A few thoughts on the very public negotiation between the Blue Jays and Jose Bautista
I am normally opposed to opinions that professional athletes are paid too much. Professional sports are highly profitable and athletes are generally paid what the market will bear—within a reasonable range of what they are worth to their teams. But recently, rumours relating to Jose Bautista’s contract demands have given me pause.
For the last six years, Bautista has been among the best players in the sport. But he signed a contract at the start of this period to stay with the Blue Jays. Signed following his breakout season, the contract was for five years and 65 million dollars. At the time, it was considered a serious risk for the team given that there was no assurance that Bautista would be able to replicate the success that he had enjoyed for the first time in the previous season. But during the life of the contract, Bautista has continued to perform at an extremely high level and has been one of the best players in the league. The contract proved to be a steal.
Clearly, Bautista is unhappy about having been “stolen.” The contract finally expires after this coming season and Bautista has indicated that he has no intention of offering the Blue Jays more favorable terms than he would offer any other teams, a so-called home town discount. A recent rumor surfaced that Bautista is demanding a five-year, 150 million dollar contract. Bautista was quick to reject the rumor as false. The next rumor was that the previous rumor was false as an understatement of Bautista’s demand and the actual demand might be as high as six years and 210 million dollars.
Bautista’s level of performance in the last six years may be worth a contract in this range but it is highly unlikely that his performance will continue at such a high level for the next six years. Bautista will be thirty-six years old at the start of his next contract. Performance of all athletes in all sports declines significantly at that age range. Bautista remains an elite hitter but his defence has already begun to show signs of decline. There is a chance that during his next contract he will have to be moved to first base or designated hitter, reducing the potential value that he could provide to a team.
Baseball player value is more easily measured than value for other professional athletes. Much of what a baseball player does is measured statistically, especially offensively. Defensive value is measured in much less exact ways but at least the value of various positions and the relative quality of various players at particular positions is relatively well understood.
One convenient measure of baseball player value is wins above replacement, or WAR. It compares the performance of a particular player to a hypothetical replacement level player, a hypothetical player who is readily available, not particularly skilled, and serves as a baseline for acceptability. Players are compared to this hypothetical replacement level player and their performance is evaluated based on the number of additional wins that they are worth to their team as compared to such a replacement level player. In the last six years, Bautista has been worth a total of thirty-four WAR according to one popular system, and thirty-three WAR according to the other. This ranks him as among the best players in the league. But players over thirty-five years almost exclusively show gradual declines in their production and the WAR value that they generate. If it is assumed that the first year of the contract Bautista produces his average WAR of the past six years and declines one WAR a year from there, over a six-year contract he could be expected to produce a total of approximately eighteen WAR over the duration of the contract. One use of WAR is that on the free agent market, players on average are said to be worth 7.5 million dollars per WAR. At this assumed WAR, Bautista would be worth only 135 million dollars. Even that may be overly generous because if Bautista is forced to change position, his decline in WAR value will be even steeper.
There is a certain sentimental value attached to Bautista. He has been the best player on the team for most of his period here and fans feel a strong affinity for him. He was instrumental in the success of the team last season and provided some of the most memorable moments to fans in recent memory. But fans should value success above all. If the team were to overpay Bautista significantly, it would hinder their ability to sign other players. The biggest mistake that a sports team can make is to overpay a player on the basis of emotion and as a reward for past performance that is unlikely to be repeated.
The majority of sports contracts are dictated by the forces of the free market and large businesses bidding on significant assets. But teams must remain objective, or risk making foolish decisions and paying players more than they are worth. Worth is a function of a combination of the likely performance of the player and what competing teams are willing to pay for that likely level of performance. A combination of these factors clearly shows that Bautista is unlikely to be worth his contract demands and the Blue Jays would be advised to not sign him. It would take truly exceptional circumstances to depart from such an approach to valuation of players, such as the revenue structure of the team changing drastically or the team perceiving that a player is of a markedly different worth than other teams perceive the player to be. Such a situation does not exist with Bautista; at this point, he is a known commodity and headed towards the tail end of his career.
Fans should enjoy this last year with Bautista. He has significant incentive to perform at a high level, earn his desired free agent contract, and begin the process of attempting to prove the doubters wrong.