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Holliday Returns to the Cardinals

In a stunning turn of events, Jon Heyman managed to break a story about one of Scott Boras’s clients, reporting that Matt Holliday has resigned with the Cardinals for seven years and 120 million dollars with a full no-trade clause.

Make no mistake about it: Although he didn’t receive “Mark Teixeira money,” Holliday, who turns 30 next week, is a tremendous baseball player. Over the last 4 years, he’s accumulated about 24 Wins Above Replacement — an average of 6 wins a year. Of course, the Cardinals aren’t paying for what he’s already done, but what he will do in the future.

What are the Cardinals paying for? The market is still working itself out, but assuming an average market value of $4.4 million per marginal win, seven percent annual salary inflation, and 0.5 WAR a year decline, seven years, $120 million dollars indicates a 4.5 WAR player for 2010. With that number in mind, what is a reasonable projection for Holliday?

CHONE’s context-neutral projection for Holliday’s 2010 offense is .303/.379/.513, 29 runs above average per 150 games. (by the time you’re reading this, Sean may have moved Holliday to the Cardinal’s team page and adjusted for league and park). My own projection is very close to CHONE’s.

Holliday’s defensive reputation may have taken a hit in the minds of many during the 2009 playoffs, but most fielding metrics see Holliday as an above-average left fielder. Earlier this offseason (before most projections had come out), I used UZR and the Fans Scouting report and estimated Holliday’s defense at +4, and Jeff Zimmerman‘s recent UZR projections get the same result. Taking into account the positional adjustment for left field (-7.5/162), let’s call Holliday a -3 fielder per 150 games.

Adding it all up: +29/150 offense, -3/150 fielding, +20/150 replacement level = 4.6 WAR player. For all practical purposes, given the assumptions we’re working with (and dealing only with the guaranteed years of the contract), St. Louis gave Holliday a contract almost exactly in line with his market value.

It has been said before, but it’s worth repeating: paying average market value for a win isn’t necessarily a “dumb” move, but it isn’t “smart” either. It’s “average” …on average. Moreover, straight market value isn’t the only factor to consider in this particular case. Leaving aside the possibility that the actual value of a win might actually be lower this offseason (dropping it down to $4.4 million, the market value of a 4.5 WAR player over 7 years drops to about $109 million), seven years is a long time for a corner outfielder in his thirties. Yes, the 0.5 win-a-season decline curve takes this into account to a certain extent, but when a team gives a player a contract this long, it not only guarantees their “control” over the player, but also gives him a higher degree of security through his likely decline years. For this reason, players usually give something of a “discount” for that security. The Cardinals did not get such a discount. Moreover, the no-trade clause inhibits the Cardinals’ flexibility down the road — and even if Holliday is willing to waive the clause, that is almost always just another negotiating ploy for more money. In other words, that is more value the Cardinals gave up on top of the money for the deal. [I’m leaving aside the vesting option for an eighth year based on MVP voting.]

The Cardinals get a player who should be very good-to great for a couple of years, and above average for maybe a few after that. Perhaps that is worth it to make a run while Albert Pujols is still under contract (and perhaps to convince him to re-sign if there’s enough left in the budget to do so while filling the other 23 spots on the roster). Still, paying market value long-term for a player in his thirties involves a great deal of risk for a franchise, and even without the no-trade clause, an expensive Holliday in his mid-to-late thirties would be very difficult to move if St. Louis needs to do so. The road to ruin for many a general manager and franchise is littered with long-term “average” contracts for players like Holliday — it doesn’t take much of a drop-off (injuries, anyone?) to turn a seemingly “reasonable” contract into an albatross. Flags may fly forever, but the only sure winners in this deal are Matt Holliday and Scott Boras.