Jose Abreu’s contract – A DEEP LOOK

The Section 108 blog is approaching 4 years old, it’s no longer old enough to cutely crap its pants no matter how likely it is for any of its individual members to do so on their own. In that time, we’ve done some 600 blog posts, 41 podcast episodes, upwards of 50 #SundaySoaks (the internet’s #1 Sports show in a Hot Tub), 40,000 tweets on the Mother twitter account and nearly as many across our individual twitter accounts. In that time, amongst all of our silliness, the topic we have discussed the absolute MOST would be the conclusion of the White Sox relationship with Jose Abreu. I mean it’s a topic that has been top of mind throughout. And now we finally have it, as Jose Abreu signed a 3yr/$50M deal with the team this past week. There has been much twitter discussion about this deal and so I felt that it was probably worthwhile to get the virtual pen and paper out and scribe some thoughts on the deal.

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ONE RULE

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We are taking emotion / fandom out of this analysis. If you are a “fan” of Jose Abreu, of course you love this fucking deal. The fan side of your brain can’t possibly forget that he’s been really the only consistently productive member of the White Sox for the better part of the last half decade. You also can’t possibly forget that the guy ate his fucking passport to get here.  Then, once he got here he went a period of nearly 3 years with only seeing his son once and he almost lost one of his fucking balls (torsion ain’t no joke). Amidst all of that personal shit, he still managed to crush. As a fan you gotta love that. No, I’d like to stick strictly to the value proposition and discussion of the current and going forward, White Sox.

THE DEAL

Jose Abreu’s contract is officially 3 yrs $50M

A quick and dirty estimation of free agent value is generally to estimate that a player on the open market is worth approximately $8M per bWAR / fWAR / WARP. Using this sort of calculation, Jose Abreu would have to generate approximately 6.25 WAR (choose the one of your choice, idgaf). As of right now, the only free projection model that I know is available is Steamer and that is housed at Fangraphs and produces a projected fWAR for the player. As of right this second, this fWAR for Jose Abreu for 2020 stands at 1.9. Let’s just go ahead and assume about a 10% regression (I’m pulling this directly out of my ass as it could vary wildly, but this should be close enough for an estimation of value) for each successive year of the deal (2021 & 2022) respectively and we get 5.1 fWAR over the life of the deal (1.9 + 1.7 + 1.5). That would seem like the White Sox are paying Abreu something of a $10M premium doing it this way i.e., the White Sox are choosing to OVERPAY him, based on his expected on-field production.

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Now, projection models tend to estimate player performance in a linear straight line way (not always, but materially). What the fuck am I talking about? Well if a player has what looks like a regression, a season that shows certain indicators declining, especially as they age, the models aren’t likely to show bounces in performance the next year. In real life, that does happen. Also, the projection models aren’t likely to show a total and utter collapse for a player like Abreu (sadly, that shit happens too).

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They tend to try and smooth that out. I figured maybe another way to carve up this problem would be to look at similar players to Abreu and see how they did. I chose to use bWAR for this (because Baseball Reference’s Play Index only costs $36 per year and allows me to have fun like this). Below is a table of similar players to Abreu, players that generated between 18 and 24 bWAR in their ages 27-32 seasons and also played 75% or more of their games at 1st base. I cut the beginning date off at 1978, which is the year of my birth (it’s an arbitrary cut off, but I like using it because it’s easy for a dumbass like me to remember and it tends to give us enough data to play around with). I also included their bWAR for the next 3 seasons (33-35 year old seasons) to see how they aged.

bWAR

That’s a fun table, a bunch of names you all remember. As you can see in the table, there are some total and utter collapses in Hrbek, Mo Vaughn, and Cooper and then you got Mark McGwire fucking shit up over those same years (I kinda miss the backne years). The Median and Average are pretty close to each other, so I feel comfortable using either for this exercise. Even more interesting and this is homework for you if you are so inclined, go ahead and check out Baseball Reference and look at the individual bWAR seasons in and around the age 31-35 years. There is a lot of bouncing around. There are plenty of sub 2.0 bWAR seasons followed by ones that bounce over 3.0 bWAR. I LOVE VARIANCE!! Since Abreu’s age 27-32 years are right in the middle, that seems like a semi comfortable number to use. Let’s use the 6.4 bWAR, if he generates that, he’s basically right on the money worth the $50M over 3 years.

But wait…..There’s MORE!!

As our buddy from the SoxMachine Josh Nelson notes, this contract cuts up a little differently than it looks. The first $5M are actually being paid in 2019. Think of this money as a fucking holiday bonus. We can all relate to that shit. Everyone likes a Holiday Bonus and not a fucking Clark Griswold jelly of the month bullshit, like a real bonus. Hey Jose, you crushed your last deal, here’s a little extra cheddar for what you achieved on that first deal. I got no problem with that at all. Take umbrage if you must. The effect of this is probably internal budget stuff. Basically, by shifting the $5M to 2019, Hahn probably cleared up $5M more he can spend on the 2020 team, while still allocating additional money to Abreu. Now, this may seem stupid to most of you reading this, but as someone who has done accounting for 20 years, it’s sometimes tough to explain 5% budget variances when you have so many stakeholders that are expecting a certain result. It’s creative accounting, but it should be filed under, “allows us to keep doing our job and not worry about explaining small dumb stuff”.

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ALSO, the back end of the deal has the Paul Konerko special, $1M per year paid out over 4 years deferred payment. Now, those dollars sure do fucking count in the budgets of those seasons, but the effects are small. Maybe it forces you to use internal depth on the 5th bullpen arm instead of signing a Ronald Belisario or a Scott Downs (which might accidentally be valuable to you), or at least making smaller deals in those spots. It’s probably not material, but it is material to the year it gets chopped off of, because the extra $4M in 2022 (like the extra $5M in 2020) are probably worth a bench bat or something.

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Let’s re-calibrate to call the deal, 3 years $41M (I’m using creative accounting here, but I explained the methodology above, removing the $5M bonus and the $4M deferment, so call me full of shit, but at least I am showing my work)……in this instance Abreu by both WAR estimations is easily worth the contract.

WAIT…..WAIT!

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Some of the skepticism of the extension, both for the time and dollars was strictly based on optionality and the risk of total collapse. As we noted in the table, a chunk of the hitters did completely and totally collapse. When I say optionality: The White Sox had a QO signed for $17.8M for 2020. They had the option to wait out the 2020 seasons performance before making a decision on 2021 and beyond. This is a totally valid concern. Whatever % of the time Jose Abreu is a total abomination in 2020 or gets a career ending or altering injury, the White Sox lose big on this deal. Let’s say a healthy 20% of the time, Abreu is LOL bad / terrible / injured / incarcerated (just play along). Then that 20% of the time the White Sox pay him $0 in those future years and gain back the money and can deploy it elsewhere. BUT, we mustn’t forget, the White Sox LOSE $6.8M on the 2020 budget which can’t be deployed to buy an extra player (a non-immaterial amount for a mid-market style payroll team).

Let’s once again assume $8M/WAR, whether it’s true or not. Abreu’s collapse risk

RISK

If you take that -0.6 WAR cost for forgoing this optionality from the various calcs you get the following

ABREU RISK

I think that table gives you a little cleaner look at the expectations and outcomes.

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There is one last point to be made. There is something that my guy Pete Hand calls the “Sox Suck Tax“. As funny as this term is, there is a premium that must be paid by teams that haven’t been as good in their recent past in order to get big time free agents. We think of this in terms of $$$ paid directly to the person being acquired. I think that is probably true, but if you are trying to lure talent to come to your organization, some of the mix, other than straight compensation to the employee is ensuring that other talent will be there. There is undoubtedly a difference in a longer term free agent coming in and knowing that you are going to have another good professional player there for term.

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Most free agents walking into the White Sox situation are probably (at least it sounded like Yasmani Grandal was, based on him speaking on 670 the Score) looking at a talented young core, with a sum total of 1 good Yoan year, 1 good Gio year (following a terrible one) and 1 good Anderson year…..however, Jose Abreu has been good for the better part of the last half decade and is a recognizable brand. His personal brand (as we might call it on twitter) is worth something to free agents coming in. I don’t have the chops to quantify it, but I am guessing the folks on 35th and Shields do and I’d assume they are comfortable with this deal. We should be too.

-BeefLoaf

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