Former Cleveland Indians g.m. and current team president Mark Shapiro does a lengthy interview with Fox Sports Ohio that covers a wide range of areas, including his front office's calculation of Wins Above Replacement and how much a win costs in the free agent market.
Fox Sports Ohio has a really, really long Q&A with Cleveland Indians president Mark Shapiro, who took over as general manager for the Indians for John Hart after the 2001 season, and who was in that role until after the 2010 season, when he became team president.
Its a really lengthy, in-depth piece that is worth reading for any number of reasons, but in particular, I thought his discussion about revenues, WAR, and what free agent costs is worth highlighting:
Q: It wouldn’t change the amount of money spent?A: It would change the amount of spent to 15 million dollars a year. What does that buy you in free agency? Very little. One and a half wins.Q: How is that figure determined?A: Our analysts can put a value on what it costs in free agency to sign a player and what that means in Wins Above Replacement and what those players end up costing in free agency and that changes every year. They measure all the players signed in free agency and what their history has been and what they offer going forward and they place a value. The challenge in free agency is you’re often paying for that in the first year of a contract, and in the out years of a contract the players WAR usually goes down because he’s usually past his prime. So it becomes a less efficient contract over time. That’s why free agency is never the best way to build. It’s a good way to supplement but not build.Q: So $8 million for one win?A: It’s $9 (million) now. It was $8 (million) two yeas ago. I think at the end of this year they figured out it was nine. And when those wins come in the win curve are important. What does that win mean if it’s the difference between 80 and 81? Very little. But if that win’s the difference between 89 and 90, that could be a meaningful win.Q: Aren’t there certain players though that could be worth more than that? The right guy and the right fit could mean more than that?A: I think there are certain players at certain positions that might be able to leverage impact on other players. Like a catcher for sure. Maybe a leadership component. More than stats alone. We factor those things in. There are certain subjective roles to what certain guys bring to the table beyond just the objective analysis of ‘this is what their added value is.’But you have to find some way to place a value on what guys bring to the table. We don’t use those conventional stats. We use our own methodology. It does factor subjective and scouting information and makeup and personality and character and all those things in. In the end you’re adding up and trying to determine how many wins that player impacts when you bring him on board. That’s what you’re trying to figure out.
There is much more in that vein, but I think it is really telling that Shapiro is talking about the front office actually quantifying what a win costs in free agency and pegging it against replacement level, given that there are some who suggest that these new-fangled stats and attempts to quantify "WAR" are inconsistent with what happens on the field. Obviously, how front offices calculate WAR isn't going to be the same as B-R, Fangraphs, or BP's way of calculating it, but everyone seems to be speaking the same language, and is just differing on methodology.
In any case, take some time and read the whole thing.