One-Hit Wonders: A Study of Contract-Year Performance among Impending Free Agents in Major League Baseball

By Martin, Jason A.; Eggleston, Trey M. et al. | Nine, Fall 2011 | Go to article overview
Save to active project

One-Hit Wonders: A Study of Contract-Year Performance among Impending Free Agents in Major League Baseball


Martin, Jason A., Eggleston, Trey M., Seymour, Victoria A., Lecrom, Carrie W., Nine


INTRODUCTION

In 2004, Adrian Beltre, then a twenty-five-year-old third baseman for the Los Angeles Dodgers, entered the final year of his first major-league contract. That year, Beltre posted the best statistics of his career. He finished the year with career highs in hits, home runs, runs batted in (RBI), batting average, on-base percentage (OBP), and slugging percentage (SLG). (1) He parlayed this performance into a major contract with the Seattle Mariners through free agency, increasing his salary by over loo percent. Unfortunately for the Mariners, Beltre did not come close to producing at the level he did during his contract year. For example, in 2004 Beltre hit 48 home runs and had a batting average of .334; after signing his new contract with Seattle, his season high in home runs was 26 and his season high batting average was .276. (2) Beltre seemed to have a resurgence with the Boston Red Sox in 2010, but nevertheless, in baseball circles, cases like Adrian Belire's evoke the idea of the contract-year phenomenon.

As described by author Malcolm Gladwell, the contract-year phenomenon is a theory that asserts that players--regardless of their sport--will statistically perform better in the final year of their contract than they have in previous years, in an effort to receive larger contracts on the free-agent market. (3) The phenomenon is so ingrained in modern baseball culture that ESPN.com produced an entire article for fantasy baseball enthusiasts, profiling players in contract years who should perform well based entirely on this theory. (4)

In the high stakes world of Major League Baseball (MLB), where contracts have reached remarkable figures, management needs a way to properly evaluate and compensate a free-agent player. If this contract-year phenomenon exists, and general managers act on short-term performance, they will not likely get what they pay for. The literature on baseball player performance has approached the issue from several different perspectives.

PLAYER MEASUREMENT AND COMPENSATION

A great difficulty exists in determining a player's monetary value in professional baseball. Statistics provide quantitative data to use in comparison to other contemporary and historical players. However, management must then decide which statistics are important and deserve more value than others. Is a home run more valuable than a stolen base? If management places value on certain statistics when evaluating a player, they are providing incentives for that player to behave opportunistically.

Holbrook and Shultz examined the salary model in MLB. They wanted an answer to the question "How much is a home run worth?" The authors designed a formula to determine the effects a player's statistical performance had on future enhancement or diminishment of contract value. (5) Their study effectively assigned a dollar amount to every hit, home run, fielding error, etc. Although the contract-year phenomenon was not the focus of their study, they did find that in a player's contract year, home runs became more valuable while hits became less valuable. Reaching the stage of potential free agency did cause changes in the value of statistics relative to the ultimate payoff the player received based on that performance. This study demonstrated that pay and performance are highly correlated, especially in a player's free-agent year. Therefore, players realize the incentive of parlaying a great statistical season into a large payday through free agency.

Lackritz, in his study of salary evaluation for MLB players, concluded that the only proper way to compensate a player was on a yearly commission basis. He argued that a player's value should be determined based on individual and team performance and pay could vary greatly from year to year. (6) This would reduce the financial risk for teams and deter opportunistic behavior on the part of the athletes. Every year would be a "contract year.

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

One-Hit Wonders: A Study of Contract-Year Performance among Impending Free Agents in Major League Baseball
Settings

Settings

Typeface
Text size Smaller Larger
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

While we understand printed pages are helpful to our users, this limitation is necessary to help protect our publishers' copyrighted material and prevent its unlawful distribution. We are sorry for any inconvenience.
Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.