Replacement level, again

Let’s try a little thought experiment. Let’s say that tomorrow morning Bud Selig declares that he’s exercising the “best intrests of baseball” clause to have Albert Pujols’ contract nullified, making him a free agent immediately. How many teams offer him a job? And how much money do they offer him?

Yeah, I know – that one’s too easy. How about Hanley Ramirez?

Again, too easy. Everybody is going to at least offer Hanley some kind of deal. And so what if you already have a shortstop? Hanley’s bat will play anywhere on the diamond, won’t it? You’ll make room for Hanley Ramirez.

What about, say, Randy Winn? Or Carlos Pena? Most teams are going to be interested of course, but some teams might reasonably decide that they can’t make room for these guys, and the intrest won’t be nearly as high.

What about guys like Jason Kendall, or Ross Gload? Sure, some teams will call, but possibly not even half of them. And the money won’t be near what those other guys would be offered.

Okay, now that we’re all on the same page, I’ll proffer yet another definition of replacement level:

Replacement level is the level of talent at which teams stop competing for your services, and you end up competing for the last handful of open roster spots.

Say again – level of talent. Remember, a player’s performance is equal to his talent plus measurement error. This is not to say that all replacement players will provide replacement-level value every game, any more than an average player is exactly average every game. Baseball players are streaky, and a replacement player can have a cold or a hot streak and look better or worse than he really is.

So why are there these replacement players? It’s simple. Remember our bimodal distribution of ballplayers:


There are simply more baseball players available below the league average than there are above it.

And remember that each team has a limited number of roster spots, plate appearances and games to allocate among players – 25, 6,250 and 162, or therabouts. To respond to a point from BP’s Christina Kahrl:

Players aren’t freely available in the way that, say, sofas are; one start-worthy sofa’s value over a replacement-level sofa can be easily resolved by just going out and buying that quality sofa. (And no, you do not have to wait for Ikea to put it on waivers.) Unlike sofas, there is not a limitless supply of ballplayers, and they’re not all freely available at the same time.

Certainly there isn’t an unlimited supply of baseball players – but there are always many, many more MLB caliber-ballplayers than MLB has any need for. This is why you have so many 30 years olds hanging around playing AAA baseball.

(Yes, due to the limited fungibility of players – your backup first baseman may be a replacement player, but he may very well not be a replacement shortstop in any real sense – and the value of a roster spot, there are some transactional costs that drag down the value of the typical replacement player. Of course, since most values for replacement level are calculated based upon observation of what actually happens in MLB, those transactional costs are included in the definition of replacement level.)

Because of this, the supply of replacement-level baseball players outstrips demand for their services, which is why these players will play for the league minimum even as free agents.

This is the point at which some see the theory and actual practice of replacement level diverging – with, say, the Alex Rios waiver claim. Shouldn’t we be comparing Alex Rios to his value compared to each team’s actual replacements, rather than these hypothetical replacements?

It depends on which question we want to answer. If we simply want to answer, “How many more games will the White Sox win if they play Alex Rios instead of the Podsednik/Wise/etc. mishmash they’re rolling out,” then sure.


Let’s go back to where we started. Let’s say that Albert Pujols is magically a free agent. He’s not going to take 2/3rds less money to play for the Yankees simply because they’re already paying Teixiera for 2/3rds of Pujols’ production. On the flip side, if no other team is willing to pay a guy over the league minimum, you’re not going to offer him a 2 year, $5 million contract. (At least I wish this was true.)

And at some point, you can’t grade these things on a curve. As a forinstance – Yuniesky Betancourt is not, in an objective sense, more valuable because the next-best option in the Royals organization is Tony Pena Jr. They’re both symptoms of the same grand failure to evaluate baseball talent. And there’s no reason to give either party involved extra credit for this grand failure.

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