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What we mean when we say $100 million is a ‘bargain’


The first response I usually get to a post like our post about the Ronald Acuña Jr. extension — a post which notes that the Braves are getting an extraordinary bargain for a supremely talented player — is “So what? It’s their choice? No one forced them to offer it. No one forced him to sign. Why are you complaining?”

Often these sorts of responses come from people who tell me they’re in business or finance or from people who lean libertarian in their world view and political and/or economic predilections. I’d like to address that point and I’d like to do it in a way that I hope speaks to such critics a bit more directly.

No, there is nothing wrong with two sides agreeing to a deal that they find to be mutually beneficial. I never said there was. It makes perfect sense for the Braves to try to lock their superstar up on as friendly a deal as possible. It makes perfect sense for Acuña to agree to take at least $100 million and secure himself and his family for generations. There is nothing wrong, in isolation, with this deal and I’d never say there is anything wrong with it in isolation.

But it does not occur in isolation, right? There are other factors in play that may make us think differently about any given deal and whether it’s good or bad or whether it’s worthy of criticism separate and apart from what the two parties to the deal sought and obtained.

If you doubt this, just think of a stock sale. Let’s call the company BigCorp. Say I own a share of BigCorp and sell it to you for $10. That’s our right! No one is forcing us to do this deal! No one can tell us not to! Why should anyone worry, criticize or complain? Well, they might worry, criticize or complain because a share of BigCorp is part of a market and we’d never talk about the wisdom of any sale of stock without reference to the market. Might we worry about a share of BigCorp going for $10 if we knew more about that market?

For example, what if BigCorp is selling for $10 because the market is crashing and the guy I’m selling my share to is bottom-feeding? What if the guy buying my share of BigCorp is doing so on inside information? What if he knows it’s really worth $25 for reasons I don’t know about and he’s ripping me off? If so, that’s a problem, right?

No one who even pretends to know the first thing about business would attempt to assess our $10 BigCorp sale without reference to the market and what’s going on with it. We’d want to know the history of that stock and similar stocks. We’d want to know if the sale is evidence of larger distress in the market, larger surges in the market or if it’s the product of unfair dealing in some way.

It’s no different with baseball players. Sure, baseball players are human beings, but they are also part of a market. They’re part of a labor market. Just like my sale of BigCorp this deal is fine in isolation, but it’s sort of worthless to say such a thing without looking at the trends and the integrity of the market in which the deal has occurred.

I’d submit to you that it’s more appropriate to look at Ronald Acuña Jr.’s new contract more like we’d look at a stock sale in a plummeting market than anything else. A plummeting market for superstar baseball talent that used to go for much, much more. As we noted when Mike Trout signed his extension, compared to baseball revenues, superstar players are making far, far less than they once did. Even on a $430 million deal Mike Trout will take home a far smaller cut of baseball revenues than Alex Rodriguez did when he signed his big deal in 2001. Acuña is going to max out, ten years from now, at less than half of Trout’s annual salary and $8 million less a year than A-Rod made nearly 30 years earlier, and that’s before inflation. Even if Acuña is only half of the player experts think he might become the degree of the bargain the Braves are getting for him is rather insane.

Acuña’s deal, however good it looks in isolation, can only be seen the same way we’d view a sale of BigCorp trading at less than half its historical norms. If that happened in the stock market, you’d be concerned. You’d worry greatly about the state of the market, would you not? You’d worry about what secondary effects that sick market might have and how it might impact the economy as a whole. And you’d be right to, because nothing that occurs in an even remotely complicated system occurs in isolation.

Now, to be sure, I suspect most of my business/finance/libertarian types don’t care about labor markets like they care about any other markets. Labor markets consist of workers and workers are human beings and human beings are far more unpredictable and expensive than machines and raw material expenses and the sorts of inputs that are far more easy to deal with. Put simply, labor is a bother to those who are trying to make money in a market. But if you’re going to analyze everything else in the context of market dynamics, you have to analyze labor the same way.

Whatever the case: if you simply say “$100 million! That’s a ton of money!” or “Hey, they agreed on their own free will!” and suggest to others that they’re wrong to take issue with Acuña’s deal, you’re missing the bigger picture. If you do that, you’re no more astute about the baseball labor market than a person buying a share of BigCorp for $10, ignoring everything else going on and saying “Hey! Nice!” I suspect you business/finance/libertarian types make fun of folks like that for their ignorance. I’ve been on the receiving end of that myself when I’ve missed important facts when talking about, say, finance or what have you. I’m no expert.

Ask yourself if this is you when it comes to baseball’s labor market. Ask yourself if you’re really that ignorant of what’s actually going on or if, instead, you really just don’t care about the baseball labor market.

Lou Whitaker snubbed from the Hall of Fame again

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Long time Tigers second baseman Lou Whitaker has long been one of baseball history’s most underrated players. He and Hall of Fame shortstop Alan Trammell formed one of the best up-the-middle combos ever, teammates since Whitaker’s debut in 1977 to his final year in 1995.

Trammell is actually a great jumping-off point to support Whitaker’s candidacy. Here are their career counting stats:

  • Whitaker: .276/.363/.426, 420 doubles, 65 triples, 244 homers, 1084 RBI, 1386 runs, 143 stolen bases, 1197 walks (9967 plate appearances)
  • Trammell: .285/.352/.415, 415 doubles, 55 triples, 185 homers, 1003 RBI, 1231 runs, 236 stolen bases, 850 walks (9376 plate appearances)

Whitaker also had slightly more Wins Above Replacement over his career according to Baseball Reference, besting Trammell 75.1 to 70.7. FanGraphs’ version of WAR puts both players slightly lower but with Whitaker still in the lead, 68.1 to 63.7.

Trammell, like Whitaker, did not make the Hall of Fame through initial eligibility on the ballot voted on by members of the Baseball Writers Association of America, beginning five years after their retirement. Trammell was elected two years ago on the Modern Era ballot. Whitaker fell off the ballot in his only year of eligibility, earning just 2.9 percent of the vote in 2001. Whitaker was again snubbed on Sunday night, receiving just six of the 12 votes necessary for induction. Trammell became eligible on the BBWAA ballot in 2002 and had a 15-year run, with his support running as far down as 13.4 percent in 2007 and peaking at 40.9 percent in his final year in 2016.

Trammell and Whitaker critics cited things like never leading the league in any important categories and never winning an MVP Award as reasons why they shouldn’t be enshrined. That last reason, of course, ignores that both contributed to the Tigers winning the World Series in 1984, but I digress.

Trammell should have been elected to the Hall of Fame on the BBWAA ballot. And, since the distinction matters to so many people, he should have been inducted on the first ballot. Among Hall of Fame shortstops (at least 50 percent of their games at the position), Trammell has the eighth-highest WAR among 21 eligible players. He has ever so slightly more WAR than Barry Larkin (70.4), who made it into the Hall of Fame in his third year of eligibility with 86.4 percent of the vote.

Now, what about Whitaker? Among Hall of Fame second basemen (at least 50 percent of games at the position), Whitaker’s 75.1 WAR would rank sixth among 20 eligible second basemen. The only second basemen ahead of him are Rogers Hornsby (127.0), Eddie Collins (124.0), Nap Lajoie (107.4), Joe Morgan (100.6), and Charlie Gehringer (80.7). Whitaker outpaces such legendaries as Ryne Sandberg (68.0), Roberto Alomar (67.1), and Craig Biggio (65.5). Sandberg made it into the Hall in his third year on the ballot; Alomar his second; Biggio his third.

Among the players on the 2001 BBWAA ballot, the only player with more career WAR than Whitaker was Bert Blyleven (94.4), who eventually made it into the Hall of Fame. Dave Winfield (64.2) and Kirby Puckett (51.1) were elected that year. Also receiving hefty support that year were Gary Carter (70.1 WAR), Jim Rice (47.7), Bruce Sutter (24.1), and Goose Gossage (41.2) and each would eventually make the Hall of Fame.

WAR is not, by any means, a perfect stat, so the WAR argument may not resonate with everyone. Dating back to 1871, there have been only 66 players who hit at least 400 doubles and 200 home runs while stealing 100 bases. The only second basemen (same 50 percent stipulation) to do that are Whitaker, Hornsby, Morgan, Sandberg, Alomar, Biggio, Chase Utley, and Ian Kinsler. Additionally, Whitaker drew more walks than strikeouts over his career, 1197 to 1099. The only second basemen to do that while hitting at least 200 career homers are Whitaker, Morgan, Hornsby, Bobby Doerr, and Joe Gordon.

Whitaker was not without accolades: he won the 1978 AL Rookie of the Year Award. He was a five-time All-Star and took home four Silver Sluggers along with three Gold Gloves to boot. Trammell took home a similar amount of hardware: though he never won a Rookie of the Year Award, he did make the All-Star team six times. He went on to win four Gold Gloves and three Silver Sluggers.

In a just world, Whitaker would have been on the ballot for the then-maximum 15 years. In a sentimentally just world, he would have gone in side-by-side with Trammell in 2002. Whitaker’s candidacy certainly shouldn’t have fallen to the Modern Era ballot, and it shouldn’t have been further fumbled by a committee that gave him as many votes as Steve Garvey.