The David Price Extension

If you wanted to make a name for yourself as a journalist there were two things you could write about when it came to the Rays. 1) Chide them for their poor attendance or 2) Talk about how they’ll never be able to keep their young stars.  Two exists because of one, or so the story goes, and now we can talk about a new narrative that stems from two, because of one, though on a more individual level.  The Rays can’t keep David Price.  Errybody on the block knows this.  It’s just a matter of hours before he’s traded to the Yankees for nothing.

Don’t get me wrong, David Price will be traded.  Most likely after this season assuming contention, and perhaps at the trade deadline if things don’t come close to breaking right.  The Rays deferring nearly half of his 2013 salary to 2014 is the writing on the wall that tells us this.  Without getting into why this isn’t such a bad thing (ok just briefly it’s never a good idea for a small payroll team to put all their eggs in one basket and the seeds sown from any Price trade should plant trees for plenty of future generations) let’s talk about why a Price extension would NOT be a good idea for the Rays or maybe any other team.

I’m naturally skeptical about long-term health for any pitcher.  Much like how there is no such thing as a pitching prospect I believe that there is no such thing as a pitcher that can avoid injury over a decade.  Sure some prospects do turn into great pitchers and some of them go on to avoid injury, but it’s not the norm and generally this injury risk is not valued into contracts.  Because I am cynical about this my fear is that the pendulum will swing too far in the other direction and that my risk averse nature will be too conservative missing out on some efficiencies.  To do this let’s take a look at some comparisons of past pitchers.

The trick with anything like this is finding the appropriate pool of similar pitchers.  To that end I looked for all pitchers from 1961 – 2012 that met the following requirements over their first five seasons:

– Greater than or equal to 650 strikeouts (Price has 725)

– Less than or equal to 350 walks (Price has 259)

– Less than or equal to 350 earned runs (Price has allowed 276)

– Greater than or equal to 750 innings pitched (Price has 786.3)

You’ll notice that Price is (a good deal) better than these thresholds, but we want to cast a bit of a wide net so we’re still going to get plenty of guys that don’t walk many, strike out a bunch, go a ton of innings early in their careers, and don’t allow many earned runs.  You’ll see this pool below, but know that I’ve also excluded a few guys that also made the cut.  These are some good pitchers, but in each instance they have not pitched at least three seasons after their initial six.  This omits Clayton Kershaw, Felix Hernandez, Hiroki Kuroda, Jim Nash, Jon Lester, and Max Scherzer.  Each guy met the requirements, but the idea here is to see how each pitcher went on to do so let’s leave them out.

All that background out of the way let’s get to the meat and potatoes:

Here are the statistical lines for each player over their first six years.  Partial years were treated as whole years.  Price’s statistics do not tie into the Wtd. Avg. nor the median.  You can see a lot of well known pitchers, all of which were phenoms as they hit the ground running.  Clemens, like Bonds, gets a ton of flak for the steroids thing, but before these guys needed steroids they were utterly incredible.  Clemens compiled nearly 40 WAR over his first six years in the league.  I don’t need to tell you that’s pretty good.  The big takeaway here is that we have a weighted baseline for how these pitchers did over their years of control.  Let’s take a look at what they did over the rest of their careers:

My big beef with pitchers is that they’re going to break down due to injury or ineffectiveness.  Well my emotional, anecdotal evidence HAS caused me to be a bit risk averse.  Now some of these lines are pulled out of whack by guys like Roger Clemens and Frank Tanana that went on to pitch another 15 years, but we should include them because there’s a non-zero chance that Price could do the same exact thing.  Let’s compare the first six years to the rest of their careers so we can get an idea of how Price might perform throughout his free agent years:

The weighted average tells us that the average pitcher here saw a 22% increase to their ERA, and so on.  We can apply these weighted average growth figures to what Price has already done and get an idea of what he would do if he ages at the middle path of all these guys.  Not shabby.  Most fans would take a pitcher putting up 3.3 WAR per 200 innings and accumulating another 23.6 WAR throughout his free agent years.  His ERA- and FIP- would both be better than league average, and quite a bit better on the ERA front.  He’d manage to strikeout over 19% of batters faced while still walking around 8%.  He would retire with likely over 2,000 strikeouts.  Only 65 guys have that many.  David Price could go on to have a Hall of Fame career, but would it be worth it to pay for that?

We can hypothesize about the extension that Price might sign, but first we’ve tip-toed around one land mine.  So far we’re only looking at Price’s first four years while each other pitcher had six years in the bigs.  That leaves us two years, and really three before Price is available as a free agent.  If the Rays were to offer Price an extension it would guarantee this year, the next two arb-eligible years and then let’s say another four on top.  After all, if the Rays aren’t getting some Free Agent years then why would they extend just to create cost certainty in the years they do have control?

So let’s project Price going forward using some projections:

That’s pretty incredible for 2013.  Price essentially had that line in 2011 putting up 224 innings and a 3.32 FIP.  He was worth 4.7 WAR that year.  Let’s say he’s worth 4.5 this year and let’s say he can do that for the next two, after all, he’s in his prime and it’s likely he could put up even better numbers so I think this walks the line of conservative and optimistic just fine.  Here’s a quick look at what a contract might look like:

This assumes $/WAR inflation of 5% which is also the same for the discount rate that helps us determine present value.  The big takeaway here is that Price is going to sign for the largest AAV for a pitcher, ever, and that we are going to expect a downturn in performance losing about half a win per year.  That’s roughly 15 wins over his four free agent years and we thought he might get another 23 before even factoring in his last three years of control.  Keep in mind that the Surplus column compares Value to Present Value, which many have qualms with.  If we compare Value to Future Value then Price would not be worth his AAV in any year of his Free Agent contract.  Overall, this would look like a good deal for the front office, but that’s mostly because of the years when his arbitration values suppress his actual value.

The figures quoted throughout here have wide error bars and should not be taken as gospel, but it’s not hard to see that David Price’s free agent years are going to come at a significant cost and it’s not likely that he will pitch well enough for the deal to be considered smart or worth it.  The Rays won’t be extending David Price and it’s not just because they’re cheap.  Any team that does sign Price long term is going to be looking at a decreasingly valuable player making the most money at his position.  Good luck with that.

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About Jason Hanselman

Rays fan.
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