Marco Scutaro and Irrational Exuberance

The perils of rumor reaction writing – Baggarly has amended his original note to suggest that the Giants offer is two years with a vesting option, not three years. So, adjust accordingly.

There are times when a player undergoes a dramatic transformation and essentially forces us to abandon everything we knew about that player previously. Cliff Lee. Jose Bautista. R.A. Dickey. It happens. Guys reinvent themselves, and as a result, their new contracts reflect the recent reality, not the average of all their Major League seasons.

And sometimes, guys have monster rebound seasons, reminding everyone of their previous levels of success, and enable teams to have confidence to pay premium prices to get them under contract. Adrian Beltre, for instance. Giving a veteran player a huge raise is not always an overpay. Sometimes, he’s just done enough to change the market’s opinion of his skills, and his performance requires a drastic change in compensation.

So, I’m not willing to say that every big raise for a veteran is a de facto overpay. But, even with all that said, I can’t say I understand what Marco Scutaro did in 2012 that has made the market drastically reevaluate his value.

According to Andrew Baggarly, the Giants current offer for Scutaro stands at $24 million over three years. Two years ago, when Scutaro was a free agent, he got $12 million over two years. After one year, the Red Sox essentially gave Scutaro to the Rockies in order to free up some payroll space to sign Cody Ross. In July, the Rockies gave Scutaro to the Giants in exchange for non-prospect Charlie Culberson, and picked up part of his remaining salary to help the trade go through. In the last year, every team in baseball has had the chance to pick up Marco Scutaro for a pittance in both salary and talent. Now, headed into his age-37 season, the bidding for his services is intense enough to require a three year commitment?

For the record, here are Scutaro’s offensive performances over the last five years.

2008 32 592 0.267 0.341 0.356 0.315 89
2009 33 680 0.282 0.379 0.409 0.353 112
2010 34 695 0.275 0.333 0.388 0.321 93
2011 35 445 0.299 0.358 0.423 0.344 111
2012 36 683 0.306 0.348 0.405 0.329 99

His 99 wRC+ last year is basically an even match to his five year average, and a bit of a step back from his 2011 performance. If anything, these numbers should suggest that his stock should have gone down slightly. He’s a year older, coming off a worse season, and is now more of a second baseman than a shortstop; there’s nothing here that really suggests that teams should have upgraded their evaluation of Scutaro over the last 12 months.

But, of course, he’s not getting this contract based on what he did the last 12 months. He’s getting this contract what he did the last three months, or at least, the last three months of the 2012 season. Because those numbers do look a lot different.

    2012 36 268 0.362 0.385 0.473 0.370 137

For the final two months of the regular season, Scutaro was an offensive monster. And then he kept it going in the playoffs, and was one of the main reasons the Giants ended up as World Series champions. From August to October, Scutaro gave the Giants 330 excellent plate appearances, and played at a level that would easily justify a significant contract, even with his advanced age.

But, unfortunately for whatever team ends up giving him three years, it was almost certainly a mirage. Nearly the entirety of his offensive surge can be chalked up to a huge spike in BABIP, as his core skills stayed basically unchanged. Scutaro is the exact same kind of player he was a year ago – an extremely high contact hitter who looks good when his balls in play go for singles and pretty meh when they don’t. There’s real value in having a guy who almost never strikes out, and Scutaro hasn’t really shown too many signs that he’s getting worse as he gets older. But we shouldn’t be fooled into thinking that anything Scutaro did in the second half represented a real improvement on his behalf.

Assuming his body holds up, Scutaro has a really nice chance to be a +2 win player in 2013, so giving him $8 million for next year is perfectly acceptable. But, unless Scutaro has some kind of age-defying magical powers, expecting him to still be an average player at 38/39 is probably a stretch. Overpaying at the end of the deal is normal in free agent contracts, but generally you hope to overpay in a few years in order to underpay now. It’s hard to see how Scutaro is a big enough value in 2013 to justify the overpayment in 2014 and 2015.

It’s not going to be a huge waste of cash. If Scutaro gives the Giants four wins over the next three years, then the contract will be close to fair. And there’s a decent chance that Scutaro gives them four wins. But this is also the kind of player that generally doesn’t demand market price wins, and he’s at the age where the skillset could just implode entirely. It looked it did in the first half of 2012, for instance. Scutaro isn’t exactly a sure thing, even for next year, and certainly isn’t any kind of strong bet for the future.

Even accounting for inflation, I would have pegged Scutaro for somewhere in the 2/12 to 2/16 range. The contract crowdsourcing results put him at 2/16. The AAV here is just fine. The third year for a 37-year-old, coming off a year where he really didn’t do anything that should change anyone’s opinion of his skills, is a bit of a surprise.

The Giants will generate a decent amount of additional revenue from their World Series run, and having Scutaro on the books in 2015 probably won’t hinder them from winning any more than Freddy Sanchez did the last few years, but it’s hard to see why a player who was essentially free in July should require this kind of commitment in December. That said, we should be evaluating the move itself, not as much the perceived motivations behind the move. And while this looks like an overpay based on a few flukey good months, Scutaro’s a nice player who fills a hole for the Giants at a price that isn’t likely to make him a disaster.

I don’t think this market correction is necessarily justified, but I also think we should keep context in mind here. This is probably an overpay on the order of $5 to $10 million for a team that just won their second World Series in three years. I don’t think this is going to break them.

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Dave is a co-founder of and contributes to the Wall Street Journal.

40 Responses to “Marco Scutaro and Irrational Exuberance”

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  1. schlomsd says:

    He’s good in odd years and bad in even years so it makes sense for the Giants to give him a 3 year contract starting in 2013 as that covers two odd years.

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  2. chaz says:

    I think there was a miscommunication somewhere…now they are saying they offered 2 years plus an option for a third.

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  3. GiantFaninDodgerLand says:

    Supply and demand. Scutaro is the best 2b free agent on the market. It doesn’t matter that he isn’t worth the money, just that the Giants can’t afford to have a replacement level player at 2b if they want to make another championship run.

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  4. fergie348 says:

    Giants need a gap filler and Scutaro is the best option they’ve got. By the 2015 season we ought to mostly be seeing Joe Panik at 2nd, so Scutaro might be the super utility infielder as Theriot was last year and Uribe was in 2010. The money’s starting to flow and accomplished 2Bs are not exactly rotting on the vine. Personally, I think the Giants should try to trade for Ian Kinsler, but they’d probably have to trade Brown to get him.

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  5. zenbitz says:

    Giants are screwed here even with the original nightmarish 3/$24. Someone has to play 2B. Keppinger/Theriot?

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    • JonSFG says:

      What? I’m guessing you don’t follow the Giants at all.

      Scutaro would be playing 2B fullt-ime, and Brandon Crawford has a stranglehold on the SS job, primarily due to the amazing defense he showed in the second half of last season, especially during the playoffs.

      Not to mention, he’s progressing decently on offense as well.

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  6. Graham says:

    Comments about context are definitely warranted here. You can’t just evaluate what Scutaro’s numbers are worth in a vacuum; you have to factor in who else is available, both externally and internally. There’s no one else on the FA market that is particularly exciting, and handing the job to the underwhelming Nick Noonan is not exactly a great plan, either. Plus the Giants don’t have much in the way of trade chips at the moment, and are likely anxious to hold on to the few pieces they have (e.g. Gary Brown) because their young core is going to start getting expensive soon.

    Given all of this, I’d be fine with Scutaro at 2/$16 with a vesting option for a third year, so long as the option is more than just a rubber stamp for a handful of at-bats. For what it’s worth, I also think the Pagan deal will end up looking pretty decent given what happens with the rest of the market. Affeldt will likely end up the biggest overpay of the bunch, and even in his case, the Giants could make a reasonable argument that the deal was a sound one, factoring in a World Series revenue premium.

    I think the Giants are actually pretty smart to more or less stand pat this offseason, returning last year’s roster and waiting to see how things shake out. They’re a competitive team right now, and I frankly don’t see many players available that would really make much sense for them to add, given their budget and roster situations. Better not to throw big money at unknown quantities, and retain the payroll flexibility for the deadline or further off scenarios.

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  7. Steve says:

    The Giants haven’t had much luck signing players to contracts after trading for them or bringing them in for short money and seeing them finish the season strong. See also: Cody Ross, Aubrey Huff. Scutaro would probably be another disappointment.

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    • The biggest question is who will play 2B for the Giants? The minors are thin so a trade is probably out and there is zero options on the free agent market. This is a reasonable deal when you look at the money being dished out this off season.

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    • Celeste Johnston says:

      Marco is a line drive hitter and those type of hitter thrive in AT&T. Sure he may only be a part-time player at 40. That doesn’t concern me. Joe Panil might be developed as we want him to be by that time. Marco’s skills will not diminish in the same way as did Aubrey Huff. I’m happy with the deal!

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  8. Mitchell says:

    Going with the original 3/24, at $5 mil per win, the Giants are expecting 4.8 WAR out of him in 3 years. I don’t think it’s too far-fetched for Scutaro to average 1.6 WAR in the next 3 years.

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    • Tom says:

      Good analysis – Remember when this type of analysis used to be the norm? Scutaro’s WORST year in the last 5 years has been 2.4fWAR

      So even if you start at 2WAR next year down to 1 WAR in the final year. It’s 4.5 WAR at 24mil (a litlle over 5/mil win over the life of the contract).

      I find it very odd that an author that’s been preaching inflation for the last 3 years calls this irrational exuberance… is a little over 5mil/win (average over the next 3 years) that “irrational”?

      It seems like the typical WAR analysis is done when trying to justify deals, it’s conveniently ignored when it doesn’t fit the narrative.

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      • Baltar says:

        I agree with your analysis. Dave should have basically said this.
        What I don’t like is that on FanGraphs, the authors evaluating this and the Pagan signing both said something like, “What the Hell. The Giants have some extra money to throw around because of the World Series. Paying an extra few million is no big deal.”
        This is extremely sloppy reasoning, especially coming from FanGraphs writers and even more especially because both deals were justifiable without that nonsense.

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  9. Robbie G. says:

    Looks like another overpay by a championship team looking to bring back the entire crew.

    I don’t recall the Giants front office giving up much for Angel Pagan, either. The Giants front office is clearly very skilled at identifying undervalued position players in their thirties (decline phase) during the season and acquiring these players for a pittance. Why not just do this again in 2013? Rather than overpay for the likes of Pagan and Marco Scutaro? Why isn’t the Giants front office aware of one of its greatest strengths?

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    • gdc says:

      Because sometimes you get Angel Pagan and other times you get Andres Torres…seemed like a fairly even deal at the time. They did let themselves get outbid on Juan Uribe who looked as valuable in 2010 as Scutaro in 2012 and missed his sudden dropoff. But maybe the cool air at AT&T lets older players not get as worn down in the summer, regardless of Soriano’s opinion.

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    • DrBGiantsfan says:

      In a market where Shane Victorino gets 3/39, 4/40 for Angel Pagan is not an overpay. Neither is 3/20 an overpay for Marco Scutaro who only has to produce 4 WAR in 3 seasons to earn the contract.

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  10. Jonny Gomes Jersey says:

    Scutaro actually signed for 2/$12.5 and a $6 million option for 2012. Combined, that totalled 3/$18.5.

    Not saying age 37-39 is the same as 34-36, but he won’t get paid that much more over the next three years as the past three.

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    • Shankbone says:

      I wish your jersey was French Vanilla, Jonny Gomes. Great point, Scutaro has been paid the moneys, and he has delivered above and beyond in the past 3 years. Its uncertain when the decline phase starts, but Scutaro’s best in the majors contact skills and his short easy swing make for decent odds. He got a signing bonus and another 18MM – 6MM a year. When you look at what else was on the market, that looks like a steal to me.

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  11. DrBGiantsfan says:

    “But, of course, he’s not getting this contract based on what he did in the last 12 months. He’s getting this contract what he did the last 3 months, or at least the last 3 months of the 2012 season.”

    What an idiotic comment! If Scutaro was getting this contract based on his performance after the trade to the Giants and the postseason, he’d be getting about $20 M per year! He’s getting a contract, which BTW, looks like it’s actually coming in at 3/20 rather than 3/24, which will be even-steven if he produces just 1.33 WAR/year. THAT is not based on anything he has done in the last 5 years in which he has not put up a WAR of less than 2.4. It is based on a REASONABLE expectation of what he is likely to produce over the next 3 years.

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  12. fergie348 says:

    Sounds like 3/20 and he’s going to be playing his spring training ball in Scottsdale. I’d say it’s fair given the market and the dearth of qualified 2B starters out there. Happy G’s fan..

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  13. PatientObserver says:

    I think some people are under-rating the decline phase most players exhibit during the latter parts of their careers. To expect a player to keep playing at a consistent rate into his late 30’s is a little bit unreasonable IMO.

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  14. Brian says:

    The contract at 3/$20mil seems reasonable for filling a major hole, especially in light of guys like Ludwick getting 2/$14 and Gomes 2/$10.

    Another major thing about Scutaro is the flexibility that a team has with regard to his position. While his best position is probably 2B at this point, he can play 3B well and pitch in reasonably at SS if needed. That has value. I think we, as a community, still do a fairly poor job of factoring positional flexibility into accounts of value. A player with demonstrated positional flexibility that allows a team to adapt over the course of the ebbs and flows of a 162 has value beyond a comparabe player locked into one position.

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  15. Evan says:

    The contract makes sense when you consider that Scutaro is the kind of veteran, put-the-ball-in-play, bat control 2-hole hitter that Bochy and Sabean imagine when making love to their wives.

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  16. Cuban X Senators says:

    . . . Not that Sabes isn’t a sucker for a Randy Winn . . .

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  17. AF says:

    Apparently the contract is 3 years guaranteed for $20M.

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  18. Hurtlockertwo says:

    Two words, Emmanuel Burriss. If there is a worse second in baseball I haven’t seen him. This guy really, really sucks. I’m glad the Giants resigned Scutaro
    just so Burriss doesn’t play.

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    • EB says:

      Noonan prob gets the start before Burriss at this point. Burriss was DFA’d and unclaimed by all other teams in MLB in case anyone wondering about his perceived talent level.

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  19. Eminor3rd says:

    I have to agree with a lot of these commenters. I don’t think it’s possible to do a good job of evaluating this deal without considering the Giants’ alternatives, both in terms of marketplace conditions and internal options. This is unlike you, Dave.

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    • Larry Yocum says:

      Nah, hating on the contracts signed by Giants players seems to be a trend with Mr. Cameron and I’m not sure I totally understand.

      I wonder if he would like to retract the one he wrote last year on Matt Cain when it looks like it would have cost the Giants a good $25+ million more if they had let him free agency guaging from the interest that Greinke is drawing. It was a good signing then, but looks like a great signing now as the timing of the extension was perfect and prior to the market getting all crazy this offseason. Otherwise Cain probably ends up in Dodger blue and making a lot more money.

      Cameron also underrated Madison Bumgarner in previous articles as well by not even including him on the list of the top 50 Trade Value commodities (Bumgarner is easily a top 25 candidate in value, if not top 10). He also rated the Giants as just the 23rd best organization in baseball in 2010, just after winning the World Series. Usually I really like Cameron’s writing, but when it comes to rating or writing about the Giants, it seems very befuddling to me and I’m not really sure why he is constantly off on the value of the players they have. I am a Giants fan, so obviously I’m biased on this and admit it, but also as a regular baseball fan, it is pretty easy to view Cain’s deal in the proper context or rate the value of a young, cost controlled Madison Bumgarner or rate an organization higher than 23rd that just won the WS. It’s as if the Giants ran over his dog or something.

      This deal is a little steeper than I would like, but market values are up. This is much better than having to watch the statue that is Jeff Keppinger again (who will be overpaid by somebody in the next day or two) or relying on an injured Freddy Sanchez or the light hitting Theriot. Also, the second base position seems to have really dried up and is very top heavy and that has something to do with the increased value of Scutaro as well.

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  20. DaveP says:

    I agree with many of the comments that point out the problems with DC’s analysis, but few that consider the alternative. Based on what was out there, the only other choice was for the Giants to trade prospects to get a younger second baseman. Wouldn’t that have been a smarter thing to do? Wasn’t there a team out there that could have been tempted by even the Giants limited resources? Or is this just a case of Sabean being more comfortable with what he knows or likes (veterans) at a reasonable price? I really don’t mind the price, it is the age that bugs me. There is a real danger of being caught with their pants down if Scutero seriously declines like so many guys at this age (or younger). I will trust the FO, but I hope that they have a good contingency plan.

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    • Shankbone says:

      The age bugs you. The Sabean loves vets joke is dead. Belt is 24. Crawford and Posey are 25. Sandoval is 26. Bumgarner is 23. Cain is 28. Pence is 29. Until the Pagan/Scutaro signings, Pence was the oldest position player on the Giants. A couple vets ain’t no thang. The Giants have one of the best young cores in baseball. Sabean throwing a vet or two in the mix is good strategy. If they break, his strength of midseason scrounging will be the contingency.

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      • DaveP says:

        Midseason scrounging is a ok and expected contingency, but you didn’t really answer my question as to why didn’t they trade for a younger (28-33) established player?

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  21. Todd says:

    I think a number of concerns – particularly about “what happens in the third year” – will be somewhat mitigated in that Scutaro’s flexibility fits snugly with the Giants’ perpetual habit of mixing/matching at various positions. Even if they overpay for league average (or just under), you consider (as did other readers) supply/demand, as well as the fact that they’re continually shifting bodies around the diamond to deal with hot hands or slumps, injuries, and other factors. That seems to me as worth something beyond just the dollar per win concept, but it would be hard to quantify having a starter-caliber sub come in for Sandoval when the latter is injured, needs a day off, etc. That so many Giant regulars play multiple positions is often lost in many analyses, but I believe it is worth mentioning in this context.

    Scutaro profiles as the 2B starter in 2013, and depending on several factors – whether he stays healthy and adds value, whether Panik continues to hit, and what happens with Noonan’s evolution as a potential supersub-of-the-future – we may potentially a “return to supersub” status for Scutaro going forward. This differs from the Huff over-signing in that the latter could really only play first base, so while there’s necessarily overvaluing based on those Scutaro’s three magical months, the Giants’ continual game of hot potato with their 13 non-pitcher slots creates additional opportunities for guys like Scutaro to add value.

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