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March 16, 2015

Every Team's Moneyball

San Francisco Giants: Embodying the Market Inefficiency

by Matthew Trueblood

Welcome to the Baseball Prospectus 2015 season previews. For the next three weeks, BP authors will be writing about what each team does best in pursuit of wins. We will parse statistics, transactions, news, and quotes in an effort to identify the market inefficiency each team is taking advantage of. Wins are the end goal, but each of the 30 teams are obtaining them in different ways by prioritizing certain initiatives. Today, we begin the series with last year's World Series players, the San Francisco Giants and Kansas City Royals.Andrew Koo


SAN FRANCISCO GIANTS
Team Audit | Player Cards | Depth Chart

PECOTA Team Projections
Record: 84-78
Runs Scored: 634
Runs Allowed: 612
AVG/OBP/SLG (TAv): .253/.310/.369 (.258)
Total WARP: 29.2 (11.5 pitching, 17.7 non-pitching, including 0.7 from pitchers)

What the Giants did to become three-time World Series champions, no one can reliably replicate. Hell, the Giants couldn’t reliably replicate it. They scouted, drafted, and developed well, but also got very lucky, when three straight top draft picks panned out and became superstars. They trusted their best eyes and took their chances on Tim Lincecum and Madison Bumgarner, a couple of unorthodox arms. They pounced when the Royals fell in love with Eric Hosmer, which led to Buster Posey dropping to them in 2008. Lincecum, Bumgarner, Posey. That’s the core of the team.

It’s not like it’s an unmatched core, though. Lincecum and Bumgarner haven’t even been ace-caliber at the same time, but for perhaps 2011. The Giants couldn’t have won without something else: a supporting cast that lent them depth, balance, and some added upside. There’s a well-loved, saber-friendly way of assembling such a group. It involves methodical, incremental improvements, made mostly via trade and player development. The idea is to build a relatively deep, cheap group of major contributors, and to commit to a player either early in his career (while his distance from free agency gives the team leverage and creates an opportunity for a bargain) or not at all.

The Giants do things almost exactly the opposite way. They willingly lean on the guys at the top of their roster, and they spend a whole lot more on the middle of it than most teams do. They beat teams by being marginally better in a large number of places, and they do that by rolling the profit they’ve made off of Posey, Lincecum, and Bumgarner into a series of free-agent signings other teams would never make. Some GMs always look smart. Some even look too cute, sometimes. Brian Sabean never looks too cute. He rarely even looks that smart, except when he’s lifting the Commissioner’s Trophy.

That’s because Sabean goes for the guys who don’t fit the smart guys’ profiles. If you want to call Tim Lincecum’s two-year, $35 million deal—a contract Sabean handed out a fortnight before Lincecum would even have become a free agent—a sentimental thing, fine. That doesn’t explain away the five-year commitment Sabean made to Hunter Pence three weeks before signing Lincecum, though.

I count the following contracts, stretching back as far as 2010 (but mostly concentrated within the last few years), as signature Sabean moves:

Player

Contract Terms

Seasons Included

Age During Contract

WARP

Hunter Pence

5 Y / $90 MM

2014-18

31-35

3.9+

Tim Lincecum

2 Y / $35 MM

2014-15

30-31

-1.2

Angel Pagan

4 Y / $40 MM

2013-16

31-34

3.3+

Tim Hudson

2 Y / $23 MM

2014-15

38-39

-0.5

Jake Peavy

2 Y / $24 MM

2015-16

34-35

?

Marco Scutaro

3 Y / $20 MM

2013-15

37-39

1.8

Jeremy Affeldt

3 Y / $18 MM

2013-15

34-36

0.0

Sergio Romo

2 Y / $15 MM

2015-16

32-33

?

Javier Lopez

3 Y / $13 MM

2014-16

36-38

-0.3+

Aubrey Huff

2 Y / $22 MM

2011-12

34-35

0.7

Mark DeRosa

2 Y / $12 MM

2010-11

35-36

-0.1

Edgar Renteria

2 Y / $18.5 MM

2009-10

32-33

1.1

There are three multi-year deals for relief pitchers here. There are three for position players who were never elite, and were well into their mid-30s before signing. Then we have two true long-term deals for outfielders in their 30s, and three two-year pacts for starting pitchers five years past their primes.

Here are a fistful more: guys who cost the team much less to sign on one-year deals, but who still came with some attached stigma—underperformance the year before they signed, injury issues, age, or limited skill sets:

Player

Contract Terms

Seasons

Age During Contract

WARP

Norichika Aoki

$4.7 MM

2015

33

?

Ryan Vogelsong

$5 MM, $4 MM

2014, 2015

36, 37

0.8, ?

Michael Morse

$6 MM

2014

32

1.9

Miguel Tejada

$6.5 MM

2011

37

1.1

Juan Uribe

$1 MM, $3.25 MM

2009, 2010

30, 31

3.6, 2.7

Sabean caught at least some flak for every one of these deals and from a pure marginal-cost, marginal-win perspective, it was justified. Those deals didn’t make the Giants money. Here’s what they laid out, and what they got back, for the above-listed players, season by season.

Season

Number of Players

Salary Paid

WARP

2009

2

$9 million

4.1

2010

3

$19.25 million

2.7

2011

3

$22.5 million

2.2

2012

1

$10 million

0.1

2013

3

$20.9 million

2.9

2014

9

$81.9 million

6.8

They owe 11 of these players a combined $98 million in 2015, and five of them are due $59 million in 2016. For a supporting cast, this collection of veterans is getting awfully pricey. Once, the punditry panned these moves as the work of the uninitiated. Sabean sure cut the figure of a sabermetric Luddite. As we get more and more information refuting that reputation though, we have to reassess. It seems clear that Sabean and his staff have an objective cause to believe that unfavorable age and skill profiles dent the value of some players more than they should.

As Sam Miller demonstrated on Friday, the Giants have the third-thinnest band of projected variance in starting rotation performance of any team in baseball. The story is similar for the bullpen and the positional corps. The Giants pay for stability, and to stay on the right side of average everywhere. They pay for track records, even though track records come with age. That’s an expensive and unsexy way to win, but it’s definitely a way to win. With each ring, their fan base gets more secure and their pockets get deeper. It’s only getting easier for Sabean to do what he does best. It’s not an exploitation of a market inefficiency; it’s an unusual willingness to be the market inefficiency. Efficiency is a means to an end, but it’s not a prerequisite for all success. In a market where almost everyone is focused on efficiency, Sabean isn’t. That creates opportunities, and Sabean and the Giants are getting very good at taking advantage of them.

Matthew Trueblood is an author of Baseball Prospectus. 
Click here to see Matthew's other articles. You can contact Matthew by clicking here

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