How Much is Too Much To Sign Stephen Strasburg?

by R.J. Anderson on Jun 9, 2009 3:45 PM EDT Comment 14 comments

Assuming the Washington Nationals don't pull a trick from the Houston Texans and pass on Stephen Strasburg in the next few hours, the next big question will be how much the Nats will fork over to sign the college phenomenon. The hot number was 50 million, although that seems more like a Scott Boras-orchestrated pipe dream than anything else, but let's assume the Nationals were to do some forecasting based on past college pitchers, what price ranges would they find?

Using Erik's prior research from Rally's WAR numbers, I divvied up the top three college hitters and pitchers from each of the drafts ranging from 1990-1999. From there I averaged their WAR during the team controlled period and found that the hitters averaged 1.2 WAR yearly and the pitchers averaged 0.9 WAR yearly. If I were to post analysis with Strasburg being an average top-three college pitcher, I'm pretty sure I would be greeted with a dozen comments and emails about how Strasburg is so much more than the average college arm. That may be true, but I think the same could've been said for Kris Benson or Mark Mulder.

Using the "free/free/free/40/60/80" cost-controlled and arbitration years method developed by Tom Tango, my goal was to find out what the appropriate signing bonus for Strasburg would be, given various career arcs. Of the 30 college pitchers chosen, only one topped 25 WAR, two 20, five 15, and only six over 10; that's not too encouraging for people expecting Strasburg to be better than A.J. Burnett from start one.

Let's run Strasburg through three different career paths. One being Mike Mussina, one being the moderately successful (at least by compared to his peers) Dustin Hermanson, and then the disappointing Paul Wilson.

The Mussina Path (25.3 WAR)

Year one: 2.1 WAR
Year two: 7.4 WAR
Year three: 1.3 WAR
Year four: 5.1 WAR
Year five: 5.1 WAR
Year six: 5.5 WAR

Free agent worth: 119 million

Cost-controlled worth: 45 million

Signing bonus break-even point: 74.6 million

The Hermanson Path (8.2 WAR)

Year one: 1.1 WAR
Year two: 2.8 WAR
Year three: 3.5 WAR
Year four: 1.2 WAR
Year five: 0.1 WAR
Year six: -0.5 WAR

Free agent worth: 37 million

Cost-controlled worth: 2.6 million

Signing bonus break-even point: 34.3 million

The Wilson Path (0.5 WAR)

Year one: -2.8 WAR
Year two: 0 WAR
Year three: 0 WAR
Year four: 1.6 WAR
Year five: 0.5 WAR
Year six: 1.2 WAR

Free agent worth: 2.3 million

Cost-controlled worth: 10.5 million

Signing bonus break-even point: Strasburg pays them 8.2 million.

If the Nationals can guarantee that Strasburg is the next Mike Mussina (which would be quite the win), they can pay him that 50 million signing bonus without blinking an eye and still get a nice profit. Otherwise, the signing bonus should be somewhere below 30 million. The thing is, the odds are against Strasburg reaching the 8 wins needed. Only 27% of the pitchers in the sample reached the plateau. Meanwhile, 9 of the 28 hitters sampled reached, or 32%. We know Dustin Ackley will sign for less, meaning the amount of WAR needed for a huge profit is actually lower than eight. Keep in mind, Strasburg pitching like Mussina with a reasonable signing bonus makes this a great deal when compared to the expected free agent costs. Which is to say, those cost controlled years make all the difference in the world.

There are some unaccountable variables. Merchandise and ticket sales topping the list, along with potentially added endorsements and attendance that would come only from a Strasburg selection. It's hard to quantify those, so for the most part I've ignored them. Plus, it doesn't seem like a sustainable boost to revenue.

You can make the case from a baseball and business perspective that the Nationals should make Dustin Ackley the first overall pick.

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Comments

I have to agree with this, especially if that means more money on #10

Ackley + one of the higher non-Strasburg arms at #10 > Stephen Strasburg + easy sign at #10

Especially when the former will cost much less than the latter.

"You end up with a name like ‘Outman,’" he said last week. "What else are you going to do? You’re going to get people out, man." ~ Dallas Braden

by Blicks on Jun 9, 2009 4:34 PM EDT reply actions 0 recs

who are you?

Did Sky hire a new writer?

I'm not a sabermetrician, but I do play one at Driveline Mechanics.

by devil_fingers on Jun 9, 2009 5:05 PM EDT reply actions 0 recs

If Dustin Pedroia played in Seattle, not many people would be talking about him.

by baetown415 on Jun 10, 2009 8:59 PM EDT up reply actions 0 recs

17

million

by iwasawesomer :( on Jun 9, 2009 7:58 PM EDT reply actions 0 recs

I realize this would never happen, but in the alternate reality where I’m running the Nats (I may not be any better than Bowden, but I’d steal less money from latin kids)…

I pick some reasonable number (some inflation adjusted combo of Prior and Price, maybe and even adjust so it’s the most money ever given to a #1 pick if it’s not a good deal more at that point), say $15mil (guaranteed + bonus), and then tell Boras: “Take it or leave it.” If he grandstands, point out that next year, it’s almost assured that the Nats will have pick #1 again, plus two sandwich round picks if Strasburg doesn’t sign. Say that we’d be happy to pick him again then, and offer $15mil + inflation. Give them a deadline of late July, and make it clear that if it’s not accepted by then then we’re perfectly happy to use some of that money to help sign the pick @ #10.

Maybe we’d pick #1 again in 2011, maybe someone else will. But does his client really want to trade two years of his career for $15mil? Yeah, he might be the next Mike Mussina. He might also be the next Mark Prior.

I can’t imagine there’d be a ton of PR backlash for making a totally reasonable offer (definitely would be some, though), no matter how Boras tries to spin it.

It’s easy to be a hard ass with someone else’s franchise.

by dannimal on Jun 9, 2009 9:30 PM EDT reply actions 0 recs

the nationals have to get permission to re-draft strasburg next year

same thing with crow – the nationals couldnt pick crow (if they wanted to).

by someguy132 on Jun 9, 2009 11:20 PM EDT up reply actions 0 recs

I had the same thought, but doesn’t the first pick alternate between the AL and NL each season?

by richardhkirkando on Jun 10, 2009 8:37 AM EDT up reply actions 0 recs

Way to much

but on the bright side, they will reform the draft on this draft

Big Numbers

by homerun013 on Jun 9, 2009 11:26 PM EDT reply actions 0 recs

The problem with this

While I generally think it’s a bad idea to overpay for draft picks (always uncertain), this analysis ignores the key point.

The Nationals are bad. Really, really bad. Even with a ballpark that opened last season, they’re not drawing well, and the fans are losing interest in the team.

To draft Strasburg and then fail to sign him would be a huge PR disaster for the Nationals’ front office. Scott Boras knows this. He’s willing to play hardball with anyone, and he’s going to use the Nats’ need for Strasburg to milk as many dollars as possible out of them.

by Tom (RFTN) on Jun 10, 2009 1:39 AM EDT reply actions 0 recs

Plus, it doesn’t seem like a sustainable boost to revenue.

It sounds like it would be huge to me. The Nationals most productive starter right now is Shairon Martis. Wouldn’t replacing him with Strasburg bring a whole lot more fans to the park?

St. Louis relievers... defying win expectancy since 2008
http://www.drivelinemechanics.com/

by vivaelpujols on Jun 10, 2009 1:46 AM EDT reply actions 0 recs