Now that we’re halfway through Mark Teixeira‘s 8 year, $180M deal he signed during the 2008 offseason, let’s examine his value relative to the amount he earns. Has he been worth every penny? How does he stack up to other first baseman who’ve received big contracts?
It is generally understood that teams pay about $4.5M per WAR. However, Fangraphs’ Matt Swartz broke down salary per win based on position from 2007-2011. He found that over this period, first baseman receive $6M for every one win above replacement. As an aggregate, hitters obtain $5M per win.
What this means is that first baseman are generally overpaid for what they’re worth. Although Teixeira is an excellent defender, most first baseman are paid for their bat.
It’s interesting to note that Swartz also found a couple other offensively prioritized positions to be overpaid. We can deduct from this that teams will pay more for a player’s offensive ability, which really isn’t a surprise. The concern, when looking at Teixeira, is his diminishing offensive ability. His wRC+ has steadily declined each season since donning pinstripes (142, 128, 125, 116). Don’t get me wrong, he’s still a good hitter (and excellent defender), but the Yankees certainly didn’t anticipate this swift of a decline.
Let’s take a look at just how valuable Teixiera has been, in terms of dollars per WAR.
$5.6M per win? Based on $6.0M per win for first baseman from 2007-2011, Teixeira has actually been slightly underpaid. On the other hand, he’s slightly overpriced considering the average for all players ($5.4M per Swartz) or very costly considering the general $4.5M assumption.
Unfortunately, there’s no way Teixeira’s value the next four years meets the $92.5M owed. Teixeira didn’t even earn his paycheck last season, costing $8M per win. We can visibly see his decline without even checking all of the traditional or advanced metrics. He’ll be 33 in April, so age isn’t on his side either. Furthermore, he spent 33 days on the DL in 2012, so health may be something to watch for going forward.
To be fair to the Yankees, all teams give big ticket free agents long-term deals knowing the back end won’t be pretty. It’s evident that teams are willing to trade off a poor finish in exchange for even or extra value performance in early in the contract’s life. In this situation, though, it looks like the Yankees will be deep in the red when Teix’s contract completes after 2016. Considering the huge chunk Mark encompasses in the luxury tax payroll and the $189M austerity budget, his diminishing value will make it very troublesome for the organization to maximize $/WAR of its remaining resources. What’s worse is that Teix isn’t the only Yankee in this situation (see: Alex Rodriguez), which compounds the issue. So, unless we get an unforeseen production bounce-back in 2013, it wouldn’t be overly surprising to see the Yankees fade into oblivion until some of the larger contracts expire.
By Keith Allison (Flickr: Mark Teixeira) [CC-BY-SA-2.0], via Wikimedia Commons