Are Expensive Free Agents Really Worth It?

During this MLB offseason, we have already experienced a multitude of extremely rich free agent signings. Yoenis Cespedes was signed for 4Y 110M, Dexter Fowler 5Y 82M, and the frenzy for relief pitching has led to the two most expensive relief pitcher contracts ever: Aroldis Chapman 5Y 86M, and Kenley Jansen 5Y 80M. With the all-star studded 2019 free agency class just two seasons away, and salaries seemingly growing exponentially, the question remains: Do these signings ever actually pay out?

To answer this question, let’s look at all historical 100M plus contracts signed from 2007-2014.

$100 Million+ Free Agent Signings 2007-2014

Player Contract Length Salary Avg WAR over Contract
Carlos Lee 6 103M 1.5
Daisuke Matsazuka 6 100M 1.4
Barry Zito 7 126M 0.4
Alfonso Soriano 8 136M 1
Alex Rodriguez 10 275M 3.6
CC Sabathia 7 161M 6.1
Mark Texiera 8 180M 3
Matt Holliday 7 120M 3.4
Cliff Lee 5 120M 4.2
Carl Crawford 7 142M 1.2
Jayson Werth 7 126M 2.5
CC Sabathia 5 122M 1.1
Jose Reyes 6 106M 2.2
Prince Fielder 9 214M 2.1
Yu Darvish 6 112M 2
Albert Pujols 10 254M 3.3
Zack Greinke 6 147M 5.8
Josh Hamilton 5 125M 1.1


To answer whether or not signing big money free agents is worth it, we can look at the data from the above table. The cutoff was made at 2014 because it would be too hard to predict the overall efficacy of a contract signed after then. When looking at these numbers, it is important to remember that to the clubs signing at the time, the deals seemed franchise-changing. Finally, a WAR over 3 would generally be considered good, but there are obviously some exceptions (Alex Rodriguez). With all of this said, let’s delve a bit deeper into some of these players.

Carlos Lee was a great player throughout his twenties. He had an OPS+ of 113, and a Slugging of .495. However, he was already 32 years old when he signed with the Astros. His hitting declined, and his base-running got much slower. These regressions effectively turned him from a 3.5 win player, to a 1.4 win player.

Alfonso Soriano is often considered one of the worst free agent signings of all time, and with good reason. He averaged just a 1 WAR over an 8 year contract.

As a World Series Winning Player, Albert Pujols was considered to be an all-time great at the time of his free agency. However, his hitting was on a downward projection. His 2009-2011 OBP was .443, .414, and .366,  respectively; not a good indicator. And this downward projection held true. His 2012–2014 OBP fell to .343, .330, and .324, respectively, and 2012-2014 Slugging fell to .516, .437, and .466, respectively.

There seems to be a trend in players like Pujols who sign big contracts but decline in performance. First, they are over 30 years old when they sign with a new team, and their skills usually decline rapidly due to aging. Secondly, they often lack athletic ability. When big, lumbering guys sign long contracts, their defensive skills are likely to decline quickly, relegating them to simple DH roles. Third, teams often misinterpret stats. Just as with Pujols, many teams are quick to shrug off declining statistics for a player’s prestige and namesake. Fourth, is signing  contracts that are often longer than five years. Especially when players age past 30, every marginal year is likely to negatively affect their performance at an increasing rate. The longer the contract, the higher the risk of this decline. The final reason is a teams’ willingness to sign a big name at the cost of developing younger players, which causes them to ignore all of these signs. The Pujols signing covers all five of these points.

While you are free to sift through all of the signings on this list, by my metric, only 5/21 of the names here ended up good signings. This level of risk relative to the money being spent is just not worth it. To conclude, we can apply the litmus test created here to Aroldis Chapman.

Age: Chapman will be 29 when the season starts with a 5 year contract. Given the nature of his gameplay as a hard thrower, it is not unrealistic for him to go downhill past 31 or 32.

Athletic Ability: Chapman is a pitcher, so this figure is not as important. However, he can easily be overused, and 10 years of throwing 100+ cannot be too good for your arm.

Misreading Stats: Chapman’s SO/9, ERA+, and H/9 have steadily gotten worse in the past three years.

Contracts Longer than 5 years: His contract is 5 years exactly. However, Chapman is a flame-throwing reliever, meaning there is a lot more risk in 5 years with him than with a position player

Signing for Prestige: Chapman is easily the most famous reliever in baseball today. It would be disingenuous to assume that prestige did not have some part to play in his signing with the Yankees.

By this metric, it seems like Chapman’s signing might not have been the best idea, especially considering the fact that the Yankees are highly unlikely to be World Series contenders for one or two more years. So, what have we learned from all this? Don’t sign expensive free agents.

Daniel Ziarko

Sports Analytics and Business, Indiana University

Source for picture: Getty Images/ Jason Miller

All other stats courtesy of baseballreference.com

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Posted in MLB

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