The first week of Spring Training may as well have been Jose Bautista Week, after he dropped the bombshell that he had made a take-it-or-leave-it contract extension offer to the front office. It reached a further fervour when his terms were reported as $150-million for the five years from 2017-21, covering his age 36 to 40 seasons, on top of his existing contract for 2016.
These terms were widely seen as a non-starter, well in excess if his expected market value this winter. And while that's almost certainly the case, there's been little discussion of what would actually be fair value on a contract extension. The Blue Jays aren't going to give Bautista that money, but exactly how much should they be willing to give him? This is the critical question that has been given short shrift, and what I want to look at more in depth.
Earlier this month at FanGraphs, Dave Cameron took his Steamer projection of 3.7 WAR for 2016, used a standard aging curve to arrive at an estimated 8.5 WAR over the four years from 2017-20, applied the rough market rate to that and arrived at fours years and $75-million (remember, on top of $14-million for 2016). That's half the incremental money Bautista reportedly wants.
As the above exercise shows, fair value on an extension is fundamentally linked to Bautista's projected value over the term of an extension. The simple model used by Cameron is a fine place to start, especially at a high level, but when the subject is a contract that could be upwards of $100-million, digging a little deeper is in order. Especially since Bautista's skillset is so different than the average player, combining prodigious power (which doesn't usually age well) with excellent plate discipline outcomes (which do tend to age well).
Also, instead of looking at WAR, I think it's better to look at offensive production (wRC+) since this is where almost all of Bautista's value already comes from and will come from in the twilight of his career. Despite a rough 2015, Bautista still has some defensive value above a pure 1B/DH, but that can be expected to continue to decline and more significantly keeping him healthy to keep his bat in the lineup everyday will militate in favour of keeping him in the line-up.
From 2011-15, his age 30 to 34 seasons, Bautista has posted a 154 wRC+ (26.1 WAR) with 173 home runs in 2,921 plate appearances. I looked for comparable players from 1946-2010 (modern integrated era) by screening players who posted at least a 140 wRC+ over at least 2,000 PA in their age 30 to 34 seasons, which resulted in a list about 50 players. I removed a handful who weren't really comparables for various reasons and a few with a wRC+ over 170 since the cutoff was 15 points below.
That left 35 players as a comparable group for Bautista. It's an incredibly accomplished group, I count 15 Hall of Famers, two more who should easily be elected when they hit the ballot, and a few more who should make in eventually. I've put all the individual data in an appendix below, but let's look at the group data:
|Age 30 to 34 seasons||Age 35 season||Age 36 to 40 seasons|
On average, the group's age 30 to 34 seasons were very similar to Bautista - almost the same playing time (2,921 PA vs. 2,966), with similar offensive production (154 wRC+ to 151) and overall value (26.4 WAR to 24.5). Bautista had 30 more home runs, but home runs are more prevalent than ever so the raw difference is more than an adjusted difference would be. Moreover, their age 35 seasons average and median are very similar to Bautista's 2016 Steamer projection (589 PA, 31 HR, 137 wRC+, 3.7 WAR).
So what did this group do over their age 36 to 40 seasons? The average was 1,712 plate appearances (down ~40%), the rough equivalent of three full seasons. They were still good hitters, on average 20% above league average, but well down from 50% above average. Home runs fell by more than half. And the average was just 7.6 WAR. Keep in mind that Cameron was forecasting 8.5 WAR for just four years (ages 36 to 39), so something like 9 WAR for ages 36 to 40. That estimate looks optimistic in light of the historical performance of comparable players
Worse, the distribution of outcomes is somewhat skewed. The median age 36 to 40 WAR is actually lower at 6.2, though median PA and wRC+ are similar. This suggests defensive and baserunning value are really cratering, probably for reasons discussed above.
We can also look at good (75th percentile) and bad (25th) outcomes. The bad outcome is decent offensive production (112 wRC+), but very little career left (under 1,000 PA) so only ~3 WAR. A good outcome would be basically four full seasons, very good production (131 wRC+) and more like 12 WAR. But the difference is largely playing time. To the extent, Bautista has kept himself in good shape, one might skew the expectation towards the better outcome.
A best scenario might look something like Edgar Martinez or David Ortiz. Martinez has some similarities as a third baseman who had to move off the position and didn't breakout until his late 20s. He had excellent plate discipline but didn't rely on power like Bautista, and aged wonderfully, with over 2,800 PA, 20 WAR and a 152 wRC+. Ortiz is almost more of an outlier, as he actually improved his wRC+ from 140 to 146 (2016 is his age 40 season). His 172 home runs from 30 to 34 is very similar to Bautista. With a decent 2016, he could get to 13-14 WAR for his 36 to 40 seasons.
But again, these are best case scenarios. I could see a case for saying Bautista should project well, something like 10-12 WAR, which would be worth something like $85- to $100-million in terms of an extension. But even then, the Jays should not go that high. They're in the driver's seat, since they already have him for 2016 - and what happens in 2016 has a huge impact on what happens after 2016. Elite hitters who had a down season in their age 35 season averaged under 5 WAR the rest of their career. Players who had a good or great year averaged almost 9 WAR. So Bautista's age 36 season will be very important in terms of revealing information about his age 36 to 40 years.
To get an estimate of fair value, we can use the historical data to roughly create a probability matrix based on possible 2016 outcomes (collapse, below, at and above projection), and 2017-2021 outcomes (done, ages poorly, okay, well) that are conditional on what happens in 2015, as well the approximate value of the production for each 2017-21 outcome:
|2016 Outcome||2017-21 Outcome||Odds||Value|
|At projection||Ages poorly||10%||$30|
|At projection||Ages okay||15%||$80|
|At projection||Ages very well||15%||$125|
|Above projection||Ages okay/poorly||10%||$70|
|Above projection||Ages very well||20%||$125|
This is guided by the historical data, but I've weighted the odds of aging well in Bautista's favour to reflect his strong conditioning. I end up around almost the same number that Cameron did, though I may have been a touch conservative putting dollar value to production (which probably reflects the Blue Jays accurately).
This shows the value of of being able to see what 2016 brings. If Bautista has a poor 2016, his expected value in 2017-21 is about $35-million (not to say that's all he'd get, someone would surely bet more on a rebound). A 2016 season at projection leaves an expected value around $80-million or so. A great 2015 would up the expected value above $100-million - but still well short of what's he's asking anyway. The Jays had every reason to wait-and-see, and Bautista's demands only make this the obvious position.
Appendix: 35 comparable hitters, 1946-2010
|Age 30 to 34 seasons||Ages 35 season||Age 36 to 40 seasons|
Excluded: Sammy Sosa, Barry Bonds (PED); Alex Rodriguez (suspension, age 40 season is 2016); Roberto Clemente (premature death); Ryne Sandberg, Joe DiMaggio, Dick Allen (injuries); Mike Piazza (catcher); Rickey Henderson, Jackie Robinson, Jim Edmonds (different skillsets); Mark McGwire, Ted Williams, Frank Robinson, Mickey Mantle, Willie Mays (wRC+ over 170)