MLB

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

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Zachary D. RymerMLB Lead WriterFebruary 5, 2014

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.

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

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
PlayerSignedFeeYearsValueContract WARContract ValueVerdict
Daisuke Matsuzaka2006$51.1 6$52.010.2$44.4Bust
Kosuke Fukudome20074$48.04.7$20.6Bust
Kei Igawa2006$26.0 5$20.0-0.3-$1.4Bust
Hiroki Kuroda20073$35.36.7$30.2Passable
Jose Contreras20024$32.010.4$35.1Worth It
Kazuhisa Ishii2002$11.3 4$12.32.9$8.0Bust
Ichiro Suzuki2000$13.13$14.015.9$40.1Steal
Kenshin Kawakami20093$23.01.8$8.1Bust
Hideki Matsui20023$21.05.7$18.6Passable
Kazuo Matsui20033$20.10.5$1.8Bust
Kenji Johjima20053$16.55.2$20.6Steal
Tsuyoshi Nishioka2010$5.3 3$9.0-2.1-$9.4Bust
Hideki Irabu19974$12.83.6$6.4Bust
Koji Uehara20092$10.02.3$10.4Worth It
Akinori Iwamura2006$4.5 3$7.76.4$27.5Steal
Kazuhiro Sasaki19992$8.03.4$8.5Worth It
Orlando Hernandez 19984$6.612.5$24.4Steal
Livan Hernandez19964$4.55.2$8.6Steal
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
PlayerSignedFeeYearsValueSeasonsContract WARContract ValueVerdict
Yu Darvish2011$51.7 6$60.0210.2$49.3Steal
Hyun-Jin Ryu2012$25.7 6$36.014.0$20.0Steal
Yasiel Puig20127$42.024.0$20.2Steal
Yoenis Cespedes20124$36.025.2$24.3Steal
Aroldis Chapman20106$30.346.2$28.7Worth It
Leonys Martin20115$15.532.4$12.3Worth It
Wei-Yin Chen20123$11.424.7$22.3Steal
Dayan Viciedo20084$10.040.6$2.6Bust
Adeiny Hechavarria20104$10.04-2.1-$10.4Bust
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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