The Point is to Win

Not to make money.

The fallout from the Prince Fielder bomb has been full of back row Joes claiming that this was a terrible signing by the Tigers and forecasting that the Tigers will rue the day they set up Prince Fielder’s off-springs’ off-springs for life.  The fatal flaw that I find with these numbers-based analysts is the assumption that the Tigers are concerned about winning later.

Actually, I see four key assumptions, any of which, if untrue, make the criticisms irrelevant.

1) That Management is concerned with the payroll in 2016-2020.  There is no doubt that the Fielder contract will likely prove to be imprudent during the last 4 years of the deal.  But maybe management does not care.  Dombrowski has made it clear that the Tigers are trying to win right now.  Fielder gives them the best chance to do that, fielding issues be damned (did you know that the Yankees teams of the 2000s had some of the worst infields in the history of the play-by-play era (1951 – )?…and all they did was win 4 pennants and 2 World Series titles).  This is a five year deal, where the Tigers will happen to keep the player for the final four.

Or, there is always possibility of trading Fielder if his salary becomes an unbearable burden. The Rangers did it with ARod and they came out okay.

To be honest, I’m sure that management does care (though to what extent?  I mean, if DD doesn’t win a WS, he probably won’t be here in 5 years, so what does he care?…and if he does, he will have won a WS within the last 5 years, so what does he care?) about financial repercussions in the last half of this decade, but that to-do is well, well below many others on a list which I imagine begins with “Win a World Series.”  Mike Illitch is now 82 years old and it looks like he has made winning a WS his main MO.  But thank you Mike for making $5 Hot-N-Ready’s your last main MO.  I’m serious.

2) That Fielder could have been signed for less.  Someone was going to sign Fielder.  And I can not imagine any scenario where he was signed for less than 6 years, and likely not less than 8.  In fact, it’s likely the 9 years, not the annual salary, which lured Fielder to Detroit like a free donuts sign.  I watched one of the guys on MLB Network the night of the deal do a long piece on WAR and how much the Tigers would pay per Fielder’s win during the last half of the deal.  Sure, I get the numbers (more below), and I understand why Fielder is likely to decline precipitously from his MVP caliber production in a few years.  But what many have failed to address is the impossibility of getting Fielder now for a shorter contract.  And if assumption #3 below is not true, then the dollar cost per win is irrelevant.

3) That the Tigers are Mike Illitch wants to make money on an annual basis.  Despite winning the NBA title, and enjoying the accompanying extra gate revenues and apparel sales, the Dallas Mavericks lost $3.9M last year, and Cuban claims that the Mavs have made money in only 2 out of the 11 seasons that he has owned the team.  Sure, the value of the Mavs franchise is increasing, but using a purchase price of $285M, and a Forbes current value of $497M, that’s a return of 5%.  Hardly worth it taking into account the annual losses and the opportunity cost of Cuban’s capital, though I’m sure his accountants find a good spot for the losses.

Mike Illitch bought the Tigers in ’92 for $82M.  Forbes valued the franchise at $385M last year, which provides a nice 8% return for Illitch, though there have been several, if not mostly, money losing seasons.  But that’s the point, Mr. I doesn’t care.  He wants to win, he wants to win now, and we’re lucky to have him as the Tigers owner.

4) That the Tigers would have spent the money elsewhere.  The sharpest criticism seems to come from WAR calculations.  The accepted salary per marginal win around MLB is roughly $4M. Thus, at ~$24M per year, the Tigers need Fielder to come in with a WAR of 6 each year. Something he’s done only once in his career.  But, this assumes that the Tigers are using their dollars to buy marginal wins.  They aren’t.  They are simply buying wins, irrespective of a value they could have bought elsewhere.

To no one’s surprise, Dave Cameron at Fan Graphs wrote a thoughtful and informative piece shortly after the signing.  But I did take exception to the point he made at the end which suggested that the Tigers had to “vastly overpay” to get Fielder.  Vastly overpay according to whom?  Cameron operates in a world where FanGraphs stats set player values, but that’s simply not the case.  Pundits, bloggers and bar economists argue all the time what the right values are. But here’s what I think – REAL LIFE TRANSACTIONS SET VALUES FOR SUPERSTARS.   While I do believe that lesser tier players with paltry demand get offers based on numbers promulgated by the likes of FanGraphs, this is not the case for players who are in high demand. When resources are scarce, price goes up.  Prince Fielder represents the scarcest of resources. Thus, the reality of it is that Fielder was worth what a team was willing to pay him.  To get Fielder now, a long-term, expensive deal, was the price.  And there were at least 2 serious other suitors, if not more.  It’s not that the Tigers overpaid, but rather the Rangers and Nationals under bid.  And in light of the Pujols deal, the Fielder deal was spot on, maybe even a bargain.  I wish someone would develop a super-star factor and build that into their player value calculations.

Cameron also surmised that the Tigers should have spent the $214M on CJ Wilson and Jose Reyes instead of on Fielder.  Again, I get that Cameron has to stick to his guns, but not a single person even thought about the Tigers + CJ Wilson until Cameron used CJ because the numbers fit his point.

A final note about the infield – I don’t believe for a minute that Cabrera will be the everyday third baseman.  Sure, he’s likely to take more starts there than anyone else, but with the way that Leyland tinkers with his lineups, I expect Cabrera to start about 60 games at 3B, 50 games at 1B, 40 games at DH, and a handful in RF.  I think we’ll see Inge at 3B when Fister and Porcello start, and lots of late inning substitutions.  Remember, when Cabrera does start at 3rd, this will have a greatly desired consequence of keeping Brandon Inge out of the line-up, and further amplify the Fielder run production benefit.

6 Comments

  1. Jeff (the other one)

    January 29, 2012 at 2:11 pm

    Nice commentary. I’ve argued that Ilitch could just tell his kids “5% of your inheritance has been set aside to fund the Prince Fielder Out Years Contract Fund”. If you view the “excess” part of the contract as Mike Ilitch eating into a small portion of his vast assets, then hue and cry is largely irrelevant.

    There is a lot of salary cap mentality due to the other three sports, and it’s true that the Tigers likely will lose money during most years of the contract — but that’s only an issue if Mike Ilitch starts seeing it as an issue.

    Prospectus and others have noted that the value of a marginal win becomes much greater when you get into the 85-95 win range and that’s where the Tigers are now and probably will be for some time to come.

    It’s an aggressive signing with some risks. But good franchises take risks. Bad franchises obsess over how the national media will react.

  2. William

    January 29, 2012 at 5:39 pm

    “But good franchises take risks”

    Hammer, meet nail.

    that summed up Kevin’s post perfectly. And we ARE a good franchise. We want to take the next step. Will this work? Who knows…but a roster with Fielder give us a better chance of winning the WS next year than does a roster without Fielder.

  3. Lewie Pollis

    January 30, 2012 at 5:13 pm

    “Back row Joe” here. You don’t seem to understand the point of the WAR valuations. It’s not about total expenditures, it’s how much you get out of your money. For the amount of money the Tigers are paying Fielder, they could be getting more production with a different combination of players.

    If money is irrelevant, would you consider a $300MM contract to be too much? $400MM? $500MM? Why didn’t the Tigers also sign Pujols and Reyes and Wilson and Darvish? Just because you can afford it doesn’t make it a good deal.

    • Andrew in Toronto

      January 31, 2012 at 1:22 am

      Actually, if the Tigers signed Pujols, Reyes, Wilson and Darvish i think i would not have minded at all.

      i’m not so concerned about the efficiency with which the wins are obtained, just the total quantity of them.

  4. The Only Tiger Fan in Mississippi

    January 30, 2012 at 5:43 pm

    Well said Kevin. Hearing all the analysts on this signing, made me recall the start of the 2008 Tigers season when they were loaded with bats and Leyland cautiously saying we still have to play this thing out. I believe we got a good reprieve from losing V-Mart for this season and the icing will come next season. And, you were spot on with your final note as in 2008 Leyland played lots of line ups. Expect the same this year. Meanwhile Vicksburg native Delmon Young should provide a good DH role freeing up better fielding in LF.

  5. StorminNorman$

    February 7, 2012 at 1:03 pm

    Well stated Kevin!

    …anyway Illich seemed prepared to cough up $400M last year to buy the Pistons (which Tom Gores ended up buying for $420M) – so in the end, maybe Illich viewed $214M for Fielder spread over 9 years as a better investment than the floundering Piston’s franchise?

    Mike Illich signed a minor league contract with the Tigers – and played in their organization for 3 years before a knee injury ended his baseball career and began his pizza career. He’ll be 83 yrs old in July, and likely views a Tiger World Championship as one of his remaining goals.