Transaction Analysis: 12 Years For Joey Votto

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Signed 1B-L Joey Votto to a 10-year, $225 extension. [4/2]

Votto is the third first baseman to sign a $200 million contract this winter. At this point, nothing short of a 10-year deal for Gaby Sanchez would shock me, purely on a pay-for-performance level. Superstars make bank. What surprises me most about this deal isn’t that Votto got 10 years and $225 million on top of the two years he was already owed, but who gave him that amount of money, and when.

First, let’s get the projected performance part out of the way. What can the Reds expect to get from Votto for upwards of $250 million over the next 12 years? Keep in mind that pushing PECOTA past 10 years looks a lot like this:

I asked keeper-of-PECOTA Colin Wyers to take the risk anyway. He hasn’t shown up on my sensors since he sent me the projection, which means he’s probably in another dimension, or possibly in his bed. But here’s what we have to show for his sacrifice:

PECOTA hasn’t been tested beyond 10 years, so parts of this projection might not mean much. Maybe that’s a sign—if we don’t even try to predict what players might do 11 or 12 years from now, committing many millions of dollars to them for those seasons might not be the best idea. What the projection shows us, though, is a pretty predictable decline. Today, Votto is closer to 29 than he is to 28. He has a few seasons of undiminished performance ahead of him, followed by a few seasons of slightly diminished performance, followed by a few seasons of significantly diminished performance. By the end of the deal, according to PECOTA’s Infinite Improbability Drive, Votto won’t be worth anything, at least on the field.

As endless contracts go, that’s not all that bad on the back end. By the conclusions of their deals, Alex Rodriguez and Albert Pujols will both be 41. Pujols projects to be worth a win below replacement. Votto will be a comparatively spry 39. All told, Cincinnati can reasonably hope for over 40 WARP in reparations for the damage done to Bob Castellini’s bank account. That means they’re paying about $6 million per WARP, more or less the going rate for free agents. (The $5-million-per-win figures you may have seen quoted elsewhere on the internet don’t translate perfectly to WARP, which are a little harder to come by than the other win-value stats out there.)

There’s one small problem with judging Cincinnati’s spending by the free-agent standard: Votto isn’t a free agent. Two years ago, the Phillies signed Ryan Howard to a five-year extension that is only now about to kick in. At the time, we wondered why the Phillies would offer the deal then instead of waiting around to see if, say, he might continue to decline, or rupture his Achilles tendon in a way that would keep him out for a large chunk of the 2012 season. Instead, they locked him up before they were in any danger of losing him. As a result, the Phillies will spend the next several seasons paying Pujols prices for Carlos Pena production.

The Reds aren’t making an Amaro-like mistake here—Votto isn’t already trending downward as Howard was when he signed his extension. By the time Votto’s extension kicks in, though, he probably will be. So why sign him now? It might have made sense if Votto had given the Reds a discount in exchange for the security of a deal that could take him to the end of his career, but it doesn’t appear that he did. It might also have made sense if the Reds would have had to pay significantly more for him had they waited one more year, but there’s little reason to believe that’s the case. The Reds caught a slow-incubating strain of the first-baseman fever going around this winter, and they’ll probably regret acting prematurely. It’s risky enough to hand out a 10-year contract. It’s even riskier when you won’t begin to know what you’re getting for another two years.

So what gives? Since when are the Reds capable of handing out contracts as massive as those dispensed by baseball’s big-market teams? It’s possible that they’re not, and that they’ve made a huge mistake. If Cincinnati’s payroll stays in roughly the same range, Votto will account for about 20 percent of it, even as his production declines. Tying up that much money in one player makes it imperative that the player performs. Both the Cardinals and the Brewers watched their super-popular, super-productive homegrown first basemen walk this winter. The Cardinals tried to keep Pujols. Milwaukee, saddled with an even smaller market than Cincinnati, didn’t make even a token effort at keeping Prince Fielder in town. (Votto is older than Fielder, but also a better, more complete player.) Maybe the Reds figured that was their future, and they acted hastily to avoid it.

Or maybe, as some have suggested, baseball teams are about to be so rich that they can afford to spend in ways that have come to seem inconsistent with what we think players are worth. The Dodgers were just sold for so much money that every other team can look at its books and see a more valuable commodity than it did just weeks before. Massive TV contracts are promising to give every team that doesn’t already have one a steady source of cash. The Rangers are already reaping the financial rewards of their TV deal, and the Angels cited their renegotiated contract as a major enabler of their offseason spending on Pujols and C.J. Wilson. And that’s aside from the inflationary effect the new CBA might have on a free-agent market that will lack big names after the recent wave of extensions. The Reds have yet to hit the same revenue jackpot, but they probably figure their turn will come. If it does, having Votto will help them make the most of the opportunity.

In a way, massive extensions are a bit of a letdown. It’s easier to be excited about getting better than about not getting worse. Angels fans and Tigers fans can expect their teams to improve after committing over $200 million to Albert Pujols and Prince Fielder, respectively, because those teams didn’t have Albert Pujols and Prince Fielder last season. The Reds, on the other hand, already had Joey Votto—a slightly younger, slightly better Votto, even. It’s heartening to see a small-market team retain its own big-name player, but the Reds would have had Joey Votto for two more seasons had this deal never been signed.

Now, they’ll continue to have him. But having him wasn’t enough to put them in the playoffs last year, and he might never again be as good as he was over the past two seasons. If the Reds can’t capitalize on his presence while he’s still approximately in his prime, their best hope for not regretting this contract might be that the next few winters’ deals make Votto’s extension look as small as his makes the ones that preceded it.

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Signed RHP Matt Cain to a five-year, $112.5 million extension with an option for 2018. [4/2]

You might have missed or dismissed the news after hearing about Joey Votto’s great expectations, since our interest in one huge sum someone else is getting generally lasts until another someone else gets more. If so, here’s a helpful reminder: Matt Cain also made a lot of money on Monday. Cain’s new contract with the Giants runs half as long as Votto’s deal and will pay him roughly half as much. Bo-ring, right? On top of the $15 million he was already owned for 2012, he’ll make $112.5 million over the following five years, plus a $5 million signing bonus. The deal also includes an option for 2018 that would vest if Cain stays healthy and doesn’t get hurt, two things he’s been particularly adept at doing. In fact, those two things make Cain more easily projectable than a lot of other players.

For example, PECOTA doesn’t know what to expect from Andrew Miller. He could be really, really bad (6.82 90th-percentile projection), or he could be bad, but better than he was last season (4.99 10th-percentile projection). Either way, the outlook isn’t good—you wouldn’t want Andrew Miller even if PECOTA’s wildest dreams about his 2013 season came true. But there’s a pretty wide range of unplayable possibilities.

PECOTA can imagine a world in which Dallas McPherson and Dan Johnson become stars at age 32, but PECOTA can’t imagine a world in which Matt Cain won’t pitch well. Only 11 starters have a 10th-percentile innings projection over 200. Only 12 have a 10th-percentile ERA projection under 3.50. Cain makes both groups. 

Of the 925 pitchers with major-league experience who are projected by PECOTA this season, only two have a smaller gap between their 10th- and 90th-percentile projections than Cain. Those two are Roy Halladay and Cliff Lee. PECOTA is pretty sure it has Cain’s ERA pegged between 2.79 and 3.34, where it has already finished for three straight seasons.

To understand why Cain’s future seems so certain, you have only to look at his past. Since 2006, 32 pitchers have thrown at least 1,000 innings. If you compare the differences between those pitchers’ highest and lowest seasonal WARPs over that span, Cain’s (1.16) comes out second-smallest. There are better pitchers with much bigger gaps between their best and worst seasons: Cliff Lee and Justin Verlander have two of the three biggest, since both have had one Cy Young season and one forgettable season in their past five. Matt Cain has never had a Cy Young season—he’s never finished higher than eighth in the voting—but he’s also never been below-average.

Cain is a loss-averse general manager’s best friend. No team has ever had cause to regret giving him innings. He’s only 27 years old. He’s had five consecutive seasons of at least 200 innings. If any pitcher is worth a $100 million payday, it would be the one who’s never pitched poorly and whose career injury history amounts to one missed regular-season start:

Cain’s health has been so good that half of his “injury” history comes from ailments that didn’t cost him any time. Here’s the thing, though: despite Cain’s consistency, his total lack of familiarity with the disabled list, and his ironclad PECOTAs, even he isn’t a great bet to make it through the next several seasons unscathed.

I know how tiresome it is to hear about how unpredictable pitchers are, but consider this stat. Since 1950, 80 pitchers, including Cain, have pitched at least five consecutive 200-inning seasons before turning 30. Do you know what the most common number of 200-inning seasons pitched by those same pitchers over the rest of their careers was? Zero. Seriously: zero. A few of them completed their five-year streaks pretty recently, so they could still top 200 again. (Anyone believe in Brandon Webb? Johan Santana?) But even if you exclude those active players, you’re still just as likely to be right betting on no more 200-inning seasons as you are on one or two more, let alone anything higher. And only 27 of the 80 have followed those five consecutive 200-inning seasons with at least five more at any point in their careers.

Cain could be another Greg Maddux or Don Sutton, two pitchers who were just getting started on 23-year careers when they completed their five-year streaks before 30. He could be another Mike Hampton, who averaged 3.4 WARP (to Cain’s 3.0) during his own streak before completely falling apart. But he’ll probably follow a trajectory between those two extremes, and the Giants don’t need him to pitch until he’s 40 to make the contract a success.

What the Giants do need him to do is continue to pitch as well as he’s ever pitched. Judging by WARP, they actually need him to pitch better than he’s ever pitched, but WARP doesn’t work very well for Matt Cain, as an army of writers have pointed out over the last few seasons. Last year, Cain’s FIP and ERA both finished at exactly 2.88. In most seasons before that, though, they had only a passing acquaintance. Only 10 pitchers since 1950 have pitched at least 1,300 innings, started at least 95 percent of their games, and recorded BABIPs of .270 or below. Cain is one of them.

There’s plenty of time for that to change. All of those other pitchers have allowed their last hits and balls in play, but most of Cain’s might still be ahead of him. Still, we’re well beyond the point at which we can dismiss that BABIP as a small-sample fluke. According to Derek Carty’s research on pitcher stats, BABIP stabilizes after just over 3,700 batters faced. Cain has faced 5,453 batters. His true BABIP talent is likely above .269, but it’s safe to say that he has a rare ability to suppress hits on balls in play.

We have to value him accordingly. PECOTA can look at Cain’s history and sense that there might be something unusual happening, but WARP doesn’t know that the Cain posting a low BABIP in one season is the same as the Cain who did it the season before. As a result, he’s averaged only 3.0 WARP over the last five seasons. Even if Cain kept doing that, he’d have a hard time earning what amounts to a six-year, $127.5 million deal.

But what if we pretended that Cain was like any other pitcher? Fair Run Average (FRA) is the backbone of pitcher WARP. For most pitchers, FRA and RA (Run Average) match pretty closely, so substituting one for the other wouldn’t be a big deal. In Cain’s case, though, FRA isn’t actually fair. What if we substituted his runs allowed rate—which does reflect his ability to prevent hits on balls in play—for his FRA, which gives the extra credit to his defense?

Give Cain credit for his low BABIP and ability to keep fly balls in the park—which he’s demonstrated even away from San Francisco—and he looks a lot more valuable. With RA in place of FRA, his 3.0 WARP seasonal average rises to 4.3. That extra WARP and change per season is worth several million dollars on the open market, which Cain would have hit later this year had he not gotten his extension.

Even so, about the best you can say about the deal on a dollars/WARP basis is that the Giants paid market rate. There was no hometown discount, and if Cain slips—always a risk with a pitcher, no matter how consistent—they won’t get their money’s worth. Last year, he got more grounders than flies for the first time in his career, but he’s also lost a tick from his fastball since 2009. A pitcher who strikes out only a few batters more than a league-average starter seems like an unlikely candidate to land the richest deal ever awarded to a right-hander, and Cain’s batted-ball sorcery will have to continue for him to make San Francisco look smart.

There are a few other factors at work here. The only five-star prospect on Kevin Goldstein’s Giants Top 11 is an outfielder, Gary Brown. Seven of the organization’s top 10 talents 25 and under are position players. One of the three pitchers on that list is 19 and has thrown seven professional innings. The Giants are a team built on pitching, and they don’t have much more of it on the way to AT&T Park. They have few financial commitments beyond 2013. They’re also about to contend with a reenergized Dodgers franchise that might have tried to outbid them for Cain had they allowed him to become a free agent. And it makes sense for them to extract as many wins as they can from their current core before they’re no longer the division’s biggest spenders.

Matt Cain is a popular player. He’s a homegrown Giant who’s been known to San Francisco fans for a decade. He’s a playoff hero who didn’t allow an earned run in his three 2010 post-season starts. Those things matter, even though the Giants might have been able to get the same annual four-or-so WARP from another player—or a pair of players—for less money. They could use a bat or three to record some hits of their own, no matter how many Cain prevents. (Cain, who thinks run support has something to do with stockings, knows this better than anyone.) But at least they have a $120-something million ace, and this time, he’s not named Zito.

Thanks to Bradley Ankrom and Colin Wyers for research assistance.