Tuesday, June 10, 2008
The Jason Giambi Contract in Hindsight
With the resurgence of Jason Giambi, there's been some discussion back and forth here and in other places about picking up his 2009 option and also about how the Giambi contract ends up rating. At the time it was viewed as a bad risk because of Giambi's age and skill set, but let's see if that's actually true.So far, Giambi has provided the Yankees with a total of 241 batting runs above a replacement first baseman (pBRAR) and has cost them 16 runs defensively (runs saved/RS). So offense plus defense he's been worth 225 runs over seven seasons, or 22.5 wins. In the current free agent market, teams pay about $4.5 million per marginal win. So if we use that for 2008 and then decrease it by 3% for each prior season to account for inflation, we can mutiply his wins above replacement (WAR) each season by the estimated value of a marginal win and compare it to the cost of Giambi and see where that ends up.
| Year | pBRAR | RS | WAR | Value | Cost |
| 2002 | 66 | 1 | 6.7 | $25,013,853 | $11,000,000 |
| 2003 | 49 | -3 | 4.6 | $17,700,590 | $13,000,000 |
| 2004 | 2 | 2 | 0.4 | $1,515,361 | $14,000,000 |
| 2005 | 49 | -7 | 4.2 | $17,331,452 | $15,500,000 |
| 2006 | 45 | -6 | 3.9 | $16,671,642 | $19,000,000 |
| 2007 | 10 | -1 | 0.9 | $4,060,243 | $21,500,000 |
| 2008 | 19 | -2 | 1.7 | $7,796,029 | $26,000,000 |
| Total | 241 | -16 | 22.5 | $90,089,170 | $120,000,000 |
I've included the $5 million buyout of 2009 in his 2008 cost since that money is a sunk cost. So far Giambi's been worth around $90 million of the $120 million the Yankees will have paid him. He's on pace to pick up another 2 wins or so if he continues to hit like he has, which would end up making his total worth around $100 million. So we're looking at anywhere from a $20-30 million shortfall if we look at what the average team spends for a marginal win.
But the Yankees aren't an average team, and a marginal win is worth more to them than anyone else. Does that make up for that $20-30 million shortfall? Maybe, maybe not.
Today's challenge? Make a case for us staying up to watch the Yankees get swept in Oakland this week.
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