Wednesday, March 2, 2011

Barry Zito Controversey and Sunk Cost Analysis

I didn't want to do this; I really didn't. I just wanted to tweet another person's awesome work and put this behind me, but I felt that there is something missing from the discussion about Barry Zito.

I got this inspiration on a topic I didn't want to touch from Rory at Paapfly. He wrote, "It’s unfortunate, but writers and perhaps even the Giants’ entire organization is incapable of separating the player from the contract, an imperative when deciding what to do when a contract has gone sour. And this one has."

I totally agree. Everyone needs to seperate the horrible contract from the performance. That money is spent and is totally irrelevant now. Zito could never pitch again and that money would still be paid to him. In economics, this is called a sunk cost. I am economist at heart, so I can't help but point out that Bruce Jenkins needs to sign up for some remedial classes at SF City College.

In a nutshell, the money owed to Zito should play no role in determining if he plays or not. The only thing that matters is if he is talented enough to justify the playing time over another person.

This is where the reasoning breaks down. People get caught up in the contract, something that Rory pointed out in his excellent article. In reality, Zito is one of the top 100 staring pitchers in the major leagues when you measured based on WAR since 2007 for SP with at least 300 innings. He comes in at number 71. If talent were spread evenly among the teams, that means he would be the third best starter for a team.

That tells you something very important. League average starting pitching talent is not easy to come by and, by the looks of things, it would not be a walk in the park to replace Zito. This is why guys with questionable track records get 2-3 year deals worth $10 million a season and superstar pitchers get absurd 5-7 year deals at $20 million a season. Good pitching is hard to find. Bad pitching is plentiful, but actual league average or better, you better hope to draft well or you will be paying out the nose.

Jeff Suppan comes in at number 142 on our list of pitchers based on WAR which makes him a fringe major leaguer in our evenly spreading talent model. That's not really an upgrade and it fails our test.

The other guys in the minors don't really look to be ready yet either. There are some intriguing arms but there's no Madison Bumgarner knocking at the door. When one of them is ready to plug in, lets come back to this question.

In reality, acquiring talent to replace Zito would be very expensive and not easy. The story would be different if there were an equally or more talented guy in-house to step in, but at the moment, that does not appear to be the case. The only way this equation changes is if some team comes along and is willing to overpay to take Zito off the Giants' hands or if the Giants are willing to overpay to acquire someone better.

Neither of those situations is likely. So Bruce Jenkins, I guess you elicited the response that you craved, but please stop with the stupidity.

If you're on Twitter, you should definitely follow The Crazy Crabbers. If you're not, you should really consider joining; lots of good stuff going on there.

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