The Trend in $/WAR for Free Agents
Photo Credit: Jayne Kamin-Oncea/USA TODAY Sports
Ben Clemens provided a detailed breakdown of the amount teams paid per WAR (Wins Above Replacement) in free agency between 2018 and 2022. In this analysis, I will expand upon his findings by incorporating data from the 2023 and 2024 free agency periods to examine the broader trend.
I don’t have access to the 2023 WAR projections for the free agents who signed last off-season (if anyone has those details, please share in the comments!). Instead, I will utilize the actual WAR outputs of the players as a proxy.
Proxying the 2023 WAR Projections
During the 2023 season, a total of 27 players who signed free agent deals heading into the season managed to produce at least 2 WAR. These players costed an average of $4.8 million per WAR for their respective teams. However, it's important to consider survivorship bias when solely focusing on players who met or exceeded the 2 WAR threshold. To gain a more comprehensive understanding, let's also examine the entire sample of free agents:
Among the 159 free agents who signed contracts last off-season, the median cost per WAR was $4.4 million. This calculation additionally takes into account players with negative WAR and close to zero WAR. However, it excludes players who were unable to participate in the entire season, such as Edwin Diaz.
To establish the proxy value for 2023 free agents, I will average the median cost of all 2023 free agents and the mean cost for the 27 free agents who achieved at least 2 WAR. This method results in a 2023 free agent proxy value of $4.6 million per WAR.
Obtaining The 2024 WAR Projections
For the 2024 off-season I’ve used Fangraph’s 2024 WAR projections. The 15 free agents that signed this off-season who are projected at least 2 WAR in 2024 are averaging $6.7m/ projected WAR. They range from $5m/ projected WAR for Lance Lynn, to $8.8m/ projected WAR for Marcus Stroman. Shohei Ohtani was dropped from this analysis since his 2024 WAR projection of 4.3 does not reflect his two-way capabilities, which the majority of his contract is based upon.
Showcasing the Trend in $/WAR
Table 1 and Figure 1 below illustrate the $/ projected WAR for free-agent signings with at least 2 projected WAR for the past seven off-seasons.
Table 1: $/ projected WAR for free-agent signings with at least 2 projected WAR for the past seven off-seasons. Actual WAR is used as a proxy for projected WAR in 2023.
Figure 1: $/ projected WAR (in millions) for free-agent signings with at least 2 projected WAR for the past seven off-seasons. Actual WAR is used as a proxy for projected WAR in 2023.
As seen in Table 1 and Figure 1 above, teams have reduced the amount that they spend per WAR for players in the 2+ WAR range over the past seven years. Specifically, they have reduced their spending by about $0.5m/ WAR per season over that timespan.
The trend may be due to teams preferring the return on investment that they get from players in the 0-2 WAR range, such as relievers and platoon players.
However, with Scott Boras clients Blake Snell, Jordan Montgomery, Cody Bellinger, and Matt Chapman still on the market, this off-season’s number is still subject to change.
