EDIT: Check out what Matt Swartz has to say about the extension at Baseball Prospectus. He makes a lot of good points. Swartz specifically adjusts for inflation, something I was too lazy to do in the analysis below.
Jim Salisbury of CSN Philly has the scoop. Five years, $125 million extension for Ryan Howard and it kicks in after the 2011 season.
From 2005-09, Howard has contributed 21.6 WAR, an average of 4.3 per season. In that span of time, he has been paid $26.6 million and provided an overall value (production minus salary) of $66.6 million. Seems like a great deal, right?
The going rate for a win in 2010 is about $5 million, which means that — assuming that figure stays static — in 2011 and ’12, Howard will be paid as a 4-win player. From 2013-16, he will be paid as a 5-win player. Using the ten-year forecast from Baseball Prospectus, Howard will be worth 3.3 wins (WARP3) in 2011 and decline gradually.
Over the length of the extension, Howard is projected to accrue 11.7 WARP3, an average of under 2 per season. Even if we make the extremely generous and unrealistic assumption that the value of a win is $5 million not just in 2010, but throughout the length of the contract (it won’t — it will rise most likely), Howard still provides an increasingly negative value to the Phillies. $84.5 million specifically from 2012-17. In chart form:
*Note: 2010-17 numbers are projected and assume a static $/win of $5 million (because it is impossible to know exactly what the going rate will be). Howard’s value is likely to be much worse than indicated above. Additionally, the 2017 season is a club option with a $10 million buy-out.
This extension pushes the Phillies’ guaranteed payroll in 2012 to about $87 million, tied up to just eight players including Howard: Roy Halladay ($20 million), Chase Utley ($15.3M), Joe Blanton ($10.5M), Shane Victorino ($9.4M), Placido Polanco ($6.4M), Carlos Ruiz ($3.7M), and Brad Lidge ($1.5M). There may be six arbitration-eligible players as well in Cole Hamels (fourth year), Kyle Kendrick (second), Ben Francisco (second), Scott Mathieson (second), J.A. Happ (first), and Mike Zagurski (first). In short, the Phillies will be paying a lot of money to just a few players, almost all of them past their prime. Furthermore, the team will have very little flexibility as few teams will want to take on such expensive contracts.
Thinking more short-term, Howard’s $20 million salary from 2011-13 may prevent the Phillies from having the financial flexibility to sign right fielder Jayson Werth to an extension, which means that he will most likely become a free agent after this season. You may recall that two months ago, I suggested the Phillies should think about trading Howard to give themselves the ability to extend Werth. Obviously, GM Ruben Amaro disagreed and apparently has tremendous faith in Domonic Brown to transition seamlessly to the Majors. The 2011 team will look a lot like this year’s team, only with Dom in right instead of Werth.
There are a couple positives with the deal. The first, obviously, is that the Phillies will not have to look for a first baseman for a long, long time — barring injury. It is unfortunate, though, that the Phillies have locked up such security at the least important position on the baseball diamond in the National League. Additionally, the Phillies may end up saving themselves several million dollars every year theoretically as the post-2011 free agent market may include Albert Pujols and Prince Fielder and both may exceed Howard’s average annual value of $25 million per season. Both players are likely to be signed to extensions (in Fielder’s case, perhaps with a new team) beforehand.
Most Phillies fans will love the extension, as it keeps a fan favorite in town for a long time. Stat-savvy fans immediately dislike the deal. Most Phillies fans will come to loathe the deal in several years when the Phillies are hamstrung by Howard’s relatively large salary and declining production.
Already, Howard has shown signs of decline as his walk rate has declined every year since 2007 and sits at a paltry 3.6% thus far in 2010. His BABIP has been lower as more and more teams have employed an infield shift against him. Opposing teams have also been bringing in more left-handed relievers to face Howard and his production against them has swiftly dropped. His strikeout rate has declined gradually but so has his isolated power. Using FanGraphs’ pitch type linear weights, Howard’s production against the fastball has dropped every year since 2006. He has swung at more and more pitches outside of the strike zone every year since he came into the Majors. Finally, his whiff rate (swinging strike percentage) has increased every year since 2006.
This will be a fun ride for two, maybe even three more years, but it will quickly become tumultuous.