Strasburg–Some Numerical Reference Points

Last Tuesday the Nationals set off down the yellow brick road to Strasburgville where the wizard is Scott Boras.  But Ted Lerner is no scarecrow.  The senior owner of the Nationals responded when asked how much the economic downturn hurt him by saying, “I own buildings, not bullshit.”  He wants a six-year lease on a very real Stephen Strasburg and the man has a history of getting value for his money. 

In a recent article in the Washingon Post, Frederick Frommer did an excellent job of giving a Washington flavor to the huge hype surrounding Strasburg.  He compared the young phenom to Walter Johnson, the last great Hall of Fame hurler to pitch in this city.  Camilo Pascual and Dick Bosman were fine pitchers, but no one has even come close to “Big Train” since he hung up the spikes in 1927.

According to Frommer Walter Johnson created much of the same high-level excitement, especially in the run up to his first major league game.  If Ted Lerner can sign Strasburg this summer, his first game in the majors–likely in September–will generate much the same hype and level of excitement as Walter Johnson’s.  It also will bring in huge crowds of paying customers to see the young phenom try to stake his claim to that tradition.

Ted Lerner understands the value, but before any of the excitement comes to pass he must calculate the cost of bringing the circus to town.

Tim Kurkjian’s interview of Ross Ohlendorf , the Pittsburgh pitcher with the Princeton pedigree provides a great starting point.  Ohlendorf’s senior thesis in economics calculated the net return on investment of top draftees from 1988-1992.  Among the top values were Jason Giambi, Scott Rolen, Mike Mussina, Alex Rodriguez, and Derek Lee.  He did it by comparing their economic value in their first five years of playing time prior to free agency to the market value of an average free agent during the same period.

The most valuable signing in Ohlendorf’s calculations was Jason Giambi.  He projected Giambi as having a net worth to the Oakland A’s of almost 34 million before free agency.  Ohlendorf got an A on his paper, but regardless how exacting the calculations, they provide a good benchmark against which to measure the value of Strasburg.

Boras may stress the value the young phenom has to a hungry fan base starved for a winner.  He is comparing Strasburg to Dice-K figure and his initial signing bonus of $50 million.  All well and good, but numerous clear-eyed analysts have noted that Matsuzaka was 26 and an established Japanese pitching star when the Red Sox ponied up that staggering amount.  Strasburg’s resume is far less extensive.

But if one examines Ohlendorf’s listing there is a name that provides a very good reference for Strasburg’s potential value: Mike Mussina.  Mussina is the only pitcher on the list which points to how risky it is to venture large sums of money on young pitchers.

There are so few pitchers on Ohlendorf’s list because there are so few Mike Mussinas who have jumped from pitching in college to the majors as quickly.  He was taken with the 20th pick of the amateur draft in 1990 and the next season was in the majors where he logged 12 starts with a 2.87 ERA.  He never looked back, never needed another inning of minor league seasoning.

Keith Law compared Strasburg to Justin Verlander who had a similar rise.  He was the second pick overall in the 2004 draft from Old Dominion College, signed a contract valued at around $6 million and was pitching in the majors the next year.  He achieved success almost immediately and  helped turn the 2003 Tigers that lost 120 games into a winner.  That is exactly what the Nationals want from Strasburg.

Verlander and Mussina are valid reference points.  Clay Davenport at Baseball Prospectus provides another.  He projects Strasburg’s college statistics to a major league equivalent of 3.54 this season.   So maybe Strasburgs makes the jump as quickly as the best college pitchers.

If so, what does Ohlendorf’s table say about his value in today’s market?  Ohlendorf’s economic thesis says Mike Mussina was worth about $22 million to the Orioles in the mid 1990’s.   Adjusting that figure for inflation, we get a current Mussina value of approximately $33 million in today’s dollars.

So if Strasburg can put up the rather impressive numbers Mussina did in his first five years (71-41 and an ERA around 3), he is worth $33 million today.   Although Verlander was not included in Ohlendorf’s calculations, his record of 53-36 and an ERA of 3.94 is worth somewhat less.  So the upper reaches of reasonable value for Strasburg probably looks more like Mussina or Verlander than Dice-K.

Scott Boras will be making the argument that Strasburg is different, in a league of his own.  It is what he is paid to do.  But the ultimate problem of agents and their clients is believing their own hype.  It all comes down to what Stephen Strasburg thinks.  Does he believe he can step onto the field and be the next Walter Johnson?  Or does he hope to emulate the best college pitchers of the modern era: Mike Mussina and Justin Verlander.

Ted Lerner was making serious money before Scott Boras was born.  My guess is that he knows what Stephen Strasburg is worth to him, knows what the chances are that he has another Walter Johnson or Mike Mussina.  That is why he cleared his draft board of any other drama to devote the summer to signing this special talent.

I believe that Ted Lerner will pay the price and Stephen Strasburg will settle for something in the Mike Mussina ballpark of $30 million, probably slightly less.  Ultimately the question is whether the biggest signing bonus in history and having Walter Johnson watching over his shoulder will be enough for Strasburg himself.  How much does he want to play, how much does he need to find where he fits within the continuum of baseball history.  There is no better place to look for an answer than in the city that made “Big Train” a legend.  I am betting we will start down the road to Straburgville this September.  It will be exciting indeed.