April 2, 2013

Transaction Analysis

Elvis In the Club

by Ben Lindbergh

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TEXAS RANGERS Team Audit | Player Cards | Depth Chart

Signed SS-R Elvis Andrus to an eight year, $120 million extension with a vesting option for a ninth year and an opt-out clause after the fourth year. [4/1]

Counting Justin Verlander and Buster Posey, who signed extensions last Friday, 41 players in baseball history received $100 million deals before Elvis Andrus. And all 41 of those players were, at some point prior to receiving those deals, better than Andrus has ever been. The worst of them is probably Vernon Wells—with stiff competition from Carlos Lee and Mike Hampton—but even Vernon Wells hit 30 homers a few times, batted .300 a few times, and won a few Gold Gloves. Once, he led the league in total bases. Twice, he was worth about five wins. And if the resume of the worst player in the $100 million club includes those highlights, you can imagine what the career accomplishments of the more respectable members look like. Most of them won major awards, or at least led the league in something significant.

The most significant category—or at least the only one that gets black ink at Baseball-Reference—in which Andrus has led the league is sacrifice bunts. He’s done that twice. Once, he led both leagues. Sacrifice bunts often get players praised, but rarely do they get players paid, which is a more sincere form of flattery. David Eckstein led the AL in sac bunts twice, and also made two All-Star teams, and had about the same offensive statistics at the same position, plus two seasons that were more valuable than Andrus’ best season to date. And for a while there, you couldn’t open a newspaper or an internet browser without reading about how wonderful Eckstein was. But no one ever gave David Eckstein more than $4.5 million per season to play baseball.

That’s not to say that Eckstein deserved $100 million, or that Andrus doesn’t. It’s just to point out that, in the past, landing a $100 million deal was a sign that you’d made it. It didn’t mean you’d be worth the contract, because there was always the chance that you’d start playing poorly—there, we got the standard “contracts this size come with considerable risk” caveat out of the way. But it suggested that in order to justify the contract, you just had to keep playing at the high level you’d already reached. You didn’t have to get better. You just had to avoid getting worse for a while.

So for the teams that hand out these contracts, and the writers who write about them, deciding whether they make sense usually requires a lot of projection in the downward direction. Normally, we want to know how quickly a player will decline—how many years of prime production he has left, and how long it’ll be until he’s a burden. For a deal this size, Andrus’ contract calls for an unusual amount of projection in the positive direction. Andrus is going to get better before he gets worse.

Andrus, over the past two seasons, has been about a three-win player, and he’s entering his age-24 season. He hasn’t shown a lot of growth in the plate discipline department: last season, he swung at a career-average rate, chased about as much as he has on the whole, and made contact about as often as always. He’s been in the majors for four years now without making many strides in any of those areas, so maybe he was the rare 20-year-old whose approach arrived more or less fully formed. We can still expect him to get a bit better offensively as his strength increases and his ISO continues to creep up, enough to counteract any immediate decline in his defense. (As Colin Wyers said in our Staff Roundable yesterday, “the defensive aging curve is pretty much a straight slope down.”) The Rangers just have to hope Andrus avoids the Garry Templeton aging curve, peaking in his early 20s and limping along thereafter.

So let’s say Andrus is a 3.5-win player this season, and a four-win player in 2014. It’s certainly conceivable that he could peak higher than that, but it’s not necessary to project superstardom to make the math work. In 2015, the first year covered by his extension, he’ll be 26, and we’ll conservatively say that he holds steady at four wins. After that, we’ll dock him half a win per year, while the cost of a win inflates by 5 percent annually. At the end of the deal, we’re left with a 33-year-old Andrus who’s half a win above replacement level. That’s believable; once his glove goes, his bat isn’t going to carry him. But by then, in this scenario, he’ll have been worth 18 wins just over his extension years, thanks to being average or above—but not too far above—for the majority of the contract. As long as the cost of a win over the span of the deal approaches $7 million (which should be a cinch), he’ll be worth what Texas is paying him, even if he makes only modest improvements. The higher his peak, the farther the financial bar falls.

Except: the deal evidently includes an opt-out clause after the extension’s fourth season, when Andrus will be coming off his age-29 season and be in a better position to command another long-term contract. That means it’s a virtual certainty that Andrus won’t be playing for Texas in 2022, unless the team elects to re-sign him. Opt-outs aren’t great for teams, since they expose them to more downside without accompanying upside. If Andrus plays well and thinks he’d be in line for a raise, he can leave, and the Rangers won’t get to reap the benefit of signing him two years before he hits free agency. If he plays poorly or gets hurt, Texas is still on the hook for the full amount. Presumably, the Rangers thought they had to sweeten their offer with the opt-out to get the deal done, but it does restrict the extension’s upside.

It’s still sort of hard to wrap your head around the idea of a hitter with 14 home runs in four seasons making this kind of money. We’re used to the big bucks going to position players who drive in hundreds of runs, not run producers who do their best work outside of the batter’s box. That’s changing. Andrus’ deal is an acknowledgement that wins are worth paying for wherever they come. He’s never been on the DL, and he’s one of the game’s best defenders and baserunners, contributing two career wins on the basepaths (he ranks fourth in BRR over the past four years, behind Michael Bourn, Ian Kinsler, and Juan Pierre) and far more in the field. He might not look like a likely candidate to be baseball’s latest $100 million man, but he fits in just fine with the other 41.

Texas could have waited to see if the open market would value Andrus’ defense as highly as they do; wins have been cheaper to come by at shortstop. But a couple years from now, the value of a player who adds value in nontraditional ways might be more widely recognized. And thanks to their TV deal, the Rangers are really rich and can afford to take risks. We should remember that.

The other aspect of the deal that deserves attention is its effect on the rest of the Rangers’ infield. The Rangers have Jurickson Profar, a 20-year-old shortstop and the best prospect in baseball, waiting patiently at Triple-A for playing time. They also have Ian Kinsler, a 30-year-old second baseman who is signed through 2017 and who already took a page out of the Michael Young playbook this winter, opposing a move to first base. The assumption for some time now has been that Andrus would be the one to go, given his relative proximity to free agency and the identity of his agent (Scott Boras). Clearly this extension makes that less likely, and it’s probable that we’ll see Kinsler consent to move to first or left later this season or in 2014. If Kinsler moves to first, expect to see Mike Olt moved to another team; with Adrian Beltre entrenched at third, there’s no other place for the promising prospect to go.

It’s a nice problem to have two potential starting shortstops. If you’re going to block a top prospect with a talented young player at the same position, it’s best that that position be shortstop. Block an immobile, bat-only first-baseman behind another player of the same type, and there’s nowhere for the odd man out to go (except DH, maybe, if it’s an AL team). In cases like that, you end up with a major-league ready Ryan Howard having a 46-homer season in the minors while he waits for Jim Thome to get hurt or be traded. It’s not the best use of your resources.

With players like Andrus and Profar, you have options; a good shortstop can become a very good second baseman, or even an asset in center field. And in the event that something happens to one of them, you have a great replacement ready to step in at a position where most teams scramble to find anyone serviceable. That’s not to say that Andrus and Profar are destined to be turning double plays for the next decade. Andrus’ contract is reasonable enough to be tradable, and Profar might bring back something better than a high-ceiling second baseman, like a big bat or an ace-type arm. The Profar-for-Giancarlo Stanton rumors aren’t necessarily over, and one way or another, Texas will have more moves to come as a result of this signing.

Ben Lindbergh is an author of Baseball Prospectus. Follow @benlindbergh
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