The Boston Red Sox and What It Means to Spend Wisely

Roush Fenway Racing Unveils Boston Red Sox Car
There is a difference between the Red Sox and nearly every other team in baseball - and it’s pretty obvious. How lucky are our home town fans, that our very own Boston squad has significantly more money to spend on players most other teams. Actually, all but one - but who's counting. Too bad they’re in our division. But that’s alright, so long as we use our resources wisely. So, what is using our resources wisely? From the Red Sox’ perspective, it’s much different from most teams. Over the past five seasons, the team’s highest budget was $143 million, registered in 2007. We’ll save spectulating on this year’s budget, which will be quite high, as there could still be some maneuvering left to go, and the value of free agents and draft picks in this economy is yet to be determined. Therefore, we’ll treat 2007 as the team’s theoretical budget through which to speculate on how the team can formulate its spending practices. Citing the research of analyst Keith Woolner, a theoretical replacement level team would win approximately 44 games. Putting this in perspective, this standard of futility is comparable to the some worst teams of all time, including the 2003 Detroit Tigers (43-119), the 1962 Mets (40-120), and 1952 Pittsburgh Pirates (42-112). After seeing this, two thoughts come to mind. One, wow, how far have the Mets come since that disturbingly dreadful inaugural season 47 years ago. The other, what in the hell happened to the 1899 Cleveland Spiders, who found a way to produce a 20-134 record (.130 win percentage) and be doomed to the annals of worst team in MLB history. Ouch. According to the all-knowing Wikipedia, only 3,179 fans attended the team's first 16 home games...
Roush Fenway Racing Unveils Boston Red Sox Car

There is a difference between the Red Sox and nearly every other team in baseball – and it’s pretty obvious. How lucky are our home town fans, that our very own Boston squad has significantly more money to spend on players most other teams. Actually, all but one – but who’s counting. Too bad they’re in our division. But that’s alright, so long as we use our resources wisely.

So, what is using our resources wisely?

From the Red Sox’ perspective, it’s much different from most teams. Over the past five seasons, the team’s highest budget was $143 million, registered in 2007. We’ll save spectulating on this year’s budget, which will be quite high, as there could still be some maneuvering left to go, and the value of free agents and draft picks in this economy is yet to be determined. Therefore, we’ll treat 2007 as the team’s theoretical budget through which to speculate on how the team can formulate its spending practices.

Citing the research of analyst Keith Woolner, a theoretical replacement level team would win approximately 44 games. Putting this in perspective, this standard of futility is comparable to the some worst teams of all time, including the 2003 Detroit Tigers (43-119), the 1962 Mets (40-120), and 1952 Pittsburgh Pirates (42-112).

After seeing this, two thoughts come to mind. One, wow, how far have the Mets come since that

disturbingly dreadful inaugural season 47 years ago. The other, what in the hell happened to the 1899 Cleveland Spiders, who found a way to produce a 20-134 record (.130 win percentage) and be doomed to the annals of worst team in MLB history. Ouch. According to the all-knowing Wikipedia, only 3,179 fans attended the team’s first 16 home games.

Sure, this anecdote can’t help the Sox build a winner in 2010 – unless they decide to buy up the Royals and trade Zack Greinke over to Boston – but, hey, what a story! Either way, the lesser teams can provide a nice baseline for what can be achieved by an organization with significant financial resources in line with that of the Red Sox. Getting back to the fictional – or, maybe, all too real – replacement level team, such a ballclub would be expected to cost just $10 million, or the league minimum salary paid out to 25 players.

That leaves the Sox with a lot of legroom. With just $10 million used up towards the first 44 wins, the team has $130 million more per season to reach 95 wins – what we will assume to be the cutoff for the Wildcard slot. This is a great deal of money, and $130 million to achieve just 55 wins seems like a pretty attainable feat.

Except that it is not an easy feat at all.

Though it may be painfully obvious to everyone at this point, no team can make the playoffs using free agents alone (assuming that the team signs free agents at the market efficient price of $4.5 million per win).

If any team attempted to do so, they would need a budget of $240 million – though, the Yankees come close, with a peak budget of $209 million in 2008. Perhaps, if they stretched the budget, they could be the first team to do so. Unfortunately, the types of free agents the Yankees (and Red Sox, for that matter) are almost always less expensive than the market efficiency price for a win, since elite players are never paid at a rate consistent with their level of production.

To understand this last point, take Albert Pujols for example. His 8.4 WAR last season would be expected to cost about $38 million on the free agent market – which no team would ever pay. Sorry Albert and sorry fans of teams who can’t afford these players. Baseball economics just aren’t fair.

Still, no team has the financial resources to build their team through market efficient ($4.5 million per win) prices alone. They must supplement their team with young players, role players, and bargain acquisitions. The Red Sox, despite their considerable resources, are no different.

But they are different in the sense that they don’t have to be nearly as efficient for each win. Assuming that they need only to obtain 51 additional wins for $130 million, they have a significant advantage in that they can purchase each marginal win at $2.55 million per win. This puts them right up there as the second-best team in the league – and in the division. To achieve 95 wins, the Blue Jays would need 1.72, the Yankees, $3.92M per win, 1.63 Baltimore, Devil Rays 1.04. Last year’s playoff teams, the Angels would need 2.33, the Twins, 1.19, and the Wild Card runner-up, the Texas Rangers, 1.13. Against that competition, the Sox look like a serious juggernaught. No surprise. This team is a monster.

Which, combined with the team’s ability to pick and cultivate draft picks, mean that it will be a perennial contender for years.

For arguments sake, let’s take the 2010 team into perspective and estimate the dollars per win rate needed to achieve 95 wins with the team’s current crop of rookies and young players. This should give us an idea of how much the Red Sox actually need young, inexpensive players and how important it is for the team to be efficient in its free agent signings.

For 2010, only Jacoby Ellsbury, Clay Buchholz, Jed Lowrie, Daniel Bard, and possibly Michael Bowden will be called upon to contribute to the big club while being paid the major league minimum of $400,000. For the sake of argument, we’ll eliminate Bowden since he is not guaranteed to make the bullpen and has too little playing time accrued to have any real sense of what he would be capable of in a relief role.

That leaves us with just four players who are locked in at $400,000, leaving the team to spread the remaining budget to 21 players. In a utility role, we can conservatively expect Jed Lowrie to contribute about 1 win above replacement for his current salary. Buchholz, assuming no improvement from 2009, can contribute about 2.5 WAR. The same rules applied to Bard and Ellsbury will yield 1 and 2 WAR, respectively. All together, this adds 6.5 wins above replacement without adding a dollar to the budget. Now, the Red Sox are starting out as a 50.5 win team for $10 million and 21 roster slots remaining.

To get to 95 wins and $140 million on the total budget, the team needs to have a win efficiency of $2.92 million per win, which is far easier than $2.55 million per win without any of these star players. Adding Bowden to the mix as a 1.0 WAR bullpen arm raises the win efficiency to $2.99 million per win. The good sign is that the team has some serious financial flexibility compared to other teams without even factoring in below-market free agents and arbitration eligibles. The downside is that the team still needs to be very efficient and can’t throw money away. Thus far this offseason? Well, assuming the players don’t improve or regress next season and assuming the standard of $3 million per win for the Red Sox, they’re actually doing quite well.

Marco Scutaro can be considered a coup at salary and skill level. If he can continue his 4.5 WAR level of production – or even his 2.8 WAR from 2008 – he will be more than worth the $6.25 million per year for his services, with an efficiency of $1.39 million per win. Now, that’s a kind of free agent Sox fans can get used to.

Mike Cameron? At an average of $7.75 per year for two years, his 4.3 WAR would come at a cost of $1.80 million per win is a considerable value. Another positive signing for the Sox.

Lackey? Depends on the eye of the beholder. At $16.5 million over the next five years, and a 3.9 WAR last season, Little John is considerably above the required mark $3 million per win, at $4.23 million per win. Still, he’s below the usual $4.5 million per free agent win and could be considerably better if his arm holds up. Still, he may not be the piece this team needed.

At least the club didn’t go after J-Bay, who will after signing for 4 years and $66 million (AAV of $16.5 million) with just a 3.5 WAR, is looking like a poor investment given the deals available, with a $4.714 million per win.

Seems like the Mets are in for another disappointing September. Matt Holliday, at $18 million – and a “shrinking” market – would be expected to cost $3.15M per win with a 5.7 WAR in 2009.

All told, the team’s investment of $30.5 million for 12.7 WAR yields a $2.40 million per win rate on free agency. That’s quite the off season. Now, if only these three players could just repeat last year’s performance.

After the rest of the offseason and arbitration cases play out, we’ll have a lot better idea of what the requirements of this team are. Until then, however, we are free to speculate about what the team is capable of doing and should do. With $3 million per win to toss around after just the young guys, however, the team’s prospects are looking pretty good. If the free agents produce anything like they did in 2009, this team is a shoe-in for the playoffs. Here’s to hoping they do.

So much for a bridge year.

Categories: Boston Red Sox Clay Buchholz Jacoby Ellsbury John Lackey Marco Scutaro Michael Bowden Mike Cameron

16 Responses to “The Boston Red Sox and What It Means to Spend Wisely” Subscribe

  1. Bob December 30, 2009 at 11:14 AM #

    OK, I will miss Bay but what is he thinking? For $ 6 million more over 4 years? How much of that will go tho the NYC tax that he doesn't pay now ( well 9 or 10 games he did versus 81 games now). Did he back himself into a corner refusing the Red Sox offer? Now he goes to a spacious outfield instead of the friendly Fenway and will have to display his running ability and poor arm for 4 years if he lasts, and there is no DH in that league – wow what was he thinking?.

    • Aaron December 30, 2009 at 1:24 PM #

      I think Bay, like most players, is a poor analyst of himself, especially when it comes to defense. That and a little pride probably kept him from really evaluating the intricacies of the decision that he was making. Also, was the Red Sox offer still on the table when he signed?

  2. mascmen7 December 30, 2009 at 3:58 PM #

    Silly analysis. Sox have noone to drive in runs except Martinez. The rest are useless at driving in runs or moving runners to next base. Holliday or 2nd or 3rd place again. Sox have finished first in AL East ONCE in last 12 years. Yikes! Did I say that?

    • Sean O December 30, 2009 at 1:16 PM #

      Just want to check, are you saying Mike's long numerical analysis is silly because of RBIs and advancing runners? Seriously?

    • random December 30, 2009 at 4:28 PM #

      I'm sure the rest can manage Bay's 15 for 78 with 1 home run in July. I know Ortiz did. Yikes, did I say that?

      • Sean O December 30, 2009 at 9:03 PM #

        Not a good card to play, man. That just means we need to match his 127/453 with 35 homers in the other months.

  3. Jim Tyrrell December 30, 2009 at 2:48 PM #

    The sox have to sign Halliday and trade Bucholtz and Ellsbury and others for Gonzo and they will be ok.
    Or stand pat reduce payroll and go wild next year when the big boys will be out there for all the right prices
    JIm T
    Cumberland, Md.

  4. Sam December 30, 2009 at 3:30 PM #

    What was Bay thinking? Definitely not about the weather.

    I assume he was thinking he wanted as much money as he could get. Never mind the fact that he's probably condemned himself to 4 years of misery playing an outfield too big for him, when he could have spent 4 years playing the smallest LF in baseball, or perhaps DH'ing.

    But perhaps Mr. Bay doesn't know, or isn't fully aware, that he's among the saddest, sorriest defensive OF'ers in pro baseball. And even if he knows that, I don't think he was trying to maximize his value to his prospective suitors: the point was, rather, for them to maximize their value to him.

  5. @Reeddav December 30, 2009 at 4:07 PM #

    Great analysis Mike that gives me a little more optimism about this season.

  6. Marcos Oviedo December 30, 2009 at 8:12 PM #

    read this Rick. Lol

  7. donna December 30, 2009 at 8:34 PM #

    Mike, you bring up an excellent idea… buying up the Royals/some other sad team and then using them for draft picks/raiding the best players… i am sure there is a rule that doesn't allow owners to buy up small teams like that but what an interesting, Imperialistic piece of thinking!
    i like the way this piece thinks.

    • Daern December 31, 2009 at 2:26 PM #

      It's not a new thought–for years teams used to do this before it was made against the rules. For instance, the lowly St. Louis Browns were so lowly because they were owned by the owner of another team, who took all their good players. Same with the Spiders.

  8. Slee December 31, 2009 at 4:28 PM #

    Isn't some consideration needed for the price paid for players to play elsewhere? Lugo and potentially Lowell. That would have to be factored in as -WAR to be made up by others.

    • Gerry December 31, 2009 at 6:37 PM #

      I think Theo has built the 2010 bridge with Cameron, Scutaro, Lackey, Kotchman, maybe Hermida, and that bridge leads to the farm system; and losing the payrolls of Lugo, Lowell, Tek, maybe Papi is the offramp. Mike's article shows just how efficient the Sox will be in 2011 & beyond when Bowden, Tazawa, Reddick, Kalish, Lars, Wagner, Expo start establishing themselves @ $400K apiece.

  9. Joker January 3, 2010 at 2:12 PM #

    If any of the prospects pan out……

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    [...] Mike Silver of FireBrandAL.com has an in-depth look at how the Red Sox have spent their money this offseason and what this can mean for wins in [...]