Sabermetrics Show Mariners Were Smart to Make Cano Deal

You won't see sabermetrics in the box scores, but they're having a larger effect on the game than most people know. And they're a great tool to analyze recent megadeals signed by Jacoby Ellsbury and Robinson Cano.

As is the case with Hollinger statistics in the NBA and the NFL Total QB Rating at ESPN, the purpose of sabermetrics is to give more insight into how sports are played.

What are sabermetrics?
Let's give a few examples. Ultimate zone rating measures how skilled a fielder is versus an average player. Batting average on balls in play -- abbreviated as BABIP -- tracks a hitter's luck. On the whole, there are more than 30 advanced sabermetrics used in baseball right now, but the most popular is arguably wins above replacement, or WAR.

WAR tracks how many wins a player contributes to his team each season versus a replacement level player. It's a measure of total value, from baserunning to hitting. 

An illustration: The Los Angeles Angels' Mike Trout led the league last year with a WAR of 9.2. Trout was worth roughly nine more wins to his team than if they trotted out a cheap, replacement player making the league minimum.

Credit: Keith Allison, Flickr.

A team like the Washington Nationals, for example, missed the NL Wild Card by four games. Adding a player of Trout's caliber would theoretically have propelled them into the playoffs.

If used correctly, sabermetrics can give far more insight into a player's skill level compared to traditional baseball statistics like batting average and RBIs. And they allow MLB front offices and fans alike to see which players to target for trades or free agent acquisitions.

Sabermetrics measuring value

Time Warner's (TWX) Sports Illustrated explored this topic, recently asking the question: What's Jacoby Ellsbury really worth? Ellsbury was the centerfielder for the World Series champion Boston Red Sox last season before signing a massive deal with the New York Yankees earlier this month.

In 2013, Ellsbury had a very good WAR of 5.8, ranking him sixth among outfielders. Over the past five years, he's averaged a solid WAR of 3.5. It's this consistent success that prompted the Yankees to give him a seven-year, $153 million contract.

So how can sabermetrics evaluate this deal? In two steps.

As is consistent with most of his peers, the 30-year old Ellsbury's production is expected to decline as he ages. Next season, sabermetrics firm Jaffe projects a WAR of 4.1, followed by an average of 2.7 over the final six years of his contract. Secondly, Jaffe projects the fair market value of a win above replacement. In 2013, this value was about $5.28 million, and using a 5% inflation rate, it's expected to rise to $7.4 million by the end of Ellsbury's deal.

With these two figures in mind, anyone can then estimate the value of Ellsbury's production over time. By multiplying estimated WAR with estimated market value per win, Jaffe finds that the centerfielder is worth about $126 million over the next seven years. Judging by that, the Yankees overpaid for Ellsbury by nearly $4 million per season.

Another recent megadeal 
Let's take a look at Robinson Cano. The second baseman just left the Yankees to join the Seattle Mariners.

Credit: Keith Allison, Flickr.

His payday?

Ten years at $240 million. Let's use sabermetrics to see what Cano is reasonably worth, in Jaffe's style.

Source: Author's calculations using Jay Jaffe's WAR method. 

The first thing you'll probably notice is the Value/Win column. In contrast to Jaffe and most baseball writers, I used a 1.53% annual inflation rate, which is what the Cleveland Fed expects over the next 10 years. What this first table implies is that Robinson Cano is actually worth about $340 million over the next 10 years, indicating that the Mariners got a steal.

Now, the formula Jaffe used estimates a modest drop-off of 0.4 WAR a year after accounting for historical averages. If these numbers are tweaked, to say, an annual decline of 0.8 WAR, we can paint a decidedly different picture:

Source: Authors calculations using Jay Jaffe's WAR method. 

In this scenario, Cano is expected to age twice as quickly as most experts deem 'league average.' The total value of his estimated production is just over $260 million. By this projection, the Mariners still got a steal at 10 years for $240 million.

Obviously, this is assuming Cano can stay healthy. If he's out for any longer than a full season under his Mariners deal, the numbers begin to work against the team. To this point, the second baseman hasn't missed more than a handful of games each year since 2006. Assuming the trend continues and Cano is able to age somewhat gracefully, this was a good contract.

What does it all mean?
As you can see, sabermetrics give MLB executives a way to analyze the production of their players. All-encompassing statistics like WAR give GMs the tools to project how much a player will be worth in the future before signing them. In the case of Jacoby Ellsbury, Jay Jaffe finds the Yankees overpaid for the former Boston Red Sox outfielder.

Robinson Cano, however, is theoretically a good signing by the Mariners as long as he stays healthy. It is worth mentioning that Alex Rodriguez, another high-priced, aging infielder, has missed 221 games over the past three seasons combined. If Cano follows that path, he will be overvalued by his new contract. Considering the fact that the Yankees are the team Rodriguez's injuries have burned, it's understandable why they were squeamish to sign Cano to such a long-term deal.

Going forward, sabermetrics should have an increasingly important role in analyzing the game of baseball. You can always look at a megacontract and think it's too expensive, but without doing the actual calculations, it's an uninformed opinion.