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Do Players Outperform In Their Free-Agent Year?

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"

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Do Players Outperform In Their Free-Agent Year?

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  1. Do Players Outperform In Their Free-Agent Year? Phil Birnbaum www.philbirnbaum.com

  2. 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

  4. 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)

  6. 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)

  7. 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

  8. 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

  9. 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

  10. 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

  11. 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

  12. 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

  13. 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

  14. 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

  15. 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

  16. 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

  17. 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

  18. 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?

  19. 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

  20. 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

  21. 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

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