Comments on: CC Sabathia signs with Yankees

By: Ingy

Ingy — Mon, 23 May 2011 00:07:26 +0000

Wow, this is great news!

By: Sal Paradise

Sal Paradise — Thu, 11 Dec 2008 03:05:52 +0000

I saw the news this morning on the Japanese morning shows, and they said 14.7 billion Japanese yen. Doing my quick calculations (divide by a hundred and round up) I figured he had made around 150 million dollars.

This exchange rate nonsense is getting silly. 160 million? That can’t be right.

By: Greg Foley

Greg Foley — Wed, 10 Dec 2008 19:49:38 +0000

Here’s another way to look at the seeming constant rate that teams pay players per WAR. It is possible to fairly reliably project a players performance one year out. So when a mediocre player signs a one year deal, the team pretty much knows what it is getting and the injury risk is low. However, it is much more difficult to project a player’s performance seven years out into the future. So many things can happen like (in CC’s case) and arm injury or excessive weight gain or loss of effectiveness. It is unrealistic for the Yankees to assume that CC will continue to be a +5.5 player for the entire duration of the deal. They have to account for the very real possibility that he will be injured or ineffective for a substantial part of the back end of the deal. Just look at the other huge contracts given to pitchers: Mike Hampton, Barry Zito and Kevin Brown. I don’t know exactly how much the accuracy of projections decrease as time increases but I do know that they decrease and that someone could assign numerical certainty value to the projection. Something like saying the first year projection is 90% accurate, the second year projection is 80% accurate etc. I’m sure someone has done this work already. The point is that the Yankees are not paying CC for +5.5 WAR times seven years, they are discounting the expected 5.5 WAR by the certainty of their projection for him, which in year seven, is very uncertain.

By: dan

dan — Wed, 10 Dec 2008 18:51:14 +0000

“According to the always reliable New York Post”

hahahahahhahahah

By: Jason T

Jason T — Wed, 10 Dec 2008 18:40:12 +0000

Yakker,

I understand that part of it. From the player’s angle I’d imagine they’d rather have as much as possible up front for the same reasons. Still though, it’d certainly help with payroll flexibility if you mixed front loaded and back loaded deals.

By: Bearskin Rugburn

Bearskin Rugburn — Wed, 10 Dec 2008 18:34:42 +0000

Since players that bring 5 or more marginal wins to a team are very rare, do you think it’s fair to price those wins at the same rate as everyone else? Adam Everett, for example only got 1 million for the lone win he will net his team, but it is not so hard to find a +1 win player.

What it all adds up to is that the deal is even better for the Yanks than you make it look because anything over +4 wins should have an extra premium on it (uber-marginal wins?).

By: Andy

Andy — Wed, 10 Dec 2008 18:30:19 +0000

I’m glad everyone thinks the economy is going to pick up in a year or two… I could use the work, money, and peace of mind… However, I think salary deflation will continue for more than just this year. 2003 is nothing compared to this year, and the economy didn’t even seem to start really souring (if not actually, then psychologically) until near the end of the season. Attendance is certainly going to dramatically drop off next year (can you see yourself spending $30 on a random night just to see a ballgame?), corporate sponsorship and spending will decline, and since these things tend to have a lag, I am willing to bet we’re going to see an even steeper salary deflation next year.

By: Yakker

Yakker — Wed, 10 Dec 2008 18:29:51 +0000

“Am I totally off base here?”

From a financial perspective, yes. One of the advantages to paying later is the time value of money. You never pay your taxes years before you have to, because a) you need to pay in today’s dollars, rather than taking advantage of inflation and b) you lose the ability to make investments on that cash now and have it “earning” money for you.

Same thing applies for MLB contracts.

By: Chanbara

Chanbara — Wed, 10 Dec 2008 18:27:12 +0000

Dave how do you calculate the +Wins?

By: Jason T

Jason T — Wed, 10 Dec 2008 16:37:49 +0000

If I were the Yankees I’d front load the s*** out of CC’s contract. Pay him Alex money now and decrease it every year. With Pavano and Giambi and Abreu off the books it’s there to spend. That way when the economy does pick up in a year or two (and NY’s payroll with it) there’ll be extra room down the line. He’s going to worth at least what they’re paying him this year (as Dave has already shown), so why not over pay a bit now so CC’s salary is more in line with his expected decrease in performance down the road. Am I totally off base here?