Matt Holliday to continue his great career with the Yankees

It has been reported that the Yankees have agreed to sign Matt Holliday to a one-year, $13 million deal. It continues a career of a player who has certainly had an interesting one. Besides having been a great player, you would have a hard time finding a long-term deal that has worked out as well as Holliday’s did with the Cardinals.

The Yankees outfield is full with Jacoby Ellsbury, Brett Gardner, and Aaron Judge, so Holliday will most likely be the full-time DH, though he might spend some time at first base depending on how Greg Bird works out there. However, Bird would have to work out very badly at first base to not be an upgrade over what the Yankees trudged out there in 2016.

The signing of Holliday might be a disappointment to Yankees fans hoping for the team to acquire Edwin Encarnación (though Encarnación himself is probably the most disappointed). He is three years younger than Holliday, but he likely would have required three to four years at $20-25 million per year. From 2012-2015, Encarnación was the model of consistency at the plate. Unfortunately, he regressed a bit in 2016. A .373 wOBA is very good, and a 19-point drop is not extreme, but his strikeout rate increased by four percentage points. The biggest culprit for that was his decreased ability to make contact on pitches outside the zone. Steamer projects him to regress even further in 2017. If he can stop pressing and lay off those outside pitches, he might be able to duplicate his 2016, but the Encarnación putting up a 150 wRC+ might be gone forever.

Holliday had a poor 2016 and missed more than half of 2015, which is why the Cardinals decided not to pick up his option for 2017 for $17 million. The Yankees are likely betting that Holliday’s decreased offensive production was the result of injury, and that he can bounce back to produce a 120-130 wRC+ in 2017. It makes sense to think that on the surface, as a broken right thumb can devastate a hitter’s production. The problem with that is that Holliday actually hit for plenty of power in 2016. His .215 ISO was his highest since 2011. The problem was his walks. His 8.2 percent walk rate was his lowest since he was on the Rockies. He did have a .253 BABIP, though, which I am more comfortable attributing to bad luck than his injury as a result of his 38.5 percent hard-hit rate.

It’s not that there isn’t risk with signing a player going into his age-37 season after struggling with injuries during the two seasons prior. However, it is just one year and $13 million, which is nothing to the Yankees. Steamer projects Encarnación and him to be roughly equal offensively for 2016. I would not hold it against anybody who thinks that is a bit too pessimistic of an outlook on Encarnación, and a bit too optimistic on Holliday, so I am curious to see what other projections say once they come out. I believe that Holliday can provide close to what Encarnación can at a fraction of the price. If he stinks, the Yankees can easily cut bait with that contract and try rotating players in and out of the DH role.

Encarnación has a higher upside than Holliday, but it is hard to hold it against the Yankees for not wanting to attach themselves to another high priced contract to an aging free agent. The team is doing a great job of getting younger while still remaining competitive. They won 84 games last year, and this upcoming season they will have a full year of Gary Sánchez, better production at first base from Greg Bird, and if Aaron Judge figures things out at the plate, this Yankees team could easily be in the Wild Card hunt.

If it turns out that Holliday is done, he will be walking away with a great career behind him. As of now, he has hit .303/.382/.515 for a 137 wRC+ and 44.4 bWAR. Early in his career he was believed to be the product of Coors Field, but he proved that to be wrong in St. Louis. The seven-year, $120 million deal he signed with the Cardinals turned out to be one of the best long-term deals of all time. During the first five seasons of his career, he average about 4 WAR per season while earning an average of $16.7 million a year. That is a great return on investment even for low-revenue teams like the Rays and Pirates. He was worth about 21 WAR for the duration of the contract. Again, that is a great return for $120 million from a high-revenue, competitive team like the Cardinals.

To better illustrate how well Holliday’s free agent contract turned out, let’s take a look at other examples from recent history.

• Carlos Lee signed a six-year, $100 million deal with the Astros going into 2007. He was worth only 8.4 WAR during that time, about half of which came in 2011 alone. He also had a disastrous 2010 when he turned in a -2.2-WAR season.
• Alfonso Soriano signed an eight-year, $136 million deal with the Cubs going into 2007. Similarly to Lee, he was worth only 9.5 WAR, almost half of which came his first season. He had a -1.6-WAR season in 2009.
• Barry Zito signed a seven-year, $126 million deal with the Giants going into 2007 in one of the most famous bad contracts in recent history. He totaled a measly 3 WAR during that time.
• Mark Teixeira signed an eight-year, $180 million deal with the Yankees going into the 2009 season. It was by no means a disaster, as he was worth his money during the first half of his contract, and he contributed to a World Series win in 2009. Totaling over 20 WAR isn’t bad, though he only averaged 2.6 WAR per season.
• John Lackey signed a five-year, $82.5 million deal with the Red Sox going into 2010. He was good in 2013 when they won the World Series, but he was terrible in 2011 and missed all of 2012 due to Tommy John surgery. He gave the team only 3.7 WAR total before getting traded to the Cardinals.
• Prince Fielder signed a nine-year, $214 million deal with the Tigers going into 2012. He was worth 7 WAR in five season. Now his career looks to be over tragically due to injury. The Ranger will get insurance help on the rest of his contract.
• Shin-Soo Choo signed a seven-year, $130 million deal with the Rangers going into 2014. He has been worth only 3.9 WAR in three seasons.
• Alex Rodriguez, Albert Pujols, and Ryan Howard. I don’t think you need me to go into detail about them. Miguel Cabrera has worked out well so far, but I am not optimistic on his future given his age and body type.

This is by no means an exhaustive list. Occasionally you will get a Torii Hunter on the Angels who will turn in good value for his free agent deal. There is also future Hall of Famer Adrián Beltré on the Rangers, though I’m not sure it’s fair to bring him up because he might not be human. The point is that long-term deals for free agents frequently turn out poorly over the entirety of the deal, and rarely work out as well as Holliday’s did for the Cardinals.

The Yankees are taking a chance on Holliday, but it is less of a risk than signing Encarnación to a multi-year deal just to DH. It is especially prudent to avoid commiting to expensive, multi-year deals when there is a great farm system that will bear fruit in the next few years. It is not the best signing, to be sure. It is, however, a fair move given where the Yankees are at right now.