|Hardy with the Call | Photo by Keith Allison|
The model performs rather well. Standard deviations for years and annual average value are 1.0 years and 2.8 MM, respectively. If you only look at the signed players with qualifying offers, then the standard deviations are 0.8 years and 1.5 MM, respectively. Roughly looking at those figures, it seems that teams losing first round picks tend to view a first round draft pick being worth around 5 MM. It also appears that yielding a second round pick is dealt as being of generally no consequence.
I decided to plug in a variety of Orioles into the suggested equation, but with one tweak. I upped the 5 MM per win mark to 6 MM per win mark because I expect salary inflation. The projected WAR below is from Steamer for 2014 and is reduced by 10% for aging as Cameron did in his own piece. I also included several players who will not be free agents at the end of the year in order to think about potential extension discussions. The players are Chris Davis, Matt Wieters, and Bud Norris. I also included the upper standard deviation limit in case a specific player is one considered to be greatly desired by other organizations.
|WAR||Years||Total (MM)||AAV||Hi Year||Hi Total|
The table above may answer some questions. For instance, the option on Wei-Yin Chen should be picked up without question. To acquire a similar pitcher on the open market may cost the team an additional 8 MM a year. Bud Norris has a slim outside chance to be a non-tender candidate at a projected market value of 7 MM because that actually equates what we would likely expect him to earn through arbitration. However, if he winds up costing what he is worth, then he should almost certainly be retained.
Matt Wieters may have numbers that you may find surprising. Those numbers would make Wieters the highest paid catcher in baseball. That might be surprising because most do not consider him to be the best catcher in the game. Those near Baltimore still remember the specter of PECOTA's Switch Hitting Jesus and will often find themselves fully engaged in belittling his value. This very simple model though thinks he is going to challenge some numbers. An extension would look something like 6 years for 100 million (his first season would be his final arbitration, which would probably peg him for 10 MM). At that figure he would fall about 300k per year behind McCann.
Davis with a 100+ MM deal is not surprising based on initial leaks from extension talks. That said, I am at a loss to think of a single contract handed to an elite level 29 year old or older first baseman that has actually worked out. The first couple years tend to work out fine, but the offense tends to collapse and leaves the team with a poor hitting, poor fielding player on the roster who has to start. Adrian Gonzalez, Mark Teixeira, Albert Pujols, Prince Fielder, and Ryan Howard are all on current big money deals signed on the back end of their peaks. None of them look like good deals. Does a team like the Orioles really need to invest 15-20% of their payroll into something like that?
Both Hardy and Cruz are scheduled to be free agents after this season. Nick Markakis also stands a decent chance in having his last year bought out by the club for 2 MM. These are the three real potential qualifying offer free agents. Off the bat, Nelson Cruz looks like a very poor player to offer a contract. He may or may not have learned from this past offseason, but he does not appear to be highly valued. Last season, he showed plus plus power over 100 games with a solid contact rate. He barely got a sniff and signed a deal well, well below his initial expectation.
Markakis is an interesting case because of how the numbers work out. If the Orioles pick up his option, he will earn 17.5 MM in 2015. However, they can buy him out for 2 MM. The qualifying offer is expected to be a shade over 15.5 MM in 2015, which puts him right where he was. The projection model thinks though that he is worth a paltry 6 MM. With that in mind, the Orioles could go through the motions of buying him out and then offering him a deal. If the team really does not want him and wishes to put that money to other uses, it could be a major bet. How much does Nick believe he is worth? That really is what it will boil down to. It might be smart for the team to engage in extension talks with him simply to see how he and his agent view his value.
How about Hardy? Would he accept a qualifying offer of 15.5 MM? Intially, I thought that he would, but that was before Cameron's toy. I also decided to put together a little thought experiment. Basically, it is working with the assumption that the player is worth that 16 MM and then applies an aging deficit of 20% each year (a poor case, not worst case scenario). If the Cameron projections beat this framework, then the player should refuse the qualifying offer.
Now, let's apply it to the players mentioned above.
|Years||Total (MM)||Tipping Point||Accept|
Based on this (again, very simple) model, it appears that the only players who should refuse the qualifying offer are those who are regarded as first division starters. Hardy, Davis, and Wieters all tend to fall into that top third for their positions. Below that mark, the players involved seem likely to make as much or more if they accept the offer.
As it stands, I find it doubtful that Hardy will be an Orioles past this season. If he continues to perform at a high level, he is bound to be earning himself a massive pay day. The questions surrounding him from his Brewers and Twins days have largely dissipated. This contrasts with Stephen Drew who many teams still have questions about his current and future worth. To me, this means that Hardy is likely to get a nice pay day after the season concludes. Much of this value is associated with his ability to play shortstop.
This loss probably does not mean much for the Orioles because they likely have a suitable replacement for Hardy. One who is much cheaper: Manny Machado. If Hardy truly is valued at 17 MM a year, then this could be a massive windfall for the club. One where that money could be distributed toward a player or players who are on the better side of 30 and possess a bat more potent than what one finds stellar at shortstop. This switching position game could result in a bright prospect like Jonathan Schoop proving his worth at either second or third, which also gives the Orioles some flexibility. At this moment though, the third base market looks very interesting with Chase Headley, Hanley Ramirez, and Pablo Sandoval all without extensions currently.
Perhaps the waiting game will work for the Orioles next off season as it did this year, potentially, with Ubaldo Jimenez and Nelson Cruz. Of course, the waiting game means that you need enough holes in your roster to be able to take advantage of what position player falls. In this situation, it would be nice if more interesting second basemen or even a left fielder was available. It does not appear than any are at the moment.