Differentiating Between Value and Production

Looking back at the 2011 season, it’s easy to forget about Cameron Maybin. As the centerfielder of the hapless 71-91 San Diego Padres, Maybin graded out surprisingly well. At the young age of 24, in his first full season, he posted a .325 wOBA with 40 stolen bases and played above-average defense according to most metrics. That’s not to say the young outfielder didn’t have his flaws. His contract skills leave a lot to be desired (.264 batting average despite a .331 BABIP) and he needs to improve his plate discipline (he strikes about three times as often as he walks).

Ben Nicholson-Smith of MLB Trade Rumors wrote a good piece about the Padres offering him a modest contract extension that buys out most or all of his arbitration years through 2015. Nicholson-Smith notes that arbitration tends to reward sluggers, rather than players with speed and defense, making Maybin rather underrated and perhaps willing to agree to a more team-friendly deal.

I think this situation is great to highlight the differences between value and production. If you poll 100 Phillies fans, asking them who would provide better value between Maybin and Shane Victorino, I’d bet the overwhelming majority would vote for the Flyin’ Hawaiian. It’s hard to blame them for picking the player worth at least 3 WAR (per FanGraphs) in each of the past five seasons over the player who just completed his first full season, despite being worth nearly 5 fWAR.

However, in 2011, the Padres paid Maybin $429,000. FanGraphs values Maybin’s 4.7 fWAR at $21.2 million, leaving the Padres with just under $21 million net value. Meanwhile, the Phillies paid Victorino $7.5 million while his 5.9 fWAR was worth $26.6 million, leaving them with about $19 million net value.

Nicholson-Smith cites Franklin Gutierrez, Jose Tabata, and Denard Span as players that could be used in comparison with Maybin when structuring a multi-year contract extension. Gutierrez and the Seattle Mariners agreed to a four-year, $20.25 million contract, for example. The yearly salary escalates from $2 million in the first year to $7.5 million in the final year, with an overall average annual value of $5 million. Over the last five years, the average value of one win above replacement has ranged between $4-4.5 million. Assuming that holds true and assuming a contract with a $5 million AAV, Maybin would only need to be worth 1.11-1.25 fWAR per season.

On the other hand, Victorino is entering the final year of his three-year, $22 million contract. He earns $9.5 million this season before heading off into free agency if the Phillies do not sign him to an extension. As a 32-year-old center fielder with a history of consistency in all aspects of his game, he would rank among the elite free agents, even in a potentially-crowded market for center fielders. It is unlikely that Victorino would provide anywhere near as much bang-for-the-buck with his contract as Maybin, even though he is a better bet to be more productive. For instance, if Victorino signs a contract similar to the one the Phillies and Raul Ibanez agreed to several years ago (three years, $31.5 million; AAV $10.5 million), he would need to be worth between 2-2.5 fWAR per season over the life of the contract. While I would feel comfortable Victorino would live up to that, it isn’t as easy to live up to as a realistic contract for Maybin.

(click to embiggen)

This is not to say the Phillies should go out and try to acquire Maybin at any cost. They should completely ignore him, in fact. Market size does play a role in this: Maybin is significantly more valuable to the Padres (a small-market, rebuilding team) than to the Phillies (a large-market, win-now team). However, it is a great illustration of the type of thinking that goes into structuring every contract. It isn’t just a matter of “can this player be productive?”; it is a matter of determining how productive he needs to be and the likelihood of that player meeting the criteria, among a plethora of other factors.

(h/t to @Slap_Bet for inspiring this topic)

Leave a Reply

*

24 comments

  1. LTG

    January 05, 2012 09:34 AM

    Why should value be reserved for econometrics? If a team values wins and does not care for the economic efficiency of those wins, it has no reason to distinguish value from production. Using value in the narrow economic sense leads to crazy arguments such as that the MVP should go to the player who brought in the most money to his team. I doubt BB agrees with that position, but something like it seems to follow from this distinction between value and production. The award isn’t MPP after all.

  2. Phillie697

    January 05, 2012 10:07 AM

    LTG,

    That kind of argument, and I’ve been saying this for months, subsumes that there is no limit to the economic inefficiency. Even the Yankees have their limits.

    If I remember correctly, a team filled with replacement-level players is expected to win somewhere around 50 games. To win 100 games, that’s 50 wins the team has to acquire through its roster of hopefully all above-replacement players. 50 wins at $4.5M a year is $225M; not even the Yankees’ payroll is that high. So it is imperative every team find SOME value somewhere. Yes, even the Phillies. You and I can debate where that value should come from, but there is no debate we still need some despite being able to spend $178M a year, especially since we’re carrying some dead weights already.

  3. Drew

    January 05, 2012 10:24 AM

    “…crazy arguments such as that the MVP should go to the player who brought in the most money to his team” <- wait, isn't this the argument for paying Ryan Howard $25mm a year?

    If anything, Bill's argument is more inclined not to value off-the-field factors. The sabermetrician's valuation is simply an on-field analysis, and therefore, considers Ryan Howard a poor investment. And like Phillie697 mentioned above, EVERY team has a financial limit. Every team is trying to minimizing cost, and paying more per player raises the marginal cost of a win.

  4. Phillie697

    January 05, 2012 11:01 AM

    So the Cubs new GM has been doing some good things, like turning a 30-year-old has-been pitcher into a 25-year-old pitcher who showed some real improvements in his peripherals in 2011 while making league minimum and has 4 more years of cost-control. How come RAJ can’t make moves like this? Oh wait, nvm, that’s right, 25-year-olds don’t register on RAJ’s radar…

  5. Nik

    January 05, 2012 11:49 AM

    Voldstad has just about 0 value and is a non-tender candidate next season. That trade is basically between 2 replacement level players, so give it a rest.

  6. KH

    January 05, 2012 12:11 PM

    Come on Bill Maybin had one good year partially fueled by a high BABIP. He is a young player so maybe he will be good as this going forward or wont but maybe he wont. You could have done better then Cameron Maybin versus Shane Victorino imo.

  7. KH

    January 05, 2012 12:13 PM

    I just want to say I agree with the premise of the post I just think Cameron Maybin versus Victorino is a poor choise to anchor it around.

  8. Phillie697

    January 05, 2012 12:19 PM

    Volstad had a 3.84 SIERA and a 3.64 xFIP last year, while simultaneously increased his K rate and decreased his BB rate, and he is a ground-ball pitcher (52.3% GB rate). He was plagued by an insanely-high HR/FB rate (15.5%). He’s only 25, and one can do a lot worse than someone like that at the back-end of a rotation. I’ll take Volstad over Blanton, and I LIKE Blanton. He’s definitely NOT a replacement level player.

    That said, no, it’s not that big of a deal, so no point getting into a big argument about it.

  9. JC

    January 05, 2012 12:36 PM

    @KH Maybin’s BABIP last season was only 0.002 points higher than a few years ago in Fla (granted there were big differences in PA). I think we’ll need more information to say his season was partially fueled by BABIP. He did reduce his K% and is pretty good defensively.

  10. Phillie697

    January 05, 2012 01:12 PM

    I think KH is confusing BABIP for pitchers with BABIP for batters. Pitchers BABIP usually hover around .300 except for a few very rare exceptions (See Cain, Matt), but hitters have some control over their BABIP by, say, hitting more line drives. So a .331 BABIP on its own is not “inflated” for a hitter. It might very well be if you look closer, but it might also very well be that he just has a good batted-ball profile. There is nothing to point to it being one way or the other with Maybin, at least not yet.

  11. LTG

    January 05, 2012 04:24 PM

    So, I’ll just say this: Drew and Phillie, you haven’t responded to my point but to a point I didn’t make. You assume BB’s position is not reducing value to economic measures (not even efficiency but, in fact, net income or surplus production over cost), whereas the article clearly assumes that value is simply economic and we have a different term for something else which has a legitimate claim to being called value, namely production. I’m against reducing value to economics. You are against reducing value to production. So, you see how your points are orthogonal to what I said.

    As for the MVP point: BB is on a slippery slope. Once value is associated with cost-saving, why not include any net income a player is responsible for as the measure of his value? Then, you arrive at the “money-brought-in” version of MVP, which is absurd.

  12. Bill Baer

    January 05, 2012 04:25 PM

    @ KH

    I picked Maybin for that precise reason: a young, vastly-undervalued CF compared to an aging, appropriately-rated CF.

  13. Bill Baer

    January 05, 2012 04:27 PM

    @ LTG

    MVP awards are mostly for the fans, so I don’t really care how you dish them out. I do think the V in MVP is a misnomer, though. Everyone seems to approach it as MPP and I think that’s in the spirit of the award.

  14. LTG

    January 05, 2012 04:28 PM

    Also, pointing out that teams have to spend efficiently eventually only establishes that economic considerations serve as instrumentally valuable means toward the end or final value of production on the field. Since what is finally valuable is more worthy of the title value than the instrument for achieving the final value, production ought not be distinguished from something else called value.

  15. LTG

    January 05, 2012 04:34 PM

    BB,

    You didn’t answer why production should be distinguished from value rather than called a kind of value, in fact, the central value in the game of baseball. The MVP point was to show precisely that what is recognized as value by most people who operate, play, and watch the game is not related to money but to production.

  16. Phillie697

    January 05, 2012 04:49 PM

    @LTG,

    If you’re arguing reducing value to economics means it’s basically the same as production, I can agree with that. After all, WAR is derived from production. But I think what BB is saying is that while that’s true, other factors come into play even after one determines the economic “value.” As you yourself conceded, the marginal value of every dollar is not the same to every franchise; for the Phillies, $12M and $13M a year might as well be the same damn thing, but not if you’re the Royals or the Marlins (pre-new-ballpark-and-spending-spree, of course). The thing is, you can’t make that kind of analysis until AFTER you’ve established what the player’s economic value is. That’s BB’s point, I think.

  17. LTG

    January 05, 2012 05:29 PM

    I’m not challenging the point of the article but a presupposition of the article, that value is distinct from production (see the title). It might appear a semantic issue, but it is not. If value is reduced to economic measures then lots of things follow about what teams have reason to do that ought not be allowed in any competitive game.

    On recursion:
    1) Not sure why the point was made since any definition is recursive in the sense that what is on one side of the definition is the same as what is on the other side of it. So, it is possible to say that something is valuable if and only if it is productive. This looks recursive in a way but is simply a bi-conditional that tells us what can be substituted for what in a line of reasoning. But I didn’t claim anything like this anyway, since I didn’t make a reductive move.

    2) If something is productive (in baseball terms anyway) then it is valuable. But not vice-versa. Not everything valuable is productive. (Think money in the Pirates pockets.) So, no, no recursion there.

  18. Bill Baer

    January 05, 2012 05:58 PM

    I wouldn’t call value and production distinct in that they are separate realms of analysis. I don’t think that is implied in the title or within the article. At the very least, it wasn’t intended to be.

    Ascribing value is more or less analyzing production when taking economics into account. Most people tend to view them as synonyms (e.g. “How valuable was he?” vs. “How productive was he?”), which was part of my inspiration for writing this.

    square:rectangle::value:production

    All (legitimate) analyses of value should include production, but all analyses of production needn’t include value.

  19. Phillie697

    January 05, 2012 06:12 PM

    You know it’s the off-season when BB actually engages in a debate about what is value and what is production…

  20. LTG

    January 05, 2012 06:37 PM

    “All (legitimate) analyses of value should include production, but all analyses of production needn’t include value.” This I would agree with.

    “square:rectangle::value:production” This doesn’t seem right. Not all legitimate analyses of squares include rectangles generally, i.e., there are truths about squares that are not true of non-square (or irregular) rectangles. This is just another way to see that value is not a subset of production but the other way around. The subset analysis, however, doesn’t provide sufficient information, since there are special inference relations between production and other kinds of value (at least in baseball and other sports).

    But, yeah, I think we are on the same page now.

  21. Phillie697

    January 06, 2012 02:05 PM

    JEFF BAGWELL IS A BUM!!! MY GRANDMOTHER CAN COME UP WITH 83.9 CAREER WAR IN HER SLEEP!!!

  22. Scott G

    January 06, 2012 02:25 PM

    I’m kind of late to the party, but… while I was reading this, all I could think about was something along the lines (I think) of the first part of LTG’s first post.

    Until we know that the Phillies have a set budget, and we know what it is, what is the point of critiquing their spending? I don’t like how we are operating under a “we need to make up our wins in the most efficient way possible” mindset. Who cares if the “value” the Phillies are getting out of Shane Victorino is $2 Million worse than the Padres are getting out of Maybin. If the Phillies are spending $160 mil, and the Padres are spending a little over $45 mil, are we really worried about this?

    I think this would be a great way of operating if there were a salary cap, where you know what you can spend and need to do the best within those confines.

Next ArticleLooking at Miami and Atlanta's Off-Seasons