Why Did the Yankees Turn Away Brandon Phillips?

The New York Yankees have a reputation for bringing in high-dollar, high-quality veterans in their never-ending quest to add to their record number of World Series titles. So you can understand my surprise when the team turned down the chance to trade for a three-time All-Star last week.

According to multiple sources, the Yankees walked away from a deal with the Cincinnati Reds that would have given them Brandon Phillips to replace Robinson Cano at second base. The trade would have required them to part with Brett Gardner, who now looks like a utility outfielder after the team's signings of Jacoby Ellsbury and Carlos Beltran this offseason.

The obvious question is: What's Gardner worth to the Yanks?

Image via Keith Allison, Flickr.

Brett Gardner's value
Brett Gardner has played in New York since 2008. The 30-year old led the AL in steals in 2011 and was first in triples last year, but he's had his share of injury problems. In the past five seasons, Gardner has missed a combined 232 games due to wrist, elbow, and oblique issues.

A perfect statistic to measure the outfielder's value is wins above replacement, or WAR, which tracks how many wins a player contributes to his team each season versus a replacement level player...from baserunning to hitting. Disney (DIS -0.45%) and ESPN calculate these values from Baseball-Reference data.

Last year, Gardner was 16th among outfielders in WAR. Before losing most of 2012 to injury, he finished 17th in WAR in 2011, second in 2010, and was a top 60 player in his first two MLB seasons. By comparing this information with salary data, we can see how much the Yankees have paid for Gardner's services.

WAR data via Disney's ESPN. Salary data via Baseball-Reference.

Now, the MLB's average value per win was between $5 million and $7 million in 2013. By this metric, the Yankees have gotten an absolute steal in Gardner. In five out of his first six years in the league, he's been underpaid significantly. For Gardner's entire career, this discount works out to roughly 90%.

Let's think about this another way: Gardner's career earnings in New York are $7.25 million. If the Yankees had been forced to pay a fairly valued contract, it would have cost them over $90 million -- an average of about $15 million per season.

The Yankees also have Gardner under contract in 2014 for $4 million. To get their money's worth, the outfielder will need to contribute a WAR of just 0.7 next year. If he stays healthy, this should be no problem. Now that we know Gardner is worth about $15 million a year to the Yankees, the second most obvious question is: Why didn't they trade him for Brandon Phillips?

Image via Keith Allison, Flickr.

Gardner v. Phillips
The answer is easy. Gardner's future production should outpace that of Phillips.

Source: Author's calculations using Jay Jaffe's WAR method via Time Warner and Sports Illustrated. *Assumes a market value per win of $5 million.

Jay Jaffe of Time Warner's (TWX) Sports Illustrated has used this methodology before, which is based on Tom Tango's Marcel method. As Jaffe explains, "the simplest projection system would start with a weighted average of recent years, with the most recent season valued the highest." I chose to use a 5/4/3/2/1 system, which accounts for the past five seasons. I also discounted 0.4 WAR per year to account for aging, which sticks closely to Jaffe's approach.

Over the next five years, Gardner is worth $62.5 million compared to Phillips' estimated value of $56.5 million. Aside from being two years younger, Gardner's defensive sabermetrics have been better than Phillips' in three of the past four years, and his career on-base percentage is 30 points higher. Gardner is simply the more complete player.

It's also worth pointing out that Phillips is owed $50 million over the next four seasons. This offers significantly less flexibility than Gardner's contract, which has one year remaining.

Future expectations
Assuming a modest value per win of $5 million, the Yankees look like they'll need to pay Brett Gardner handsomely next winter if they want to keep him. If the aforementioned projections hold, he's worth about $12.5 million a year over the next half-decade.

Teams like the San Francisco Giants, Detroit Tigers, Cleveland Indians and Reds are rumored to be interested, and that sentiment is unlikely to change by 2015. Because of this attention, I wouldn't be surprised if he signs a premium deal in the range of $15 million to $17 million through 2018, his age 34 season.

Speedy, defensive-minded outfielders with the capability to player center aren't exactly bountiful these days. If the Yankees can lock up Gardner to play alongside the similarly fast Jacoby Ellsbury, they'll be sitting pretty. Judging by the statistics, it's easy to see why the team turned away a trade for Brandon Phillips.