Do%20Players%20Outperform%20In%20Their%20Free-Agent%20Year?

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Do Players Outperform In Their Free-Agent Year?

• Phil Birnbaum
• www.philbirnbaum.com

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Free Agent Performance

• Do players outperform in the year before free
  agency ("contract year")?
• Conventional Wisdom says "yes"
• By "trying harder" that year, players immediately
  turn their effort into higher salaries

3
John Burkett

• John Burkett Component ERA
• 1999 5.44
• 2000 5.28
• 2001 2.86 (contract year)
• 2002 4.95
• 2003 4.41

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But, Jeff Fassero

• Jeff Fassero Component ERA
• 1997 3.60
• 1998 4.10
• 1999 8.02 (contract year)
• 2000 5.25
• 2001 2.97

5
Jack Clark

• Jack Clark RC27 (avg-HR-RBI)
• 1985 7.15 (.281-22- 87)
• 1986 5.58 (.237- 9- 23)
• 1987 11.08 (.286-35-106)
• 1988 5.98 (.242-27- 93)
• 1989 7.11 (.242-26- 94)

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But, Terry Pendleton

• Terry Pendleton RC27 (avg-HR-RBI)
• 1988 3.43 (.253- 6- 53)
• 1989 4.07 (.264-13- 74)
• 1990 2.81 (.230- 6- 58)
• 1991 6.73 (.319-22- 86)
• 1992 5.79 (.311-21-105)

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Effect not obvious

• For every example of a sudden contract-year star,
  theres a counterexample of a contract-year
  collapse
• Need a systematic study

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How to figure it?

• What is evidence for a player having a better
  contract year?
• Cant go by the raw numbers because of aging
  effects

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Aging

• Free agents tend to be older players
• Older players are on the decline
• A 35-year-old in his contract year would be
  "outperforming" just by keeping his numbers the
  same was when he was 34

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Methodology

• Used the "luck" algorithm
• Calculates expectation based on two previous
  seasons, two following seasons
• 35-year-old compared to his numbers at 33, 34,
  36, and 37
• Takes care of regression to mean
• Predicts fairly accurately for all ages

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The Study

• If players deliberately find ways to outperform
  in their contract year, they should appear to be
  "lucky" by this algorithm
• Calculated for all contract years to 2001
• Thanks to Retrosheet for free-agent transaction
  info

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Results Hitters

• All contract year hitters, 1977-2001
• Season outperformance -0.1 runs
• Only hitters with 300 batting outs
• Season outperformance 1.9 runs
• Same, normalized to 400 batting outs
• Season outperformance 2.2 runs

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Results Pitchers

• All contract year pitchers, 1977-2001
• Season outperformance -0.2 runs
• Only pitchers with 100 innings
• Season outperformance 0.6 runs
• Same, normalized to 200 innings
• Season outperformance -1.1 runs

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No evidence of any effect

• Results indistinguishable from zero
• Statistical significance not met
• For instance, standard error of pitching estimate
  1.1 runs is 0.8 runs
• Algorithm is not 100 precise
• but its pretty good within 1-2 runs per
  season for regular players

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No evidence (contd)

• Possible bias in data
• Players who retire after contract year (because
  they lost effectiveness) are not counted, biasing
  the sample higher
• Players who re-sign before the end of the season
  are not included in the sample
• Including only regulars biases data in positive
  direction players who are struggling wont make
  100 IP or 300 batting outs

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More Results

• Batters, min. 300 batting outs, normalized to 400
  batting outs
• Contract year 2.2 runs
• Everyone else 1.1 runs
• Pitchers, min. 100 IP, normalized to 200 IP
• Contract year -1.1 runs
• Everyone else 2.6 runs

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Other Studies

• "Baseball Between the Numbers," Chapter 5.3, "Do
  Players Perform Better in Contract Years?" by
  Dayn Perry
• Found "genuine phenomenon" of about half a win
  per season (5 runs!)
• But used "prominent free agents" not a full
  or random sample
• "Prominent" after the fact may have biased the
  results upward

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Other Studies

• "The Influence of Free-Agent Filing on MLB Player
  Performance," Atlantic Economic Journal, Dec.
  2005, Evan C. Holden and Paul M. Sommers
• Used 2003 only, but examined every player filing
  for free agency
• Found no significant contract year effect, but
  found that performance decreased significantly in
  the year after
• Effectively, the authors dont discuss the
  "contract year" issue so much as the decline
  following
• " youngest players exhibit the smallest decline,
  largely because they (unlike their older
  counterparts) will have the opportunity to sign
  another contract before they retire."
• Could the effect be simply due to player aging?

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Other Studies

• "Shirking or Stochastic Productivity in Major
  League Baseball?", Southern Economic Journal,
  April 1990, Anthony Krautmann
• Checked all free agents, 1976-1983, who signed 5
  year free-agent contracts
• Counted the number of players with significantly
  outlying performances in contract years, and
  following years
• Found only the expected number of such players
• Conclusion no evidence for the contract-year
  effect
• "A Test of Additional Effort Expenditure in the
  "Walk Year" for Major League Baseball Players,"
  Benjamin D. Grad
• Regressed performance on a bunch of variables
  including contract year
• No effect found for contract year

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Pitchers with best/worst free-agent years

• 44 John Burkett, 2001
• 39 Darryl Kile, 1997
• 35 Danny Darwin, 1996
• -57 Jeff Fassero, 1999
• -39 David Cone, 2000
• -33 Kevin Brown, 1994

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Hitters with best/worst free-agent years

• 40 Bret Boone, 2001
• 38 Albert Belle, 1998
• 37 Mark McGwire, 1992
• -38 Delino Deshields, 1996
• -34 Johnny Damon, 2001
• -32 Roberto Alomar, 1998