Dodgers Contract Value Series: Evaluating Rich Hill's Contract
As we continue to breakdown each of the Dodgers’ major transactions this off season we look towards returning Dodger Rich Hill and his new 3 year/$48m deal.
After a deep playoff run, the Dodgers entered the 2016 off-season with an impressive crop of departing free agents. Among core players Justin Turner, Kenley Jansen, Chase Utley and Joe Blanton, Hill appeared to standout perhaps of something as a luxury when prioritizing the clubs off-season needs.
Coming off the back of a season and 4 starts of excellence, Hill hit the free agent market as a 36 year old without the burden of a qualifying offer thanks to a mid-season trade from the A’s to the Dodgers. With such a dearth of free agent starters (Ivan Nova represented the next best alternative) Hill looked set to earn a handsome payday despite his age.
After bouncing around as a roughly league average starter for much of his career, Hill broke out late in the 2015 season in a 4 start cameo with the Red Sox in September. In those 4 starts, Hill would post a 1.55 ERA with 11.17 K/9 against just 1.55 BB/9. Those numbers proved enough to spark the interest of Billy Beane and Hill signed a 1yr/$6m deal that off season.
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However, it was in 2016 that Hill truly dominated. In 110 innings split between the Athletics and Dodgers, Hill would compile a 2.12 ERA with 10.52 K/9 and a stingy 2.69 BB/9. FIP also viewed Hill’s work favorably offering a 2.39 mark.
All that culminated in the Dodgers re-signing Hill for 3yrs/$48m but just how much value can we expect the lefty to provide?
One way in which we can judge Hill’s contract value is by comparing him to other notable free agents. The only other notable free agent starter this off-season was Ivan Nova, comparing him to Hill looks something like this:
So by nearly every measure, Hill out pitched Nova in 2016 and will get paid significantly more over the next 3 seasons.
Perhaps we can look back to last off season to find some better comparisons and that is in fact the case.
The table above describe Rich Hill’s 2016 season compared to the 2015 seasons of Scott Kazmir and John Lackey – ie each of their contract years. Again, Hill appears to be the superior performer in most categories compared to his peers, however, the gap is less glaring than with Nova. Each of these starters will earn an Average Annual Salary of $16m so it appears that Hill’s new contract is right in line with the market rate for an above average, aging starter.
Another way we can measure Hill’s contract value is by calculating the expected surplus value for the duration of his contract.
At the current rate, we know that the free market values a win at roughly $8m. Meanwhile, Steamer projects Hill to produce 3.2 WAR as a 37 year old next season. If we apply a 10% aging penalty for years 2 and 3 of the deal then we can expect Hill to produce 3.2, 2.9 and 2.6 WAR through 2019. Doing some simple maths, at $8m per win Hill is expected to be worth $69.6m over those 3 seasons, good for $21.6M of surplus value.
However, it may be unreasonable to expect Hill to still be a member of the rotation as a 39 year old in 2019 with top prospects Walker Buehler, Jose de Leon and Jordan Sheffield ready to make an impact. If we push Hill into a loogy role for the 2019 season – a role where he should excel – we could expect Hill to produce something more along the lines of 1.3 WAR. Again with some simple math, we get Hill being worth some $59.2m – $11.2m of surplus value over the three years.
No matter which way you look at it this contract appears to be a steal for the Dodgers. While Hill’s advanced age and somewhat extensive injury history offers plenty of risk the lefty should more than pay off his deal.