Reds Sign Francisco Cordero (probably)

The scuttlebutt is that the Reds have reached a preliminary agreement with former Texas Rangers and Milwaukee Brewers closer, 32-year old RHP Francisco Cordero. Reportedly, it is a 4-year, $46 million contract, which, Ken Rosenthal says, would be the richest 4-year deal ever given to a reliever. That comes to an average of $11.5 million per year. Therefore, Cordero essentially replaces Eric Milton on the roster, and will be (I think) the Reds' second highest paid player behind Adam Dunn. Big time signing. Here's my take on him:

History

Francisco Cordero (6'2", 235 lbs) hails from the Dominican Republic, and was signed in 1994 as a 19-year old undrafted free agent by the Detroit Tigers. Over his first several years in the minors, he was used as a starter, but he never seemed to put it together. Then, in 1997, he was converted to relief, and immediately put up stunning numbers: 0.99 ERA in 54.3 innings, striking out 67 while walking just 15 in Single-A West Michigan. Just two years later, in 1999, he made his debut with the Detroit Tigers at age 24.

That offseason, the Rangers acquired Francisco in a large deal that ended Juan Gonzalez's first tenure with the Texas Rangers. After struggling and missing time due to injury over his first two years, Cordero finally settled into the big leagues for good in 2002, and took over the closer's job for good in 2004 at age 29. Acquired by the Brewers in '06 as part of the Carlos Lee deal, Cordero was the cornerstone of Milwaukee's bullpen last season. And now, with this signing, he's a Cincinnati Red.

Recent Stats:

Year	Age	Team	IP	K/9	BB/9	HR/9	%GB	BABIP	ERA	FIP	AVGa	OBPa	SLGa	OPSa	R/G	RAR
2005	30	TEX	69.0	10.3	3.9	0.7	42.9%	0.332	3.39	3.15	0.234	0.315	0.356	0.671	3.8	8.9
2006	31	TEX	48.7	10.0	3.0	0.9	43.3%	0.371	4.80	3.43	0.265	0.324	0.395	0.719	4.5	4.3
2006	31	MIL	26.7	10.1	5.4	0.7	32.8%	0.313	1.69	3.67	0.213	0.321	0.351	0.672	3.5	5.1
2007	32	MIL	63.3	12.2	2.6	0.6	40.5%	0.342	2.99	2.24	0.218	0.272	0.314	0.586	3.0	15.0
3-Year	---	---	207.7	10.8	3.5	0.7	41.1%	0.342	3.38	2.97	0.234	0.261	0.352	0.612	3.7	33.3

Cordero is the consummate power closer. His strikeout rates have always been high, and while they peaked a bit last season, we can reasonably expect 10+ k/9 rates from him next year. He is something of a fly ball pitcher, but his excellent strikeout rates seem to have helped him keep the ball in the park, even when he was pitching in the bandbox that is Ranger Ballpark (or whatever they call it these days). His walk rates can sometimes get out of hand, but that's the only thing that keeps him from being absurdly dominant. But the guy has been nothing but quality since 2002.

I see no red flags in his numbers (except maybe his age...more on that later), so I don't think it's unreasonable to anticipate something on par with his 3-year averages next season: 3.4ish ERA, 10+ k/9, 3.5 bb/9, less than 1 hr/g. That's a kind of weapon the Reds haven't had coming out of the pen in years.

Pitchf/x "Scouting"
To see what's behind those numbers, here's a pitchf/x profile on Cordero, courtesy of Josh Kalk's blog (horizontal break is from the perspective of the catcher):
Hard, Hard, Hard. The big right-hander touches 100 mph with his fastball (average of 96 mph), which tails back in on the hands of right-handed batters as much as 10 inches. His slider can also come in at over 90 mph (average of 88 mph), and has a typical break that is ~12 inches different from that of his fastball (Euclidean distance...sorry, too lazy to deal with trig tonight!). Overall, Kalk's data indicate that Cordero throws his two pitches at roughly the same frequency, though he favors the slider a bit vs. righties and the fastball a bit vs. lefties.

Evaluation of Signing

Basically, Cordero's been everything that the Reds' bullpen has not over the last three years. He throws hard, misses bats, and has been consistently effective. He has been quality. And if he can maintain that performance next year--and I see no reason he can't--the Reds bullpen should be substantially improved.

The question, of course, has to do with the cost. I don't have a lot of experience trying to assign dollar values to player production, but I'm going to give this a go.

Tom Tango's current free agent Salary Scale indicates that a 4-year deal worth $45 million (the closest to Cordero's contract) is an appropriate figure for a player capable of delivering 3 wins above replacement (WAR) per season. My player value estimates have Cordero as ~11 RAR per season over the last three years, which translates to ~1.1 WAR per season if you use a 10 runs = 1 wins approximation. Such a player, based on Tango's scale, would be worth ~$4.5 million/year. Eek.

That might be a conservative value estimate, however, because of the high leverage of the situations in which Cordero pitches. To try to account for that, we can look at WPA. Cordero's total WPA from '05-'07 was 3.0 wins above average in 207.7 IP. If we assume that a replacement reliever is a 0.470 pitcher (Tom Tango's number), over 23 games (207.7 IP / 9 = 23) a replacement pitcher would be at -0.7 wins compared to an average (0.500) pitcher. This puts Cordero at 3.0 + 0.7 = 3.7 WAR from '05-'07, or ~1.2 WAR per season. That's slightly higher than my runs-based estimate, but still puts him well shy of the 3 WAR per season needed to be worth $45 million over 4 years.

It's worth noting that a part of the reason that Cordero isn't looking as good as one would hope in these value estimates is because of the rather high baseline for relief pitcher replacement level that I'm using (which comes from Tom Tango). Relief pitching is much easier than starting, and thus replacement pitchers perform fairly close to average in relief and well below average as starters. Tango estimates that a replacement pitcher, as a reliever, will be a 0.470 pitcher (think of that as winning percentage), and has good reason for using that number. But for the sake of argument, let's use Patriot's slightly lower 0.450 replacement level for relievers instead. Over 23 games, a 0.450 pitcher would be -1.2 wins below average. That would put Cordero at 3.0 + 1.2 = 4.2 WAR from '05-'07, or 1.4 WAR/season. .... Which still would put Cordero's value at just ~$6.5 million/season. Assuming I'm doing this right.

As another comparison, JC Bradbury recently reported that he has Mariano Rivera valued at ~$6 million/year over the past three years. Even if you add 25% to that value because of the high leverage in which Rivera pitches (which JC admits he doesn't address), that still puts him at $7.5 million. Cordero has been good, but he hasn't been as good as Rivera, so $7.5 million/year would seem to be at the high end of what he could possibly be worth. I'll try to update this with other valuation systems as I see them.

So, even if we assume that Cordero will maintain his typical '05-'07 performance level over the four years of the contract, it seems clear that the Reds are massively overpaying him...perhaps on the order of double his actual value. ... Now I certainly believe that a team can stand to overpay a player now and then if they are saving elsewhere, so long as that player is making the team better. But it's kind of hard to justify paying someone twice what they're worth over a four-year deal.

Further complicating the issue is the question of Cordero's age. He turns 33 in May of next season, and will be 36 at the end of his contract. So what is the probability that he will maintain his level of production through 2011? Well, BPro hasn't yet updated their PECOTA cards following Cordero's excellent 2007 season, so think of this as conservative...but here is Cordero's "Stars and Scrubs" chart prior to last season:
My interpretation of this figure is that PECOTA predicts a drop-off in Cordero's performance both in '08 and '09, and then stabilization over the last two years of the contract. It does indicate a 30-40% chance that Cordero might maintain effectiveness ("regular" band) over the full contract. But his chances of being a "star" (which you'd hope a $11 million/year closer would be) drop to almost nothing by '09, and the 50% prediction is that he'll degenerate into a "scrub" pitcher by then. Not good. I'm guessing that this figure will look slightly more optimistic after factoring in what he did in 2007, but it probably wouldn't shift the decline estimates by more than a year or so in the Reds' advantage.

...

So, in sum, I'm torn about this signing. I'm really excited to see Cordero in the Reds' bullpen next year, and I really do think that--assuming the deal goes through, and they don't have to make substantial payroll adjustments following this signing--the Reds have demonstrably improved heading into next season.

But at the same time, my best estimate is that the Reds will be paying about twice what Cordero has been worth. I'll be interested to see other estimates on this, but I'm guessing my numbers are pretty close to accurate (maybe +-$2 million at worst?). Add to that the fact that we're going to be paying that kind of money to a pitcher headed into the twilight of his career, and you have me pretty worried. Again, I think it's ok to overpay here and there if you can save elsewhere and if the player clearly improves the ballclub. But this is kind of extreme...

But what's done is done. Let's all hope for the best, and try to avoid calling for his head the first time he blows a save, eh? If nothing else, the Reds should have a really good closer next season, and that's going to be fun to watch.

Update: Some other value estimates or projections from folks around the 'net:

MGL:

Cordero, Francisco that is, is a stud reliever/closer. One of the 3 or 4 best in baseball right now.

He is around .5 runs per 9 better than the average closer, which is worth around an extra .8 wins or so (above an average closer). I don’t know what an average closer gets paid on the FA market. Maybe 6 or 7 mil? So Cordero would be worth 8 to 9, which implies he is worth 2 WAR.

At this point I don’t know what a replacement reliever is as compared to average. I really don’t. I would think that you could take a replacement pitcher, turn him into a closer and he would be a run worse than an average closer at worst. Maybe .75 runs. At a run worse, that would mean that a replacement closer would be 1.7 wins worse than an average closer, so that Cordreo would be 2.5 WAR.

So let’s say 2 to 2.5 WAR, whatever that is worth for 3 years. [Note by Justin: By Tango's scale, over 4 years, that would be $24-34 million. Higher than my estimate.]

Dan Symborski with his ZiPS projections:

2008 ZiPS Projection - Francisco Cordero
-------------------------------------------------------------
     W   L   G  GS   IP    H   ER  HR  BB  SO   ERA
-------------------------------------------------------------
Projection  5   2  71   0   70   61   26   5  27  80  3.34
2009?       5   3  73   0   72   64   27   5  27  78  3.37
2010?       5   2  71   0   70   63   26   5  26  75  3.34
2011?       5   2  71   0   71   65   27   5  25  73  3.42
-------------------------------------------------------------
Opt. (15%)  6   2  76   0   78   62   22   4  23  95  2.54
Pes. (15%)  3   3  59   0   56   54   26   6  25  61  4.18
--------------------------------------------------------------
Top Comps:  Robb Nen, Troy Percival

[Note by Justin: That's very encouraging--ZiPS is a fine projection system.]

Tangotiger:

Cordero: 4/46, paying for 3.0 WAR.

A 3.0 WAR implies a relief pitcher (72 IP) with a win% of .700. This is calculated as:
(.570 - .470) * 1 = .100
+(.708 - .570) * 2 = .260

where the “* 2” is the LI. The total wins is +.376 per 9 IP, or a total of 3.0 WAR.

In post 60, I had Mo as a .700 pitcher (3.0 WAR). I can’t have Cordero that high. I would say .625 or .650 pitcher, which implies a WAR of close to 2.0, or a salary of 3/23.

A great reliever, obviously. Since 2002, his WPA has been +9.3 wins, with an LI of 1.9, on 407 IP, which means his unleveraged WPA is .610.

Relievers are incredibly overvalued, and this is yet another case. I’d like to know what was his second-best offer on the table.

I’m also not too concerned about his age. If he’s throwing fastballs with movement at 96, he’s got a “young arm”. It’s like Mo. I would guess that all old starting pitchers who used to have plus fastballs should be turned into relievers.

[Note by Justin: the difference between his and my estimates is that he incorporates an additional reward for exceptionally good relievers (performance above 0.570 is given extra merit), which essentially means the bar isn't as high to get to 3 WAR. I'd put more faith in his work than mine--as I said, this was my first go at this type of estimate. It's also worth noting that his 2 WAR estimate converges with MGL's 2-2.5 WAR estimate. This means that the Reds are probably overpaying by $10-20 million over the course of the contract.]

J.C. Bradbury (I quoted him above regarding Rivera, but here's his take on Cordero):

The contract for Cordero is simply awful. If the Reds are trying to be taken seriously by flashing some dollars, then flashing their money is all they are accomplishing. Cordero is an excellent reliever, but I don’t see how the Reds can justify spending $11.5 million/year for four years on a pitcher about to turn 33 for a team that doesn’t appear to be built for success in this timespan. Adam Dunn and Ken Griffey are gone after 2008 and Arron Harang and Bronson Arroyo are due big raises. I understand that there may be help coming from the farm, but I do not think that expectations are rosy enough to justify spending big money on a closer just yet. If the Reds put that money in other places, I believe the team would be more competitive in the near term.

Even if the Reds could use this final piece, I still think it’s a bad deal. I have Cordero producing $19.6 million over the next four seasons—$26 million more less than he’s being paid. Now, it’s pretty clear that my model isn’t predicting well for “closers.” And while I’m a believer in efficient markets and willing to acknowledge that I might be underestimating closer value, the current closer premium is excessive. And I think that Scott Linebrink’s contract supports my contention.

[Justin note: His estimate on Cordero comes in at $4.9 million/season, which is about where my initial runs-based estimate had him. I think Tango's numbers are more reliable because they take into account the leverage of the situations in which he pitches, but the end result is only a $6 million improvement over the course of the deal.]

More as I find 'em.