Nine Figure Failures

This postseason was nothing short of a disaster for Alex Rodriguez. The former three-time AL MVP hit just 3-23 in the playoffs, was benched in the final games of both series, and was pinch hit for three times. His abysmal performance even inspired the satirical sports news site SportsPickle.com to create a new stat–WAR-ROD–to measure Postseason Wins Above Replacing A-Rod. But, hey, at least he’s out on the market again, ladies.

Really, this season as a whole has been a disaster for A-Rod. He only played in 122 games (his second lowest total since his rookie season), hit just 18 home runs (again, his second lowest since his rookie season), and had a .353 OBP–just his third worst since his rookie campaign. His defense has been deteriorating as his lateral quickness falls, and things certainly won’t be getting better any time soon.

A-Rod may be putting up rather bad numbers, but the Yankees still have him under contract for five more years. Not just that, they’re on the hook for $114 million over that stretch. Money may be no object for the Yankees, but Rodriguez’s contract is beyond an albatross. It’s more like an overweight albatross on steroids contract.

Chart of players with $100 million contracts

This ushers in a very interesting question: how did the Yankees end up in this unenviable situation? After opting out of his 10-year contract in 2007, A-Rod and Scott Boras somehow convinced the Yankees–the only team on the market who could afford the slugger–to give Rodriguez yet another 10-year deal, this time worth $23 million more.

Despite the fact that only premier athletes earn $100 million contracts, a sad truth in baseball is that nine-figure deals rarely work out well for the team. Contracts to players like Barry Zito, Vernon Wells, and Jayson Werth (all ironically with 7-year, $126 million deals) are already among the worst in the league, and Prince Fielder’s 9-year, $214 million pact looks like a ticking time bomb with Fielder destined to be a DH in four to five years.

There have been 32 total contracts of at least nine figures in baseball history, but the success rate certainly isn’t good. Maybe that’s because 12 of those were players at least 32 when they signed, including four whose contracts expire after they turn 40. Maybe it’s because only eight of the twenty-five hitters play prime, non-corner defensive positions.

Or maybe, just maybe, $100 million deals rarely work out because by the time players hit free agency, they are normally at the tail end of their prime. So during the length of their blockbuster deal, the team gets declining results at increasing costs. Take a look at the numbers.

Graph of WAR vs. Age for players during $100 million contracts.

This graph shows the WAR for every player under a nine-figure contract at each age. Obviously, there’s a clear pattern that WAR and overall play decreases starting as early as age 26. The regression line for the relationship between WAR and age for these nine-figure players comes out to be a nice equation:

WAR = 16.875 – 0.402*Age          R² = .838

Now, this function is only viable for ages between 24 and 40, since it can be dangerous and assumptive to extrapolate beyond the data set, but the data is very interesting. According to the regression line, $100 million players should drop 0.4 every season. Additionally, 83.8% of the change in WAR can be attributed to age.

To put this in perspective, players given a 10-year contract are projected to have four less WAR in the final season of the contract than than they will at the start of the contract. Albert Pujols produced 5.0 WAR in the final season before his new contract , so under this model, one would expect the final season of his 10-year contract to have 1.0 WAR. To make matters worse, Pujols is due $30 million that season.

Since almost every current contract is backloaded, players have decreasing production while earning an increasing salary.

Some may argue that deep-pocketed teams have a huge advantage over smaller market teams because the Tampa Bays and the Pittsburghs of the world can’t just hand out $100 million contracts, and that is true to an extent. But the ability to spend money doesn’t make a team better, especially when the vast majority of players available in free agency are 30-year old post-prime players.

For non-Yankee teams, signing a player to an inevitably failing nine-figure deal can cripple the organization. Joe Mauer has only compiled 6.5 WAR over the past two seasons, and the Twins still owe him $138 million over six years. Because of that behemoth sum of money, the Twins likely won’t be able to sign another premier player until Mauer’s contract runs up, especially since the team lost 195 games over the past two seasons.

The most effective way to spend money still remains to be developing talent within the minor leagues and acquiring young players. Thanks to arbitration rules, players under 28 really don’t get paid all that much comparatively. And considering the best years of players’ careers come around ages 26-29, it really doesn’t make sense to pay extravagant sums for very good players in decline.

Let A-Rod’s recent play be a lesson to all teams thinking about signing players to blockbuster deals (or in the Dodgers’ case, trading for players with $100 million deals). It may hurt to let a great player go, but there are far more effective ways of spending money than doling out a 10-year contract to a 30-year old first baseman.