My Thoughts on Albert Pujols' Contract with the Angels

Albert Pujols just signed a contract with the Angels worth $254 million over 10 years. Many people are focusing on just the details of the deal, and I’ve not really seen any analysis on whether this is a good deal or not (other than some talking-head mumbo-jumbo on TV).

So I wanted to take a look at the stats and see how this deal stacks up. First, let’s look at Pujols’ stats and his projected stats (B-R = Baseball-Reference, BP = Baseball Prospectus):

How to value a player

Before diving into the projections, some background on how to measure Pujols’ (or any player’s) value.

Currently a win is worth roughly $5 million. This figure increases year to year, though the rate of increase varies — for several years it rose 8–10% annually, then barely moved for a stretch, and lately has shown signs of steady increase again. A safe estimate going forward is somewhere around 3.5–5% per year.

A player’s value can be measured in wins via WARP — a stat that converts performance into wins above what a replacement-level (roughly AAA/AAAA-equivalent) player would provide. WARP can be calculated differently depending on the source, which is why you’ll see different numbers from different places — some adjust for ballpark and league factors, some account for defense, some do both, some do neither.

There are also different systems for projecting future performance — most prominently PECOTA, ZiPS, and Marcel. Marcel doesn’t project more than one season out, so it’s not directly useful here, though Tom Tango (Marcel’s creator) has a handy formula for estimating WARP based on contract length and value. Below are 10-year projections from all three systems. (PECOTA WARP is estimated, since Baseball Prospectus had pulled Pujols’ 10-year projection from his player card to recalculate following the 2011 season — so the PECOTA figures below are my own estimate based on his pre-2011 PA, BB, HR, and AVG projections.)

I’d wager the final PECOTA projections land closer to Tango’s, and I think ZiPS overstates the decline at the tail end of Pujols’ career, since he’ll be able to shift to DH and still provide value there. I don’t see Pujols being worth less than 2 wins in his last two seasons unless he misses significant time to injury or other unforeseen circumstances.

Using the marginal value of a win combined with these WARP projections, Pujols projects to be worth somewhere between $186M and $270M, the MORP-X (Marginal Over Replacement Player, WARP-method) figure corresponding to each projection system:

The two risks that could blow this up

There are two possible issues that could shoot this whole analysis out the window. First: Pujols’ age. There have been rumors for some time that he’s at least two years older than stated. If true, these projections take on a whole new shape, and this contract isn’t close to a good deal (the ZiPS projections would start looking very accurate). I don’t discount this possibility at all. In fact, Pujols’ current decline curve (his AVG/OBP/SLG over the last four seasons) would almost suggest he is older than listed.

The second issue is performance-enhancing drugs. I’ll cover this more in a follow-up piece on Ryan Braun specifically, but the possibility of Pujols eventually being connected to a banned substance isn’t negligible. There are already rumors circulating about two distinct instances where he may have been caught and had either MLB or the Cardinals quietly cover for him.

The hedge

So there are two real risks that could cause this deal to blow up in the Angels’ face (I’d put the odds at roughly 20% that either materializes during the valuable part of the contract). Even given that, the Angels can quickly cover the value gap (even in the event of a career-ending injury) if they make the playoffs twice during the length of the deal. With their current pitching staff (Weaver, Haren, Wilson, Santana) and a weak overall division, they should be able to make the playoffs at least twice over the next 5–10 years. A playoff appearance is currently worth roughly $60M in additional value to a team, so two appearances alone would cover any shortfall in the contract by a wide margin.

The real value: timing

The biggest value, though, is the timing of the Angels’ acquisition. Much has been made of the Dodgers’ ownership troubles (the divorce, the bankruptcy) so I won’t rehash all of it. But with the Dodgers losing in the court of public perception and frustrating their fan base, the Angels pick up a massive $150M-per-season TV deal at the same time they sign a player who will draw attention and potentially elevate them past Texas for a playoff spot. This is huge. It could transform LA into an Angels town rather than a Dodgers town (something like the Mets or White Sox taking over as the preferred team in their city).

So while Pujols didn’t take the largest contract in history (that’s still Alex Rodriguez’s) and won’t be the highest-paid player this season (he’ll be 4th or 5th), the overall size of the deal is enormous, and a good one for the Angels.

Originally published as a Facebook note in December 2011.

A year later: the $9M/win comment

Posted roughly a year after the original piece, in response to an interview with then-Indians president Mark Shapiro.

Indians president Mark Shapiro discussed in an interview that his analysts put the value of a win at $9M. In that context, the Pujols deal looks even better. Even if he performs at the ZiPS level from the original projections above, at $9M plus inflation over the 10 years, it’s a great signing for the Angels no matter which projection turns out true, or whether they ever make the playoffs. They just have to hope Pujols doesn’t get hurt or his performance doesn’t bust.

Using that $9M figure: Pujols was worth approximately $33.3M–$41.4M in his first season alone, depending on which WAR calculation you use (Baseball Prospectus had the lowest at 3.7, Baseball Reference the highest at 4.6). So even in a relatively disappointing debut year, he still made the Angels more than they paid him.

The ESPN comparison, and a correction

After this piece was originally published, ESPN ran a story comparing Pujols to the best players historically at ages 32–41, calculating Pujols’ MORP using projected WARP from ZiPS. The author covers some of the same ground as this piece, but fails to account for inflation in the win-value calculation, which undervalues Pujols’ entire contract relative to a properly inflation-adjusted figure. I posted a comment on the ESPN piece noting that correction.

Four years later

The following is a comment I posted on the original piece roughly four years after publication, tracking how the prediction actually held up.

Over the four years, Pujols has been worth roughly $110M, and the Angels have paid him $75M. The Angels made the playoffs the year before this comment was posted. So far, Pujols has been a net gain of somewhere around $40M, crediting him roughly $4M for his part in getting the Angels to the playoffs in ‘14.

The big catch will be seeing if he can hold up over the last three years of the deal, when the Angels will be paying him $87M and hoping he gets them at least 2 WARP per season so they’re not losing too much on him (losing $10–12M per year otherwise). They need Pujols to match his current production for at least three more years for even that level of output to pan out as a profitable deal.

So far, none of the 10-year projections have been close, as Pujols’ production dropped much quicker than anticipated (Matching an aging curve of a player roughly 2 years older (which was one of the noted risks).