Service time manipulation is bad. As currently constructed, the system is designed to benefit team owners, while penalizing the best young players by delaying their major league debuts and their free agency.
The poster boy for service time manipulation in 2019 is Toronto Blue Jays prospect Vladimir Guerrero Jr., who slashed .381/.438/.636 across 394 plate appearance in AA and AAA last season. In a recent interview with MLB Network Radio, Jays GM Ross Atkins stated that he doesn’t “see him [Vlad Jr.,] as a major league player”, citing age and defense as his main concerns. This is, as has been rightfully pointed out by fans and pundits alike, a total lie.
However, this is not to say that at this moment, it is in Ross Atkins’ best interest to tell the truth. Doing so gives the MLBPA grounds to win a grievance that would render any attempts at service manipulation moot. So, let’s give Ross Atkins the ability
For the purposes of this article, we’re going to assume this contract will be 10 years. Obviously, this could be extended or reduced by a couple of years, but I’m going to roll with 10 since it’s a nice round number. We’re also going to assume that Vlad Jr. will stick at 3B for the duration of this contract, even though it is possible that he will move over to 1B or DH at some point. This shouldn’t have a huge impact on any calculations, since the difference between a weak 3B, a mediocre 1B, and a DH in terms of WAR isn’t drastic enough to noticeably impact any contract values.
The first step to determining the value of a contract is to figure out the value of the asset itself. This begs the questions, how good is Vlad Jr. now, and much better is he going to get.
To answer the first question, let’s look at his 2019 projections. Steamer, ZiPS, and PECOTA project 4.6 WAR in 545 PA, 3.0 WAR in 496 PA, and 3.7 WAR in 512 PA respectively. Take the mean of these three projections, adjust them for playing time, and you get 4.7 WAR/650 PA. It should be noted that this 650 PA figure is arbitrary, and only used to account for differences in WAR figures brought on by differences in playing time.
For the second question, the answer gets a little more complicated. Most scouting services see Vlad Jr. as a 70-grade prospect. Since the 20-80 scale is designed such that the distribution of players is normal, this means that at his peak, Vlad Jr. expected peak should put him in the 97.7th percentile of major league players.
Since 2000, 967 third baseman
So, we have approximately figured out what Vlad Jr.’s floor and ceiling are, all that’s left is to figure out everything in between. Thus, the next step is to approximate the development curve for an average 3B. Since 2000, 3B in their age 27
Using this method, we find that players improve gradually until their peak at age 29. The graph below depicts the skill of a constantly average 3B throughout their career.
The difference between the skill of an average 20-year-old and average 29-year-old is about 2.3 WAR. For Vlad Jr. however, the earlier floor and ceiling findings put the difference at only 1.7 WAR. This should not come as too big a surprise however, as any marginal improvement becomes significantly harder as a player approaches the current physical limit. As such, we shall assume that Vlad Jr. will, from 2020 on, improve by 74% of the rate of an average third baseman.
From here, we must show Vlad Jr.’s progression from now to his projected peak. By adding the year to year improvements seen for an average third baseman and multiplying them by a factor of 0.74, we find following graph, which depicts Vlad Jr.’s projected progression for the duration of the hypothetical 10-year contract.
Now that we have approximated how good Vlad Jr. is going to be, we need to translate this performance into dollar figures. The first three years of this 10-year contract are simple. Since, regardless of how good Vlad Jr. is for the first three years of his career, the Jays do not have to pay him more than league minimum, this should be reflected in the value of the extension. The 2019 league minimum salary is $555,000, and since the minimum salary has increased by $10,000 each of the last two seasons, we’ll assume it does again in 2020 and 2021. However, it should be noted that even if this assumption is off, any change would have to be incredibly drastic to have a noticeable impact on the eventual value of the contract.
Where it starts to get tricky is in his age 23 through 26 seasons, when Vlad Jr. becomes arbitration eligible. Up to this point, we’ve been assuming 650 PA. However, arbitration figures take both total playing time and performance into account and as a result, we need to come up with a more definite answer as to how much Vlad Jr. is expected to play per season over the term of the contract.
To estimate playing time, we need to estimate how much time Vlad Jr. will spend on the recently renamed Injured List. MLB position players spent a total of 16,891 days on the DL last
Based on the projected fWAR figures calculated above, we’re going to also assume that Vlad Jr. is the best hitter on the Blue Jays. Given that the recent trend across baseball, we’re also going to assume that Vlad Jr. hits second in all of these games. American League number two hitters averaged 4.54 PA per game, which translates to 577 PA per season for Vlad Jr.
Upon adjusting above calculations from the arbitrary 650 PA to a likely 557 PA, we project Vlad Jr. will put up 28.8 WAR in his first six seasons. Now, to estimate his arbitration earnings, we shall compare him to Josh Donaldson, who put up 35.2 fWAR over his nearly six years of service time leading up to his final arbitration hearing. This is a sizable gap however; Donaldson was chosen because unlike better recent comparables who have reached free agency, Donaldson went through arbitration four times, as Vlad Jr. would if his service time was manipulated.
To make up for this performance difference, we will multiply Donaldson’s arbitration earnings by 0.82, since Vlad Jr. projects to put up approximately 82% of Donaldson’s WAR. This is admittedly, an oversimplification of MLB’s arbitration process. It is possible that Vlad Jr. could end up earning both significantly more or significantly less than this figure states. At present, however, it’s the best method of estimation I can come up with.
On the other hand, MLB payrolls will also inflate substantially by the time Vlad Jr. reaches arbitration, as they have risen leaguewide an average of 5.2% per year since 2000. Taking all this into account, we project that Vlad Jr. will earn just under $67 million in his arbitration years, bringing his projected total earnings up to around 68.6 million through his first seven seasons.
After this, Vlad Jr. reaches free agency eligibility. Thus, if the Jays wanted to extend him for the full 10 years assumed above, they would have to pay fair market value for at least three of them. To determine this value, we’re going to take into account all 42 free agent position players to sign major league contracts this current offseason. Below they are listed in terms of fWAR/577 PA, and the AAV of the contracts they signed, along with a trendline.
Assuming Vlad Jr. performs as projected, he’ll put up an average of 5.6 WAR for the three free agent years. Based on the equation of the trendline, this performance is worth 38.43 million per year in 2018. However, this must be adjusted for payroll inflation, and on the 5.2% payroll inflation rate per year mentioned above, this average salary inflates to about 57.7 million per year. This brings the value of the three free agent years to just over $173 million and the total value of the 10-year contract to about $241.7 million, or an AAV of $24 million per year.
Unfortunately for baseball, saving Vlad Jr. from service time manipulation at this value seems unlikely. Vlad Jr. has basically reached the upper limits of any projection, meaning any exceeding of the limits makes Vlad Jr. a generational talent. This leaves very little room for the Jays to recuperate any surplus value on this deal, while inheriting huge risk at $24 million a year. Thus, it’s more likely the Jays would prefer the less risky approach, controlling Vlad Jr. for seven years and making a decision on a long term contract at that point, meaning that any attempt to rescue Vlad Jr. from service time manipulation is, unfortunately, unlikely.
Featured Image: via flickr
