Saturday, December 30, 2006

Transaction Recap: Giants, Yankees, Angels

Giants:

Signed SP Barry Zito to a 7-year, $126 million contract (rating: 1/10)

"I'd say this is the most important signing we've had since we first signed Barry Bonds back in late 1992," owner Peter Magowan said Friday. "It means that much to the franchise and the future of the franchise. We don't make this kind of deal every year or every five years. It takes a very special player."

Clearly, I don't feel the same way. My 1 rating can be broken down into three components: the length of the contract, the significant difference between Zito's perceived and actual value, and the Giants' status as a non-contender.

With regard to the length of the contract, you can count the number of seven-year deals for pitchers that have worked out well using zero fingers. Just one six-year deal looks good in hindsight, and the 1998 version of Pedro Martinez was a much more promising pitcher than Zito; at the time of the signing, he was coming off a Cy Young season with a 1.90 ERA, 67 BB and 305 K in 241 innings, and was just 26.

Zito is a good pitcher, but his skills are nowhere near Pedro's. Still, he's especially durable, with 34 or more starts in six consecutive seasons. Some people seem to take this durability as an indication that he will never get injured, ignoring the fact that pitching injuries are largely random. It's folly to suggest that you can guarantee 34 starts out of him in 2013...or in 2007.

Some are defending the seven-year deal because Zito will be just 29 in 2007, but a pitcher's age is far less important than his skills, as evidenced by the number of 40-year-olds who are still pitching effectively. Analysts generally agree that a pitcher's strikeout rate is far more important than his age in projecting how long he can remain effective; Zito's strikeout rate is not great (6.2 K/9 in 2006) and has been in decline for years.

Let's switch our focus from the unnecessary length and dollars of the deal to Zito himself. Is he really a "very special player" who would have been a bargain at, say, 5 years and $80 million? In short, not a chance. As we've known for awhile, three factors dominate a pitcher's future projections: his strikeout rate, walk rate and groundball/flyball ratio. Zito's strikeout rate hasn't been above 7.0 per nine innings since 2002, he consistently walks more batters than the league average, and his career G/F ratio is 0.87, well below par.

Zito's averages for the past three seasons look like this: 221 innings, 90 walks, 162 K, 27 HR. The 221 innings are nice, but the rate stats--3.7 BB/9, 6.6 K/9, 1.1 HR/9--fall in line with an ERA over 4.50, rather than the 4.05 he's actually produced in that span.

Even a 4.05 ERA seems high, right? When you hear the name Barry Zito, a lot of things may come to mind: Cy Young award winner, spacey personality, 12-to-6 curveball, The Big Three. But you picture a well-above average pitcher, not a guy with an ERA over 4.00. It's likely that everyone involved was bidding off Zito's reputation, rather than his actual skills or results.

Finally, although signing Zito may have made sense to a team, like the Mets, that looks like a perennial contender in the near future, the Giants do not fit this criteria. They have all the earmarks of a franchise that should go into a total rebuilding mode, but are still trying to solve their problems by throwing big money at overpriced and aging players. They will once again be the NL's oldest team by a wide margin, and their farm system is very weak. The addition of Zito takes them from non-contender to fringe contender, and in order to maintain even that status in the coming years, they will need to overspend on more free agents in the coming years.

An impact free agent is most valuable to a team in the 86-90 win range. At this point, a few additional wins will make a huge difference in their chances of making the playoffs, and of advancing once they get there; adding Zito might increase their chances of making the postseason by 20-25%, and their World Series chances by 4%. In the Giants' case, they might receive a benefit of 5-10% this year, and probably less in the future. That's not the kind of return you're looking for in exchange for $126 million.

Perhaps the best way to sum up the contract is this: The Giants traded in a better pitcher, Jason Schmidt, for a worse one who will earn a comparable annual salary--adjusted for inflation--for seven years rather than three. That's just an awful exchange.

Yankees:

Signed SP Kei Igawa to a 5-year, $20 million contract (5)

That's a total of five years for $45 million, most of it free of luxury tax, which is below the going rate for a league-average starter. Igawa shouldn't be much ahead of the league average, if at all, based on his translations, but he shouldn't be worse than Jeff Suppan or Gil Meche, who signed more expensive deals.

Especially because he's on the Yankees, Igawa is likely to be a middle reliever or swingman at some point in this deal, but the Bombers can afford to spend this kind of money on an effective pitcher filling this role. Because we know the Yanks will contend over this span, the money won't be wasted on a 70-win team, like Zito's will be at some point.

A better analysis of this contract requires better translations of Japanese stats. This is still an inexact, fledgling science that gets updated every year.

Angels:

Signed 1B/DH Shea Hillenbrand to a 1-year, $6.5 million contract (3)

The problem isn't the money; $6.5 million won't significantly affect the Angels' bottom line. But Hillenbrand isn't a good player. His career OPS+ is 99, below the league average, and he can only play offense-first positions, with defense that rates terribly at third base. It's hard to argue for the intangibles of a guy who's been traded three times in four years, including his latest episode, where his manager challenged him to a fight before he was designated for assignment.

Furthermore, as Keith Law points out, Hillenbrand doesn't offer anything the Angels don't already have in spades, and he blocks the Angels' 1B prospects. Unless Juan Rivera and/or Mike Napoli consolidate their gains from 2006, it looks like the Angels will be in a familar situation in 2007, with no impact hitters other than Vladimir Guerrero, in spite of all the money they're spending for left field, center field, shortstop and first base.

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