We rarely talk about baseball here at the Salad. This is largely because our particular brand of deconstruction doesn’t seem to advance the cause of sabrmetrics. (There is the notable exception of my piece on Kyle Drabek, where I argued that the residue of the signifier was enough to make him a good draft pick. Leider, I left out the jargon so it doesn’t count.) No, until such time as we’re able to do away with the ball-strike and out-safe binaries, Yesterday’s Salad will mostly sit out commenting on our national pastime.
But we will comment on Ryan Howard’s contract since lost in the kerfuffle over whether Ryan Howard’s extension is a good deal or a bad one are the discrete pieces of knowledge it gives us about Ruben Amaro, the Phillies GM.
1. Amaro is not afraid of old position players. We already knew this from the Raul Ibanez signing, but the Howard extension confirms that Amaro suspects that so called “old player skills” can now translate into production by old players. It doesn’t hurt that Ryan Howard’s conditioning has improved considerably in recent years and he looks less and less like Mo Vaughn and Cecil Fielder every day.
2. The Hometown penalty is real. Credit goes to Will Leitch for this one. It used to be said that players would offer “hometown discounts” to continue playing with their current teams. If anything, the opposite is now true. Certain players are more valuable to their current teams than they are to other teams because they already play there and are identified as being singular causes of winning. Consider the outrage over the Phillies’ trade of Cliff Lee. Lee wanted more money than the Phillies were willing to offer, and a large portion of his demands clearly resulted from the Lee mythology that had developed in Philadelphia during last year’s postseason.
3. Conversely, being a winning team is/enables/exposes a market inefficiency. Roy Halladay took a below market deal to come to Philadelphia since he determined that being a Philly was a good way of getting to the postseason. There are players of a certain caliber who value winning as much or more than money itself. These players want to be on winning teams and will take less money to be on the winning team, lowering their acquisition cost. Yet this efficiency is only available to teams with the demonstrated ability to win (some matrix of actual won-lost record, perceived strength of franchise, and payroll).
Consider a hypothetical from the independent film world where actors will often work for scale to make a prestige picture with a high-chance of winning Academy Awards. John Travolta might normally want 10 million plus to star in “Pulp Fiction 2: Where Vincent Vega Never Goes to the Bathroom,” but he’d be willing to sign for much less if Uma Thurman, Samuel L. Jackson, and Ke$ha (in a “heart-rending dramatic turn” that “could only come from the mind of Quentin Tarantino”) all took reduced salaries to make the film a-go.
Could investing in Howard and locking in those wins actual lower the cost of the next win? In other words, there might be an additional value to sunk costs.
4. Baseball economics vs. Real Economics. Finally, what will the global market be in a few years? Obviously the baseball market is influenced by the real economy but we don’t quite know in what way. Is it a lagging indicator or reasonably recession proof? Certainly inflation will help balance out Ryan Howard’s contract but will it really balance it out? Rob Neyer suspects not, though there’s always the possibility that it could.
For example, what if we were to experience another financial panic (let’s bring back this term once and for all)? Ryan Howard’s contract might end up looking pretty good compared to the cost of a win in the miserable “Oops! I did it again Depression of 2013” free agent market (a result of president Palin dismantling derivatives controls coupled with a strict no-bailout policy that leads us into a hyper-inflationary mess [shudder]). Or, more reasonably, what if the US economy resembled that of the late 1970s and we were suddenly in an era of double-digit inflation? Again, Howard’s contract might look a lot better.
Teams certainly consider all sorts of baseball and financial factors when offering a contract. What this clause presupposes is, maybe they also consider macroeconomic factors? Unfortunately that’s an area where no one really knows what’s going on, and Glenn Beck style gold purchasing might be a real loser in a deflationary economy. So to with Ryan Howard.