The Curious Bidding War for Eric Hosmer

Eric Hosmer has waited some time for a market to come together for his services. Part of the reason for the delay is that large-market clubs like the Dodgers and Yankees are not in need of a first baseman and are trying to remain below the luxury-tax threshold. Part of it is that teams are learning to better wait out free agents. (By Jan. 3 of last winter, nine of FanGraphs’ top-10 free agents had signed. This year? Three.) Hosmer’s agent Scott Boras famously said that there should be no concern for a free agent if he’s “the steak,” making the analogy to the main course of a fine dinner. There is some debate, however, as to whether Hosmer is a steak or a lesser cut.

By now, you are probably aware of the dilemma regarding Hosmer. He looks the part: an athletic, 6-foot-4, left-handed first baseman who is adept at vacuuming up short throws as a defender. He is also praised as a clubhouse leader. He’s a young free agent, entering just his age-28 season. But he’s remained wildly inconsistent in overall performance and seems determined to keep pounding balls into the turf while demonstrating little interest in evolving.

Over seven years in the majors, Hosmer has produced single-season WAR totals of 0.0 (2014), -0.1 (2016), and -1.7 (2012). He posted another GB/FB ratio north of 2.0 this past season, the third straight campaign in which he’s crossed that threshold. Hosmer’s average launch angle since 2015 (4.3 degrees) ranks 378th out of 399 hitters (minimum 300 balls in play), according to Baseball Savant data. Last season, Hosmer ranked 371st with a 3.8-degree launch angle.

Hosmer might become more consistent. He might even be able to change his swing and become a more productive offensive player. Maybe the defensive metrics that rate him as a poor defender are missing something. Still, a combination of the factors considered above and the uncertainty of what they for his future has certainly contributed to limiting his market.

Nevertheless, some teams seem to be ready to invest. Perhaps they believe a value price point has been reached.

Bob Nightengale reports that the Padres and Royals remain the top two contenders for Hosmer — and, apparently, the bidding has intensified.

Eric Hosmer, coveted all winter by the San Diego Padres, now has another surprising small-market team going head-to-head for his services.

Yes, his old team.

The Kansas City Royals have offered Hosmer a franchise-record seven-year, $147-million contract, persons close to Hosmer told USA TODAY Sports on the condition of anonymity since negotiations are still undergoing.

Hosmer also has a seven-year, $140 million offer from the Padres, people close to Hosmer say, which is $1 million less a year than the Royals’ deal.

This is a weird bidding war.

After a productive run that included a World Series title, the Royals are in trouble — sizable trouble — as Jeff noted earlier this offseason. The Padres and Royals, as presently constructed, are tied for the second-worst record in 2018 according to FanGraphs’ current projections. Those are teams for which Hosmer’s remaining age-20-something seasons are probably least likely to assist in a postseason run.

The Royals seem to be a long way from their next competitive team. The Padres have a much healthier farm system, but it seems they are at least a couple years away from contending for a playoff berth.

Maybe the clubs are buying into Hosmer’s intangibles, but Hosmer doesn’t seem to be a Daniel Murphy or Justin Turner in the clubhouse — that is, a player capable of exposing teammates to ways of optimizing performance.

Jon Morosi reports that the Cardinals are also interested, though St. Louis could pursue other options like Josh Donaldson, and it’s not clear of the Cardinals would consider such a contract.

The curious part of these deals isn’t so much the annual average value. Something like $20 million per season for a 28-year-old who has produced 10 WAR over seven seasons, but is coming off a four-win season, is not a wild overpay with a win worth about $9 million on the open market.

It’s more the volume of years that is surprising and concerning.

There is a point at which Hosmer becomes a value play. But seven years is not much of discount from Boras’s original ask of eight. And seven years is a quite a commitment for a player who carries so much inconsistency and uncertainty. Hosmer would ideally become a value play for a club on a shorter-term deal. And there is an argument that Hosmer might do well for himself on a shorter contract to prove he has more upside and consistency. Then he could re-enter the market in a year or two.

While the asking price appears to have come down from Boras’s original $200 million number, while clubs should be in search of value, seven years and $140-$150 million still doesn’t constitute a favorable deal for a club.

Hosmer is not yet a value play.

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A Cleveland native, FanGraphs writer Travis Sawchik is the author of the New York Times bestselling book, Big Data Baseball. He also contributes to The Athletic Cleveland, and has written for the Pittsburgh Tribune-Review, among other outlets. Follow him on Twitter @Travis_Sawchik.

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Joe Joe
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Joe Joe

As much grief as has been given Hosmer, I get 139 million over 7 years using the Fangraphs Depth Chart WAR projection, Fangraphs standard aging curve, $9 million/WAR, and a 5% inflation rate. As bad contracts go, these reported offers at least aren’t guaranteed to be DOA.

tz
Member

If the Royals put the same intangible value on keeping the face of their franchise as the Twins did with Mauer, this should give them some comfort about the cost of that intangible. Mauer was 28 when he signed the extension, and has been worth about 16 WAR through the first 7 years of the deal. Not what the Twins were hoping for, but not a bad proxy for what Hosmer would produce.

maguro
Member
maguro

If I were thinking about signing Hosmer to 7/$147M, it would not give me a lot of comfort that Joe Mauer sustained a serious injury that moved him off his position and still ended up being about as productive as a healthy Eric Hosmer is projected to be.

Jonathan Sher
Member

While both Hosmer and Mauer may have been valued for their clubhouse contributions, their value on the field is not remotely comparable.

The Twin extended Mauer after a little more than six full season in which he produced 31 fWAR; Hosmer has been at or below replacement value in three of his seven season and produce 9.9 fWAR in total.

Mike NMN
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Mike NMN

Ellsbury has produced 9.7bWAR over the first four years of his seven year deal, and the contract is considered a complete albatross.

emh1969
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emh1969

Seems like Travis’ criticism is mostly based on the years and the teams that are offering Hosmer. Plus, given his inconsistency, it’s hard to know what he’ll give you going forward. There’s a lot of risk involved, even in giving Hosmer a short term contract.

Beyond that Hosmer really ought to be platooned. Much was made of the Indians need to platoon Alonso when they signed him. Well, Hosmer’s numbers against lefties are only marginally better than Alonso’s. (87 wRC+ vs 84wRC+).

Joe Joe
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Member
Joe Joe

Risk is both on team and on Hosmer, though. There is a decent chance (I’d guess about 30%) as Travis puts it that Hosmer “has more upside and consistency”. I wouldn’t bet on it as I don’t like that type of risk for the teams rumored. That said, I was expecting a smaller number than 139 million before I ran numbers for 7 years based on the amount of Hosmer bashing.

emh1969
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emh1969

See I’d put the chance at less than 30%, probably more like 10-20%.

That being said, Hosmer is definitely in a bad position, all things considered. He could sign a one year contract, and hope that he repeats what he did in 2017. But I seriously doubt that he wants to be part of next year’s FA class. A two year contract would put him back on the FA market around age 30. Again, he probably wants to avoid that. Not sure what other options he has.

maguro
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maguro

Hosmer is in an amazing position, with two 7 year/$140M+ contract offers in hand. Why would one need more options than that? Let alone consider signing a one year contract.

emh1969
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emh1969

Sigh. I don’t really understand why I need to explain this. I was clearly responding to Legeisc who wrote:

“Risk is both on team and on Hosmer, though. There is a decent chance (I’d guess about 30%) as Travis puts it that Hosmer “has more upside and consistency”.”

So yes, Hosmer has risk. He might sign a contract that is significantly under what his value will be going forward (it’s clearly under what Boras and/or Hosmer believe it already to be). But he doesn’t have options. I see no path that will lead him to more dollars than what are currently on the table.

Again, I hate to be snarky but I’m stunned that I’m getting downvoted and that I had to explain something so obvious.

maguro
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maguro

There’s always some risk on both sides in any free agent deal, but for Hosmer at 7/$140M, the risk is very much weighted towards the club. I think you put the chances of Hosmer outperforming this deal at 10-20%. Those are really good odds from the player’s perspective. He’s got two of these offers, so he’s obviously in a really nice position. The fact that these offers are less that Boras’s opening bid is neither here nor there. It’s an opening bid, that’s how negotiations go.

emh1969
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emh1969

1) It’s completely irrelevant what I think the risk is or what Legeisc thinks it is or what anyone else on here thinks it is. It only matters what Hosmer and Boras think the risk is.

2) You claim that Hosmer is in an “amazing position” because he has two 7 year, 140+ million contracts in hand. (though note that Boras has disputed that). I think most of us here would agree that those are fantastic offers for Hosmer. But Boras and Hosmer might disagree. They might believe that Hosmer deserves a lot more money. And all I did was consider some options that they could pursue if they weren’t happy with the contract offers and wanted to make more money. I then quite clearly rejected those options.

So sorry, but I’m completely 100% befuddled as to what the point of your comments is. Do you honestly believe that Hosmer/Boras are in a great negotiating position, if they decide that they want significantly more than 7 years/140+ million dollars?

pedeysRSox
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pedeysRSox

Hilariously insane deals

johansantana17
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johansantana17

That’s because $9 million/WAR is too high. It was taken from deals at the top of the market, not the middle. Can anyone give me more than one example of a 3-win player who got an AAV of $27 million+ or a 4-6-win player who got an AAV of $36-54 million+?

sadtrombone
Member
sadtrombone

Saying “this is unlikely to be the worst FA deal of recent years” is really damning with faint praise.

Nobody is signing a guy who they think is going to give them 2-3 WAR a year for $20 million a year for the next seven years. That’s like the 6th best position player on a real playoff contender like the Red Sox or Yankees, or 5th on the Nationals. And that’s just the position players!

While part of roster construction is that your best players are often in arb/pre-arb, blowing 1/8th (give or take) of your team payroll on a position player to be your 8th or 9th best player is nuts. The Padres and Royals are likely weighting the intangibles very, very heavily, or they think he’s going to give more value than what we’re seeing here.

soddingjunkmail
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soddingjunkmail

I love this comment with a fierce love. Well put.

maguro
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maguro

I still can’t quite wrap my head around this valuation. In the first year of the deal, Hosmer is projected for 2.8 WAR, $25M in value against a $20M paycheck. Barely better than break-even. But somehow, he is supposed to hold his value for the next 6 years to the point that the 7/$140M contract is practically break-even as a whole. I don’t get it.

shampain
Member
shampain

These things always seem weird at first, but it’s because he’s young — so doesn’t lose much value on the aging curve at first — and the $ cost of WAR keeps going up. So as he becomes worth less in value he also costs less in “real” (i.e. inflation-adjusted) terms, which prevents his $-adjusted value from going negative for awhile.

Of course this assumes that any reasonable team is fine with a 1 WAR first-baseman in 2024 just because inflation has meant that his $20mn salary is fairly close to the average $/WAR in the market. They wouldn’t, because of opportunity costs — there are always Adam Linds and Yonder Alonsos and Matt Adamses and Lucas Dudas and John Jasos and Mike Napolis out there who can be signed cheaply on a short-term basis and give you roughly league-average production in a sensible platoon. Better to sign those guys cheaply and save your big money for a substantial upgrade.

Which is why few teams are in on Hosmer in the first place, and the ones that are are bad teams. This also illustrates why $/WAR calculations are not always useful for the real-world task at hand, esp when projected that far out into the future.

sadtrombone
Member
sadtrombone

I sincerely doubt that $/WAR is used to justify free agent signings in front offices like they are on Fangraphs. The cost of a win is a descriptive measure of how much people have paid in the past. Teams are looking to set the $/WAR figure based on their own internal projections, desire to make improvements, and budget…not respond to it. The details of how FO’s make their valuations could be a whole article series in and of itself, and a good complement to Swartz’s work on the cost of a win.

(If Fangraphs is looking for a topic to write on, I promise I’ll click on it)