Rockies’ Qualifying Offer to Cuddyer is Intriguing; Not as Surprising as Most Think

By: Brian Mangan

Yesterday, the Colorado Rockies extended to outfielder Michael Cuddyer a “qualifying offer.”  A qualifying offer (QO) is a one year contract offered to a team’s own free agent, worth $15.3 million. The player can choose to accept the QO, and sign the $15.3 million, one year contract, or decline the QO.  In the event the player declines the QO, the team that offered it, in this case the Rockies, would be entitled to the first unprotected draft pick of the team that signs the player.

In order to evaluate how wise it was for the Rockies to extend a QO to Cuddyer in this instance, several things must be understood: the value of Cuddyer as a player, the likelihood that he accepts the QO, and the value of the draft pick which the Rockies will get in return if he leaves.

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Most people around the internet have characterized the Rockies’ QO to Cuddyer as “surprising,” “dumb” or worse. Even the guys over at Baseball Think Factory have panned the deal.  And yes, there are a lot of reasons why you might not offer Cuddyer a QO.  However despite those reasons, it’s a defensible move.

Let’s start with the easiest part.  The Rockies like Cuddyer.  They’ve said it all season, and they’ve said it consistently for the last three years.  “Michael is someone who has had a great impact on this organization both on and off the field for the past three years,” Rockies general manager Jeff Bridich in a news release. “After weighing our options, we felt the qualifying offer was in the best interest of the organization.”  (Denver Post).

Here’s the second easiest part: Cuddyer is going to accept the QO.  Given his age, durability concerns, and otherwise, it would be foolish of him to decline a $15.3 million salary – especially in light of the depressing effect a QO has on the players it is offered to as they attempt to navigate free agency.

As for on the field, Cuddyer has been worth 0.6, 2.4 and 1.5 WAR per season with the Rockies, playing 101, 130, and then 49 games.  He is older, he is injury prone, he is a liability defensively, but he also has hit .331 and .332 over the last two seasons (745 plate appearances combined).

What might the Rockies be able to expect from Cuddyer in 2015?  And what is the cost of a win on the free agent market?

Steamer projects Cuddyer to bat .262 next season and post 0.9 WAR in 130 games.  I think that games played estimate might be a little high, but both the batting line (.262/.322/.425) and WAR total seem low. Given his ceiling of approximately 2.5 WAR (he posted 2.4 WAR or more in ’06, ’07, ’09, ’11, and ’13), here’s how I would distribute the possible outcomes.

130 games, 2.5 WAR: 20%

100 games, 1.5 WAR: 20%

100 games, 1 WAR: 40%

50 games, 0.5 WAR: 20%

Unscientific, but good enough for my purposes. The weighted average of those outcomes is 1.3 WAR.

The price of a win on the free agent market was $7 million per win last year according to Fangraphs, and that number might be higher this year.  However for the sake of argument, let’s use $7 million.  At that rate, and with the above range of potential outcomes, Cuddyer should earn somewhere between $9 and $10 million next season.  If the price of a win goes up to $8 million, and if you think Cuddyer might post 1.5 WAR, that projected contract ends up at $12 million.

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The argument here is not that the Cuddyer QO isn’t a likely overpay, because it is.  In actuality, the move has everything to do with a team using and protecting assets that belong to it.

Without extending Cuddyer a QO, he walks away from the Rockies, they lose his bat, they lose flexibility, and they get nothing in return, not even a draft pick. However by extending the QO, they have a non-zero chance that he declines it and tests the water as a free agent, in which case they’ve earned something for nothing … and if he accepts the QO, they have a veteran player on a deal with little to no downside.  Or, he can decline the QO, fail to find an acceptable free agent contract, and crawl back to the Rockies on an even cheaper deal later int he year.

When you sign Robinson Cano to a $240 million contract, you have $240 million in downside.  When you sign Curtis Granderson to a $60 million contract, you have $60 million in downside.  But a player on a one year deal can never kill you, can never handcuff your organization.

Of course, any team that wants to win needs to make some big bets on some marquee players in order to do so.  But when it comes to filling out a roster, contracts like Michael Cuddyer’s or Chris Young’s much-lamented one year, $8 million deal, aren’t the ones that break your season.

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I have no idea what the Rockies intend to do with Cuddyer, given the presence of Justin Morneau at first base and the glut of capable outfielders that they have.  But I like the risk they are taking.  In a $/WAR sense, they are likely to have overpaid a little bit for his services, but make no mistake, Michael Cuddyer on a one-year contract is a valuable asset.  He can play outfield, he can play first.  He can be dangled in a trade.  He can provide depth and pinch hitting.

We’ve estimated that the Rockies lose about ~$5 million should Cuddyer accept the deal.  But that’s not 100% likely — the Rockies have also given themselves a chance at a first round draft pick (valued somewhere around $9 million) or Cuddyer returning for even cheaper.  Should we assume that there is about a 10% chance that Cuddyer rejects the QO and tests the free agent market, the net value of the QO becomes even closer to zero, even before you consider what Cuddyer might return in a likely midseason trade.

It’s an expensive contract, but it isn’t a long one, for a player who has posted 3.9 WAR over his last 179 games, and who you know is healthy entering 2015.  Compared to a long term deal where you are guaranteeing someone money for a period of years, with no guarantee of their health or performance, this is really the least-risky move in the world.

I like the move for the Rockies.  Let’s see what happens.

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Brian Mangan is an attorney and Mets fan living in New York City