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Finding Success Rate, True Value of Big MLB Contracts to International Stars

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Finding Success Rate, True Value of Big MLB Contracts to International Stars
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The very idea of Major League Baseball teams investing big bucks in unproven international players doesn't sound like a good idea. A look back at recorded history will say that, yeah, it's really not.

The twist, however, is that this might not be the case for much longer.

You can probably guess why we're about to have this conversation. Surely you've seen the three big contracts handed out to international stars since the middle of last October. If not, well:

  • The Dodgers gave Cuban infielder Alexander Guerrero $28 million over four years.
  • The White Sox gave Cuban first baseman Jose Abreu $68 million over six years, the largest contract in club history and the largest ever for a Cuban defector.
  • The Yankees gave ace Japanese right-hander Masahiro Tanaka $155 million over seven years, by far the largest ever for a Japanese import. And that's not even including the $20 million posting fee going to the Rakuten Golden Eagles.

That's roughly $270 million spent on three players whose next MLB game will be their first. Think about that long enough, and you'll inevitably start to ponder all the other international players who have ever attracted seemingly outrageous investments.

That's where my train of thought took me, anyway, and that's when research started happening.

MARTA LAVANDIER/Associated Press/Associated Press
When Livan Hernandez joined the Marlins in 1996, he did so via what Sports Illustrated called an

I used MLBTradeRumors.com's transaction tracker, Baseball-Reference.com's history of the MLB posting process, Cot's Baseball Contracts and various other sources to track down international players who required at least a $10 million investment. Once I was (pretty) sure I had them all, I then made the executive decision to add Livan Hernandez, Orlando Hernandez and Kazuhiro Sasaki to the mix, as their international signings were for impressive money at the time.

[Sidenote: Hideo Nomo was another executive-decision candidate, but he was actually signed to a minor league contract in 1995.]

To put these investments in a proper (and simple) perspective, I used FanGraphs' WAR-based value system, which estimates the annual value of a win based on the "mean of the dollars per win handed out to free agents in any given year." In this way, it measures what a player was worth in a given season.

Since FanGraphs only has win values for as far back as 2002, I had to fill in some of the blanks for the 1990s and early 2000s. Since a win was worth $2.8 million in 2003 and $2.6 million in 2002, I figured it was close enough to say that a win was worth $2.4 million in 2001, $2.2 million in 2000 and so on. 

Lastly, I substituted RA-9 WAR for FanGraphs' FIP-based WAR for pitchers. The difference is that RA-9 WAR focuses on runs a pitcher actually allowed rather than how many runs he should have allowed. While I tend to prefer FIP-based WAR when assessing the quality of pitchers, it's best if we focus on actual value rather than hypothetical value for this sort of experiment/study/thing.

Now that we're all on the same page, let's take a look back at big international investments that are a thing of the past. What we see is this:

Big International Investments in the Books
Player Signed Fee Years Value Contract WAR Contract Value Verdict
Daisuke Matsuzaka 2006 $51.1 6 $52.0 10.2 $44.4 Bust
Kosuke Fukudome 2007 4 $48.0 4.7 $20.6 Bust
Kei Igawa 2006 $26.0 5 $20.0 -0.3 -$1.4 Bust
Hiroki Kuroda 2007 3 $35.3 6.7 $30.2 Passable
Jose Contreras 2002 4 $32.0 10.4 $35.1 Worth It
Kazuhisa Ishii 2002 $11.3 4 $12.3 2.9 $8.0 Bust
Ichiro Suzuki 2000 $13.1 3 $14.0 15.9 $40.1 Steal
Kenshin Kawakami 2009 3 $23.0 1.8 $8.1 Bust
Hideki Matsui 2002 3 $21.0 5.7 $18.6 Passable
Kazuo Matsui 2003 3 $20.1 0.5 $1.8 Bust
Kenji Johjima 2005 3 $16.5 5.2 $20.6 Steal
Tsuyoshi Nishioka 2010 $5.3 3 $9.0 -2.1 -$9.4 Bust
Hideki Irabu 1997 4 $12.8 3.6 $6.4 Bust
Koji Uehara 2009 2 $10.0 2.3 $10.4 Worth It
Akinori Iwamura 2006 $4.5 3 $7.7 6.4 $27.5 Steal
Kazuhiro Sasaki 1999 2 $8.0 3.4 $8.5 Worth It
Orlando Hernandez 1998 4 $6.6 12.5 $24.4 Steal
Livan Hernandez 1996 4 $4.5 5.2 $8.6 Steal

Assorted for contract info, FanGraphs for stats

Note: Just to clarify, the dollar figures do indeed represent millions.

Even if you're not cool with WAR, you'll have to admit that there aren't any real arguments to be made here. Jose Contreras being worth it is one possible argument, but he was really only a bust for the Yankees. When he found himself in Chicago, he did enough to justify his contract.

There's certainly no arguing with the busts, anyway. Daisuke Matsuzaka, Kosuke Fukudome and Kei Igawa did not become the stars the Red Sox, Cubs and Yankees were hoping they would. Hideki Irabu and Kenshin Kawakami had success, but it was short-lived. Kazuhisa Ishii and Kazuo Matsui hung around for a few years but were nothing special. Tsuyoshi Nishioka got off to a horrid start with the Twins in 2011, and that was pretty much it for his MLB career.

On the whole, the above table isn't totally discouraging, as 10 of the 18 entries either panned out fine or surpassed expectations. What is discouraging, however, is that the busts increase in frequency as the investments get bigger.

That makes sense strictly on the basis that it's a lot harder for any player to live up to a big investment. But this is also a reason why, collectively, we still get uncomfortable whenever a team invests a ton of money in an international player.

As nice as the international successes are, it's the failures that stick out. They stick out largely because they were big failures. And because they were big failures, the writing on the wall says that the higher an investment in an international player goes, the more likely it is to fail.

That's a distressing notion in a day and age when international players are only attracting more money. But as I hinted way back when, things might be changing for the better.

If we look at recent big-money international investments that are still in progress, what we see is more encouraging:

Big International Investments in Progress
Player Signed Fee Years Value Seasons Contract WAR Contract Value Verdict
Yu Darvish 2011 $51.7 6 $60.0 2 10.2 $49.3 Steal
Hyun-Jin Ryu 2012 $25.7 6 $36.0 1 4.0 $20.0 Steal
Yasiel Puig 2012 7 $42.0 2 4.0 $20.2 Steal
Yoenis Cespedes 2012 4 $36.0 2 5.2 $24.3 Steal
Aroldis Chapman 2010 6 $30.3 4 6.2 $28.7 Worth It
Leonys Martin 2011 5 $15.5 3 2.4 $12.3 Worth It
Wei-Yin Chen 2012 3 $11.4 2 4.7 $22.3 Steal
Dayan Viciedo 2008 4 $10.0 4 0.6 $2.6 Bust
Adeiny Hechavarria 2010 4 $10.0 4 -2.1 -$10.4 Bust

Assorted for contract info, FanGraphs for stats

Just as it was hard to argue with the bad investments above, here it's hard to argue with the good investments.

Two years in, Yu Darvish has been worth every penny of Texas' $111.7 million investment. Same goes for Wei-Yin Chen and the Orioles. Hyun-Jin Ryu and Yasiel Puig were stars as rookies for the Dodgers in 2013. Aroldis Chapman has turned into a stud reliever, and Yoenis Cespedes is at least an above-average outfielder. Though it took him a while to get there, Leonys Martin put himself in that same category with his speed and defense last year.

I'm obligated to issue a warning that this may mean nothing. The only contracts up there that don't fall under a "too early to tell" umbrella belong to Adeiny Hechavarria and Dayan Viciedo, who are both busts.

It's also worth noting that even Dice-K looked like a solid investment early on in his career, compiling 10.6 RA-9 WAR in 2007 and 2008. That, however, was the end of his shelf life as a useful player. Maybe Darvish, Cespedes, Chapman, Puig and others will fall victim to the same sort of decline.

However, I'm also obligated to suggest that maybe there are other forces at work here. Maybe, just maybe, the reason that more recent big-money international contracts are working out is because teams know what they're doing now.

One very important factor regarding Cuban players like Cespedes, Puig and now Guerrero and Abreu is that teams are now better able to scout them. Here's Jorge Arangure Jr. writing for Sports on Earth:

Cuban players are also becoming less of a risk. Teams can not only scout players during international tournaments, they can also access statistics and video of Cuban league performance on the internet. There are several websites dedicated to livestreaming Cuban league games.

'We can access performance in terms of statistics in the Cuban League,' [A's general manager Billy Beane] said. 'It's not as much as we have in other areas, but it's more than before. More players coming over also gives you a baseline to judge these guys too. It just gives you more of a foundation.'

The "other areas" Beane referred to presumably include Japan's Nippon Professional Baseball league, where Darvish and Chen come from, and the Korean Baseball Organization, where Ryu comes from. The availability of video and statistics from these leagues surely trumps that of video and statistics from Cuba, giving teams more means to form educated projections.

Increased access and, with it, increased analytical power are the kinds of things that would lead to a greater frequency of sound investments in international stars. We won't be able to make a definitive judgment on that until a few years from now—when we'll be able to put the investments in the above table in perspective and also dissect the Tanaka, Abreu and Guerroro investments—but for now it's a possibility that should be taken seriously.

I'll say this much: Teams definitely should be figuring things out when it comes to international stars. With spending limits placed on the draft and on the international amateur market, and with the extension craze sucking talent out of free agency, teams are finding themselves with money that they have to spend somewhere. To this end, international stars are an intriguing outlet.

So if ever there was a time for teams to stop missing on big investments in international stars, it's now.

 

If you want to talk baseball, hit me up on Twitter.

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