Is Signing Elite Free Agent Starting Pitchers a Good Idea?

The great “Should the Yankees sign Gerrit Cole” debate is in full force.  A common refrain from the “No” crowd will be that signing elite starting pitchers to free agent contracts has been a bad idea. I decided to do a quick analysis to see if this is actually true. 

I took ten of the top free agent contracts and looked at WAR (wins above a borderline MLB replacement player) for each pitcher in each year of the contract.  This obviously skews towards more recent signings which is fine because the game has changed a fair bit in the past 10 years. The conclusion of this rather number heavy is analysis is that at least in the past 6 years, general managers are pretty much getting what they paid for.

For my analysis, I am assuming that a team should get an average of 3.5 WAR per year from an elite free agent.  That assumed an average salary of $35 million per year and an expected cost of $10 million per WAR.  One can quibble over the exact amounts but these are correct within 10% or so.

Here is a breakdown of the original results.  NA (not applicable) applies to the 7th year of 7 year contracts and x applies to years that have not been played for that player.

The 5 Win Contracts

Cole Hamels, Clayton Kershaw, CC Sabathia, Max Scherzer and Justin Verlander all performed to expectations or outperformed their contracts.  With the exception of Verlander, most of the pitches started off strong and faded over time.  

The 4 Loss Contracts

The Felix Hernandez and David Price contracts were terrible for their teams, although Price did help pitch the Red Sox to the 2018 World Championship.  Jon Lester will be a modest loss for the Cubs as will Masahiro Tanaka for the Yankees.   

Zach Greinke

Greinke has been up and down for the first four years of his deal.  My guess is that this deal works out okay unless that Astro statistical magic helps the 36 year old Greinke stave off father time and continue to pitch at the borderline elite level that he did in 2019.

Decline Over Time

The decline in WAR is rather striking.  Average WARs drop from an elite 4.9 in the first year of a contract to a very good 3.7 by Year 4 to and average 2.7 in Year Seven.  These pitchers were only above 4 WAR for 3 years so that is really the realistic time frame to use them as an ace to contend for a titl

“Profit and Loss”

I next decided to look at “profit and loss” for each player.  Profit and loss looks at the expected WAR (I had to guess for some players still playing out the contracts) minus the expected 3.5 WAR per year.

As you can see, the total profit for all ten contracts is 13 WAR.  This is only 1.3 WAR per contract which is well within the estimated error of by 3.5 WAR per season guess.  The bottom line is that, in the end, the teams pretty much got what they paid for.

I also included contract length.  The total loss for 7 year deals was -2.6, or only -.5 per contract.  Again, this is within the margin of error of my 3,5 WAR per season guesstimate.

So Should A Team Sign Any Elite Free Agent Pitcher?

  And this is what makes this all so challenging and ripe for baseball discussions and debate…

The answer is a definite maybe.  Here are some factors to consider:

  1. What is your team budget and do you have enough cost controlled players to absorb this over the next 6-7 years?

  2. Are you in “go for it” mode where even if the last 2-3 years of the contact the pitcher is terrible, you don’t care because you contended for a title in the first few years of the deal?

  3. All things considered, do you really need to take the risk to compete for a title?  If you have a great farm system, some good cost controlled players and a high budget, you may not need to risk such a high dollar signing.

Should the Yankees Sign Gerrit Cole?

At this point, I’m still thinking about this based on my three criterion listed above. 

The point of this article is that the Yankees should not NOT sign him because he will command a high dollar, long term contract. It looks like they will get their money’s worth for the entire deal and will have an elite pitcher at the start.

Based on the above, what do you think?