FORT MYERS, Fla. – A question hovered like a balloon in the wake of the Red Sox’ decision to commit $63 million to sign dazzling but unproven 19-year-old Yoan Moncada: If the team was willing to set the market for amateurs, why wasn’t it willing to do the same to address an area of glaring need by opening its wallet for an ace like Jon Lester?
Red Sox principal owner John Henry, who also owns the Globe, offered some insight into the matter on Tuesday. He noted risk is universal in big contracts, that players who are stars at one point may decline. The Red Sox are now at a point where they want to invest aggressively in baseball players, but they’re more eager to bet on young players with upside rather than hoping that free agents in their 30s resist decline.
“I think we’re more discerning than ever, despite what people might write this week,” Henry said. “High-ceiling players, you have to take risks on, but especially young players. But I think we’re more discerning, especially with regard to free agents, and 30-year-old free agents and above. … We did an analysis, and you take risks with every player. More and more we prefer to take risks with younger players rather than older ones.
“Anytime you spend $50 or $60 or $100 million on a player, it’s a risk,” he added. “It’s so difficult to predict performance, but if your goal is to win championships, you have to be bold.”
Henry noted a number of Cuban free agents, though not all, have enjoyed considerable success. He also alluded to the idea that as a 19-year-old with tremendous physical tools, Moncada represents the sort of talent to which the Red Sox haven’t had access with the No. 1 pick in the draft.
However, comparing market-setting free agent pitchers, top draft picks, and Cuban prospects shows the immediate return is higher for pitchers, although it costs a lot more. That could change over time as the contracts of each group play out, but at the least, the performance of these groups suggests it would be a mistake to overlook the value of high-end pitching as a short-term/win-now option, even as it offers greater long-term risk.
$20 million starting pitchers
There are 13 pitchers who have pitched at least a year under a deal with an average annual value of $20 million or more. The group has largely done well, with a surprising number of elite performances.
This group of starting pitchers has averaged 3.4 wins above replacement (as calculated by Baseball-Reference.com) per year. Five (Clayton Kershaw, CC Sabathia during the first three years of his initial seven-year deal with the Yankees, Felix Hernandez, Cole Hamels, and Cliff Lee), averaged 5.0 wins above replacement per year under their hefty contracts, meaning their average level has been that of an All-Star.
This group has yielded just one complete bust, meaning a player worth zero wins above replacement or less: Tim Lincecum offered a negative WAR value over his two-year, $40.5 million deal with the Giants.
Two asterisks to the largely successful performance of this group:
First, there’s an excellent chance that the average yields will get quite a bit worse. Justin Verlander, who raised red flags of decline, has five years remaining on his deal, while Sabathia’s contract with the Yankees has two more years of potentially miniscule returns remaining. There are far more incomplete, thirtysomething seasons of $20 million-a-year starters than there are complete ones.
Secondly, even given the relative success of this group, the cost of their effectiveness is extremely high. The average cost of a win for pitchers in this group has been $7 million.
|Players||AAV ($M)||WAR/year||$ per win (M)||5 WAR/year players|
|$20 million/year pitchers||13||24.1||3.4||7||5|
|$10 million Cuban free agents||14||6.5||2.5||2.5||2|
|$5 million draft bonuses||16||n/a||2.5||n/a||1|
Top draft picks
Insofar as Henry compared Moncada to a top draft pick, it’s worth scrutinizing the impact of players who were deemed the most talented amateurs, using the largest signing bonuses as a measure of the view of their abilities.
There have been 27 drafted players who have received signing bonuses of $5 million or more. The jury remains out on 12 – 11 of whom have yet to reach the majors – but who remain under team control with the club that drafted them.
Two players qualify as complete busts. The Padres recently released Donavan Tate, concluding a waste of a $6.25 million bonus. Joe Borchard, an outfielder who received a then-record $5.3 million bonus in 2000, had a negative WAR.
Only one of these draftees performed during his first six-plus big league seasons as a player who averaged five wins or better: Joe Mauer (5.3 WAR per season prior to free agent eligibility). Buster Posey (4.7 average WAR) and Manny Machado (4.3) are close, and David Price (3.9) has performed at an elite level for much of his career. Bryce Harper (3.3) and Anthony Rendon (3.8) both have made an impact already while showing the potential for quite a bit more.
The average returns on many of the others has been solid if unspectacular, though with some standout seasons in the mix, for players like Dustin Ackley (2.6 WAR per year), Eric Hosmer (1.4), Matt Wieters (2.4), Justin Upton (2.6), Stephen Strasburg (2.6), and Gerrit Cole (1.5).
Overall, the roughly 67 years of big league service time (or potential big league service time in the cases of Tate and Borchard) accumulated by the players who have received the largest draft bonuses have yielded an average of 2.5 wins per potential big league season. That number could go up based on the futures of players not just like Harper and Rendon but also Kris Bryant, Byron Buxton, and Mark Appel, none of whom has reached the big leagues yet.
The takeaway: The bets on elite prospects haven’t yielded the same magnitude of impact to date as the far more expensive bets on elite starting pitchers. That said, whereas one would expect the performance of the $20 million pitchers to decline, most of the draftees who received $5 million bonuses have their primes in front of them and could see an uptick in performance. It’s possible that the performances of the group of the biggest bonus babies could converge, if not surpass, that of the $20 million starters.
Meanwhile, the elite draftees have represented extremely efficient expenditures, with each win coming at an average cost for the group of just under $1 million to date. This is the crux of the Sox’ interest in a player like Moncada: Though they’re spending huge sums on his initial acquisition, he’ll be a very cost-effective big leaguer. And, the team hopes, as he develops through his twenties, he’ll have an opportunity to provide increasing returns.
The team’s optimism on that front is certainly influenced by the performance of other players from Cuba.
Few free agents in recent years can match the returns offered to date by Yasiel Puig and Jose Abreu. In less than two full big league seasons, Puig – who signed a seven-year, $42 million deal with the Dodgers in 2012 – has been good for a stunning 10.4 WAR. Abreu, in his rookie year in 2014 after signing a six-year, $68.5 million deal with the White Sox, delivered 5.5 WAR.
Puig and Abreu represent two of 14 players from Cuba to receive $10 million guarantees or more in free agency. Those two are the only ones to date to perform, on average, at a star level, but others such as Yoenis Cespedes (3.2 wins per year), Leonys Martin (2.9 wins per year), Jose Contreras (2.6 wins per year), and Aroldis Chapman (2.0 wins per year) offered solid returns on their deals as well.
Of the roughly 20 seasons of big league service time for this group, the average yield has been 2.5 wins per year, at a cost of about $2.5 million per win. Like the top amateur market, the Cuban market has not matched the annual impact made by the elite starting pitching market so far. There remains, however, the possibility that as Puig and Abreu and others like Yasmany Tomas accumulate more time, that market could look all the more appealing as cornerstone players who deliver a tremendous rate of return that cannot be matched by $20 million per year starters.
That, at least, is the bet that the Red Sox were most comfortable making. That said, the emphasis on the preferred course on betting on younger players as opposed to pitchers in their 30s should not obscure the fact that a number of those megacontracts have, to date, offered more short-term returns than the largest deals for Cubans or draftees.
The Moncada course represents a calculated gamble by the Red Sox, but a gamble nonetheless. It will be years before the wisdom of setting the market on him, as opposed to digging in $20 million shy of the market-setting offer for Jon Lester, can be demonstrated.