Rockies lock up Tulo long, long, loooooooong term

The Colorado Rockies have handed Troy Tulowitzki a 7/$134mil extension that will kick in after the 2013 season, meaning he will don the purple pinstripes through 2020. Damn.

I was going to get into this, but Tom Tango had a better post on his blog, so I’ll just let him take it away.

Quote:

Tulo: extension of 6/119, starting in 2015.

Wow.  Tulo was born Oct, 1984.  In his last 4 years, rWAR is at 19 wins, and fWAR is at 18.

Lucky for us, I just published the WAR aging curves for great players, and Tulo is a standard great player.

In 2011, he will be 27 years old.  The historical precedent for players like Tulo is about 16-17 wins from 2011-2014.  He’s already being paid for those years.

The extension is for the 6 years starting in 2015.  So, we just need to look at years 5 through years 10 from the aging curve for players entering year 1 at age 27.  And those 6 years are going to be about 15-16 wins.

Here’s what happens:

Year    $/win    WAR
2011     $4.50
2012     $5.00
2013     $5.50
2014     $6.00
2015     $6.50     3.9
2016     $7.00     3.4
2017     $7.50     2.9
2018     $8.00     2.4
2019     $8.50     1.9
2020     $9.00     1.4

 

I’m starting the $ per win at 4.5MM$ in 2011, and going up by 0.5MM$ each year.  Is that a good estimate?  Bad estimate?  I don’t know.  We’re all in the same boat here.  His WAR in 2015 (age 31) would be 3.9.  And then we drop it by 0.5 wins per year.  I know that is a good estimate, because that’s the typical pattern that we’ve seen historically.

Anyway, all we have to do is multiply the second column by the third column, and add up the numbers.  And what do we get?

$119MM$.

Seriously.

Listen, I know I got lucky here.  I could have started the $ per win at 5.0.  I could have instead increased the $ per win by 7% or something (that would have gotten me to 119.6MM$).  Whatever, that’s not the main point.

The main point is that we have a framework to analyze the deal, and we can plug in reasonable numbers to see how we could get to 119MM$.  And, we were able to do so with reasonable numbers.

Good job on the Rockies and Tulowitzki for coming up with a reasonably justifiable deal.

*When he made the post, it was rumored to be a 6/$119mil extension. It’s now 7/$134mil. That doesn’t change anything though. Previously he was going to be paid $15mil in 2014. Now he is going to be paid $16mil. So it’s basically 6/$118mil.

Using his WAR estimates and $ per WAR estimates, over the life of his now 10/$153.75mil contract, he would be worth $202.85mil, so that’s a ton of net value for the Rockies. Over the span of the extension he will be worth about $142.85mil. So this is a really good deal for both sides. The Rockies are getting fair value and if Tulo plays well, especially late into his career, they could be saving money. Meanwhile, Tulo has security and a shit ton of money.

In the comments section of his blog, Tango showed best case and worst case estimates for Tulo’s last six seasons. If he ages well, he could be worth $198mil in the last six years alone. If he ages poorly, he’d be worth $37mil over those six seasons. I have to agree with Tom when he expects Tulo to age somewhere in the middle. If that’s the case, as I stated above, it’s a great deal for both sides.

Obviously things change if the $ per WAR is different in reality as we progress to those future seasons, for a scale, it’s a good estimate.

And bonus time! Here is a table to show the numbers. For his 2011-2014 seasons, I gave him a solid 4 WAR each season. To me, that’s conservative. According to Tango’s age path, players in their age 27-30 seasons get a total WAR of 16-17. That’s why I gave him 4 WAR each season, even though something tells me he will do better than that.

*Might need to right click to enlarge.

Now hopefully Tulo uses his new money to get a haircut.

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3 Comments on “Rockies lock up Tulo long, long, loooooooong term”

  1. Doug Bies Says:

    Please get a job in baseball one day!

    • Disco Says:

      Haha, hey I’m trying. Majoring in Sports Management.

      It’s fast growing, but still tough to get a decent job. Gotta be diligent and persistent. When I’m an upperclassman I plan on being one of the people that goes to the Winter Meetings with a resume on the 1% chance you get a job. Network, meet people, etc.

      • Doug Bies Says:

        That would be awesome man…You should repost some of this stuff on sites like BtB, where experts will commend your work & you can make a name for yourself before those meetings. Then once you show up & they realize your half the age of them & as knowledgeable as many of them, they will be floored…


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