Do Players Outperform In Their Free-Agent Year?

Phil Birnbaum www.philbirnbaum.com

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

John Burkett John Burkett Component ERA

1999 5.44

2000 5.28

2001 2.86 (contract year)

2002 4.95

2003 4.41

But, Jeff Fassero Jeff Fassero Component ERA

1997 3.60

1998 4.10

1999 8.02 (contract year)

2000 5.25

2001 2.97

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)

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)

Effect not obvious For every example of a sudden

contract-year star, there’s a counterexample of a contract-year collapse

Need a systematic study

How to figure it? What is evidence for a player

having a better contract year? Can’t go by the raw numbers

because of aging effects

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

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

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

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

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

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 it’s pretty good: within 1-2 runs per season for regular players

No evidence (cont’d) 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 won’t make 100 IP or 300 batting outs

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

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

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 don’t 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?

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

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

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