How to not handle superstar contracts: Howard vs. Hanley


The Philadelphia Phillies’ Ryan Howard was the 2005 NL Rookie of the Year, batting .288/.356/.567 and belting 22 home runs in just 346 PA. In 2006, Hanley Ramirez won the NL Rookie of the Year with an impressive .292/.353/.480 campaign at a defensive premium position. While Hanley was taking home the rookie hardware, Howard was busy building a .313/.425/.659, 58 home run season at the plate, en route to his first MVP award.

While Howard has been showered with more accolades than Hanley, both players came up in similar times and started off in similar ways. So you have to find it interesting that, while Hanley received a six-year, $72M extension that bought out three free agent seasons, Howard hit the arbitration process by receiving a three-year, $54M extension that bought out his two remaining arbitration years plus a free agent year and, according to today’s news, will receive another extension that will buy out five more free agent years for $125M total.

It’s especially interesting when Hanley Ramirez is the better player by a good margin.

This is no issue of market size. This comes down to a simple explanation: the Phillies overvalued Howard. A lot.

What’s the difference between them?

The Phillies apparently felt like Howard was worth an average of $24.2M starting in his first free agent year in 2011. The Marlins valued Hanley in his first three free agent years, beginning in 2012, at an average value of $15.5M. What’s with the drastic difference in value? Well, each team is obviously interested in paying its own rate, but as Craig Calcaterra so succinctly puts it, Howard is being paid like the second best player in baseball. Let’s examine how that arguments holds when compared to Hanley.

Howard’s big ticket is the home run. He hits ‘em far, and he hits a lot of them. But baseball isn’t just about home runs. The only thing baseball is really about is runs and wins, right? Well, Howard’s home runs are great at producing runs, but his outs are also just as good at taking runs away. Hanley makes less outs, but has a lot less power. Overall, they’re actually closer than you think offensively (park-adjusted wRAA from FanGraphs, park-adjusted lwtsRAA from Rally’s WAR database as of 2009).

Howard, career: 3228 PA, .279/.374/.583, .394 wOBA, 166.0 wRAA, 127 lwtsRAA
Ramirez, career: 2839 PA, .315/.387/.526, .390 wOBA, 159.4 wRAA, 164 lwsRAA

Depending on your measure, those two players are actually in a dead heat offensively. By FanGraphs, much of the offensive difference comes from the extra PA; both players have very similar wOBA. Hanley has more singles and gets on base more, while Howard wins the power category. Hanley also has the edge in baserunning.

So on offense, those players are actually the same. But what about defense?

Defense/Position counts

Neither Howard nor Ramirez are known as Gold Glove defenders, and both carry bad reputations in the field. Howard, however, has graded out by the metrics as a pretty decent fielder, while Ramirez has come off as a solidly below average defender primarily because of his piss-poor 2007 campaign.

Howard, career: 5.4 runs bUZR, 21 runs TotalZone (as of 2009)
Ramirez, career: -32.1 runs bUZR, -12 runs TotalZone (as of 2009)

However, there is of course context to those numbers. Ramirez plays the toughest position in the field, shortstop, while Howard plays the easiest position, first base. We need to adjust for the scarcity of shortstops and first basemen, noting that there are a lot fewer players who can play shortstop at the major league level than there are players who can play first base.

Howard, career: -55.3 runs positional adj. 1B
Ramirez, career: 27.4 runs positional adj. SS

This gives this following total for defensive contribution, adjusted for position:

Howard, career: -49.9 runs bUZR, -26 runs TZ (1B adjustment a bit different for TZ)
Ramirez, career: -4.7 runs bUZR, 16 runs TZ

Hope he ages well too

So both players, so far in their careers, have been even on offense and, due to position differences, about two wins different on defense. But neither Larry Beinfest nor Phillies GM Ruben Amaro are paying for past production, but rather for future production. There is, however, one caveat there that could be the ultimate killer for this Howard deal.

In 2012, when the extension kicks in, Ryan Howard will be 32 years old.

Let that sink in for a second.

When Ryan Howard begins his extension, he’ll at best be at the late stage of his prime. And the contract pays for five seasons, ages 32 through 36. Hanley’s deal pays him for his ages 28 through 30 season. Both players have played very similarly through their past, except one of them is four years younger than the other, and it’s the latter that’s receiving the $125M commitment. As good as Howard has been, the best bet is that he’ll be declining (and most people say that, with his skillset, that decline will be fast) as he’s still receiving huge yearly salaries. That’s what we in the business call an albatross.

The Lesson

Sometimes, it’s good that our team won’t spend money. While it’s frustrating as hell most of the time, there are times like these when you realize a strained budget means your franchise must make the best of its limited cash. The Marlins did a great job signing Ramirez to a deal that, while undervaluing him, still gave him security and plenty of money for a long time. The Phillies, on the other hand, unnecessarily spent extra money on a player that they overvalued by an enormous amount, and did so for years they should not have been willing to touch. Such a mistake would cripple the Marlins organization, which is why you rarely see teams like Florida, Tampa Bay, and Oakland* make these moves.

*Yes, I know Oakland got screwed with Eric Chavez. I said rarely.

Tags: Hanley Ramirez Miami Marlins Philadelphia Phillies Ryan Howard

  • http://sodomojo.com Griffin Cooper

    Man, Ruben Amaro Jr. is bad

  • Michael Jong

    Griffin,

    I don’t know if it’s so much Ruben Amaro as it is the love affair Philly faithful have with Ryan Howard and his RBI. Though Amaro doesn’t have a great track record either (signed Polanco: good; signed Ross Gload: BAD).

  • JoeA.

    Michael,

    My first thought when I saw the news today was that it’s great to see a division opponent make a mistake like this one. I know their revenue streams are great now, but the new stadium shine will wear off eventually. People should remember they didn’t exactly pack them in at the Vet. My point is a contract like this one could cripple them for a while.
    By the way, I have to give the A’s and Billy Beane a pass on the Chavez contract. I doubt they could have foreseen all the injury problems he’s had.

    • Michael Jong

      JoeA,

      I completely agree with what you mentioned. Howard’s deal is going to be a noose around the Phillies’ necks due to sheer size. You are quite right on Chavez and the A’s, there was no way they would know. That’s retrospective thinking, the contract was a pretty good one at the time of signing.

  • JoeA.

    Michael,

    I would have to assume that Jayson Werth is as good as gone now. I think the Phils are going to miss him more than they think.

  • Michael Jong

    JoeA,

    Yeah, I agree, Werth is probably out. He was extremely valuable to them as a plus defender and a patient bat. In fact, he’s totaled more WAR over the last three seasons than Howard, yet Howard comes out with $20-25M while Werth probably will get stuck with a lot less.

  • Joe

    If the phillies were a craftier organization it seems like they could have kept Cliff Lee. If howard were to get a contract similar to Hanley, they could have worked it for around the same money. With Dominic Brown coming up next year they will save a lot of money. It seems moronic to think that they passed on a rotation that included Halladay and Lee.

    • Michael Jong

      Joe,

      I keep hearing that the Lee move was used to refill their farm system after trading a lot of it to acquire Lee and Halladay. I think for some reason teams are underestimating Lee’s skill, and that is the potential problem. We’ll see how the Phillies handle their finances once this Howard deal kicks in. I’d say they are lucky they have Utley signed through and past his prime, because having to resign him midway through this extension would have been difficult.

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