Introduction:

Baseball is notorious for being a place where large-market teams do their best to outspend their opponents in an effort to put together a team of superstars. The lack of a salary cap gives any team free reign to spend as much as they would like, as long as they are willing to pay the luxury tax.

Meanwhile, small-market teams put together every resource they have to try to find that “diamond in the rough” that can propel success for a much cheaper price than signing a three of last year’s All-Star’s in one off-season.

The goal of this analysis is to find the position that is providing the most value by performing at a level higher than they are being paid in relation to their peers.

Conversely, this analysis also serves as a predictor for what position may attempt to command the most money at the negotiating table in future off-season meetings.

Two metrics will be used to complete this analysis: Wins Above Replacement (WAR) and Average Annual Value (AAV). Wins Above Replacement represent an estimate of how many wins the player directly contributed to through their own performance. The metric evolves for each position and takes into account a plethora of different contributions that are weighted differently by position. Average Annual Value represents the average amount of player’s salary, in example, total salary cost divided by years on contract.

For the purpose of the analysis, a median split was completed that took only players paid above the median amount for their position. The intent of the project is to predict what position is likely to get the next upscaled set of paychecks and splitting the league down the middle reduces the chance of outliers having a significant impact on the data.

General positions such as “Pitcher” (PO) and “Outfielder” “OF” have been allowed to retain a position in the data. There are still players who don’t play a dedicated position but still contribute heavily to their teams. Just as removing these players would negatively effect their team’s roster, removing them here would negatively effect the data.

Batters Dataset

Pitchers Dataset

Performance to Salary Correlation

Baseball is known for being a sport where you can buy low and sell high. Players can be developed over time to become far better for far cheaper than it is to buy them off the free agent market. The moderate to slightly strong correlations below show that the association between how much a player is paid and how well they perform isn’t an easy assumption.

Correlation between Batters’ Wins Above Replacement (WAR) and Annual Salary

## [1] 0.4885184

Correlation between Pitchers’ Wins Above Replacement (WAR) and Annual Salary

## [1] 0.5564112

Batter WAR/Salary Comparison

WAR Rankings by Position

Among the league’s hottest performers by position, the young men in Right Field lead the way. Ronald Acuña Jr. led the league in 2023 with a WAR of 9.0 which was about 15% higher than the second best WAR for the season from Freddie Freeman at 7.8

Salary Rankings by Position

The table above shows the highest paid position groups prior to the 2024 season. Speaking of Freddie Freeman, he got paid pretty well for showing up in second place in WAR. However, the right fielders do not seem to get the same recognition when checkbooks are brought out. In fourth place, they have the second largest gap between performance and pay.

WAR to Salary Difference

## 1B DH 3B RF SS LF CF 2B  C OF 
## -1 -6 -1  3  0  0  0  5  0  0

The largest gap between pay and (positive) performance among hitters comes out to the second basemen. Rising five places in the rankings from eighth in pay to third in performance.

Designated hitter’s drop steeply in value when WAR is considered. One thing to note is that Shohei Ohtani and his monster contract were not considered in the batters calculations.

Pitcher WAR/Salary Comparison

WAR Rankings by Position

Starting pitchers provide the most value to a team as they are consistently used throughout the season and pitch more innings than the relief pitchers are able to cover. As such, it’s no surprise to see that they contribute the most to a team in WAR.

Salary Rankings by Position

While the highest paid pitcher receives a sizeably larger salary than the highest paid batter, one thing to note is how the figures for pitchers drop off considerably. Teams are extremely willing to dish out figures in thirty millions for the league’s best hitters, however, they prefer to stay under thirty million for the league’s best pitchers.

Conclusion

The league’s most underpaid and overperforming group is its second basemen. The title of “flashiest middle infielder” goes to shortstops, the first and third basemen get the notoriety that comes with their stereotype of power hitting, but the second basemen can lay a claim to the most underappreciated position.

So what’s next? Marcus Semien, Xander Bogaerts, and Jose Altuve are the league’s best players at the position but they are locked into their teams until 2033, 2028, and 2029, respectively.

Rising star second basemen with contracts that expire in the next two years that have the potential to sign market-busting contracts include Gleyber Torres (NYY), Luis Arraez (MIA), Nico Hoerner (CHC), Thairo Estrada (SF), and Jonathan India (CIN).

Everything about sports comes down to timing. A player has to have the best one or two years of their careers and put themselves at the negotiating table with a lot of momentum to draw in one of these deals. However, it’s not impossible.

It’s worth keeping an eye on these players as they draw closer to those expiration dates. They are on track to get the most money for their services, it’s just a matter of time.