The Mike Leake Contract: A Question of Valuation (And Questionable Valuation)

When I was a pre-teen, maybe eleven or twelve years old, my family was not particularly well off. My dad worked for St. Louis Refrigerator Car, which was the railroad line owned by Anheuser-Busch, and my mother, at the time, was wrapping meat for a living. Not bad money, necessarily, in either case, but unfortunately for us, A-B was in the process of selling off all non-brewery-related assets in the late 80s/early 90s, leading to the death of Eagle Snacks, the eventual sale of the Cardinals to Bill DeWitt's group, and the shutdown of St. Louis Refrigerator Car.

My father wasn't actually out of work all that long; his previous boss had moved on to another railroad shop across the river, and within a couple months Dad had a job in the paint shop, doing the same thing he had done for SLRC, and we really only had a short run of belt-tightening. Things had been worse in '84, when both of my parents happened to get laid off the same year, and we ended up chopping firewood to sell in order to try and keep above water. Of course, I was only four at the time, and thought we were just hanging out at my grandpa's lake property a lot more than usual. Later on, my father would climb the ladder at his company, and my mother would buy a bread delivery franchise, and my parents would ultimately end up with enough disposable income to make at least two or three bad purchases a year. But in the early 90s, we weren't there yet. We were living in pre-Clinton economic expansion America, and hadn't seen a whole lot of trickling down happening.

I remember a year or two later, probably around '93 or '94 -- I think '93, but I won't swear to it -- we desperately needed a new set of living room furniture. Ours was all dark wood and fabric with a riverside mill print; the sort of furniture most popular in the late '70s and into the early '80s. The set I grew up with was purchased sometime before I was old enough to remember, so pre-1983, essentially. Ten years on a set of furniture is always rough; a household with two children, one dog, and several cats at any given time was simply more than it could bear. And so, the decision was made to replace the living room sofa and chair.

My mother and I shopped for a month or more, looking at pretty much every furniture store in the St. Louis area. My brother mostly stayed with my grandma when we went on sofa-hunting expeditions; at six years old he had very little interest in furniture shopping, perhaps unsurprisingly. Finally, after what seemed like the longest search in history, we found a living room set at the old Carol House furniture in Valley Park. Dark brown fabric, a contemporary shape with squared arms and exposed legs. Two cushions, rather than the usual three-way divide, with a row of buttons running across the middle of each back cushion. Simple, elegant, and an enormous upgrade over the dowdy old set we had been sitting on nearly my whole life.

The only problem was the price. The set was $900, if I remember correctly, and this was in 1993 money. We had been shooting for the $500-700 range, but this set was just fantastic. And it was quality.

However, just a year or so removed from our forced belt-tightening, that extra $200 or so felt like a very big deal. I remember my parents discussing it, then arguing about it, then not talking, then discussing it again. In the end, it was decided the set was just too expensive. We actually had enough in the bank to afford it, and there was always financing, but in spite of that set being The One, it wasn't the option we ultimately chose.

Instead, we decided to purchase a second-hand set from my mother's father and stepmother. They were getting rid of the set they kept in the basement, mostly because they were taking out the bar (I've always found the death of the home basement bar an oddly sad phenomenon of current cultural reality), and had no need of it anymore. So Don and Doris sold it to us, for the princely sum of two hundred bucks. Not bad, really.

Except, of course, for the fact it was horrible furniture. The fabric was a country sort of print, but all avocado green, harvest gold, and bright orange. It looked more like a refuge of the 1970s than the set we were getting rid of; it had just seen substantially less wear and tear. Quality-wise, it was nothing to write home about, but it was fine. It would work, for the price. Oh, and it smelled musty, too. You know, like it had been sitting in someone's basement bar for the last decade or so.

We put that awful set of furniture in the living room, repainted the walls to at least not clash terribly with it, and resolved to live with the arrangement. My mother hated it, commented on it waspily at nearly every opportunity, and never could get the smell out. The next year, at Christmas time, we went out and purchased a different cheap set, blue and brown plaid fabric, from Value City Furniture. It was low quality, and pretty ugly, but at least it didn't smell. And it only cost about $400, I think.

The recliner broke down less than a year later, and my dad had to have another. So we bought a recliner that sort of matched, for a couple hundred bucks. And when one of the legs broke off the sofa, we glued it back on and tried to laugh at our shitty furniture. It went on like that, purchasing a piece here, and a piece there, changing out chairs when one wore out, each time with another cheap temporary fix.

It wasn't until the summer of 1997 when we finally remodeled the living room fully. Tore out a wall, put in an extra bathroom off the main hall, put up antique replica ceiling tiles, and invested in a new set of furniture. It was a red, green, and gold plaid, dual recliner sofa, and it weighed something like ten thousand pounds, I believe. Two matching recliners, meaning all four members of our family could lean back and put their feet up, if they wanted. The set cost at least fifteen hundred dollars, from Carol House, where five years before we had refused to invest in the set we really wanted.

That plaid set lasted a good long time; probably eight years or more, and it was replaced more because my mother got tired of it more than because of it wearing out. It was a damned good set of furniture, and whenever I went home after moving out in 2000, I sat on it and marveled at how well it was holding up, thinking about all those sets we tried out during the mid 90s.

I have no idea how much we spent on furniture in the five years between deciding on the orange, green, and gold hand-me-down monstrosity over the dark brown set we really wanted. But I paid more attention than you might think. I was kind of a weird child that way, I suppose. Between replacing that $200 set with a $500 set that we still didn't like, replacing at least two recliners, and swapping end tables because the ones we had originally looked awful with the blue and brown, I think it was probably at least $1200. Maybe more. And the living room was ugly for the whole five years.

I became fascinated with the idea of how one can spend more by trying to spend less, and when I first heard the phrase, "Penny wise and pound foolish," I thought I had finally found a proper descriptor for the phenomenon. Unfortunately, that old saying has more to do with spending big and trying to save small, but the dueling, self-defeating notions of when and how to value things appealed to me as I looked for an explanation for the thing I had noticed. My interest ultimately stopped short of doing much in the way of calculations; as intrigued as I am by the idea of mathematics, actually doing math is something I struggle to not find excessively tedious. It's unfortunate, really.

Still, I tried to take a lesson from our living room furniture, which is an odd sentence to type, I must admit. If we had invested in the really good set, the one we liked best, in 1992, we would have been out $900, probably had to finance it and add another bill to the stack, and maybe have had to watch spending on movie and video game rentals quite as much for six months or so. Instead, we went the cheaper route, bought an ugly set that smelled funny and had a spring that wasn't quite right over on the left-hand side, and then proceeded to spend far more than $900 trying to make do over the course of what likely would have been the good set's lifetime.

*******

Not too long ago, Craig and I recorded a podcast. One of the topics was free agents, specifically free agent pitchers, and which of the remaining crop would be the most appealing to sign. Of the non-one year contract Buehrle/Cliff Lee types still out there, I said Mike Leake would probably be my choice. He's been durable over the course of his career, making at least 30 starts four years in a row, is a pretty solid pitcher by RA9, which as time goes on I become more convinced is closer to the truth than simple FIP-type stats, though still not quite right, and came with no qualifying offer. As much as I prefer Scott Kazmir as a pitcher, it's tough to forget Kazmir was essentially out of the game less than four years ago, and less risk is really what the Cardinals are trying to invest in here.

Then there was the possibility of a trade popping up, specifically a potential deal with the Tampa Bay Rays for Jake Odorizzi. I have to admit, I was conflicted about Leake vs Odorizzi. I am normally a person who comes down on the side of spending money only before I'm willing to spend in talent or draft picks. I realise there's a dollar figure you can put on prospects and draft picks, and I'm not completely against those sorts of valuations. But I'm also not convinced those dollar figures are really a good reflection of what you're actually giving up, and so I don't particularly like putting a number on the value of a pick. Argue with me all you want; I will always value the limited resource far more than the one which accrues again and again as people file through the turnstiles. Perhaps it's the simple fact I've become much less enamoured with winning the fiscal efficiency trophy as time has gone on.

In the case of Odorizzi, however, I found myself wishing the Cardinals would do the thing I normally counsel against, and spend not in money, but in talent and opportunity, to bring in a pitcher I've long coveted. The reason: because I believe Jake Odorizzi has the potential to be an elite pitcher, or at least a well above-average one, and I don't believe that of most other options we've seen tossed around here since the Redbirds failed to sign David Price.

Still, I meant what I said at the time of the podcast recording: I believe Mike Leake is one of the better options on the market for the St. Louis Cardinals. What the Cardinals need -- innings -- Mike Leake has been quite good at providing. They're not dominant innings, certainly, but they are innings of an acceptable quality, and in good quantities.

That, of course, was when the Mike Leake signing was purely a hypothetical in my head. Now that it is reality, however, I find myself more and more depressed at the possibility of watching Mike Leake do his Mike Leake mediocre starter thing 30+ times a year for the next five years. Or maybe even six, though I have to think by that time the Cardinals will be ready to move on from the Five Finger Discount Kid. (On a side note, the one thing I do find very not depressing about Leake signing here is the hope we'll see lots of, "Mike Leake Stole This Shirt For Me" tee shirts at Busch Stadium this year.) It's not that Leake is not a solid pitcher; as I said, I think he very much is. But is this really the kind of pitcher we want to see the Cardinals invest half a decade and $80 million in?

Here's the thing: the Cardinals decided, at the outset of this offseason, that signing David Price was their number one priority. They put off Jason Heyward's impending negotiations, barely engaged any other free agents at all aside from the small-fry signing of Brayan Pena, and went hard after the top free agent pitcher available. It was an exhilarating time to be a fan.

Price, like Leake, cost only money, having been traded this past season and so ineligible for a qualifying offer. He is, on the downside, two years older than Leake, at 30. Price has also thrown at least 200 innings five of the last six seasons, falling less than fifteen innings short in 2013, when he missed time early in the season with a triceps strain. Over those six seasons, Price has been worth 30.5 WAR according to Fangraphs, 27.9 WAR if you prefer Baseball-Reference. Best of all, he's coming off either the best or second-best season of his career, depending on which WAR valuation you prefer. He threw 220.1 innings in 2015, posting a 2.45 ERA and 2.78 FIP, along with a strikeout to walk ratio of nearly 5:1.

The Cards went hard after Price, and nearly got him. In fact, he was planning on signing with the Redbirds until Boston swooped in and went approximately $30 million higher on their total offer. The Cardinals came back with a counter offer that was closer, but still not really in the same ballpark. And so David Price is a Red Sock.

Mike Leake has pitched six seasons in the big leagues, five of them full campaigns. In those five full seasons, he's reached 200 innings just once, in 2014. Now, to be fair, he's passed the 190 inning mark two other times, in both 2013 and '15, so it isn't as if he's not racking up pretty fair innings totals. Just not David Price innings totals. In the six years he's been in the big leagues, Leake has been worth 9.7 wins above replacement going by Fangraphs, and 9.1 according to B-Ref. He was just fine in 2015; his run-prevention results were exactly the same as in 2014 (3.70 ERA both years), and his stuff actually appeared to tick up a little. His strikeout rate fell, though, and there are some worrying trends to watch as well.

In other words, Mike Leake, over the previous six years, a sample size of close to 1100 innings, has been approximately one-third as valuable as David Price. In 2016, Steamer sees Leake as a 2.2 win pitcher; Price comes in at 5.0 WAR.

Admittedly, Price and Leake's contracts look quite a bit different. Leake has $80 million guaranteed on his deal, and will be here the full five years pretty much no matter what, due to the lack of an opt-out and a full no-trade clause. (Which, yes, pisses me off all to hell and back.) Price has $217 million guaranteed. And yet, looking at the average annual values, you're talking $16 million for Leake, and $31 for Price. So David Price is making slightly less than twice as much as Mike Leake per year, yet has been worth three times as much over the previous six seasons. He still projects to be well over twice as valuable in 2016, in spite of a two year difference in age.

If we assume the option on Leake's contract is picked up, bringing him to six years and $98 million -- strictly because it's closer to Price's overall deal -- then we're looking at approximately 45% of the contract the Red Sox handed David Price. Personally, I think the Cardinals could have gone to 7/$210 and Price would have come here, but just assuming they would have had to match the $217 figure, how many of you feel confident Mike Leake will be half as good as Price over the life of their respective contracts? I know, the opt-out complicates things. But, just for a moment, consider what the next half-decade would look like with each of these two pitchers in the Cardinal rotation.

I really don't hate the Mike Leake signing. Honestly. He's unexciting, and it's a bit of a downer to be teased and tantalised with not one, but two of my favourite pitchers in all of baseball potentially coming to the Cardinals this offseason, either via signing or trade, and to then end up watching Mike Leake take the ball for the next five years. But it's not an unreasonable contract, by any means, particularly if we believe Leake is, in fact, a true talent FIP-beater (which, given that he does it basically every year, is probably an okay way to look at things), and factor in he's a fairly good hitter -- for a pitcher, that is -- and adds at least some value with above-average defense, as well. Mike Leake by RA9 is probably a 2.5 win pitcher; add in a little boost for the other stuff he does, and maybe it gets to 3.0 WAR or so. If that's the case, this could actually be a pretty good contract, in terms of value per dollar.

But then again, we're back to rooting for the fiscal efficiency trophy, and so far as I know that award doesn't come with any playoff games, and certainly doesn't get you a bye into the World Series. And also, there's always the question of whether Leake remains an FIP-beater if he loses even just a little stuff as he approaches his 30th birthday. Guys who outperform their peripherals are fascinating, until one day they stop outperforming them, and then they're just...not very good pitchers anymore. And that's not nearly so fun.

I can see a way to spin the Leake signing in a very positive direction. It's basically the same argument that Scott Boras used when shopping Barry Zito around years back, focusing on how dependable Zito had been, and how remarkably count-on-able he was. For a rotation like the Cardinals', so thin on predictable innings, that dependability has the feel of a big deal. Perhaps one could argue there's an organisational failing, that the Redbirds have to step outside the system to grab a starter to fill the back end of the rotation, but considering all four of the other presumptive Opening Day rotation members are farm system products, that feels like an unfair argument to make.

But then again, one could also look at the Leake signing as nothing more than a glorified insurance policy against disaster, but one that lacks any real upside beyond mediocrity. Leake will probably keep you from cratering if there's an injury or two in the rotation, but if there isn't an injury, does he really propel you upward at all? He raises the floor, but not the ceiling. And the problem is, the Cardinals already have a pretty high floor, but perhaps not all that high a ceiling. They needed to raise the top end, instead of just mitigating against disaster. In other words, I could see the Cardinals without Mike Leake winning 85-92 games in 2016, or possibly having a run of injuries and only winning 75 or so. With Mike Leake, that 75 is probably out of the question, but 85-92 still looks like pretty much the best case scenario.

The bottom line, for me, is this: the Cardinals have once again made a pretty smart, useful move to bolster the depth of their roster, all while allowing the top end of the club to stagnate and weaken. They refused to pay big bucks for the guy they wanted most, then paid more than half as much for a pitcher probably worth less than half as much.

That's probably not penny wise and pound foolish; the saying is really geared toward a different kind of valuation problem. But it feels a whole lot like buying a sofa you don't like, then spending more than you refused to invest in the first place, chasing the thing you really wanted all along, doesn't it?