Unless you were deep in the heart of the Amazon or making that final ascent to the summit of Mount Everest, you probably heard that the New York Yankees signed a pitcher on Wednesday. Not just any pitcher, mind you, but Masahiro Tanaka, the import from Nippon Professional Baseball, and the best player available in a free-agent market that's already seen most of the big names sign contracts.
You also may have heard that a lot of currency was involved in making this deal happen, $155 million, spread out over seven years, a lot of money even for an MLB team in 2014.
If the Yu Darvish contract and Darvish's performance had not already done it, the bidding war for Tanaka and the eventual dollar figure of the contract officially closes the door on the era in which players from Japan's professional league were considered novelties. From now on, NPB's top stars will be looked at as comparable to very good MLBers, and their contracts will continue to reflect this reality. But that's an article for another day.
You're here for the bottom line -- specifically, the real-world effect on the bottom line of the Yankees' win total in 2014. So let's get cracking.
The Yankees are a team facing difficult challenges going into the 2014 season. A surprising frugality set over the organization the last few years thanks to the team's obsession with getting the payroll under the luxury tax limit in order to "reset" the penalties. An aging team, the Yankees did little last winter to staunch the bleeding of talent due to departures and age. The team still managed to put together 85 wins and stay relevant until the closing weeks of the season, but it didn't seem so much as a heroic battle in which the Yankees simply came out on the losing end, but more akin to an aging lion in the African veldt, giving one last weak roar as the jackals take his kill.
Playoffs? Playoffs?
Where did the Yankees stand before the signing? To get an idea, I fired up the old ZiPS projection system and the Monte Carlo simulator and used 2014 projections to get an estimate of the team's chances of contention. Before the Tanaka signing, the Yankees' mean projected record came out at 80-82, the worst of the five teams in the AL East. There's a great deal of uncertainty, and a team projected to have 80-win talent may actually have 85- or 75-win talent. Or possibly even 90- or 70-win talent. That's the use of a Monte Carlo system, putting together all these uncertain probabilities.
In the end, after simulating the 2014 season a million times (assuming current roster construction), the pre-Tanaka Yankees won the division 7.2 percent of the time, made the playoffs either through a division championship or a wild card 19.7 percent of the time, and won the World Series in 1.7 percent of the million simulations. Adding Jacoby Ellsbury and Brian McCann helps the team, but only really cancels out the loss of Robinson Cano -- it doesn't fix the team's other holes. The only question is just how much Tanaka moves the needle.
Tanaka's projections in New York are solid (see table above), but the problem for the Yankees is that Tanaka is unlikely to be is a true superstar, someone like Clayton Kershaw, who can actually add six to 10 wins to a team.
His projected 3.8 WAR represents a three to four-win upgrade for the Yankees, with his innings likely to displace some combination of innings thrown by David Phelps, Michael Pineda, Vidal Nuno and a few others, projected to be somewhere between around 1.0 WAR.
Running the simulation a second time, with the Tanaka boost now built-in, the outlook for the Yankees improves, but not to the degree that it thrusts the franchise back into the first tier of playoff contenders. The Tanaka Yankees simulate to an 83-80 average finish, which keeps them behind every other AL East team other than Baltimore, and gives them a 12.0 percent shot at the division, 29.4 percent playoff odds and 2.6 percent odds of winning the World Series.
To put the probabilities a different way, Tanaka improves the Yankees' chances to win the AL East by only 4.8 percentage points, claim a wild card by only 9.7 percentage points, and win the World Series by less than 1 percentage point.
Tanaka's likely to succeed in the majors, but he doesn't fix the Yankees by himself.
Still good dollar value
Purely from a value standpoint, $155 million for Tanaka is not unreasonable. ZiPS still believes Tanaka has growth left as a pitcher and assuming $5.45 million per win in free agency with 5 percent yearly growth, estimates that a pitcher of Tanaka's abilities should earn $146 million over seven years in a straight-up contract in free agency. There's also an opt-out clause after four years that provides additional cost to the Yankees, as Tanaka's ability to seek a new contract if he hits his optimistic projections reduces the upside that the Yankees can wring out of the contract.
The indirect costs to the Yankees are high as well. This was the team's best chance to reset the luxury tax penalty to the minimum. With Tanaka in the fold at $22 million a year, the Yankees already have $147 million in guaranteed contracts for nine players in 2015 and $142 million guaranteed for seven players in 2016.
Before the Tanaka signing, the Yankees appeared to be an aging, expensive, hole-ridden team, with a weak farm system, that had an uphill fight to be serious contenders. After the Tanaka signing, the Yankees appear to be a slightly better aging, expensive, hole-ridden team, with a weak farm system, that has an uphill fight to be contenders. The Bronx Bombers are expensively raging against the dying of the light, but the Masahiro Tanaka signing only delays the darkness.