Reviewing MLB National Transaction Day, Part Two: Signings

Part One of this two part series was released late yesterday, analyzing the trades on December 3rd. This segment will focus on the seven major free agent signings that occurred on that day as well.

When analyzing signings, three principles are critical. First and most obvious is the significance of the upgrade relative to the replacement. The Brian McCann signing made sense to the Yankees because the difference between Brian McCann and Francisco Cervelli is quite large. While McCann also would have helped a team like the Dodgers, the difference between McCann and current Dodger catcher A.J. Ellis is not as big, thus signing McCann would not have benefitted Los Angeles as much as New York.

Second, teams must understand the relationship between the money a player is paid and the value the player will provide. The current correlation is one win above replacement (WAR) to $5-6 million on the open market, which means that McCann must post at least 14 WAR over the course of his five year contract to justify his deal. This ratio is not a constant, but is a product of the market, which is subject to inflation. It's conceivable that the price of WAR on the open market will rise significantly over the next few years, meaning that McCann could provide fair value with less that 14 WAR. Of course, WAR is not a perfect statistic, but is useful as a bridge between on field contributions and finances.

The third principle is to view individual salaries as percentages of the team total. Paying McCann’s $17 million average annual value (AAV) over the next five seasons accounts for only 8.5% of a $200 million budget, but it would account for almost one-third of a $60 million budget. While the Rays had the freedom to sign McCann to a market value deal as he would have helped their team, it is not in their best interest to devote such a significant portion of their budget to an aging catcher.

With these principles in mind, let’s examine the seven signings.

Yankees Sign CF Jacoby Ellsbury for 7 years, $153 million

This signing is covered in depth and from all angles in Drew Angel's article.

Rockies sign 1B Justin Morneau for 2 years, $13.5 million

The Rockies wasted little time in reallocating the $7 million savings from the Dexter Fowler trade in a two-year deal for Justin Morneau. Injuries have derailed the career of the former superstar, who will likely never come close to repeating his elite numbers from 2006 to 2010, but Morneau is still a quality major league player. Morneau’s contract suggests he should provide roughly 2 WAR over the next 2 seasons and the Steamer projection system agrees, calling for 0.9 WAR next year. The retirement of Todd Helton left a hole at first base, and despite the low WAR total, Morneau is an upgrade over any internal replacement.

Marlins Sign C Jarrod Saltalamacchia for 3 years, $21 million

The question I keep hearing about the Jarrod Saltalamacchia signing is, “Why would he sign with such a bad team?” The answer is simple: over the course of the contract, the Marlins are not going to be a consistently bad team. The Marlins are in much better shape than teams like the Astros and Mets since they have quality young, MLB-ready talent and no long term commitments.

Giancarlo Stanton and Jose Fernandez lead the offense and pitching staff respectively, but the Marlins have more than just these two stars. The other two outfield spots will be filled by some combination of Marcell Ozuna, Christian Yelich, and Jake Marisnick while the infield consists of 1B Logan Morrison and SS Adeiny Hechavarria, leaving second and third base currently vacant.

Young pitchers such as Nathan Eovaldi, Jacob Turner, and Henderson Alvarez join Fernandez in the rotation while Steve Cishek remains an effective closing option. The Marlins are a few moves away from fielding a competitor that will have a long window of contention.

Three years and $21 million for Salty is very good value for Miami, especially since this contract covers Salty’s age 29-31 seasons. He's not an elite catcher, but he did post 3.6 WAR last season. His power numbers will likely diminish in the spacious Marlins Park, but even if he reverts to his career norm of roughly 1.7 WAR, this contract is favorable to the Marlins.

Red Sox sign C A.J. Pierzynski for 1 year, $8.25 million

Replacing the aforementioned Salty on the Red Sox is A.J. Pierzynski, formerly of the Texas Rangers. The depth of prospects in the Sox’ system means that a temporary placeholder such as Pierzyski a better option for the Sox than an elite catcher on a long term contract such as McCann.

Pierzyski is a below-average catcher who does not take walks and is poor defensively, but this doesn't mean this is a bad signing for the Sox. Pierzynski has posted a combined 4.9 WAR over the past two seasons, driven largely by his 27 home run campaign in 2012. Pierzynski’s contract suggests that he should produce roughly 1.5 WAR next season, a mark that is exactly what Steamer projects. It is also worth mentioning that Pierzynski gets high marks as a motivator and clubhouse guy, a concept which may have helped the Red Sox more than we think this past season.

Tigers Sign RP Joe Nathan for 2 years, $20 million

Following the departure of Joaquin Benoit and Jose Veras, the Tigers had a gaping hole at the back-end of their bullpen. Joe Nathan fills that void and gives Dave Dombrowski the proven closer he longed for, but was it worth the money?

As much as I despise paying big money to so-called proven closers, this deal makes sense for all parties involved. With the exception of his injury plagued 2011 season, Nathan has been one of the league’s best closers for the entirety of his career. Despite this contract covering his age-39 and age-40 seasons, there are numerous examples of relief pitchers remaining effective as they age and Nathan figures to be the next to do so.

Steamer projects Nathan’s value to diminish significantly, but I would be surprised if Nathan dropped from 2.5 WAR to the projected 0.8 WAR in consecutive seasons. WAR isn't the best metric for analyzing relief pitchers, but we can see that Nathan is still essentially the same pitcher he has always been by examining his K and BB rates. Over the past two seasons in Texas, Nathan’s K rate has risen above his career average while his BB rate is below his career average, proving his effectiveness. The key to this deal is the effectiveness of Nathan as he ages and if he continues to age well this deal will provide good value for the Tigers.

White Sox Re-sign 1B Paul Konerko for 1 year, $2.5 million

Paul Konerko re-signs with the White Sox for a final farewell tour, but will be relegated to a reserve and pinch hitting role. The signing of Cuban defector Jose Abreu to play first base and the presence of Adam Dunn at DH means that Konerko will back up both positions. Konerko’s value dropped off significantly last season as he posted -1.8 WAR, but Steamer projects the veteran to produce 0.5 in his final season. $2.5 million for a 0.5 WAR player is fair market value, but there is more to this deal than statistics.

Konerko also has good value for the Sox as a clubhouse guy. Prior to the hiring of manager Robin Ventura two offseasons ago, rumors circulated that the Sox were considering Konerko as a player-manager. Even though the Sox hired Ventura instead, the rumors support claims that Konerko is invaluable as a mentor and positive clubhouse presence. Finally, in what projects to be another down year in Chicago, the opportunity to see Konerko play one last time will keep fans coming to U.S. Cellular Field.

Phillies Sign Wil Nieves for 1 year, $1.25 million

Lastly, the Phillies wasted no time in replacing departed catcher Erik Kratz with former Diamondback Wil Nieves. Nieves is nothing special - a slightly below average defender with his only offensive value coming from hitting singles - but he is certainly serviceable as a reserve. A high BABIP led to a .297 AVG this past season, though further offensive contribution was limited by his poor OBP and SLG.