….or, the Return of the Contract Retrospective.
Jim Hendry is reportedly out as the general manager of the Cubs. I’ll leave a general summary of Hendry’s tenure to someone else. In the meantime, I thought that an appropriate tribute to Hendry’s time at the Cubs’ helm might be a retrospective look back at one of his signature moves: the eight-year, $136 million contract with Alfonso Soriano that began in 2007. The idea behind a contract retrospective is simple: it is easy enough to look at a contract and call it good or bad after the fact, but if we reconstruct what was known about the player at the time, did it make sense from that perspective? This one’s for you, Mr. Hendry.
What did the Cubs pay for, given the market at the time? Check out this salary scale from the 2007 off-season. Given the market price of $4 million per marginal win, a 10 percent annual increase in that price, and an half-win-per-season decline (Soriano was going to be 31 going into the 2007 season), $136 million over eight years meant the Cubs were paying Soriano as if he would be a five win player in 2007. That’s just in monetary terms — we’ll get to the other aspects below. What was a reasonable expectation for Soriano into 2007?
I remember always getting excited about Soriano plate appearances when he was with the Yankees: you never knew if he’d strike out swinging on a slider a foot out of the zone or launch it 400 feet. You did know that it wouldn’t take long to find out. Soriano had a couple of good-not-great seasons with the bat after being traded to the Rangers (he also mysteriously aged…), then
had a better season after getting traded to Washington prior to 2006. Let’s stick with a simple projection from prior to that season. For 2007, Marcel projected him for about a .356 wOBA, or about 15 runs above average per 700 plate appearances in that era’s run environment.
Fielding is a more complicated matter. Prior to 2006, Soriano had been a (terrible) second baseman with the Yankees and Rangers. The Nationals understandably wanted to move him to left field. Soriano didn’t want to move, and the situation looked like it might get ugly. Soriano finally relented, and had a good season in left according to UZR (+7 runs), and a great one according to DRS and TotalZone with hit location (+21 with both) as well as traditional TotalZone (+16). Soriano had always been fast, but it was still just one season of metrics with big error bars. There’s a lot of guesswork here, as numbers from second base don’t really help us. The aggregate average for his 2006 in left field was +16. Without going through a bunch of methodological stuff here, I’ll say that a reasonable projection for him given the data at the time would have been something like +8 over a full season in left field. I’ll admit that’s pretty sketchy — one could say it’s too generous from a statistical perspective, or too conservative given certain scouting reports. Objections noted, let’s move on.
For overall projected value, we have +15 offense – 7.5 positional adjustment for left field + 8 fielding + 22.5 runs replacement level, all adjusted down a bit for playing time, and we’ve go somewhere between three and 3.5 WAR projected for Soriano in 2007 given the information at the time. Let’s call it 3.5 WAR.
That is well below the five WAR the Cubs were paying him to be. According to the salary chart from above, the biggest contract a 3.5 win player like Soriano should have gotten was something like seven years and $69 million. Of course, the Cubs saw things differently, perhaps in his fielding. And, indeed, in that first season Soriano seemed to defy even that lofty expectation, putting up seven wins. He not only out-hit his Marcel projection (he had a .380 wOBA), but put up a +33 UZR in the outfield. Of course, projections aren’t put out as certainties, but as midpoints of probabilities. This is especially true in the case of defense, and the fact that DRS and TotalZone weren’t quite as high on Soriano in 2007 as in the previous season demonstrates that one has to big cautious with defensive metrics.
Nonetheless, after 2007, the Cubs could feel pretty good about the contract, they had gotten more than they paid for so far. Soriano settled down to a four-win season in 2008, but the slightly “shortfall” that season was made up for by 2007. Then Soriano bombed in 2009 to the tune of replacement level, had a okay (if insufficient to justify the money) rebound in 2010, and is currently having another miserable season. It started out well, but it doesn’t look like it will end that way. Only three more seasons, Cubs fans!
Did Hendry just get unlucky? After all, the projections had a lot of uncertainty on the defensive side, and Soriano was a monster in 2007. Moreover, the price of open market wins has not increased at the rate people expected it to back in 2007, which makes the contract look even worse. Still, we see players have big seasons late in their career all the time, and for every Jose Bautistas who maintains the new level, there are many more Brady Andersons. Soriano probably was more like a four win player, he just had a “big year” in 2007. Stuff like the generic aging curve and the projections aren’t meant to be seen as mechanical predictions, but “reasonable midpoints.” The idea that Soriano was being paid for a 5 WAR 2007, 4.5 in 2008, and so on is simply a way of expressing what is being paid for over the total life of the contract. Still, in total, Soriano hasn’t been worth the money, and there is little chance he will be as he moves into his late thirites and his salary increases.
What went wrong? The Cubs simply paid too much, straight up. Yes, there is uncertainty, but the Cubs bet on the high side on a player who was going to be 31. And that is without counting the immense long-term security they gave him, not just in years, but by giving him a no-trade clause. That the price of free agent wins stalled for a few years is just another reason why contracts of this length should be for less money per projected win — it protects against the risk one takes when signing a player for so many years. Even if Soriano had been a five win player, these factors should have meant less money.
In the end, although the beginning looked nice, the contract predictably went sour. The Cubs overestimated Soriano’s value, and overpaid for even their optimistic projection. Even without the benefit of hindsight, this retrospective shows that we shouldn’t be surprised at what an albatross the Soriano contract has become. Jim Hendry made a big bet on Soriano in 2007 and lost. It’s one reason he isn’t the Cubs general manager any more.