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Extensions are the new on-base percentage

Mar 29, 2013, 7:05 PM EDT

Dave Dombrowski, Justin Verlander AP

Years after Michael Lewis wrote Moneyball and teams started taking a smarter approach to building baseball teams, writers would often proclaim something as “the new on-base percentage”. Billy Beane’s Oakland Athletics rose to prominence in one small part due to their ability to find cheap players with good on-base skills. A quick Google search of the phrase “is the new OBP” showed such proclamations about Ultimate Zone Rating (UZR), health (injury prevention), and software in general. Surely scores more await with more dedicated digging.

I bring this up because two big pieces of news were announced today: the Tigers and Justin Verlander agreed to a contract extension, as did the Giants and Buster Posey. A smaller but related piece of news included the Diamondbacks and Paul Goldschmidt agreeing to a contract extension as well. The Mariners extended Felix Hernandez earlier in the off-season, and now the Dodgers are thinking about doing the same with Clayton Kershaw.

This isn’t just a coincidence. More and more team executives seem to agree that buying out their star players’ arbitration years and delaying their foray into free agency is a great way to maximize player value. As an example of something that commonly happens, look what happened with the Indians and Cliff Lee: they got two good seasons out of him, then had to trade him at the deadline in 2009 because they had fallen out of contention. Since then, the Phillies have had two and a half stellar seasons out of him, while the Mariners and Rangers also got a half-season each. Meanwhile, the prospects that the Indians got in return for Lee (Jason Donald, Lou Marson, Carlos Carrasco, and Jason Knapp) have turned out to be duds.

Several years ago, Matt Swartz showed that teams that re-sign their own players, rather than signing free agents who came from other teams, got more value out of the contracts. With surging advancements in data collection and technology, teams are better able to make accurate, long-term projections about players they have grown and cultivated over many years. Though you are still prone to the land mines that are injuries — see: Johan Santana — teams will only get better and better at identifying and predicting them as time goes on.

  1. missthemexpos - Mar 29, 2013 at 7:36 PM

    Most importantly, fans hate to see their home grown stars leave to play elsewhere.

    • ezthinking - Mar 30, 2013 at 1:47 AM

      See; Babe Ruth.

  2. churchoftheperpetuallyoutraged - Mar 29, 2013 at 7:38 PM

    Random question for you Bill. I know Matt has worked on a lot of Game Theory stuff the last few years, and many on twitter in the SABR world have mentioned it recently. Any links to his recent stuff?

    • Bill Baer - Mar 29, 2013 at 7:40 PM

      You can find links to his five-part series on game theory above the green chart here:

      http://www.hardballtimes.com/main/article/game-theory-is-the-next-moneyball/

      And you can follow him on Twitter:

      https://twitter.com/matt_swa

      • churchoftheperpetuallyoutraged - Mar 29, 2013 at 7:52 PM

        thank you sir.

  3. kiwicricket - Mar 29, 2013 at 7:38 PM

    I do wonder when the top of the curve will be reached with regards to extensions and ‘TV rights’ money.
    As with most things in America, moderation and stopping before its played out is not a particular strong suit.

  4. kiwicricket - Mar 29, 2013 at 7:46 PM

    Slightly off topic…but after what was perceived as a great extension when it happened, Nick Markakis is making $30M over the next 2yrs. Holy crap.

  5. proudlycanadian - Mar 29, 2013 at 8:06 PM

    Bill will be pleased that Cliff Lee looked very good against the Blue Jay regulars in the 4 innings he pitched tonight. He only gave up 1 hit and did not allow a run.

  6. sfm073 - Mar 29, 2013 at 8:27 PM

    We’re the athletics good bc of guys with good obp or bc they had three of the best young starters in baseball and 2 MVP caliber players in tejada and Giambi?

    • churchoftheperpetuallyoutraged - Mar 29, 2013 at 9:11 PM

      Tejada really wasn’t MVP caliber except one year in BAL (he shouldn’t have won the year he did). And Giambi left after the 2000 season…

  7. alexo0 - Mar 29, 2013 at 8:32 PM

    The Mets didn’t develop Santana, so using him as an example isn’t quite accurate.

  8. scotttheskeptic - Mar 30, 2013 at 10:26 AM

    I do not want to hear any player/agent/media proclaim any of these guys “underpaid” years from now. The AAV of all contracts will continue to increase, and these guys will not be the highest paid players in 2016, 2017, etc…

  9. townballblog - Mar 30, 2013 at 10:45 AM

    Hi Bill – I like the post but I think the Johan Santana example is not the best one. Before all he hurt his shoulder he gave the Mets three really great years.

    You want to talk landmines?: Carl Crawford.

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