16 January 2016

Orioles Go Slightly Bananas And Sign Chris Davis

Did Someone Say Bananas!
Signing Chris Davis was not a surprise.  I stated that he would be with the club in 2016 back in September when Peter Angelos specifically identified Davis as the only departing player he wanted back in the fold.  Although I advocated for the club to look elsewhere, I have maintained my prediction that Davis would return and that it would not be a good thing.  On the former, I have been redeemed with the Orioles signing him to a seven year deal worth 161 MM with 42 MM of that deferred, a deal in which we should assume that they outbid someone.  A partial no trade clause is in effect until he assumes 10-5 rights in 2019.  Of course, any no trade clause is somewhat redundant because this contract is rather unwieldy.  It would not be entirely surprising though to see him later involved like Prince Fielder was where the Orioles throw in a great deal of money and get an unwanted but slightly useful player in return.  On the latter, it does not look like a good thing, but we won't know for sure until months or years from now.  That said, I still think it is a poor move.

Cost and value can be looked at in a couple ways.  Two of the approaches I have taken to determine value of a player are: (1) projections of market value based on retrospective performance and (2) projections of cost per win based on comparison modelling of future performance.  I christened a model BORAS which looks at past market value based on age and offensive performance.  That model thought the contract Davis would seek would be four to six years in length with a 20.8 MM annual salary.  Off the bat, seven years is considered a sizable deviation.  A 23 MM AAV is not beyond the 95% Confidence Limits, but certainly would be considered in the top quartile.  In other words, it is a uniquely high salary for a uniquely high length of contract, according to this model.  Perhaps a simpler way to put it is that the contract is one year too long and 35 MM too expensive.

The comparison model does not have a snazzy name because it simply is what so many people already do around the league and on the internets.  You can read about it here.  That model does not set any idea about how long a deal should be, but what value we can expect coming out of that deal.  For seven years, the upper composite value is 172 MM with the 50th percentile mark as 104 MM.  That is a pretty wide divide and the top tier is largely driven by amazing performance by Sammy Sosa, Jay Buhner, and Frank Howard, players who blossomed later than normal and had strong seasons in their thirties.  If you considered all the similar players, then the conclusion would be that the Orioles overpaid here by 57 MM.

The deferred payments changes the contract slightly.  As it stands the deal will take 22 years to complete with payments.  He gets 17 MM from 2016-2022, 3.5 MM from 2023-2032, and 1.4 MM from 2033-2037.  In today's money the deal could be expressed as roughly seven years and 138 MM or that Davis needs to deliver roughly 18 WAR.  The 50th percentile projection puts him at 12.5 WAR while the upper level projection is at 21.8 WAR.  With that in mind, BORAS would now say that is 1/13 too much and the comp model would be marked down to 34 MM overpay.  Regardless, the deal looks optimistic, but not egregiously so.

Where the deal looks worse has to do with fit and the consequence of holding onto Chris Davis.  First of all, Davis brings to the immediate a strong bat with a heavy right handed favored split.  This might bring visions of Ryan Howard in your head, but keep in mind that Howard was useful until his Achilles gave out the year before his extension went into effect.  Most ways to look at it though point towards Davis likely being a useful to very useful presence for the next three to four years and then be rather poor.  The reason for that has to do with how does what he does so well, which is to only touch a few balls but make those touches count.  Players with big power and poor contact rate tend to develop a couple years later than normal and stick around for an extra year or two before seeing their value completely collapse.  Players similar to Davis in the past often experienced complete loss of ability likely due to them depending so much on a fringe skill (i.e., contact) to take advantage of their another very loud tool (i.e., power).

Wile Davis should indeed be helpful in the near term and provide a needed left handed bat, he really is not what I would call the best fit for the club.  Depending on what else the Orioles do (there is talk about the club remaining in the Yoenis Cespedes market due to pitching drying up), they may be pressured to play Davis in right field.  Metrics project a range for Davis of -15 to 0 defensive runs.  If you ask scouts and front office folks, they lean hard toward the -15 mark.  If you ask Scott Boras or my 13 year old nephew, they lean hard to 0 and also suggest that Davis should be a swing man to buoy the rotation.  What this all means to me is that the club was in more need of a strong presence in right field defensively than a left handed bat.  Cespedes might well be worth two to even three wins more than Davis defensively in right field, which may mean more to a club whose starting pitching does not exactly miss bats.

On top of this, we would have expected Chris Davis to have signed somewhere even though no other suitors ever made it known they were interested in him (although the Houston Astros made a great deal of sense).  If Davis would have signed elsewhere, the Orioles would have been awarded something near the 32nd pick in the 2016 draft, which is worth about 7 MM.  That turns the deal into something more like seven years and 145 MM.

When it is all said and done, the deal looks poor, but not monumentally foolish.  I think they spent too much for a player who was slightly more of a luxury than them actually addressing a more pressing need.  Davis will likely provide good value for the next three to four years, but it would not be surprising if he is released before the end of this contract.  The comparison modelling says it is a 50/50 shot that he is a MLB player the final year of the deal.


Anonymous said...

This is a bad move in my opinion:

* While $23 million per year might have been fair given the current market price for free agents, the same $161 million could also have been used to re-sign Chen AND add Cespedes instead, for example.

* That means Davis needs to produce more WAR by himself than the other players that the Orioles could have gotten with the same amount of money. If we use the Chen + Cespedes hypothetical example again, the Steamer projections on FanGraphs suggest that they'll be worth +2.8 and +2.9 WAR in 2016, respectively. Is Chris Davis able to produce +5.7 WAR in 2016? I doubt it.

Jon Shepherd said...

Total earnings is not the same as yearly salary. Your comparison does not work.

Anonymous said...

Jon and Anon,

First, seems like the report I saw said Cespedes was looking for Davis-like money no matter what anyone has said and he might get it without draft compensation. No one is signing him or Upton because everyone wants to get them cheap cheap which may or may not happen. I don't know why the O's didn't want to sign Chen but it seems like that was never going to happen. They still need at least one strong SP and Kazmir was the absolute best fit and could've been had easily if the O's were willing to give an opt-out.

Secondly, with regards to the contract, it seems to me everyone is forgetting where we started on Davis. When we put together rosters a couple of months ago, we all assessed Davis at 25-30MM per year. With this contract, he's at 17MM per year. The $42MM deferred is nothing to the team - a pittanca allowable over a long period of time when salaries could inflate where it may be the MLB minimum by then (1.9MM). Why isn't anyone evaluating this contract at the 17MM number that it actually affects this year's payroll by?

Further, our earlier roster analysis was prior to the cheap Kim signing and the reasonable Trumbo acquisition. Not to mention the O'Day signing. If the O's were to make a play for Latos or (gasp!!!) Cliff Lee, this season could shape up very nicely. A lot of risk but a lot of upside risk (Kim, Lee, Latos, Miguel, Bundy, Tillman, Wilson, Wright, etc...).

I now see every offensive "hole" addressed (Kim in LF, Davis/Trumbo in RF/1B, Wieters/Joseph at C, and everyone rotating through the DH including Paredes). The bullpen is more than solid and is actually excellent. The bench is not so bad with Reimold, Rickard, Flaherty. We just need to find five solid starters out of a lot of risky players and we could use a FA upgrade. If Tillman and Gonzalez recover, Gausman emerges, and Jimenez stays average then we're not so far away. This is not so bad.

Anonymous said...

P.S. Remember Matt's analysis indicating that RF defense may not be as important as believed.......

Jon Shepherd said...

1. Cespedes and no one is expecting him to be cheap. Davis was not cheap either and Davis was asking for 8/200 if you remember.

2. Only people saying Davis was 25+ were Boras. Everyone else was projecting below that. You can read our articles or Heyman or Dierkes or Bowden or Cameron. Also read the article, I address the deferred payments.

3. The pitchers left over are about 1 to 2 win improvements over what the Orioles have. Maybe this brings projections to about 83 wins with one of those signings.

4. I think your outlook is quite positive with everyone breaking right. If that happens this is a solid team. I give maybe a 5 percent chance of everything breaking right.

Jon Shepherd said...

I do not think that is what Matt said at all. He said defense is important, but questioned whether it could be worse than 30 runs below average. He also questioned the validity of the metrics. That is why I backed up those numbers with views from actual scouts.

Anonymous said...

Jon, I'm not so sure I'm being overly optimistic. Seems to me that Tillman and Gonzalez were both "down" last year and are due for an improvement. Gausman was misused and giving him a set starting role could easily lead to a breakout (even a small one would be great). Subtraction of Bud Norris is an automatic improvement. Rolling the dice on Latos and/or Lee (a lefty??!!!?) could be cheap way to ensure some performance over Wilson/Wright, but leaving the possibility that any one of those four could get hot. Really need to make sure Ramon Martinez is paid to keep boosting Jimenez.

With regards to our rosters, we all allocated 25-30MM to Davis if he were to be brought back. Seems like 17MM leaves an additional 8MM to play with although I agree that the FA options are very limited at this point.

Do we need to talk about making Matusz into a starter again? If Bundy cannot perform then it may be time to start letting another team play the waiting game with him and see if we can take someone else's bad contract off their hands for some pitcher with some sort of value that we could buy for 8MM and Bundy.

Anonymous said...

Oh, and did you read the other analysis on FG responding to Cameron? One of the points is that the O's may not have spent the money on anyone else plus, even if the O's did pick up Upton/Cespedes it doesn't make the remaining FA SP any more palatable. The biggest debacle of the off-season was not offering Kazmir an opt-out.

Jon Shepherd said...

The money only for Davis consideration has been out there for months.

Jon Shepherd said...

To me that reads as optimistic because it seems as if you are discounting poor performance without consideration that there will likely be unexpected poor performances by someone this year.

Again...I am unsure why you think anyone kept 25 to 30 MM for Davis. I do not understand where you get that from.

Matusz is not a starter. He needs time to develop and probably a pitching environment thst is forgiving. Even then it will take a year to sort himself out. Basically by making him a starter the Orioles at best are breaking him in for someone the following year.

P said...

About that pitching situation, John…
Right now it looks pretty bleak. Is it possible that Dan is praying for some kind of break out by Bundy?
I can't imagine why he has ignored pitching, but on the other hand I think signing Gallardo would be a dreadful move. How likely is a Bundy renaissance? And if not him, anybody?

Anonymous said...

Jon, I relent. Your suggestion was 22MM for next year. http://camdendepot.blogspot.com/2015/10/blueprint-for-2016-orioles-nothing-is.html

I reserved 25 or 30MM just to be conservative. So I'll talk about the extra 5MM instead of 8MM. I'm kinda liking my blueprint at this point (of course, I did not anticipate Wieters accepting the QO but that move is what made Trumbo possible). Recommended Davis, O'Day, and Kazmir. Switch out Kim for Parra (I am not much of an expert on Korean Leagues). I still recommend trading/releasing Matusz but the "extra 5MM" allows the O's to keep Gonzalez. Finally, the Trumbo trade covers my recommendation of signing Pearce (trades were not part of the blueprint). I still stand by Davis in RF. I think that's what will happen most likely on some kind of rotating basis between Davis/Trumbo/Paredes/Wieters on 1B/RF/DH with protection against injury. I hope Paredes has been practicing his OF defense this winter.

The big hole is not getting Kazmir. I almost forgot that Worley was a great signing and has a chance to insert himself into this discussion too. Could Cliff Lee really be looking to get back in for a reasonable cost or will his price be high? How much baseball does he have left in him? A lot of the bloggers here liked the idea of Latos. That is still a possibility.

I just do not think my assessment is overly optimistic and is in line with what the O's themselves are thinking.

I challenge anyone to say that Davis/Kim are not better than the motley assortment from last year at the corners.

Jon Shepherd said...

Kim is on par. It is why he is not paid much. A sub 700 OPS is more probable than not. The modeling I have done thinks mid to upper 600 OPS although it is a model that really only excels with walk rates and homeruns. Additionally, he is not someone you expect to really do well in the field and will need some adjustment with setting up to throw. In Korea, you can be a little lackadaisical because running ability is less there.

Regarding Davis, the expectation is that he would perform similarly to last year. Do we really expect that? The thing with regressing to the mean is that the exceptional performances last year should also be regressed. All extremes should be regressed unless we have good reason for those performances to have been indicative of new performance levels.

Regarding Lee and Latis, why should we see these as sure things as opposed to investments with more questionable levels of risk.

My bet would be though that the corner outfield DH estimates are similar for 2016 as those estimates were for 2015.

Jon Shepherd said...

How likely is a Bundy renaissance? I would say minimally so. He has not been able to increase workload on his arm and has been largely unable to put in any meaningful time in the minors these past several years. I think 2016 and maybe 2017 will be transition years. I would peg him for a rotation slot in 2017 or 2018 as long as he stays healthy.

Jon Shepherd said...

ZIPS had last year's group in corners and DH at 5.3. This year's group is 5.2 using replacement level instead of Reimold's negative value.

Jon Shepherd said...

That was a quick look so feel free to verify.

Anonymous said...

Jon, did the corners and DH actually PRODUCE 5.3. IF not and this year's group does produce 5.2 then it's a significant improvement.

With regards to Davis and the mean, I'm not sure you can actually know what the mean is yet. Assuming he gets his TUE, his mean is 40-50 HR with 100+RBIs in 500+ AB. Even in the bad year, his HR would have been well over 30 without the suspension and his OBA was over .300. How old is Nelson Cruz again banging away at the HR lead with Davis?

I think Kim is going to be used for OBA not power. If he becomes a gap hitter and walks a lot atop the lineup, the worst case is he can be a lefty/righty platoon with Reimold who showed a good ability to leadoff late last year when the O's surged.

Maybe we should hire Thome to pump up Davis like we hired Ramon Martinez to pump up Jimenez. We can give all the big earners their own personal psyche coach.

I'm afraid you're right on Bundy. That's why I was suggesting seeing if someone else would take on his risk for a known performer now. With regards to Lee/Latos, I was not suggesting that they were sure things at all..... not at all. Just that surrounding the team with guys motivated to improve or come back especially guys with track records of success coming off of injury might not be such a bad thing.

Jon Shepherd said...

I think what makes the most sense is to evaluate the players by the same methodology. What were the expectations of last year's group vs the expectations of this year's group. What last year's group did is largely irrelevant unless we have good reason to explain why they underperformed according to their expectations and perhaps why the current group is expected to be more in line. It seems to be a poor way to compare the underperformance retrospectively without a comparable with this current group.

I think that is a very optimistic view on Davis with a narrative that may well be rather convenient. He did use medication in 2014 and was caught, so I am unsure whether we can cross off 2014 as a year where he was not using. He probably used less than he normally does, but it is difficult to have any good idea what all that means.

OBA is tied into walks and that is expected to be cut down immensely. Again, it all depends on his contact rate as our current models do poorly with that. Of course, it would be nice if the model thought his contact rate would be good. Best projection for him I have seen is actually from us here. I think it was around 1.6. Elsewhere it looks like 1.1 and below.

I think the idea that Thome can pump up Davis is another optimistic view. It is looking for things to work out as opposed to keeping an even line. Additionally, it is unlikely Ramon Martinez did much of anything with Jimenez. You can go back through the past four or five years and see how different pitching coaches or mentors were seen as finally cracking the Jimenez code. It is kind of funny how many times that article has been written over the years. We were going to write about that here a few months back, but it seemed a little too mean spirited to another local blog and Melewski.

I think the idea of older players with success acting as benevolent mentors or leaders by example is one of hopeful optimism. It has not been the case with other pitchers like Greg Maddux. Typically, these guys keep to themselves, lash out, or whatever as they try to drag themselves back to what they once were.

Matt Perez said...

"First, seems like the report I saw said Cespedes was looking for Davis-like money no matter what anyone has said and he might get it without draft compensation."

I bet that means that Cespedes wants more per year from 2016 to 2020. I don't think that Cesepdes is really looking for more than what Davis got. But I wouldn't be surprised if Cespedes wants more than 5 and $90M which would be more than what Davis received over those first five years.

"I do not think that is what Matt said at all. He said defense is important, but questioned whether it could be worse than 30 runs below average. He also questioned the validity of the metrics. That is why I backed up those numbers with views from actual scouts."

Agreed. I certainly didn't prove that corner outfield defense isn't important although I suspect that it isn't as important as we think. But there's a huge difference between "suspect" and "can prove".

I'd also suspect that scouts and front office types are influenced by UZR. But if they really believed in it then Jarrod Dyson would be a starter and superstar somewhere instead of a really good fourth outfielder.

I thought Davis would get 7 years and a lot of money but I probably would have passed.

Anonymous said...

I like the O's. I can't change what they do. So it seems like optimism is the better part of valor. Statistics should be a guiding light but should not temper our optimism when the standings are 0-0.

What I heard Matt saying was that if the RF gets 99% of the easy balls then his defense is adequate. I've seen Davis play RF. I've seen him botch a perfectly simple ball into a 2B. I know that everyone thought that he was a terrible 3B. On the other hand Lough's defense wasn't enough to keep him from being released (Janish, too - except for a MiLB deal). I personally feel more comfortable with Kim, Davis, Reimold, Rickard than Lough, Young, Reimold, Parra, Parmelee, Snyder. We can hope Kim goes all Kang on us and not all Wada on us. Basically, my optimism serves to justify what has already been done.

I don't really know about the psyche stuff (the earlier line was sarcastic "maybe we can hire a psyche counselor for all the big contact guys".....). I agree with you on Jimenez but the opinion guys spent a lot of time on it last year. But we DO want Davis to turn out like Thome. Can we at least keep our fingers crossed? Our fallback at this point is Walker/Mancini. If Davis doesn't play RF then Trumbo will. Which one do you prefer?

Let's work on fixing the pitching now. I just read that Lee is looking for a "big base" so he may not be an option (even though I don't think he'll get it). Sounds like Latos or bust right now. Big mistake not fighting for Kazmir.

Philip said...

Re: pitching.
I don't know why we didn't sign Rich Hill. He has an amazing 1/2 season, and a good 1/2 season was enough to get Jiminez 50 million, while Hill could have been had for 7.
Going forward, Gallardo would be a horrible choice, so all we have as options are:
1)Flyers on Fister, Latos, et al( is there anyone else?)
2) international search: find the next Miguel
3) Trade. Ha! Trade what? Unless we move Britton, which is an excellent idea that will not happen.
4) sacrifice to the baseball Gods and hope that an unexpected guy-or three of our guys-can give us 180 good innings.

Anonymous said...

Anyone notice Chris' arm in the above picture?

Matt Perez said...

"What I heard Matt saying was that if the RF gets 99% of the easy balls then his defense is adequate."

No. I said that a player wouldn't be terrible if he could get to 98% of the easy balls and that the average corner outfielder converts over 99%. Interestingly, Inside Edge doesn't think that CD failed to convert an easy play in outfield last season and only failed to convert one likely play (75-90%).

The point is that what you think is an easy play was considered far more difficult by the actual scouts. In other words, the easier plays are even easier than what you consider easy.

Anonymous said...

Matt, I don't agree about the "easy play" analysis. If that play I remember was the "one" then it was a huge misjudgment of a fly ball that he never even touched (zero jump on the ball not just a bad jump). What I do think is that is an excellent example of where the subjectivity is in defensive metrics. Who decides what is "easy"?

On another note, a couple of other names to add to the SP list - Billingsley and Minor. I had not recalled that Minor was released and he's a lefty. Signing Minor and getting him healthy could make for the best signing of the year. I think he has more potential than Latos. Dave Wallace knows him well from the Braves. And Billinglsey used to have Kershaw-hype around him.

P.S. Media including Olney keep talking up the Davis signing.

robotosan said...

I actually had moved on after the offer for Cespedas was made. Of course it was obvious that it was a arm twisting move to get Davis to either sign or put at risk a very nice payday. Nobody else was going to give him 154 very big ones.

I was disappointed the O's didn't give Parra another chance. He would have nicely filled that outfield spot and likely would have come back to his normal hitting for average. All the spots would have been filled. Strong up the center (Etchebarren, Aparicio,Johnson and Blair) defensively, a hopefully strong continuation for Machedo, normal great year for Jones... We could have gotten a #2 somewhere along the line but...

Buck will have to do with what he's got and we will all hope for another 2014 kind of Orioles Magic.