2013 nyu diamond dollars case competition presentation

Diamond DollarsNYU Case 2013

Syracuse University

Greg Ackerman, James DiDonato, Matt Filippi, Jeremy Losak, Zack Potter

Player Profile: Brian McCann

Age: 29

Bats/Throws: L/R

Height/Weight: 6-3/230

Position: C

Previous Contract:

$26.8M / 6 Years (2007-2012)

+ 1 Option Years

http://www.fangraphs.com/statss.aspx?playerid=4810&position=C

McCann’s Contract Projection

5 years/$85 million

Offensive StatsSeason G HR ISO OBP wOBA WAR

2010 143 21 .184 .375 .362 5.1

2011 128 24 .195 .351 .350 3.9

2012 121 20 .169 .300 .300 1.7

2013 102 20 .205 .336 .347 2.7

Steamer 113 21 .193 .334 .339 3.6

TRENDS:

• Durable, since 2006 averaged 131 games per year

• Playing through torn labrum in 2012 resulted in big dip in stats

• Missed first 30 games in 2013 and rebounded nicely with comparable power numbers and WAR to previous years

*Stats according to Fangraphs

Defensive History

*Graphic via Fangraphs - 2012*Graphic via Getting Blanked

- Through August of 2013 Season -

Intangible Qualities • On September 11th, 2013 game against Miami Marlins, Jose

Fernandez appeared to show up Paul Maholm after hitting a homerun. McCann was confronted Fernandez to defend his teammates

Other Consideration:

• Strong possibility McCann will move to first base during latter part of contract. AL team may give him time at DH to hinder transition

• 2 weeks later against the Milwaukee Brewers, McCann physically prevented Carlos Gomez from touching home plate after he presumably disrespected Paul Maholmduring his homerun trot

WAR ProjectionData projected using McCann’s 2014 Steamer projected 3.6 WAR and subtracting half a win (accounting for being a catcher)

Average Annual Value (AAV): $17M

• 2014: 3.6 WAR * $6 million= $21.6 million





*Projection holds 1 win be valued at $6 million on open market

- Similar value to what the Phillies paid Carlos Ruiz

Catcher Aging Curve

According to Dave Cameron of Fangraphs:

“A +3 WAR player heading into his age-35 season shouldn’t be expected to be demonstrably worse in the next season than a +3 WAR player headed into his age-31 season. A more important variable in a player’s expected future production is the player’s estimated production for the upcoming season, not his age in that season.”

Comparable Contracts

1. Miguel Montero - 5 years/$60 million (After age 28)*

2. Yadier Molina - 5 years/$75 million (After age 29)*

3. Victor Martinez - 4 years/$50 million (After age 31)^

4. Carlos Ruiz - 3 years/$26 million (After age 34)

* - Signed an extension while under contract

^ - Received qualifying offer tied to draft pick compensation

Victor Martinez• Signed 4 yr/$50 million contract with Detroit Tigers

following age 31 season in 2010

• Signed as catcher, played mostly as a DH due to poor defensive performance

Stat Martinez – 2010 McCann - 2013

OBP .351 .336

ISO .191 .205

wOBA .364 .347

WAR 3.5 2.7


Miguel Montero

• Signed extension during 2012 regular season for 5 yr/$60M **Signed off the open market**

• Age 29 when he signed extension

• Montero has not demonstrated consistency

Stat Montero – 2012 McCann - 2013

OBP .391 .336

ISO .152 .205

wOBA .364 .347

WAR 4.6 2.7


Yadier Molina• Signed extension during 2012 season for 5 yr/$75M taking

effect for his age 30 season. **Signed off the open market**

Stat Molina - 2012 McCann - 2013

OBP .373 .336

ISO .186 .205

wOBA .375 .347

WAR 6.2 2.7


Market Conditions

• Competition: Jarrod Saltalamacchia, A.J. Pierzynski, Kurt Suzuki

• Possible Suitors: Yankees, Red Sox, Rangers, Blue Jays, Dodgers

What it means:

Several large market, high budget teams willing to spend money on free agents to fill catching vacancy

Draft picks are mostly mid to late 1st round

Playoff contenders in “win now mode”

Conclusion: With limited options available at catcher and high competition to sign McCann, his value will be inflated as teams will be more willing to spend the money on McCann

Carlos Ruiz• Age: 35 – entering 2014 season

• Signed 3 yr/$26M contract with Phillies last week

• Suspended 25 games during 2013 season for using amphetamine

• McCann ranked 6th in Catcher Defense Rating, Ruiz was ranked 14th -- *According to Matt Klaaseen (the defense chart)*

*Graph via Fangraphs

Contract Value at Six Years

Projected Contract: 6 yr/$92.6M

Presumably worth less value and money for that projected year.







Smaller value would decrease total AAV for the contract.

Contract Value at Four Years

Projected Contract: 4 yr/ $70M





Lowest value is removed from the average, causing the AAV to rise.

2005-2008 MLB Drafts

0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30

Probability of Majors by 23

Probability of Majors by 23

WAR By Draft Pick

Average WAR by Selection

• 1990-2010: Selections 11-30

• Average War of All Picks 11-30: 4.115

• Picks 11-15: 6.125

• Picks 16-20: 5.7

• Picks 21-25: 3.4

• Picks 26-30: 1.32

• My guess of what MLB Front Offices value these picks at: 4-6 Wins Above Replacement.

• Flawed? Players who do not make the majors are valued at a WAR of 0, when they should be valued below replacement level.

Draft Pick = Stock

• Pick given a monetary value to allocate throughout draft rounds.

• Ability to Draft a player with potential

• Trade Asset after at least one calendar year

• Drew Pomeranz (1-5-2010) traded from Indians in a package for Ubaldo Jimenez in 2011.

Competitive Balance

• Favors teams with Protected 1-10 selections and later first round selections

• Teams with Protected 1-10 Selections can still choose in the first round and sign a free agent with Qualifying Offer

• Prime Example: Michael Bourn – Indians had a protected pick, Mets had 11th 1st Round selection. According to my model, this seemed to be the right decision by the Mets, as the odds of adding a solid player is high. The Indians were able to add a short-term asset in Michael Bourn and still select a player at a draft position with a high probability of success

McCann Contract Value Having Not Received Qualifying Offer

Average Annual Value: $18M for 5 yr/$90M

McCann will benefit slightly, gaining an additional $5M in guaranteed money

• His market value will not be drastically affected due to his demand from large market and competitive teams

Player Profile: Ubaldo Jimenez

Age: 29 (Entering season at 30)

Bats/Throws: R/R

Height/Weight: 6-5/210

Position: P

Contract:

$10M / 4 Years (2009 – 2012)

+ 2 Option Years

Salary Projection

3 years/$45 Million

Previous StatsSeason G IP K/9 BB/9 ERA FIP WAR

2010 33 221.2 8.69 3.74 2.88 3.10 6.5

2011 32 188.1 8.60 3.73 4.68 3.67 3.3

2012 31 176.2 7.28 4.84 5.40 5.06 0.1

2013 32 182.2 9.56 3.94 3.30 3.43 3.2

Steamer 32 182.0 8.71 3.74 3.88 3.64 2.7

TRENDS:

• Very durable. Since 2008, started 30+ games and pitched 170+ innings

• Enigmatic career, big stat fluctuation after trade in 2011 leading to poor 2012

• Rebounded with much Improved 2013 season


Pitching Velocity

Season Team vFA vFT vFC vFS vSI vSL vCU vCH

2008 Rockies 95.4 90.0 91.7 86.0 75.8 86.0

2009 Rockies 96.0 91.2 86.1 78.0 86.3

2010 Rockies 95.8 96.3 89.1 86.3 78.7 87.0

2011Rockies/

Indians93.9 93.7 89.3 83.4 78.6 86.6

2012 Rockies 92.5 92.7 90.6 83.7 83.0 77.7 84.5

2013 Rockies 92.1 91.6 90.1 84.1 83.6 77.6 84.2

Total - - - 94.7 94.3 90.1 88.0 90.0 84.8 77.6 85.5

Fastball velocity significantly down from 95.4 MPH in 2008 to 92.1MPH in 2013


2010 Pitch Selection

*Graphic via Brooks Baseball

2013 Pitch Selection

*Graphic via Brooks Baseball

Comparable Free Agents

1. Edwin Jackson – 4 years/$52 million

2. Anibal Sanchez – 5 years/$80 million

3. Jorge De La Rosa – 4 years/$43 million

4. Kyle Lohse – 3 years/$33 million^

^- Received qualifying offer tied to draft pick compensation

Edwin JacksonSigned 4 yr/$52M contract following his age 28, 2012 season

• Jimenez’s Projected 2014 WAR: 2.7

• Jackson’s Projected 2013 WAR: 2.8

Edwin Jackson

Season ERA FIP

2009 3.62 4.28

2010 4.47 3.86

2011 3.79 3.55

2012 4.03 3.85

Ubaldo Jimenez

Season ERA FIP

2010 2.88 3.10

2011 4.68 3.67

2012 5.40 5.06

2013 3.30 3.43Contract Year Contract Year

*Stats according to Fangraphs *Stats according to Fangraphs

Jorge De La Rosa

• Received contract guaranteeing 2 yr/$21.5M following 2010 season

• Included two additional player/team options that could potentially raise total contract value to 4 yr/$43M

Statistic De La Rosa – Age 29 Jimenez – Age 29

WHIP 1.32 1.33

BB/9 4.07 3.94

K/9 8.36 9.56

WAR 1.8 3.2


Anibal Sanchez

• Received 5 yr/$80 million after age 28 season.

• Each pitcher is very durable, having thrown more than 150 innings each of the previous 3 seasons.

Stats Sanchez – Age 28 Jimenez – Age 29

FIP 3.53 3.43

ERA 3.86 3.30

K/9 7.68 9.56

BB/9 2.21 3.94

WAR 3.7 3.2


Market Conditions• Competition: Ervin Santana, Matt Garza, Ricky Nolasco, Phil Hughes

• Possible Suitors: Blue Jays, Angels, Yankees, Indians, Phillies, Cubs, Giants and others

What It Means:

Several teams looking to bolster starting rotation

Multiple comparable pitchers to Jimenez in this years class

Several do not have qualifying offers (Garza, Nolasco, + Hughes), potentially making them more valuable to teams

Conclusion: Similar to Kyle Lohse last offseason, the market for Jimenez may take time to develop. As starters are signed, Jimenez’s asking price will respond appropriately to the market

Kyle Lohse• After age 33 season, received 3 yr/$33M deal following 2012

season **Received qualifying offer prior to contract**

• Lohse had incredible 2012 season leading into free agency.

• Contract likely diminished due to loss of daft pick tied to signing. - Many teams weary to sign him, didn’t sign until March 25th

Lohse 2012 Season

ERA 2.86

FIP 3.51

K/9 6.10

BB/9 1.62

WAR 3.4


Ubaldo’s Odd Year

• Latest year is most important when a player hits free agency

• Many assert Jimenez’s 2013 season started poorly and significantly improved as season prolonged

• We believe bad fortune played role in his early poor starts.

Ubaldo’s career average HR/FB%: 8.7%

Month (s) HR/FB%

March/April 20%

May 16%

June 10.8%

July 8.3%

August 3.8%

September/October 0%


WAR Projection

• Same process used with Ubaldo as performed with McCann

- Ubaldo’s Steamer projects a 2.7 WAR.

Average Annual Value (AAV): $15M




Contract Value at Four Years






With the smaller projected $7.2M in final year, the AAV would decrease.

Contract Value for Two Years




Ubaldo’s AAV would increase because the year in which he is valued the least (final year of contract) would presumably be removed

Jimenez Contract Value Having Not Received Qualifying Offer

• Average Annual Value: $14M for total of 4 yr/$56M

• AAV decreases by $1M, however, Jimenez receives an additional year and more guaranteed money

• Without having to give up a draft pick and draft pool money, teams will be more willing to pay Jimenez

• Similar to Edwin Jackson 4 yr/$52M deal with Cubs

2013 nyu diamond dollars case competition presentation

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