Hm, on second thought, maybe it's kind of a funny nickname.
April 8, 2008
There's got to be a better nickname
MLB.com just published an article entitled, "Yankees' 'Three Amigos' handling pressure", subtitled, "Young Hughes, Kennedy, Chamberlain counted on in Bronx". There's got to be a better nickname for the trio than Three Amigos, which is the apparently the term that Phil Hughes himself uses. If this inane phrase becomes widely adopted by the media and I have to hear it for five years, I will lose my mind.
Hitting starts off slow, and I ramble about Igawa
The Yankees are 4-3 through seven games despite having scored only 23 runs so far this season, which is good for 25th in the MLB in terms of runs per game. It's funny to see the Yankees, the Red Sox, and the Tigers all among the bottom seven teams in the league in that category, which obviously won't be the case in a few months.
With the exception of Ian Kennedy, the Yankees rotation has looked solid. Expect a few bumps along the road for Kennedy, whose dismal 2.1 inning showing against the Devil Rays a few days ago was only the fourth major league start of his career. To be honest, I wouldn't be surprised if Kennedy is the one who Joba replaces in the rotation after a couple months, rather than Mussina as most people thought would be the case. If Kennedy really blows up, then it might even be Kei Igawa filling in for a while. Though Kennedy tore up every league he faced during his one-year stint in the minors, the bottom line is he has been rushed to the MLB.
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I have been thinking recently about the general Yankee fan's perception of Kei Igawa as an unmitigated disaster. While yes, he has been terrible, I think most people don't consider all the factors at hand when signing an international player.
One interesting characteristic of baseball is that there are many incredibly promising prospects who Just Can't Cut It at the major league level. There are some players that tear up the minor leagues, but when they get the call-up, their numbers all of a sudden dip to replacement level. This phenomenon is not limited to pitchers -- we all remember Andy Phillips, for example.
Anyway, I relate this idea to the signing of Kei Igawa because when the Yankees signed Igawa, they were essentially signing a stellar prospect. The Japanese leagues are probably AAA quality, and he had GREAT numbers there, just as someone like Phil Hughes, Joba Chamberlain, or Ian Kennedy would have.
The point is, you can project numbers from league to league based on historical conversions and player comparisons and probably arrive at a reasonable expected value for prospects, but you're going to see some variance. Some prospects' abilities will translate to the majors, some will not.
You might say, "BUT JORDAN THE YANKEES PAID KEI IGAWA A BILLION DOLLARS AND YOU'RE SAYING HE'S A PROSPECT LOL". Yeah, well, that was their perception of his fair market value, and I think they paid about the right amount, to be honest. They bid $26m for Igawa and signed him to a $20m, 5-year contract, right? Using the 40% marginal luxury tax, that's a $26m untaxable bid that we can amortize over the life of his contract and $28m in salary and taxes, which comes to $10.8m a year. Discount that value by the 40% marginal tax rate, and that's equivalent to the Yankees paying $7.7m a year for five years for a player on the MLB free agent market.
So I pose the following question to the Cashman-bashers: were a high-level pitching prospect to be on the open market, would you pay $7.7m a year for him? For example, if Ian Kennedy were somehow on the market, would you give him that kind of money? It's tough to say, because despite his incredible numbers in lesser leagues, we're not very sure at this point as to what kind of major league career he's going to have. But when you consider that very mediocre pitchers like Ted Lilly go for $11m a year in this market, $7.7m a year almost seems cheap for a promising prospect.
I would also argue that differing risk premia among major league teams factor into international signings. As I mentioned before, I think most sabermatricians would agree that it is possible to produce a reasonable estimate of how players coming from other leagues will perform in the majors, but there is much more uncertainty in this projection than, say, projecting an NL pitcher's numbers to the AL. Therefore, assuming the markets for baseball players are rational, the monetary utility of a player on the open market, which should be correlated to their expected added win shares, must be discounted at a greater rate for prospect-types (i.e., international players) to account for the additional risk. The Yankees, however, most certainly have less risk aversion than other MLB teams due to their deep pockets; if a high-risk, high-reward player doesn't work out, they have no problem just eating the salary. For example, were Kei Igawa's projected numbers applied to an MLB free agent, let's say most teams would pay in the range of 10-11m a year for his services. When you consider the uncertainty in the estimates, however, the mean value decreases and the range widens when you take into account differing risk preferences among MLB front offices. Therefore, the bids on Kei Igawa might range from 4-7m a year when taking into account this volatility.
The bottom line is that baseball, like the stock market, is a tough thing to predict. All you can do is make the most informed investment decisions possible and live with them. Kei Igawa happened to be a bust, but I don't think Yankee fans should be too upset with Brian Cashman about his signing.
With the exception of Ian Kennedy, the Yankees rotation has looked solid. Expect a few bumps along the road for Kennedy, whose dismal 2.1 inning showing against the Devil Rays a few days ago was only the fourth major league start of his career. To be honest, I wouldn't be surprised if Kennedy is the one who Joba replaces in the rotation after a couple months, rather than Mussina as most people thought would be the case. If Kennedy really blows up, then it might even be Kei Igawa filling in for a while. Though Kennedy tore up every league he faced during his one-year stint in the minors, the bottom line is he has been rushed to the MLB.
-----
I have been thinking recently about the general Yankee fan's perception of Kei Igawa as an unmitigated disaster. While yes, he has been terrible, I think most people don't consider all the factors at hand when signing an international player.
One interesting characteristic of baseball is that there are many incredibly promising prospects who Just Can't Cut It at the major league level. There are some players that tear up the minor leagues, but when they get the call-up, their numbers all of a sudden dip to replacement level. This phenomenon is not limited to pitchers -- we all remember Andy Phillips, for example.
Anyway, I relate this idea to the signing of Kei Igawa because when the Yankees signed Igawa, they were essentially signing a stellar prospect. The Japanese leagues are probably AAA quality, and he had GREAT numbers there, just as someone like Phil Hughes, Joba Chamberlain, or Ian Kennedy would have.
The point is, you can project numbers from league to league based on historical conversions and player comparisons and probably arrive at a reasonable expected value for prospects, but you're going to see some variance. Some prospects' abilities will translate to the majors, some will not.
You might say, "BUT JORDAN THE YANKEES PAID KEI IGAWA A BILLION DOLLARS AND YOU'RE SAYING HE'S A PROSPECT LOL". Yeah, well, that was their perception of his fair market value, and I think they paid about the right amount, to be honest. They bid $26m for Igawa and signed him to a $20m, 5-year contract, right? Using the 40% marginal luxury tax, that's a $26m untaxable bid that we can amortize over the life of his contract and $28m in salary and taxes, which comes to $10.8m a year. Discount that value by the 40% marginal tax rate, and that's equivalent to the Yankees paying $7.7m a year for five years for a player on the MLB free agent market.
So I pose the following question to the Cashman-bashers: were a high-level pitching prospect to be on the open market, would you pay $7.7m a year for him? For example, if Ian Kennedy were somehow on the market, would you give him that kind of money? It's tough to say, because despite his incredible numbers in lesser leagues, we're not very sure at this point as to what kind of major league career he's going to have. But when you consider that very mediocre pitchers like Ted Lilly go for $11m a year in this market, $7.7m a year almost seems cheap for a promising prospect.
I would also argue that differing risk premia among major league teams factor into international signings. As I mentioned before, I think most sabermatricians would agree that it is possible to produce a reasonable estimate of how players coming from other leagues will perform in the majors, but there is much more uncertainty in this projection than, say, projecting an NL pitcher's numbers to the AL. Therefore, assuming the markets for baseball players are rational, the monetary utility of a player on the open market, which should be correlated to their expected added win shares, must be discounted at a greater rate for prospect-types (i.e., international players) to account for the additional risk. The Yankees, however, most certainly have less risk aversion than other MLB teams due to their deep pockets; if a high-risk, high-reward player doesn't work out, they have no problem just eating the salary. For example, were Kei Igawa's projected numbers applied to an MLB free agent, let's say most teams would pay in the range of 10-11m a year for his services. When you consider the uncertainty in the estimates, however, the mean value decreases and the range widens when you take into account differing risk preferences among MLB front offices. Therefore, the bids on Kei Igawa might range from 4-7m a year when taking into account this volatility.
The bottom line is that baseball, like the stock market, is a tough thing to predict. All you can do is make the most informed investment decisions possible and live with them. Kei Igawa happened to be a bust, but I don't think Yankee fans should be too upset with Brian Cashman about his signing.
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