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Sabernomics: Werth Deal is Aggressive, But Reasonable

JC Bradbury's Sabernomics often zigs when others zag, and today's defense of this weekend's Werth deal in DC is a perfect example. The standard line of thinking is that the deal was incredibly overpriced, poorly timed, and costly for a team that can't afford to make mistakes.

But JC takes exception with that analysis, and in fact, values Werth at $127M over the length of his $126M contract:

1. Aging - Bradbury contends that aging is "rather flat," for which his estimate takes account, but doesn't mention that Werth is a post-peak player getting paid like a player that projects to peak over the next several years.

2. Revenue Projection - He projects MLB revenue growth will remain at 9% through the the life of the contract, in what I presume is to suggest that Werth's percentage of the Nationals' total expenditures will go down accordingly.

3. Adam Dunn - Probably the best argument in the article, JC takes issue with the idea that the Nats could get the same production for less cost. The idea is that Dunn's "defense" makes him more valuable to an AL club, but he makes no mention of why paying another player 70 MILLION additional dollars (over an additional 3 years) is a way to leverage that AL/NL value disparity.

4. Albatross Contracts vs. Risk of Loss - This last argument has me somewhat stumped, honestly, but the gist of it is that albatross contracts can be mitigated by cutting losses, dealing away good players, and recouping some amount of the contract.

And what about the future? A few years down the road the Nationals may not just be a losing team, but a loser with an albatross contract. I think the Nationals signed this contract looking forward, rather than trying to make a splash now. The Nats may have needed some good press in DC, but Werth isn’t quite the household name to make that splash. The Nats have a core of good young players, such Ryan Zimmerman, Stephen Strasburg, and Bryce Harper. In a few years, when the team wants to add another piece to push them into the playoffs (and with players will be worth more) Werth could be worth more than his contract. Now, if the plan doesn’t work out, the Nats may end up having to cut their losses and deal away some of their good players. When that time comes, they can minimize some of their losses by selling away overpaid players for less—the loss isn’t the full salary of the contract. Yes, a loss is a loss, but risking a loss to make money is something that businesses must do every day.

I’m not sure I would have recommended this deal to Rizzo if asked, but I can understand why this deal was made. It’s aggressive, but reasonable. 

Essentially, Bradbury is arguing that the Nationals may very well get one hundred and twenty six million dollars of value out of Jayson Werth eventually, and that's a fine (if slightly obtuse) argument.

The problem is that that isn't the problem. The problem is that the Nationals, for whatever reason, overpaid the current market value. Maybe they had to give him the additional year? Maybe there's a play-for-a-loser premium? Maybe they know something we don't? Maybe they have access to the Zoltan Prophetron Fortune Teller?

Perhaps there are a lot of fantastic reasons that contract got so high, but I think the crowd has this one right. It doesn't matter if they eventually get what they paid for (unless you're a Nats fan), the problem is that they paid more than the market was willing to currently bear, and in so doing have somewhat upset the balance of the entire Winter Meetings and every contract after this. It may eventually look like a fair deal, but it's a bad contract now.