From a fan perspective, there really isn’t much reason to care about the St. Louis Cardinals spending $14 million for a season of Greg Holland.
Opinions on the new Cardinals reliever vary somewhat, with some noting that he led the National League in saves with the Colorado Rockies in 2017 and was an excellent closer for the Kansas City Royals before he missed a season recovering from Tommy John surgery (both true), with others noting that Holland’s run suppression numbers (a 3.61 ERA, 3.72 FIP, and 4.05 xFIP) were far less glamorous than his save total (also true).
But most people, even those who are not especially high on Holland, agree that he is now one of the eight best relievers on the Cardinals and thus deserves, at the bare minimum, a spot on the team. And while “it’s not my money so go for it” is a fairly short-sighted bit of baseball analysis, because any money spent on one player can by definition be spent on a different player, this is much less of a consideration with regard to Greg Holland since by March 29, every other player of Holland’s caliber had been signed. Sure, the Cardinals could have signed Lance Lynn or Alex Cobb earlier in the month (not to mention the scores of alternatives they could have signed earlier in the off-season), but on March 29, he was probably the most efficient way to spend $14 million, even if this isn’t the case when the time frame is stretched back months.
So let’s assume the alternative to signing Greg Holland was the Cardinals banking that money—on paper, from a fan perspective, this is an easy choice. But there are residual effects which come from signing Holland which go beyond the loss of $14 million that the Cardinals may not have spent anyway.
Because the Cardinals signed Greg Holland, who received and declined the one-year, $17.4 million qualifying offer from the Rockies in November (a move he surely regrets but could not retroactively accept once it became evident that the market for his services had substantially thinned), the Cardinals will lose the #59 pick in this June’s Major League Baseball First-Year Player Draft. The Cardinals will also gain a pick after the Minnesota Twins similarly signed Lance Lynn to a one-year deal after the qualifying offer seemingly deterred teams from clamoring for him, and while this diminished the meaning of the #59 ever-so-slightly (since the newfound Lynn pick means the Cardinals have more minor league depth), it is a relatively minor consideration.
There are predictable diminishing returns with each subsequent draft pick. For instance, the #1 overall pick has produced six players with at least 40 career Wins Above Replacement (Alex Rodriguez, Chipper Jones, Ken Griffey Jr., Joe Mauer, Adrian Gonzalez, Darryl Strawberry), while several other active players have a reasonable chance of making that threshold (David Price, Justin Upton, Stephen Strasburg, Bryce Harper, Carlos Correa). No relief pitcher in baseball history has been valuable enough over the course of one season to justify losing that kind of upside.
But the #59 pick is a very different animal. While 45 of the 47 number-one overall picks from the first modern MLB draft in 1966 through 2012 (a semi-arbitrary endpoint, but one which gives players a reasonable amount of time to reach the big leagues) eventually made it to the big leagues (which works out to 95.7% of them), just 18 of the 47 #59 picks in that time (38.3%) made it to the Majors. Of those eighteen, seven were worth negative WAR per Baseball Reference, and the average MLB player was worth 3.9 WAR.
This is a totally meaningless number, however, for several reasons. The 3.9 WAR only measures the guys who made the big leagues, most obviously—the average of the forty-seven total picks is 1.5 WAR. And to further degrade the value of the pick is that it would be unfair to allocate an entire MLB career to the pick—the 4 WAR that Dean Palmer accumulated following his club-control years came at free agency prices.
Of course, Nolan Arenado, by far the most valuable #59 pick ever (the aforementioned Palmer is a distant second, while current Cardinal Jedd Gyorko has a very good chance of passing Palmer in the next couple years), is throwing off the WAR expectations average a bit. But that’s part of the calculus—a #59 pick is probably not going to be as valuable as Greg Holland (ZiPS projects Holland for 0.8 WAR, which is more than 85% of #59 picks in history have been worth in the Majors), but there is the chance that it could be much more valuable than what is effectively a rental reliever.
Greg Holland has as much value to the Cardinals as he has to any team in baseball—contenders such as the Los Angeles Dodgers, Cleveland Indians, Boston Red Sox, and New York Yankees have established, elite relief pitchers and Holland would be lost in the shuffle, while non-contenders seem quite at peace with their status as non-contenders, and thus a team without an obvious, relatively certain closer candidate, such as the Cardinals, should prioritize him.
And yet the system has made it so that, even ignoring the cost of the salary, Holland is not a slam-dunk candidate. There was already an (allegedly)-unintended salary suppressing effect to the qualifying offer, but it has become even more exacerbated thanks to an ostensibly player-friendly rule change. Players are now only subject to the qualifying offer process once, and while this means that Greg Holland (and others) avoid the punishing effects of it next year, it also means that teams have less incentive to sign these players to one-year contracts with the silver lining being that the team can recoup its lost draft pick in a year.
Between the loss of a lottery ticket in the #59 draft pick and the loss of $500,000 in international bonus pool money (international signings tend to be quite significantly below domestic free agent market values, and this is a more valuable half-million than money that could be used to sign an extremely low-level MLB player), it is already a questionable move to sign Greg Holland. If he turns into Peak Royals Greg Holland, it’s probably a good signing, and if he turns into the Greg Holland we’ve seen since 2015, it’s a gamble. Without the qualifying offer system, there is essentially zero risk (unless you really care how profitable the Cardinals are), but with it, we are pigeonholed into a bizarre“win now or win later?” dilemma while evaluating a one-year free agent contract.