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Free Agency: What kind of bang to expect for your $

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With the Astros playing pretty well down the stretch, even without Carlos Lee, Drayton McLane is most likely going to have around $15 mil eating a hole in his pocket this winter. Assuming the team brings in a big name free agent starter, will his addition be worth it?

The Astros' goal (as well as the other 29 Major League teams) is to reach the post-season in hopes of winning the World Series. Sounds simple enough, right? It follows that the more games a team wins, the better their chances at making the playoffs. The chart below, courtesy of Vince Gennaro, exhibits the probability of a team reaching the post season based on their final regular season win totals. No surprise that the NL offers the path of least resistance, as far as a team's ability to play in October.


We can't say for certain whether or not the Astros' brass has access to this information, but it is not earth shattering news by any stretch. Judging by the graph, a NL team doesn't even need to win 90 games to give themselves a 50/50 shot at reaching the postseason. Knowing what the Astros need to do to put themselves in the running for a playoff spot, the front office will have to evaluate whether or not a free agent, coupled with improvements in other areas of the team, can add enough wins to the team's 2008 total to reach the playoffs in 2009.

This is where it gets tricky. Free Agent signings are not usually ruled by reason. A lot of the time, teams make decisions to fill certain areas of need, and in doing so they overspend a great deal. However, a small group of teams- both New York clubs, the Cubs, the Red Sox, the LA clubs, can sometimes be justified in overspending for a free agent. Teams stand to make an extra $30-40 million dollars if they make the post-season. Source: Diamond Dollars. These big market teams are usually the ones that are already high on the baseball food chain, as far as won-loss record goes. If, for instance, the NY Mets offered Carlos Beltran an average of $17 million a season to be their center-fielder, they may feel that they're justified in doing so, based not only on their desire/ability to reach the post season, but because of the money that a Carlos Beltran can generate for a team like the Mets in a market like New York City. Funny thing about Mr. Beltran and his 2005 NY Mets- the same team that won a grand total of 71 games in 2004, won only 83 in their first season with Beltran patrolling center. A 12 win jump is extraordinary, but the Mets' improved play certain had as much to do with David Wright's ascendancy into elite status as a third baseman, as well as the addition of Pedro Martinez and his ERA+ of 145. For what it's worth, you can see Beltran OPS'ed below the league average that season. The Mets reached the playoffs in 2006, winning their division and falling one game shy of going to the World Series. Carlos did his part that season- hitting 41 HR's and slugging a tidy .594, perhaps making it easier for Met fans to stomach this closing act of his. His Wins Above Replacement Level leaped from 5.7 in 2005 to 10.8 in 2006. Source:  Baseball Prospectus. The Mets' transition from terrible team in 2004 to decent team in 2005 to division winner in 2006 stands to prove my point that in order for a big free agent signing to begin to make sense in terms of $(s) spent, it's best to figure out whether or not your club is a viable post-season contender if said free agent is signed. The Mets got a shell of the Carlos Beltran they signed for in 2004, and as a result, their 2005 was only average. Their 2006 version of Beltran was exactly what they wanted, as his increase alone in WARP would have been enough to win the NL East.

What does this mean for the 2009 Astros? For starters, McLane, Wade and Tal Smith need to seriously evaluate whether or not the 2008 club is as good, or as bad, as their record indicates. Before last night's win, the Astros' Pythagorean Won/Lost Record was 60-68. This should tell us that the Astros are probably not a .500 team, but rather a .469ish team. Based on what we saw with the 2004 Mets, and for that matter the 2006 Astros, signing a big name free agent (Beltran and Carlos Lee, respectively) when your team isn't within striking distance of a playoff spot doesn't make a whole lot of financial sense.  Baseball Prospectus has the Astros finishing right at .500 with a 81-81 record. For the sake of argument, let's assume that the law of averages does not correct and the Astros' W/L does not regress to the mean. We're left with a team that's about 8 games out of serious contention for a post season birth. What sort of conclusions can be made about the club in 2008 and heading into 2009? Here are some pretty reasonable/general conclusions I came up with:

  • Hunter Pence and Michael Bourn will not be as poor offensively as they were in 2008, and their defense may actually improve based on having another full year in the majors
  • Roy Oswalt should rebound and put his injury riddled 2008 campaign behind him
  • Carlos Lee and Lance Berkman will not be able to produce the same kind of numbers they did in 2009 as they did in 2008. Ditto Brian Moehler
  • The pitching staff's otherwordly HR/FB rate should improve dramatically
  • JR Towles can have a much improved 2009 season after having extended time in AAA, as well as instruction throughout the winter
  • Wandy Rodriguez and Brandon Backe cannot be counted on as front of the line members of the rotation
  • Randy Wolf as per this analysis,  had a pretty fortunate season in terms of batters faced, runs allowed, etc.
  • Attendance at Minute Maid Park has been ok. The Astros ranked 7th in NL home attendance in both 2007 and 2008 (projected). Source: What affect will a big free agent starter do for attendance, team merchandise, promotions, and overall revenue?
  • Bearing these factors and more in mind, suppose the Astros signed Ben Sheets to a $90 million dollar contract over five seasons. Averaging out to $16 mil per season, Sheets would pair with Roy at the top of the rotation, causing someone to lose out on a job. Judging by Stephen's analysis, Brian Moehler has been propped up by our stellar defense and cannot  be expected to perform as he did this season. Wandy, while being Jekyll and Hyde again, is still the youngest member of the staff and above all else is left handed, so odds are he'll be back. Assuming he recovers from his pinched nerve, Felipe Paulino should be given every chance to earn a spot in the starting rotation. That leaves Brandon Backe as the odd man out. Again, we need to take into account a lot of different factors, but the question now is, whether or not Ben Sheets addition and Brandon Backe's removal from the Astros starting rotation will be significant enough to push the team into contention. Judged against a Replacement Level pitcher (think AAAA), Brandon Backe is expected to win .4 games above a  replacement level player in 2009, while Ben Sheets should win 3.5 more. Source: Baseball Prospectus.  Sheets and Backe have both exceeded their 2008 projections, so the exact numbers may be slightly different, but Ben Sheets should give the Astros about three extra wins on the season if he did indeed replace Brandon Backe.

    The second part of the free agency decision making checklist is value. Thirty year old free agent starting pitcher are about the scariest words a GM can hear. Whether it be the Dodgers signing Kevin Brown, the Phillies signing Kevin Milwood or the Mets signing Tom Glavine, inking a veteran starting pitcher to a big contract is perilous to say the least. Sheets though, may be slightly less of a drain on the pocketbook. If Sheets were to average the $16 million a season I hypothetically awarded him earlier, what could the Astros stand to lose per year, assuming they were to lose money at all? Without taking into affect revenue sources off the field, Sheets has a Market Value Above Replacement Player (MORP) of the following:

2009 $9,400,000
2010 $8,525,000
2011 $7,625,000
2012 $6,300,000
2013 $5,375,000

    The sliding scale is clearly in vogue for our potential number two starter. Each season he stands to lose about a million dollars in value above a AAAA-type starter, someone like Brandon Backe.

    In the very short term, say 2009, this deal may be pallatable. Sure, we'd be overpaying to get Ben Sheets, but with the improvements from Roy O, Towles, Pence, and Bourn, coupled with good years from Lee, Berkman, Wigginton, and others, this team may have a chance to reach the post season. Especially considering how we'd be simultaneously strengthening our probability of appearing in the postseason while weakening a division rival's. In the long term though, with Roy O facing a similar decline in his output as Sheets, and with Berkman, Lee, Moehler, Wandy, et al moving into regression-ville as well, the deal may not make as much sense.