 2009 at 35 scares me a bit. Maggs' comparables by age - Fred Lynn, Wally Berger - didn't age so well, and there are some question marks on his PECOTA comparables (Andy Pafko, Bernard Gilkey) as well.
Comments-[ comments.]
It has been all over the Internet - well, since the Sox aren't all over the Internet, I should say White Sox Interactive and Soxtalk.com - that Magglio Ordonez has rejected a 5-year, $70-million dollar contract from the White Sox. The hub-bub has largely stemmed from a column by Jon Heyman in (New York) Newsday. The article reads:
Newsday has learned that Ordoñez's contract negotiations with the White Sox recently fell apart after he rejected a five-year, $70-million bid, exactly what he originally sought. Ordoñez now is all but certain to leave.
Very damning. But it's only a Newsday report for now, and we have no idea of the source or the contract that was offered. It could have had incentives, a lot of deferred money, who knows. But my instinct is that Ordonez wouldn't be wise to go into the market having rejected a Guerrero-esque deal with the Yankees largely taken out of it by contracts with Hideki Matsui and Gary Sheffield at the corners. It's likely only the Mets (who just spent a bunch on Mike Cameron) and Dodgers among major market teams might be able to pursue Maggs - and the Dodgers are hampered by Shawn Green's contract. So I think the rumors of Maggs' demise in a White Sox uniform are greatly exaggerated.
This brought me to thinking - what is the right contract for Maggs? Thinking about it analytically, one would want to know what similar right-fielders have made on the market for the value they've provided. I tried to calculated a value for Maggs in terms of $1000's of dollars per run of VORP he is likely to add from 2005-2009. I looked at all right fielders with more than 300 plate appearances from 2001-2003 and got their salaries from the
USA Today salary database.
I then segregated out the players with 7+ years of MLB experience- those who have signed free agent contracts (or at least signed contracts to cover a free agent year). I then threw out the worst contract (i.e., Bobby Higginson making $11 million for less than zero production) and the best contract (Reggie Sanders in 2002 and 2003 - cheap contract, good VORP) to arrive at an average of $302,000 per run of VORP for MLB RF'ers. I then calculated Maggs' projected VORP over the 2005-2009 period - estimating that his 2001-2003 VORP would attrit by 6% per year over the period - which is reasonable, given that Maggs would be 36 at the end of this contract, and it would still give him well above average performance.
The result is a contract of $68 M over 5 years, going from $15.4 million in 2005 to $12.0 million in 2009.
I then compared Maggs' production to Vlad Guerrero's over the same period. Vlad has produced a little bit better over the 2001-2003 period than Maggs (even with his injuries), and Guerrero's PECOTA projections show him attriting by 5% per year - arguable since Guerrero is now in his prime and 2 years younger than Ordonez.
So I took his salary over the period (splitting out his $5 million bonus in $1 million installments over the five years) and divided it by his projected VORP. I then applied that $000/VORP to Maggs' expected production over the same period...and got a 5-year, $60 million contract, an average value of $12 million per year. Anyway, here are the tables:
RF Average $000/VORP
| RF Type | 2001 | 2002 | 2003 | 2001-2003 AVG |
|---|---|---|---|---|
| 7+ Years | 240 | 388 | 331 | 320 |
| 7+ Hi/Lo Deleted | 219 | 366 | 322 | 302 |
| All RF | 165 | 234 | 221 | 207 |
Maggs' Salary Using Projected VORP (Using 7+ Hi/Lo Deleted)
| 2005 | 2006 | 2007 | 2008 | 2009 | Total | |
|---|---|---|---|---|---|---|
| VORP | 51.04 | 47.98 | 45.10 | 42.39 | 39.85 | N/A |
| $000/VORP | 302 | 302 | 302 | 302 | 302 | N/A |
| Salary | $15,415 | $14,490 | $13,620 | $12,803 | $12,035 | $68,363 |
(note- Maggs 2001-2003 Average VORP of 54.3)
Guerrero Salary 2004-2008
| 2004 | 2005 | 2006 | 2007 | 2008 | Total | |
|---|---|---|---|---|---|---|
| Projected VORP | 56.02 | 53.22 | 50.56 | 48.03 | 45.63 | N/A |
| Salary | 11,000 | 12500 | 13500 | 14500 | 15500 | $67,000 |
| $000/VORP | 196.36 | 234.89 | 267.03 | 301.90 | 339.71 | N/A |
(note- Guerrero 2001-2003 Average VORP of 59.0)
Maggs' Salary Using Guerrero Contract
| 2005 | 2006 | 2007 | 2008 | 2009 | Total | |
|---|---|---|---|---|---|---|
| Projected VORP | 51.04 | 47.98 | 45.10 | 42.39 | 39.85 | N/A |
| Guerrero $000/VORP | $196 | $235 | $267 | $302 | $340 | N/A |
| Salary | $10,023 | $11,270 | $12,043 | $12,799 | $13,538 | $59,672 |
Anyhoo, that's my rough analysis of the Magglio contract - he deserves less money than Vlad, and perhaps a little bit more than Garrett Anderson. The difference between the two - a 5-year, $65 million deal, would seem to be a decent deal, although Maggs making $13 million in 2009 at 35 scares me a bit. Maggs' comparables by age - Fred Lynn, Wally Berger - didn't age so well, and there are some question marks on his PECOTA comparables (Andy Pafko, Bernard Gilkey) as well.
Comments:
Well, he's not way off base, but I think that he's asking for too much by asking for 5 years $70 million based on either the Guerrero deal or the marketplace. One thing I noted about RF'ers is that there are a lot of marginal contracts out there - overpaying for very little production.
My thought is that something like $65 million over 5 years probably is a reasonable request. Remember, though, he's overpayed at $14 million per this year when Vlad is making $14 million as well (average value of deal). The best move is probably something like a 4-year $56 million deal that is 4 years with an option year at $14 million or a $4 million buyout. Pay him 13/13/13/13 and then if he stays healthy, it's a 5-year $70 million deal. Also, I think he can be insured if it's a 4-year deal. Gosh, this makes too much sense.
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My thought is that something like $65 million over 5 years probably is a reasonable request. Remember, though, he's overpayed at $14 million per this year when Vlad is making $14 million as well (average value of deal). The best move is probably something like a 4-year $56 million deal that is 4 years with an option year at $14 million or a $4 million buyout. Pay him 13/13/13/13 and then if he stays healthy, it's a 5-year $70 million deal. Also, I think he can be insured if it's a 4-year deal. Gosh, this makes too much sense.
