The Poor Man’s Analyst

CC Sabathia and his $161M deal

with one comment

I’m lazy. Instead of trying to figure out all the dollars per win figures over the next 7 years, and figuring out how many innings CC will pitch, and how effective he’ll be… I’m just going to show the work of Tom Tango, and explain it all in simpler terms. Then at the end, I’ll discuss the opt-out.

Here’s his comment on the subject:

If I
– call CC a .625 pitcher, with a .380 replacement level, and 23.5 “complete” games in 2009, and then
– use the Rule of 10 (drop winning percentage by 10 points, drop IP by 10%) for each year, and
– apply the 4.84MM$/win and increase by the 10% inflation rate each year, I get this:

Year WAR Salary
2009 5.8 28
2010 5.0 27
2011 4.2 25
2012 3.5 23
2013 2.9 21
2014 2.3 18
2015 1.7 15

That total is 25.4 WAR, and 158MM$ for 7 years.

BINGO.

So let’s break it down step by step.

  • The “.625” pitcher is Tango’s way of saying he’s really good. It puts him in the same class as guys like Webb, Santana, and Halladay. It’s really just an expression of how good Sabathia is in an easy to understand way.
  • The .380 is the same as above, but it’s what a freely available replacement level pitcher would do.
  • 23.5 “complete” games means that he’s projected to pitch about 211 innings next season.
  • The rules of 10 mean that his “ability” decreases by 10% each year, and his innings do the same.
  • The salary in dollars per win has been discussed here previously, and the 10% inflation is just saying that the standard year-to-year increase in dollars per win is 10%. Last season it was 4.4, this season is 4.84, next year it will be about 5.32. This has been true over the last several years.

Tango values CC at $158M over the next seven years, accounting for aging and decline much more than most people would. This look like a fair deal for both sides. But there’s the opt-out clause, which is giving some people pause.

The Opt-Out Clause

CC reserves the right to opt out of his contract after 3 years, for whatever reason he wants. At this point he will have been paid approximately $69M (we don’t know if the deal is back-loaded or not). In recent years, players like J.D. Drew, A.J. Burnett, and Alex Rodriguez have opted out of their deals in search of even more money.

The Yankees offered CC Sabathia a reported 6 years and $140 million right off the bat. If Sabathia had come to them and said “Actually, I only want 3 years and $69 million,” the Yankees would have agreed faster than you can say “Carsten Charles.” You see, the Yankees wanted him for six years, no questions asked. If Sabathia had not insisted on an opt-out, the Yankees would have him for 6 or 7 years, and lived with him regardless of whether he got hurt or was ineffective. If he gets hurt in year three, and says “screw the Yankees, I’m staying and taking the money,” then, well, that’s what the Yankees intended to sign up for anyway. If Sabathia absolutely dominates and opts out after three years, I’m sure the Yankees will be satisfied. In other words, if Sabathia is so good in the next three years that he thinks he can get even more, then I suspect the Yankees could not be happier with their investment.

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Written by dcn29

December 10, 2008 at 9:21 PM

Posted in Player Value

Tagged with ,

One Response

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  1. The potential for success and disaster are both huge – C.C. Sabathia huge!

    Shane Bertou

    December 11, 2008 at 8:38 AM


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