Transaction Roundup: 4/12/2006

There are two items of interest that I want to address, ones that have already received a great deal of attention in the past two days. David Ortiz and Derrek Lee, two of the better players in baseball, signed extensions with their respective teams that will keep them around through at least 2010. There are already various opinions around as to whether or not these were good ideas or not, but I still want to take a look at some numbers and decide for myself.

Let's start with David Ortiz. He is in his age 30 season, and is coming off of the best performance of his career. His deal doesn't actually kick in until 2007; it starts by replacing the option year, and runs through 2010, with an option for 2011. He'll make $6.5 million for his production this year, and $12.5 million per year through 2010.

The Sox have had Ortiz at a very good bargain the entire time they have had him under contract. In 2003, he signed a one-year, $1.25 million contract. He responded with a .288/.369/.592 line and 4.9 WARP (which is considerable, since no defensive value is taken into account at designated hitter), and then signed a one-year deal for $4.5875 million to avoid arbitration. Again, he was worth more than that, as he hit .301/.380/.603 (6.4 WARP) and was absolutely ridiculous in the playoffs, hitting .491/.588/.855 in the three playoff series combined. To give that a little more context, Ortiz went 27 for 55 with 13 walks (plus three intentional passes), 5 homeruns, 3 doubles, and a triple. I'm not advocating anything with that listing off of numbers, I'm just astounded at the sheer weight of that performance...I was watching every one of those games intently, and it never dawned on me how well he was hitting statistically. I was too busy watching him dance after game-winning hits to notice his averages.

Ortiz was rewarded with a two-year extension that paid him a little more, although not much. 2005 gave him $5.25 million, and he is set to make $6.5 million this season. Considering Ortiz was worth 8 Wins Above Replacement Level with the bat alone in 2005, I'd say he was a steal rather than a bargain.

Of course, that is retrospective. I have some fears in regards to Ortiz; he is a large player, coming in at 6'4", 240 pounds, and he will be at a spot in his career where serious decline might occur due to age and size when the contract reaches the last few seasons. As someone who remembers Mo Vaughn leaving and breaking down, I'm sort of hesitant to immediately applaud the extension. Then again, PECOTA doesn't seem to mind. His comparable players are favorable for the most part (Fred McGriff, Carlos Delgado, Willie McCovey, Willie Stargell), although the presence of Vaughn at #9 is staring me down. PECOTA does expect regression every year from here on out, but not enough to warrant alarm.

Now I wouldn't normally take the 5-year projection from the PECOTA cards, but I think it is necessary to make my next point. Also, I would hope those of you on the fence about acquiring a Baseball Prospectus subscription would see how much information is contained within the PECOTA cards and finally sign up. Worth every cent I tell you.

As you can see, Ortiz is expected to have a great deal of offensive value for the next three seasons. In 2009 there is a great deal of regression, but there is absolutely nothing wrong with a line of .279/.369/.540 from your designated hitter. This is crude analysis, but let's take the Value Over Replacement Player (VORP) for the player who appeared in the most games at DH for each club, and see what we get as far as value goes, in comparison to Ortiz's expected contributions in the 30's.

Now, as I said, this is crude, especially the average. A few of these teams had multiple DH's, so I took the one with the most time at the position. In a way this is helpful to the argument that Ortiz's production will still be valuable in 2009-2010, as it somewhat implies that finding a solid, productive designated hitter is a difficult task. Ortiz's 2009-2010 production is above the average VORP production of the 2005 DH's, so if you trust in PECOTA, you have your answer as to whether the Sox investment was intelligent. Paying Ortiz a few extra million than he is worth at the backend of this deal works, considering they could still be getting a deal on him production wise in 2006-2007, and remember, they have only spent roughly $11 million for a 3-year line of .297/.383/.600. By the way, the positional average over the same time span is .268/.349/.464 (thanks to Lee Sinins' Complete Baseball Encylopedia for those last few nuggets).

Overall, I don't think the Red Sox will regret signing Ortiz to this deal, and I don't think it is a bad extension. I may have attempted a 3-year deal with an option, but considering the lack of noise for money that Ortiz has made thus far, maybe the Sox felt they should repay him. From a coldhearted business standpoint, that probably wasn't the right thing to do. The Sox do have a few extra dollars to toss aside on risk every year (see: Mike Lowell, Wade Miller, Scott Williamson, Matt Mantei...), so I don't think they will regret this in the long run. If he ends up like Mo Vaughn, feel free to remind me how wrong I was though. I'm still sort of on the fence about it, but I'm leaning towards the idea that the long term risk is worth the short term gain.

As for Derrek Lee's extension: congratulations to the Cubs for seemingly paying Lee for his established performance level, rather than his ridiculous 2005 season. Not to say that I don't believe he has improved somewhat, because he most likely has. I just don't expect to see him leading the league in positional Net Runs Above Average again anytime soon.

Here was my comment on Lee from my Cubs' Team Preview:

Lee is also in his age 30 season, and is certainly a more athletic player than David Ortiz, although he is a big dude himself, coming in at 6'5", 245 pounds. PECOTA sees Lee as an above average player for the next three seasons, and then basically a league average player in 2009, with a dropoff in production coming in 2010. PECOTA is usually pretty conservative of course, and a great deal of the value dropoff seems to come from a lack of playing time in the later years of the contract. Even before his monster 2005, I thought of Lee as one of the top first basemen in the league, and I don't think that will change for the next few years. As noted above, he is considered a very good defender by some standards, and he is either smart or fast enough to steal double digits in bases year after year (75% success rate from 2003-2005). Considering that he is one of the few complete package players on the Cubs (Aramis Ramirez, stay healthy and field some balls, will ya?), the Cubs absolutely need to keep him around. They didn't dish out too much money for him ($13 million annually through 2010), and as David Pinto noted, if he remains an elite player throughout most of the deal, then it is an absolute steal.

Lee and Ortiz both seem to enjoy their surroundings, and signed extensions for potentially less money than they could have pulled in if they had waited for free agency. The Cubs may have made the less risky deal, since Lee is less of a risk than Ortiz, but the Red Sox can afford to take on an Ortiz-sized one. Ok, maybe not the size of Big Papi, but still, large.

Thanks to Retrosheet, Lee Sinins' Complete Baseball Encylopedia, and Cot's Baseball Contracts for supplying me with wonderfully accessible statistics and dollar figures.