Monday, January 24, 2011

Revisiting Zito's Contract

When decisions are made during times of desperation, the results are rarely pretty.

In the 2006 offseason, the Giants were determined to sign a big-time free agent bat. They offered deals upwards of $100 million to two players, but couldn’t coax either Carlos Lee or Alfonso Soriano to head to San Francisco. In hindsight, this ended up being a very good thing, in that neither Lee nor Soriano are particularly useful any longer, if at all; except that, having failed in their endeavor to sign them, the Giants pulled the trigger on another ill-advised deal: they signed Barry Zito.

There wasn’t really anything wrong with Zito as a Major League starter at the time, nor really is there now. The problem was this: they gave him the richest contract for a pitcher in baseball history, i.e. 7 years for a total of $126 million, and an option for an eighth season for another $18 million (or otherwise a $7 million buyout).

Zito was never an elite pitcher, despite wining the AL Cy Young award in 2002. His best season actually came in his first full campaign, when he finished with 5.0 Wins Above Replacement (WAR) in 2001. But that season he struck out 8.61 batters per nine innings. and he would never again approach that. He was always more of a finesse lefty, and one who walked his fair share of batters. As his fastball velocity slowly eroded, so did his value. After his 2002 Cy Young season, he never again posted a FIP (fielding independent pitching) beneath 4.00 (it was 3.87 in ’02). His WAR went from that 5.0 in 2001, to 4.4, to 4.3, to 3.2, to 3.0, and to 2.1 in 2006, his last season with the Athletics.

And then the Giants made him the richest pitcher in history, despite these obvious signs of his steady decline.

The Giants had come within outs of winning a World Series in 2002. In 2003, they were favorites to return to the Fall Classic and win it this time; instead, they lost in the first round to the Wild Card Marlins. In 2004, they were eliminated from playoff contention on the final day of the season. In 2005, nearly all of Barry Bonds’ season was wiped out because of knee surgery, and the Giants finished third in the West. In 2006, the Giants again placed third in the West.

And so, the Giants felt compelled in that offseason to accomplish something significant. They wanted to return to the playoffs in 2007 for one last shot with their franchise player, Bonds, who would depart afterwards with the all-time (and single-season) home run record. They wanted to show the fans they were not cheap, and could compete with the big boys contract-wise. They wanted to make a splash, and improve their PR position*. So when Soriano and Lee declined, they became desperate. The Giants moved on to Plan C, possibly paying somewhere around $40 million more than the next highest bidder to bring in Zito.

*Never was that more evident than when they arrived in Spring Training and both Bonds and Zito wore T-Shirts that read: “Don’t Ask Me, Ask Barry.”

The below chart I’ve created provides a nice visual of the results. The basic idea is that the years (or seasons) go along the bottom, the x-axis, from 2001, his first full season, to 2014, the final year of his contract if his ’14 option is picked up. Across the left-hand side going up and down is our y-axis, denoting both salary in dollars ($) and WAR value* in dollars ($). The yellow circles with green borders are his WAR values* from his time with the Athletics. The orange circles with black borders are his WAR values* with the Giants. The green circles are his salary figures throughout his career, and the last one has a white border because it’s an option ($7 million buyout if not picked up).

*The mechanics: for the more hardcore among you, I’ll explain the WAR values here. Fangraphs tells us that in 2002 the dollar per win – this is the dollar per win above replacement in the market – was $2.6 million. This basically means that if you went out to sign a free agent that you expected to be worth 1 win above replacement (1 WAR), you’d have had to pay $2.6 million for that, on average. That number increases with inflation each season, and is at about $5 million now (’03 = $2.8, ’04 = $3.1, ’05 = $3.4, ’06 = $3.7, ’07 = $4.1, ’08 = $4.5, ’09 ~ $4.0 and ’10 ~ $5.0). To arrive at what Zito is worth, you simply multiply the dollar per win in that season by his season WAR total.

What we see is that the A’s were getting quite a bit of value from Zito when he was young and cheap, before and during his arbitration eligible years, which also happens to be when he was at his best. As his salaries increased from 2001 to 2006, his value was slowly decreasing but never to the point he wasn’t worth what he was paid. In 2006, his final season with the A’s, his salary and value converged almost perfectly. His salary was $7.9 million and he was worth about $7.7 million that season posting a 2.1 WAR.

The Giants foolishly signed Zito to an enormous contract and have been paying for it ever since: his salary and value continued in the same directions they had since he was a young man, his salary headed up and his value headed down.

So why did I make this chart? Well, for one it’s a nice little visual the sheds some light on the Zito contract. It 1) gives us a pretty good idea how bad the contract really is. But also, it 2) goes to show that Zito didn’t just stop trying when he arrived in San Francisco. The fact is: he was headed in this direction all along and simply continued on the same path. Living up to his contract is, and always was, impossible. Zito has been a player to scorn for many, especially during his lower points such as being sent to the bullpen in ‘09 or walking in two runs in a potential division-clinching game in 2010.

But there’s another reason I’ve done this: Tony Reagins, the GM of the Los Angeles, California, Angels of Anaheim, i.e. the man who just brought over the worst Canadian import since Nickelback. When one thinks toxic baseball contract, the two players that more often than not come to mind are Barry Zito and Vernon Wells.

In 2006, Wells was coming off an excellent season that followed a few really good ones. He wasn’t an MVP candidate, but he was certainly playing at an elite status. And with that, J.P. Riccardi extended Wells in December of 2006 for: you guessed it, 7 years and $126 million, though not structured on a per year basis exactly like Zito*. This deal, along with the one he handed to Alex Rios, contributed to his firing in 2009.

*Oddly, or perhaps not, this is also essentially the same contract Jayson Werth got this offseason, another enormous deal that’s almost certain to spoil. The $126 million deal is becoming satire.

Let’s take a look at Wells’ chart, using the same methodology as Zito’s:

While Wells’ decline isn’t so linear, it is apparent. Directly after signing his big deal, he began playing at a level well below not only his contract, but also well below what you would have expected given his track record. And just like that, another albatross was born.

In both 2007 and 2008, he was only worth 1.5 wins and in 2009 he absolutely plummeted to 0.0 WAR, as you can see from the tiny dot represented at the x-axis between 2008 and 2010. In reality, there shouldn’t be a dot at all but I plugged in 0.1 WAR just so it was visible.

His 2010 season was quite a bit better as he posted a 4.0 WAR, but thank god it was because it’s also the season in which his salary jumped from $10 million per season to $21 million. Over the next four seasons, it will balloon to a total of $86 million, $23 million in ’11 followed by three more of $21 million.

Unfortunately, it doesn’t appear his resurgence is sustainable. Here’s why: his 2010 offensive outburst coincided with a park factor in his home field that went absolutely berserk. I don’t think anyone has yet figured out exactly what happened, but this much is clear: something did. At home, he posted a weighted on-base average (wOBA) of .417. On the road, his wOBA was just .306, or pretty much abysmal. It’s normal for a hitter to perform better at home than on the road, but such a drastic differential leads me to believe something was amiss.

But the most compelling evidence that Wells won’t continue to play at his 2010 level is that in three previous seasons, he averaged just 1.0 win above replacement, and at 32 years old, he is now entering the decline phase of his career according to his age.

It was widely believed that no team would ever take on Wells’ contract, unless the Blue Jays were willing to eat an enormous chunk of the remaining money.

In steps Tony Reagins of the Angels. The Angels expected to contend for the division title in 2010 but instead their best hitter, Kendry Morales, broke his leg during a walk-off celebration and they finished third. From the beginning of the offseason, they made it very clear they had money to burn, and intended to do so. Their top target was Carl Crawford. They misjudged the speed of the market and before they knew it, Crawford was a Red Sox. They then coveted Adrian Beltre, but he opted to sign with the Rangers. So, after stupidly relenting a first round pick to sign a good but not great left-handed reliever in Scott Downs, they’d seemingly exhausted all other possibilities – though this seems extremely unlikely – and went ahead and made a trade for Wells.

And not only did they take on virtually the entire contract in terms of cost, but they gave up (when a cold bowl of miso soup would have done the trick) a 29 year old catcher named Mike Napoli, the same of a career wOBA of .357, when the catcher of their managers’ (Mike Scioscia) choice has a career wOBA of .255. Jeff Mathis does seem the better of the two at catching, but he’s neither shown an ability to throw out more runners or give up fewer passed balls. The likelihood of him closing the gap with his defense given the chasm in their offensive output is remote. No, it’s impossible.

If you have concerns about whether or not this is truly a horrid trade, allow me to alleviate them. Over the past four seasons, Zito has been worth 1.85 WAR per season. Wells has been worth 1.75 WAR per season. Even if Zito’s 2014 option was picked up, his remaining salary would be just $75.50 million versus the $86 million to Wells is owed. What’s more, if his 2014 season is bought out, the total remaining commitment to Zito is just $64.50 million. Zito has been more valuable, and is owed less.

This is quite possibly the worst trade ever, and certainly ranks in the top five or so. This acquisition smells so profoundly of desperation, it’s not funny. There have been whispers for a long while that the signing of Zito in 2006 was done at Peter McGowan's (Giants owner) behest, as was also the case even more recently when the Yankees signed Rafael Soriano. I wouldn't be surprised if that played a factor here. But in any event, we can thank the Angels for teaching each of us this lesson once more, but certainly not for the last time.

In my wildest dreams, I can't imagine how Toronto could have gotten so lucky.

I've used Fangraphs' WAR (fWAR) for this post.


  1. One problem, for me, with the standard valuations of pitchers is that it assumes that the pitcher is governed by DIPS. Zito, however, has proven to not be governed by DIPS, his BABIP is not average and he has pitched long enough that this is significantly so.

    I am not too familiar with Fangraph's WAR, but I would have to assume that DIPS theory is underpinning that. That falls apart for a pitcher like Zito, whose BABIP has varied significantly under .300 for much of his career. Thus when the formula adjusts his BABIP upward to .300, assuming he was being lucky, he gets penalized for deriving value by being one of the few pitchers capable of keeping his BABIP lower than others.

    However, I probably am nitpicking here because, if I recall right, Zito has been around .300 BABIP since joining the Giants, adjusting for this would probably make your chart look even worse for him because his WAR would be much higher in his A's days since, if I recall right, that was when his BABIP was super low, mostly. Still, I think it would still boost his WAR value while with the Giants and make it not so lopsided in terms of value delivered because I think he has been below.

    I would recalculate the WAR for you but I don't have a formula to do it easily.

  2. Oh, but nice article overall, really enjoyed it.

  3. Fangraphs WAR is FIP based; so yes, low BABiP is penalized in their system. But you're right, he posted low BABiP's often in Oakland, and still does, though to a lesser extent. Baseball-reference uses a different system based on runs, and honestly I think his WAR is worse there. But anyway, I'm not quite sure why that matters. WAR was the best way to relate his value to his salary, and I just happened to use fWAR this time, and I used the same system for both players.

    Glad you enjoyed it, thanks for reading!