Prince Fielder’s Deal For King Albert’s Ransom

Prince Fielder’s Deal Clears Path For King Albert’s Ransom

After the Milwaukee Brewers signed Prince Fielder on Tuesday to a $15.5 million 1-year contract, many baseball pundits exclaimed, “If you’re going to pay Fielder this much, how much is Albert Pujols worth?”

Well, if you place any stock in the validity of one particular Sabermetric statistic called ‘Wins Above Replacement’, Albert’s worth is between $33.0 M and $35.7 M annually based on yesterday’s transaction in Milwaukee.

Because of various economic realities, however, he may be lucky to receive $25 M annually. And if he gets the $30 M annually he seeks, he may have to accept a contract of shorter length.

USING SABERMETRICS TO GAUGE PLAYER VALUE

Deep in the vault of the Sabermetics Library, there is both an intuitive and quantitative explanation for the WAR statistic, which stands for ‘wins above replacement’. As they explain:

“WAR basically looks at a player and asks the question, “If this player got injured and their team had to replace them with a minor leaguer or someone from their bench, how much value would the team be losing?”

The website Baseball-Reference.com contains WAR data, so out of curiosity I compared the WAR data for Mr. Fielder and Mr. Pujols from 2007-2010. My findings:

- Mr. Fielder’s average and median WAR was 4.025 and 3.8 games, respectively;

- Mr. Pujols’ average and median WAR was 8.575 and 8.75, respectively.

So if WAR is our proxy for productivity, and thus, player value, then this implies that Mr. Pujols was between 113% and 130% more productive than Mr. Fielder over this four-year span (depending upon whether you choose to use mean or median values).

If you multiply Mr. Fielder’s 2011 earnings of $15.5 M by factors of 113% and 130% respectively, then this would imply that Mr. Pujols would then be worth between $33.0 M to $35.7 M annually based on his career numbers to date.

A BETTER COMPARISON

Now truth be told, no one before yesterday was really comparing Albert Pujols to Prince Fielder when gauging what Mr. Pujols might fetch in his contract discussions with the St Louis Cardinals.

Many believe Mr. Pujols to be the best player in the game, and thus, should eventually be making the most money of any ballplayer. Currently that title is held by Mr. Alex Rodriguez.

In 2007, A-Rod signed a 10-year, $275 M deal with the NY Yankees. So his average annual salary under this contract is $27.5 M.

Using similar WAR comparisons, let’s assess the relative productivity of Mr. Rodriguez and Mr. Pujols.

If we cover the period from 2001-2010:

- A-Rod’s average and median WAR are 6.48 and 6.95 games, respectively;

- Albert’s average and median WAR are 8.38 and 8.3, respectively.

This implies that Albert has been between 19% and 29% more productive than A-Rod over this stretch. This alone would imply (based on A-Rod’s current $27.5 M yearly average) that Albert is worth $32.8 M to $35.6 M annually.

The productivity gap is even greater if we focus just on the years since A-Rod signed his massive deal. From 2007-2010, A-Rod’s average and median WAR are 5.53 and 4.65 games, respectively.

Comparing these WARs to Albert’s from the same period would imply that Albert has been between 55% and 88% more productive than A-Rod since the beginning of the 2007 season. This would imply that Albert is worth between a whopping $42.7 M to $52.7 M annually!

WHERE IS THE REALITY?

If we focus on the Fielder comparison from 2007-2010 and the A-Rod comparison from 2001-2010, we paint a picture that Albert could command an annual salary somewhere in the neighborhood of $33 M – $36 M.

In light of this, $30 M per year seems like a bargain if the calculations herein have merit.

That said, I suspect that Mr. Pujols will stay in St Louis and sign a deal that averages between $25 M – $30 M per season. The longer the length of the deal, the lower the annual average.

St Louis is a great baseball market as evidenced from the fact that they have financially outperformed their market size (8th highest franchise value despite the 17th largest MSA) largely due to one of the most loyal fan bases in professional sports.

But they aren’t New York, Boston, Los Angeles, or Chicago in terms of local market size. And their smaller market does place an upward limit on local revenue streams from local sponsors and local media relative to these other markets.

Fortunately for the Cardinals, the free-spending Yankees and Red Sox are pretty secure at 1st base with Mark Teixeira and Adrian Gonzalez respectively, the Dodgers are hamstrung financially by the messy McCourt divorce proceedings, the Mets are not likely to spend big in light of recent inefficiencies, and it would be Ruthian of Pujols to ever contemplate a jump to the Cubbies.

Albert has been a model of consistency, but is it reasonable to expect that he sustain such high levels of performance well into his late 30s? Albert will likely still be great at age 37. But $30 M great? As a Cardinals fan, I hope so. As a realist, doubtful.

So if he gets his $30 M per year asking price, expect it to be a 5-6 year deal. Any longer than that at that annual rate, and the Cardinals risk being financially hamstrung in a McCourt-ian sense by not being able to divorce themselves from Number 5’s weighty contract.

Either way, King Albert can thank his Prince for setting such a high bar.


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