Ichiro, $20 million a year
Once the euphoria of the realization that Ichiro is sticking around, and will probably spend his entire major league career as a Mariner wears off, we’re going to see the questions begin to arise – is Ichiro worth $20 million a year for his age 34 to 38 seasons? If you’ve read the blog for any length of time, you probably already know my answer to that question, but let’s take an analytical look at it anyways. (Caution: Long Post, Some Math Ahead)
The first thing you have to do when evaluating a signing like this is to come up with a projection of value for the duration of the contract. Before we can know how much money a player’s performance is worth, we have to know what we expect them to do. In order to come up with an accurate projection, we essentially have to answer two questions:
A) What is the player’s true talent level right now?
B) How do we expect that talent level to improve/decline?
Let’s answer the current value part first. How good, relative to his peers, is Ichiro as a player right now? Let’s start with his offense, using Runs Created as the sum of his hitting and baserunning value.
2004: 143 Runs Created
2005: 114 Runs Created
2006: 113 Runs Created
2007: 77 Runs Created (Season Pace: 146 Runs Created)
We only go back 3 1/2 years because data beyond that has generally been show to have little to no value in projections, and we can almost certainly get an accurate true talent assessment of ability with that data sample. The most recent performance is the most important, but since 2006 is a full year sample and 2007 is still only half a year, we’re pretty close to the point where the 2006 and 2007 values can be weighted evenly, with 2005 and 2004 carrying less importance.
We’ll weight the years as 10% for 2004, 20% for 2005, 35% for 2006, and 35% for 2007, which gives us a four year weighted average of 128 Runs Created. We can safely say, accounting for a +/- 7 runs margin of error, that Ichiro’s true talent offensive level as of today equates to something like 120 to 135 Runs Created per season. Still with me? Good.
Now, we need to know how that compares to other center fielders. Teams win games by being better than their opponents, and players provide competitive advantages by generating more runs for their team than their positional peers. So, here’s a list of the Top 100 center field seasons in baseball, by runs created, from 2004 through 2007, with the caveat that Ichiro’s time in right field means you won’t find him on the list.
At the top of the list are two performances from last year – Carlos Beltran and Grady Sizemore both had fantastic seasons last year, garnering them significant MVP votes and establishing themselves as the two best center fielders in baseball. Beltran created 125 runs, while Sizemore created 124.
You read that right. Ichiro’s weighted average the past four seasons of 128 Runs Created per season is better than every offensive season major league center fielders have had for the past four years. Read that sentence again. Even if we just look at Ichiro’s raw totals without the weighted average and included them on this list, his 2004 season would be #1, his 2005 season would be tied for #5, and his 2006 season would be 6th. That, is, of course, until the year ends, when his 2007 total would almost certainly become #2.
In other words, unless Ichiro entirely falls apart in the second half, his last four years, had he been a CF full time, would have ranked as the 1st, 2nd, 6th, and 7th best Runs Created seasons of all major league center fielders in the last four years. In the mix with the four Ichiro seasons are one Carlos Beltran season, one Grady Sizemore season, one Jim Edmonds season, and one Johnny Damon season.
That’s your top 8 center field seasons the last four years – Ichiro, Ichiro, Beltran, Sizemore, Ichiro, Damon, Ichiro, Edmonds. He’s a pretty good hitter, I think.
Okay, anyways, let’s get back to quantifying things, which was the original point of this post. The average Runs Created total of those 100 CF seasons the last four years (weighted for plate appearances) is 75.1 RC per season. Essentially, that’s what we’d expect an average offensive center fielder to give us in a full, healthy year. Ichiro’s weighted average, remember, is 128 RC per year, plus or minus a few runs.
Ichiro is something like 50 runs better than the average center fielder offensively in a typical Ichiro year. He was 70 runs better than average back in 2004, then dropped off to just 40 runs the last two years, and is on pace to be 70 runs better again this year.
50 runs better than average. Just with his offense.
Quantifying defense is a bit tougher, especially since we have less than one full season of data with Ichiro playing center field. Personally, I think Ichiro is something 10 runs better than an average defensive center fielder over the course of a full year, but the advanced defensive metrics we have don’t really agree with each other, and it’s nearly impossible to build an airtight case, statistically. So, as much as you guys know how much I love harping on the value of defense, I’m actually going to leave that part to you guys. We know he’s something like +50 with the bat. If you think he’s overrated defensively, maybe you want to adjust his total value down to +40. If you think he’s the greatest center fielder ever, you can adjust his value to +70. Or, if you just want to ignore defense entirely, you can leave him at +50. That’s your call. Personally, I think he’s something like a +60, meaning the total package of Ichiro’s offensive, defensive, and baserunning value is 60 runs better than an average center fielder, and that’s the number I’m going to use going forward.
To convert that runs figure to dollars, we have to figure out how many wins 60 runs above average is worth, and how much a win is worth. Thankfully, smarter people than me have spent hundreds of hours on these issues, and so I can just give you the short answer and keep this post from becoming any longer than it already needs to be. It’s generally accepted that 10 runs is equal to 1 win, which makes Ichiro something like 6 wins better than the average center fielder. Now, teams just don’t have average center fielders hanging out in the minors making the league minimum, which is why the concept of replacement level is so vital to contract valuations. What we really want to know is how many wins Ichiro is worth above the league minimum player, so we can know how much he should be paid above the league minimum player.
Again, smarter people than me have done the research on the typical performance of replacement level players, and have found that you can generally find a guy who is 2 wins below average with little effort. So, basic math says that Ichiro is something like 6 wins above average, and average is 2 wins above replacement level, so Ichiro is worth about 8 wins more than a replacement level center fielder. Depending on your opinion of his defense, you might have him as low as 6 wins or as high as 10 wins. But I’m pretty comfortable with the 7-8 win range as Ichiro’s current talent level.
Now, finally, we’re going to put a dollar figure on that. Harkening back to the research done by those smarter than me (basically, Tango, who I’m borrowing heavily from in this post), every marginal win is worth something like $2.5 million dollars to a team. Now, teams have to pay significantly different figures for those wins, with pre-arbitration players making just a couple hundred grand per win and free agents costing ten times that, but overall, the league as a whole spends about $2.5 million per marginal win added. Last year, free agents were commanding a little over $4 million per win, showing why I’m generally a big advocate for avoiding long term free agent contracts.
So, using $2.5 million per win as actual value and $4 million per win as market value, we can use Ichiro’s win totals to figure out exactly how much he is worth right now.
Actual Value: 8 wins * $2.5 million per win = $20 million
Market Value: 8 wins * $4 million per win = $32 million
Hey, look at that – Ichiro’s actual value to the team is worth something like $20 million this year. If he was a free agent last winter, and had signed a one year deal, we’d have expected it to cost about $32 million, based on the going dollar per win rate. Man, the final year of his last extension was a massive bargain.
Man, this post is long, and I’ve only answered the first of my two questions from earlier. I need to make the second part shorter or no one’s going to finish reading this thing. Remember question #2 from an hour ago when you started reading this post? Well, now that we have a pretty good idea of Ichiro’s current value, we want to know how we expect that to change as he ages.
Originally, I was going to go through the whole process of aging curves, when skills peak and decline, Ichiro’s uniqueness and how his health should alter our projections, but I need to wrap this up, so here’s the Cliffs Notes version. Tango has five good articles on player aging on his site, so if you want the math behind all this, that’s a great place to start.
A typical aging pattern for players would have Ichiro lose approximately 15% of his value each of the next two years, then about 20-25% in each subsequent year before the end of his career. Starting from his current level, then, you’d have something like the following projections of wins per season for Ichiro:
2008 – 7.0 wins
2009 – 5.9 wins
2010 – 5.0 wins
2011 – 3.7 wins
2012 – 2.8 wins
If he ages fairly normally, we should expect Ichiro to be worth something like 25 wins over the course of the contract extension. Of course, he’s Ichiro, and there are all kinds of reasons to think he’s going to age better than normal players, but that will be a discussion for another day.
Teams were paying just over $4 million per win last offseason, and free agent inflation has been rising at almost 10% per season. Based on normal inflation, and teams agreeing with my analysis of Ichiro’s value in terms of wins, we would have expected Ichiro to have signed for something like $121 million over 5 years this winter.
5 years, $100 million for Ichiro. It’s a lot of money. It’s also a pretty massive bargain at the same time.
Congratulations to the Mariners for signing a true superstar to a below market contract.