Zack Greinke Money = James Shields Value?

Hunter talked a bit about James Shields and his desire for a Zack Greinke sized deal come next off-season.  Let’s put pen to paper (meaning play around in Excel) to see what the Royals should offer for Shields with reference to our former Cy Young pitcher.

There is one gigantic difference between Greinke last year and Shields a year from now.  When Zack signed his deal he had just turned 29, and Shields will be 33.  Greinke got 6 years and $147 million, but at the end of the deal he will be finishing up his age 34 season rather than Shields who on a similar deal would be 38.  See the pitcher aging curve:

So Our expectation for Shields should be diminished velocity and K rates over the life of any contract.  His strike outs have already come down some as Hunter pointed out, though so far the velocity has been fine.  Not that the expectation for Greinke was to improve, 28 and on is also generally a downward trend, but Greinke’s peak was a lot higher than Shields and he had a couple of years before the sharper drop-off was to be expected.

Shields has one advantage over Greinke, durability.  He has thrown 7 consecutive 200+ inning seasons.  Not that Zack should be considered a low durability guy hitting the 200 inning mark 4 out of 5 seasons prior to his contract and 171 2/3 in the one year he missed the mark due to a basketball injury during spring training.

For the coming season Hunter, projections (Oliver and Steamer), and myself all put Shields somewhere near a 4 WAR pitcher.  Greinke has hung around that except for

Sep 27, 2013; Chicago, IL, USA; Kansas City Royals starting pitcher James Shields (33) reacts to a play made by left fielder Alex Gordon (not pictured) on Chicago White Sox shortstop Alexei Ramirez (not pictured) during the sixth inning at U.S Cellular Field. Mandatory Credit: Rob Grabowski-USA TODAY Sports

his other worldly 2009 Cy Young year.  Shields has never approached that type of year and had a really rough year in 2010 that is much worse than anything Greinke has done since his mental break from baseball/bullpen comeback.  Let’s start at 4 WAR and see what sort of value that brings.

If we steal Dave Cameron’s methodology here, That would put a 6 year contract for Shields in the realm of $110 million (109.35 to be exact).  I want to use his $6M/WAR beginning point, though that might be a little light and I tend to agree that each additional WAR from a singular player is worth more than the last, just to establish another estimate in present value terms.  Then I will go on to a less number driven approach.

Discounting WAR by various rates (production this year worth more and more certain than future production)as well as adjusting for different rates of performance decline leads to range of present values as follows:

So the min/max present value of Shields’ contract should be between 50.3 and 95.5 million dollars.  The Greinke contract if started in 2015 at a discount rate of 10% would have a present value of $116 million (19M the first year, 26, 25, 26, 25, 26).  That means Sheilds needs something less by quite a bit, and I feel like the 10% discount is probably generous given his age and the idea or risk/return where his ceiling is not much above the 4 WAR being assumed as his next year performance and as a starting point for the contract.

Using the $110 million from a couple paragraphs ago we get a little closer.  Evenly spread ($18.3M/year) has a PV of 87.8 million.  If you back load a contract like that some it starts to get a little better.  If the Royals could talk him into 15, 15, 17, 17, 23, 23 the PV drops to $85.4 million.  Still a little higher than I would like, but pitching seems to be pretty expensive though Clayton Kershaw is not a good comp for Shields, Jason Vargas getting 4 years and $32 million seems expensive to me.  Talking about the Dodgers attempting to break baseball will have to wait for another time.

A lot of things here qualitatively should be figured in as well.  Who else will be available as a free agent, the ones that matter are Max Scherzer, Jon Lester, Justin Masterson, and Homer Bailey.  Some subset of those will be extended by their teams and it is hard to guess who, but that is quite a good mix off names that might help the Royals out with Shields.

Another part is how Big Game James is viewed.  I view him as a tier below ace, but others might think more highly of him.

The last thing that could change things most drastically are the performances of Danny Duffy, Yordano Ventura, and Kyle Zimmer.  If they struggle/succeed then the need for James Shields in KC increases/decreases and so does his value.

Overall I would hope the Royals could get a 5 year deal somewhere south of $90 million, but the Greinke comp is not outlandish on the part of Shields’ agent.  If it takes 6 years $110 million looks like about the ceiling and if you have to go that high it would hopefully be back-loaded a bit to be more team friendly.