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What is the Value of Value in Sports?

May 1, 2010

The news of Ryan Howard’s new contract could have been a blip on the radar of sports news, and for many people outside of baseball or outside of Philadelphia it was likely nothing more than that. But to someone like me, who likens himself as someone with a finger on the pulse of the Philadelphia sports world and, try-as-I-might, someone who keeps abreast of the goings on in baseball, this situation has been the most dominant and polarizing storyline I can ever remember on the Internet. That’s not an exaggeration either, Ryan Howard became the poster player for Stats vs. Eyes, taking a seat in baseball purgatory until 2016, with a club option for 2017.

And no, I’m not going to turn this into another long post about the contract extension that Howard received from the Phillies. It’s honestly not about that. It’s about the concept of value in sports. We linked to a post by Bill Baer at Crashburn Alley who adeptly assessed Howard’s performance on the field to project his level of play at the end of this contract extension and determined that, based on win above replacement, he’ll actually be costing the Phillies a significant amount of money, given the combination of his (projected) production and salary.

I thought about this for a long time. And while you can’t argue with Baer’s logic – the older a player gets, the less productive he is likely to become – he didn’t factor in the other value Howard provides for the team. He’s the mayor of Philadelphia at this point. He’s the city’s official sports ambassador, wearing a Phillies uniform. He’s not an Eagle or a Sixer or a Flyer. He’s a Phillie, and there’s value to that in the city. Howard will fill seats and sell jersey and, perhaps most importantly, keep people tuned in on the television and radio. The Phillies negotiated a deal they felt was fair, based on the value that Howard provides both on and off the field.

Value differs in different sports, too. Look at the NFL, where draft picks are treated like gold, but current players – especially those who command large salaries – are traded for virtually nothing. Santonio Holmes, transgressions included, was traded for a fifth round pick because that’s all he was worth to the rest of the league. The guy was a Super Bowl MVP and is in the prime of his career, but his off-the-field issues made him far less valuable to the Steelers organization. Dumping him, for whatever they could get, was worth more than letting him go for nothing, and clearly more valuable than keeping him.

Ben Roethlisberger, on the other hand, was reportedly being shopped for a top ten pick, despite the fact that his off-the-field value has to be lower at this point than anyone else in the league. Drew Brees, he is not. But Ben provides more value on the field than Holmes did, so the Steelers decided to put a higher premium on his services and keep him if their price wasn’t met.

When the Redskins traded away a second round pick for Donovan McNabb – that trade also comes with a mid-round pick next year based on McNabb’s success – they lost all leverage for a trade of their incumbent quarterback Jason Campbell. Campbell’s value was at it’s lowest, and the best they could do was a trade for a fourth-round pick in 2012. Speaking of fourth-round picks, the Cowboys traded their second round pick, 59th overall, to the rival Eagles for the 55th overall pick. The price? A fourth rounder. So, within the same division, theoretically, Jason Campbell is as valuable as moving up four spots in the draft…two years from now? The Cowboys drafted linebacker Sean Lee with the 55th pick, while the Eagles traded the 59th pick for a third and two fifths. Of course, they subsequently traded the third for more picks later in the draft. Clearly, they didn’t see the value in drafting anyone with those picks.

Obviously those are just a few of the many illustrations of value in football where potential – in the form of picks – is almost always more valuable than production. But nothing is as bad as the NBA, which trades in a currency we like to call the Expiring Contract. Jack Kogod shared the best example with me:

On February 19, 2008 Van Horn signed a three-year deal (only the first year guaranteed) with the Mavericks in order to help complete a blockbuster trade that sent Jason Kidd from the New Jersey Nets to the Mavericks and Devin Harris to the Nets. As expected, Van Horn didn’t play at all for the Nets and was waived on October 23rd, 2008.

The guy was traded and he wasn’t even playing anymore, which is just about as bad as a player who is added into a trade and immediately bought out so he can sit out 30 days and re-sign with the team that traded him. Zydrunas Ilgauskas…come on down!

Yes, in the NBA world, cap space to potentially sign players is more valuable than actually having players who will play for you. It’s a wonderful system, really.

And then, of course, there’s soccer, which has the most straight forward system of them all. Give us cash for our talent and you can have them.. The richest transfer in the history of the sport came when Real Madrid shipped more than 93 million euros to Manchester United for the rights to Cristiano Ronaldo. That’s before they paid him his annual salary, by the way. But clearly, Real Madrid felt that spending that much money on the rights to player would pay off in the form of championships…and financial gains. To have one of the best and most popular athletes in the world wear your jersey is a powerful pitch to potential jersey sponsors. Simply put, record transfers or not, they wouldn’t have made the deal if they thought they’d be losing money.

And that’s where I think things fall with the Phillies and Howard. They clearly feel he provides more than just the value on the field. So while his WARP3 may decline in the next five or six years, the team has to feel he provides a different kind of value that, perhaps, you can’t actually measure with advanced stats. David Montgomery, President and CEO of the Phillies, told 610WIP this week that, “The key for a player of Ryan’s stature is the length of the contract. This is a statement to our fans and everyone who follows us that you know who the first basemen is going to be for the next five, or hopefully six years.”

So to the team, stability is pretty valuable. There are many other examples in many other sports. Heck, it works in any kind of business. I got paid to write this post (I know, right, I’m stealing money with this gig, so don’t tell anyone) and the powers that be decided that I provide a certain value to their overall product. Much like the deal for Howard, my bosses determined what is a fair amount to pay me based on what the market dictates, what others before me have earned and balanced that with what they feel is an appropriate value for the amount of traffic my work garners. Much like Howard, it’s my job to deliver on their trust and produce to the level they expect. And no, I’m not making anywhere near $125 million bucks.

Please don’t think I’m saying that I’m the Ryan Howard of sports bloggers, although I do try to knock it out of the park every time I write (thank you, I’ll be here all week, don’t forget to tip your editors). And no, I don’t know my Value Over a Replacement Blogger (VORB). And yes, some of us are working on a way to actually calculate such things. It’ll revolutionize the way bloggers are hired, even if we acknowledge that there’s not always a scientific way to determine someone’s value.

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