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Relievers aren’t being overpaid… but designated hitters are: An investigation

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Why are designated hitters still being overpaid? 

Blue Jays Encarnacion strikes out against Astros Andrew Francis Wallace/Toronto Star via Getty Images

These days, all the rage seems to be about relievers.

During the season and playoffs, writers analyzed how they were used, or misused. The return they garnered in trades, and now, during the offseason, the contracts they are signing.

It wasn’t always this way. People didn’t use to be obsessed with relief pitchers. Before, in the sabermetric world, we had engraved notions of what they were, and what they were worth.

Now, that notion is somewhat changing.

But, even though our notions on relief pitchers are changing and being challenged, there’s still misconceptions going on when it comes to relievers.

The first is that the contracts signed by relievers are unusually high, or higher than ever before. But, as, Sam Miller of ESPN kind of showed, that’s not technically true.

And in general, reliever salaries aren’t rising like crazy. [1]

Since 1985 reliever salaries has had a 428 percentage growth. Which, in just about any market, is sure a s**t-ton of growth. But, in baseball, not so much. Especially when you compare it to just about every other position in the game. The average baseball salary, since 1985 has gone from $486,051.30 to $4,361,726.80 marking a 797.37 percent growth rate during that time frame.

Plus, when I adjust reliever salaries to 2015 values, this is what the trend looks like.

Salaries, for relievers, are actually down, by a considerable amount. Salaries aren’t rising like crazy — in fact, they are not even rising at all!

Designated hitter’s salaries, on the other hand, might be out of control. In fact, they’ve had the highest growth rate of any other position, and it’s not all that close.

When I started my research, I wanted to answer the question of whether relief pitchers were overpaid. That question still hasn’t been answered, because even though their contracts haven’t risen, we still need to compare contracts to performance to determine whether someone is being overpaid. For example, if a designated hitter is making 7 million a year, you might think that that sounds about right, but if he’s got a WAR of 8 well, now he’s seriously underpaid.

So I looked at position salaries from 1985 to 2015 and compared it to they’re WAR values, adjusting the salaries to 2015 levels.

While relievers, in general, make the least amount of money compared to any other positional group, they also produce the least amount of value. Designated hitters, on the other hand, make the most amount of money, generally, but they typically, produce the third least amount of value. I think it’s pretty safe to say at this point that designated hitters are overpaid.

The catcher’s data point is also probably misleading. I used baseball reference’s WAR metric, which for catchers doesn’t include catcher framing which is a huge part of their value, and probably undersells their productivity.

It’s not unreasonable to think that designated hitters have probably produced the second lowest amount of value since 1985. One of the biggest reasons is that most designated hitters are typically older players, and they are heavily penalized in WAR metrics for not playing any position.

Most designated hitters are over 30, with the most common age group at 35. We also know, from aging curves, that players in their 30s, especially late 30s, are typically past their primes, and can hurt their teams more than help them.

That said, baseball’s salary structure is a little wacky. Usually, the better you are at your job, the more you get paid. That’s how things should work in the “real world” (they don’t always). In the baseball realm, however, young players are typically underpaid because of the salary structure. The younger you are, typically the better you are as a player, but you’re also less likely to be making crazy money. That type of money usually comes after you hit free agency, or sign a huge contract extension. But, when that happens, the player at hand is typically in his late twenties and early thirties, which is when players usually start to decline.

For designated hitters, this sort of distribution is, probably, to an extreme.

Basically, if you want any hope of making crazy money, you better be an older player. You better be in your thirty’s; hell you better be in your late thirty’s.

So, why is this happening? Why are designated hitters overpaid? Why are they so old?

An explanation for the chart above, is, as we’ve seen, most designated hitters are older. One of the reasons for this is that fielding abilities usually peak at young ages, and decline quickly. Therefore, if a player is young, it’s unlikely that he’ll be playing a lot of the time at DH because that position is designed for players who have a good bat but don’t have a good glove.

There are obviously other reasons for why a designated hitter is overpaid, but explaining that gets tricky very quickly.

My hypothesis is that these players are overpaid because they are signed to bad contracts and had to move from one position to another. So, for example, while some players are signed to primarily play DH, such as David Ortiz, others such as Alex Rodriguez, are players who were signed to play third base but, as they got older, they had to be moved to other positions, and eventually become a DH. At the age of 39, Rodriguez mostly played DH but still made $22 million.

It’s difficult to test this theory but baseball-reference has a category for players called, “Acquired”. Which basically tells you how those players were acquired by their specific teams. That said, this does not include contract extensions. So, for example, Ryan Braun was extended in 2011, but he still appears as acquired by the draft.

With that data, I looked at players who played at least one season as a designated and grouped them by their acquired type. With that information, I was able to see how those players were initially acquired.

Most of them were acquired by free agency. I thought this boded well for my theory.

So, then I looked at the average adjusted salary by acquisition type, thinking that free agency would be where general managers were overpaying these players.

The results surprised me. I expected most players who were acquired by free agency to be making considerably more than the results show.

Obviously, the big surprise is the “Amateur Free Agent” category. Some of these players include Carlos Delgado, Edgar Martinez, Jim Leyritz, Juan Gonzalez, Kendrys Morales, and more.

The biggest reason, that this acquired type is so high, is that most of these players ended up signing extensions with their teams. These were mostly first baseman types, who had solid careers. This reveals one of the biggest flaws with this analysis, and that’s that these results don’t include contract extensions. This isn’t an acquired type, but it could explain why designated hitters are still being overpaid. That general manager's, are signing some players to long-term contracts, whether it’s by free agency or contract extensions, and those players ended up at the designated hitter position.

I also looked at which position this group of players played in their first season after being acquired, and I found that 50 percent of them played DH. I then looked at which position this grouping of players played in their final year, and found that 73.4 percent of them played DH. A pretty big uptick but not a huge one. (obviously, every player in that group played at least one season at DH).

The more surprising number here is that 50 percent of them played DH when they were first acquired. This means that general managers either fully knew what they were doing when acquiring these players. Assuming that most of them would play at DH. It’s also possible that something went horribly wrong in the first season and that most of these players either suffered an injury, or their defense went to hell after they were acquired, so they were forced to DH.

I’m not entirely sure why designated hitters are still being overpaid. There is some evidence to suggest that these are contracts gone wrong, or overpays by general managers, but not enough to make any conclusions. Another study, with probably a better methodology, would need to be done in order to get an answer to this question.

That said, maybe it’s time we stop focusing our outrage on the ‘overpaying’ of relievers. The 2016 salary values weren’t in this analysis, but I would be shocked if they drastically changed the picture. I will analyze those values when the data is released.

Relievers are obviously interesting for other reasons, but I think this shows that designated hitters are kind of a fascinating test case as well.

***

[1](Data was gathered at baseball reference, which did not have salary data for 2016, in the tables that I scraped. Data before 1985, is also incomplete. The position was determined as the position most often played by that player, in the given season. I determined a starting pitcher by a pitcher who started more than 50 percent of his games, the others were categorized as relievers.)

Code for this piece can be found on GitHub here.

Julien Assouline is a contributor at Beyond the Box Score. He’s written for Baseball Prospectus, The Hardball Times, and BP Milwaukee. You can follow him on twitter @JulienAssouline