Analyzing Trevor Bauer’s New Contract

by Peter Oswald, February 17, 2021

On February 5, 2021, Trevor Bauer became the highest paid player in MLB history. Bauer’s contract is particularly player friendly; with opt-outs available after each season. Bauer will earn $40 million if he opts out after 1 season, $85 million if he opts out after 2 seasons, and $102 million if Bauer stays for all three seasons. No player has earned $40 million in a season before, and Bauer will likely break that threshold. This means a lot for the game for a variety of different reasons. For one, the MLB team ownerships and Players Association are potentially headed for a strike after the end of next season, and undoubtedly the biggest contracts will be a part of the negotiations. Bauer’s contract shows the inability of many MLB teams to hold on to talent. Cleveland shipped off Bauer to Cincinnati knowing they were not willing to pay him in free agency, and Cincinnati never realistically entered the conversation to extend their Cy Young Award winning pitcher. There is also the question of whether or not Bauer is worth it. Bauer played well in 2020, but a small sample size combined with a lack of past performance at that level shows why many are questioning this deal. Additionally, the rise of Bauer’s spin rate raises not only his fastball, but questions on whether it shows his development as a pitcher or whether this is due to the foreign substances Bauer himself has mentioned. This is a very risky deal for the Dodgers, as well as one that might be bad for both MLB and the game as a whole.

Bauer’s contract will likely change how the labor dispute between MLBPA and the owners will play out. With MLB’s Collective Bargaining Agreement to expire after the end of next season and no real improvement in the situation, the highest paid player in league history will be included in discussions on labor disputes. MLB owners have recently justified asking players for 2020 salary cuts and not spending on 2021 payrolls by citing the pandemic. However, the Dodgers just made Trevor Bauer the highest paid player in league history during said pandemic. This seems openly contradictory, and the Players Association will likely hone in on how any MLB team could afford this given the claims that owners supposedly lost billions. Bauer’s contract bodes well for the new era of superstars, as players like Juan Soto, Fernando Tatís Jr, and Ronald Acuña Jr. can all justify asking for higher wages by citing Bauer’s contract. Bauer’s contract, however, will likely have little effect on the vast majority of MLB players.

By this chart, we can see that the highest paid MLB player in each season has seen significant but volatile growth in salary, while the league average has slowly risen over the years. The average MLB salary is skewed by many of the highest earners, with the median salary often significantly less than the average. In 2019, the median MLB salary was $1.4 million compared to an average salary of $4.375 million. While Bauer’s contract may look like a good thing for labor negotiations, it does not mean much for the majority of MLB players who make less than a tenth of what Bauer does. While the highest, minimum, and average salaries have risen comparatively percentage wise, many MLB players may still feel aggrieved with their salaries.

One of the main criticisms of big free agent signings is that these deals likely drive down competitive balance, due to an inability of smaller teams to compete with these wages. Certainly, common logic would suggest this would be the case, as an MLB team can add a free agent to their existing team to get better. To see if free agent deals can actually ensure a team’s success, team winning percentages has been plotted against each team’s ratio of the annual MLB player payroll from the last expansion in 1998 to 2019.

While the R2 value is not particularly high, the line of best fit is a reasonably good indicator given how few variables were considered. This plot does not consider player development, as a team may spend a lot on free agents and have a bad record due to poor talent development. A player can easily justify their salary and be on a team that bucks this trend if they are surrounded by below replacement level players. This plot does not consider teams that take on payroll in trades designed to gain them more prospects, which by design would not affect current winning percentage. In the red on the plot above, we have Trevor Bauer’s 2021 contract projected within given salaries for MLB teams for the 2021 season. By this metric, a team with Trevor Bauer’s salary as its entire payroll would finish the season with about 72 wins. A team with these projected numbers would not have made the playoffs, but this team also would not have finished last in any division in 2019. There is a lot of variation due to a lot of factors not considered in this plot, but spending money has a correlation to winning baseball games.

The optics of the Dodgers adding a Cy Young Award winning pitcher immediately after winning the World Series are fairly negative. While Kevin Durant was lambasted for his move to the Warriors in 2016, Bauer’s deal is considered nothing out of the ordinary in MLB, despite having similar circumstances. While teams like the 2020 Rays can succeed with a low payroll, it is fairly disheartening for fans of these small market teams to see their golden boy sign a massive contract with one of the New York or Los Angeles teams. Cleveland has a combined salary lower than one of their former players and without a single player in the top 100 of MLB payroll for 2021, despite being a playoff team in 2020. Cleveland has lost the likes of Bauer, Lindor, and Clevinger in trades designed to get assets for these expiring contracts. This is bad for the game, as Cleveland developed and introduced an extremely talented team of players for them to only be snapped up by the teams with the go-for-it-all attitudes that Cleveland should have had all along. Deals similar to Bauer’s will hurt fans of low payroll teams and may eventually hurt baseball as a whole by making the game less competitive and losing potential fans of teams with low budgets. The Pirates have not won a division title since moving to the NL Central in 1994, and for their returns to the playoffs after a 20 year drought in 2013-2015, they had a bottom 5 payroll in each of these seasons. It is hard to imagine why anyone would possibly start being a fan of the Pirates in this day and age given their paltry payroll, low future expectations, and past history. This will be bad for the game if left unchecked, as it may leave cities with MLB teams entirely ambivalent about the sport.

Despite all of the other impacts Bauer’s contract has on the game, the most pertinent question has not been answered: Is he worth it for the Dodgers? By using traditional logic of $8 million per 1 Win Above Replacement, Bauer has only had 2 seasons that would justify the $40-45 million salary (using bWAR, assuming 2020 production is sustainable over the whole season). However, his increase in spin rates likely means that his 2020 is likely more indicative of his class as a pitcher than previous seasons. By using the slope of the trendline of the scatter plot above, Bauer’s contract as a whole should represent a 4-4.5 win per season difference. Bauer’s WAR will exceed this total if he continues his form from 2020; however WAR probably is not the best metric in the Dodgers case, since he is replacing players better than 0 WAR players. Bauer is not replacing an average player, as he is likely to replace some combination of Tony Gonsolin, Dustin May, or Julio Urías in the rotation. Urías had the worst 2020 out of the three in terms of WAR, and even then he would have had around a 2.5-3 bWAR season if his 60 game totals are indicative of his talent over a full season. Bauer’s projected 162 game 2020 totals would have been the only season of his career exceeding 7 bWAR, so this deal is a stretch to be worth it by this metric. This also reduces the starting opportunities for these young pitchers, which can have an immeasurable impact on their development. Bauer’s deal will only be worth it for the Dodgers if Bauer performs at his 2020 form or better, and that is risky for the Dodgers.

There is the possibility that Bauer has been using foreign substances to increase spin rate, meaning it is possible for Bauer’s form to regress if MLB starts regulating substances. By using substances like pine tar or rosin, pitchers can get a greater grip on the baseball and massively increase spin rate. Bauer himself has suggested that he could increase his fastball’s spin rate by 400 rpm by using pine tar, before adding 385 rpm to his average fastball last season. If Bauer indeed has been using foreign substances to improve spin rate, he certainly isn’t alone. Many of MLB’s elite pitchers (Verlander, Scherzer, Cole, etc.) have been implicated in using foreign substances by fired Angels clubhouse attendant Bubba Harkins. However, this means Bauer and many of the league’s best pitchers could regress if they are actually using foreign substances and if MLB finds a way to control the doctoring of baseballs.

It is worth noting where Bauer’s contract falls within the other highest paid annual earners since 1998. In the bar chart below, the WAR of each of the highest paid players in the year before gaining their respective contracts is shown. (Bauer’s 2020 WAR is projected to a full season by (2020bWAR*0.5*(2019inn/2020inn+ 2019GS/2020GS)).)

Bauer becoming the highest paid player is not surprising by this metric, especially considering how short his contract is. Sheffield and Strasburg stand out as outliers, but their situations should be each taken with a better understanding. Sheffield was a known talent coming off a bad season and World Series win. Strasburg is arguably the face of the Nationals franchise and easily justified any money spent by winning the World Series MVP. Bauer is a player who has had 2 good seasons, and whether this contract is good or bad is likely determined by whether or not Bauer’s 2020 form is sustainable in the coming years.

Off the field, the deal comes with a lot of financial risk for the Dodgers, however, Bauer’s marketability due to his presence on websites like YouTube and Twitter may make up for some of his salary, even if he is not worth it on the field. The converse may be true as well, as Bauer’s controversies have included engaging in online harassment and conspiracy theories. While Bauer’s social media presence has improved this past year, he did call recently refer to The Athletic as a “gossip blog” on twitter after articles by Molly Knight and Pedro Moura detailing his controversies were published on The Athletic’s website. He will be under the attention of a notoriously difficult LA press, and this amount of exposure is both an exciting and trying prospect for the Dodgers and MLB as a whole.

Bauer’s contract may be terrible for all parties but Trevor Bauer. Bauer’s contract will be great news for Trevor Bauer, as he is the highest paid player in MLB history, despite, arguably, not being the best player in MLB history. It may be good news for the Dodgers on the field, as they are getting a Cy Young award winning pitcher in his prime. However, Bauer has yet to have three total seasons that would justify this salary. Off the field, the Dodgers likely are not too worried about going over the salary cap, but the money likely could have been spent better if they traded for one of Snell, Arenado, or Lindor and given up a few prospects. Bauer’s social media presence is an exciting yet terrifying commodity for the Dodgers and MLB; as he could help usher the sport back into the public consciousness in the digital age, or he could cause controversies and ruin MLB’s and the Dodgers’ public image. Most importantly, this deal may be bad for the soul of the league, even if it is just a symptom of larger problems. MLB teams should be keeping their team’s star player, and that simply is not possible when many choose to cut their budgets as much as possible. Additionally, Bauer’s contract further divides the MLB players association, as the MLBPA will struggle to balance the needs and wants of the highest earners with the needs and wants of the vast majority who will not make Bauer’s 2021 salary in a lifetime. Bauer is polarizing on and off the field, and his contract is no different. Trevor Bauer’s contract may be bad for the Dodgers, who will see which Bauer they get, but ultimately Bauer’s deal will have bigger effects on the fans, labor negotiations, and the increasing payroll inequality in MLB.

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