The Mets surprised everyone when they signed Michael Cuddyer this offseason to a two-year, $21 million deal. In doing so, they forfeited their first round draft pick in 2015, something that had a lot of Mets' fans scratching their heads, including yours truly.
Is this move dead on arrival? In other words, can Michael Cuddyer perform well enough over the next two years to justify losing a 15th overall draft pick?
Let's find out.
First, we need to understand the value of a draft pick. Something that has been researched and debated for years. We will rely on our fellow Beyond the Box Score friend Andrew Ball's work from June 2013, updating a few of his input variables to make sense for today.
To find the performance value of first round picks, Andrew compiled the fWAR over the first six years of service time for each top-100 draft pick. He then broke the draft picks into tiers, finding the average fWAR of the top draft pick in each tier in terms of draft position and the actual top performer within the tier.
Since the Mets would have selected 15th overall, had they not signed Cuddyer, we will use the average value of the 16th pick and the top performer drafted between 16-30, for the years of 1990-2006, which is 4.57 fWAR over six seasons. The average signing bonus for a player drafted between 16-30 is $1.83 million (again from Andrew's research).
It would be easy if we could simply look at the average fWAR over six seasons of a 15th overall pick to see how much fWAR Cuddyer must produce over the next two years to match that amount. But we are smarter than that. We understand that wins today, like money, are worth more than wins tomorrow. We must discount the fWAR over six seasons to find a current value, and then we must consider how much the team paid to get that value.
To find the present value of WAR, we use a standard 8% discount rate per year, bringing the six-year 4.57 fWAR found in Andrew's research to 3.75 fWAR in today's production.
Beyond the on-field production, we must also consider the cost to acquire that value. Michael Cuddyer was a free agent signing, so he cost the Mets $21 million over two years. A draft pick would be under team control for six seasons, being paid below market value. To compare the two, we must consider the difference in dollars spent.
Using $7 million for the current cost of a win in free agency, we need to discount that amount to account for the cost of a player in their first six years of service time. Following with Andrew's logic in his valuation piece, we will assume that players get paid 31% of their market value while under team control.
We can then multiply the current production value of 3.75 fWAR by the current market cost per win of $7 million to get roughly $26 million in free agent value. Using the 31% team-controlled market value, we find a 3.75 fWAR player would cost an estimated $8.14 million over six years, plus $1.83 million in bonus, for a total of $9.97 million.
Our logic has brought us to the point where a 15th overall draft pick is worth an estimated $2.66 million per win ($9.97 million in cost divided by the projected 3.75 wins).
Let's review. We used research by Andrew Ball to find the average fWAR of draft picks in the range the Mets would have selected had they not signed Cuddyer. We then discounted the six years worth of fWAR to today's value. We also found a market value for players under team control. Using the two, we found the cost per win.
For Cuddyer to match the cost-effective $2.66 million per win value over the next two seasons, he would need to produce at least four wins per season in that span. Or more precisely, he would need to produce roughly 8.2 wins. To get there, let's say he had a four-win season in 2015, he would need 4.2 more wins in 2016, which at a 8% discount would equate into 3.9 wins, for a total of 7.9 wins in today's value. At $21 million over two seasons, that equals $2.66 million per win.
Of course, all of this is contingent on the success rate of the draft pick. We looked at the average performance of the best performers drafted between 16-30 in the first round. There is a good chance that whoever the Mets would have selected could have turned into a bust. At that point, Cuddyer's performance wouldn't need to be as strong to match the value, or would it?
If we use the projected Steamer value for Cuddyer of 0.7 wins in 2015, and assume a 0.5 drop-off in 2016, he would produce 0.9 wins over two seasons. That would make his cost $23.76 million per win. A drafted player would have to perform at replacement level, around 0.1 wins through six seasons, to match that cost per win value. But even then, the Wilpons would be relatively better off as they would only be spending approximately $2 million for 0.1 wins rather than $21 million for 0.9 wins.
A lot of math to tell us what we already knew: the Mets made a mistake in signing Michael Cuddyer. For a cash-strapped team, spending $21 million on an aging outfielder more likely to produce zero wins than four wins is a payroll killer. By losing a 15th overall draft pick in the process, the Mets cheated themselves of future value that they will likely not come close to redeeming in 2015 or 2016.
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All statistics courtesy of FanGraphs.
Jeffrey Bellone is an editor and featured writer at Beyond The Box Score. He can also be found writing about the Mets at Mets Merized Online. He writes about New York sports at Over the Whitestone. You can follow and interact with him on Twitter @OverWhitestone.