Saturday's duel between the Tampa Bay Rays' ace, David Price, and the Yankees' ace, CC Sabathia was basically a microcosm of the season-long fact that the Ray's ace is decidedly better than the Yankees' ace. And that 's in spite of the fact that the low-budget Rays pay Price less than half of what the Yankees pay Sabathia.
Which is one reason why the Rays will probably make it to the post season 2013, and the Yankees probably won't. And for reasons discussed below, this relationship may last into 2014 and beyond.
More to the point, Sabathia isn't even better than his own teammates even though he's paid much more money. According to FanGraph's measure of wins over replacement (WAR), pitchers Hiroki Kuroda, Ivan Nova, and Andy Pettite are all above Sabathia (as of August 24, 2013). Only "fifth starters," David Phelps and Phil Hughes are below him. And the second-highest paid starter, Kuroda, is making $15 million, or less than two-thirds of what Sabathia takes home.
Does this mean that the Yankees gave Sabathia too rich a contract? Especially for multi-years? (Unless otherwise noted, all references are to the original (2009) contract of $161 million out to 2015 or $23 million per. It stands to reason that what amounts to a two-year contract extension (out to 2017) at $25 million per, is a further indiscretion.)
A pitcher signed in his age 29 year (as Sabathia was) is close to his peak, and will start to decline as time goes by. But teams and players usually don't like contracts that pay peak value (e.g. $30 million) up front, and then adjust downward to reflect the pitcher's likely decline. Instead, they opted for a "level" $23 million contract that was designed to underpay Sabathia for his front years, and overpay him for his "out" years. This year, 2013, apparently marks the beginning of his out years.
Such a contract can be fair to both team and player if the team's savings in the front years more or less match the excess pay in the out years. Mr. Sabathia is (or at least ought to be) smiling like the cat who swallowed the canary. But was the contract good for the Yankees?
I raised this question three years ago in this 2010 piece. People criticized me at the time for being "too early" for this call, but the record since then shows that those early fears were well founded.
The answer is no, according to FanGraphs. In round figures, based on that site's proprietary formulas, Sabathia produced $27, $20 $29 and $20 million of value for the Yankees in 2009, 2010, 2011, and 2012, respectively. That's a total of $96 million of production, versus the $92 million he was supposed to be paid for those years. The excess value of only $4 million for the four front years is a drop in the bucket against the huge current and likely future deficits.
The problem begins in the fifth (current) year. In 2013, Sabathia has produced less than $9 million of value so far. Let's assume that he finishes the year on a bang, so the total value is $11 million, which is less than half of what he is being paid.
And let's assume that he "flat lines" (rather than declines) for the next four years at $11 million of value. That would put him at a level with Andy Pettite, and just below Ivan Nova. Would anyone suggest paying either Pettite or Nova $23-$25 million a year?
What's worse is that the team has similarly bad contracts with aging and declining Mark Teixiera and Alex Rodriguez (if and when he is allowed to play baseball). They go out to 2016 for Teixeira and 2017 for Rodriguez. These contracts differ in details, but not in overall damage, from Sabathia's.
A few years ago, CC Sabathia was the poster person for what was right about the Yankees. He's now the poster person for what's wrong. The drag of these bloated seven- to ten- year contracts from the team's glory days will both bring about and represent the twilight of the (current) Yankees, and a reason why the team will experience several years of post-season drought in the mid-2010s before rising again around 2020.
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