Estimating the Value of Contract Extensions: Kyle Gibson

In this investigation, we will attempt to approximate the salary (dependent on the length of the deal) the Twins will offer impending free agent Kyle Gibson (in their efforts to extend him) through encompassing age decline and the average cost / 1 WAR on the FA market.

In Neil Weinberg’s Beginner’s Guide To Aging Curves, he explains that…

“a basic rule of thumb is that once a player gets to 30, you sort of expect them to lose about 0.5 WAR per year of value due to aging. Some players will age better or worse, but that’s an average estimate”.

Another one of his articles analyzed the price teams pay per 1 WAR on the FA market. Neil Weinberg asserts that…

$/WAR is basically a measurement of how much teams are paying for players on the free agent market according to how many wins they will add over replacement level players. Right now, we think teams are paying about $8 million per every WAR they add to their roster. For example, a 2 WAR player signed for three years would theoretically provide his team with 6 WAR, so a team might want to pay him anything up to $48 million. If the team pays less than $8 million for each expected WAR, we call this a “good deal” and if they pay more, we say they “overpaid.”

Gibson will presumably insist on pay comparable (relatively speaking) to what he could have potentially gotten had he tested the FA market. 

Photo: Getty Images

32-year-old starting-pitcher Kyle Gibson is due to hit free agency after this season (2019). Gibson bounced back in a big way in 2018…

2017

  • IP: 158
  • ERA: 5.07
  • K/9: 6.89
  • BB/9: 3.42
  • HR/9: 1.37
  • fWAR: 1.2
  • SwStr%: 10

2018

  • IP: 196.2
  • ERA: 3.62
  • K/9: 8.19
  • BB/9: 3.62
  • HR/9: 1.05
  • fWAR: 2.8
  • SwStr%: 11.5

Gibson, a former 1st round pick (22nd overall in 2009), has been very durable the last 6 seasons (despite undergoing TJ surgery in 2011); he has exceeded 150 IP annually from 2013-18. His huge improvement in ERA from 2017 (5.07) to 2018 (3.62) can likely be attributed to Gibson’s ability to induce more swings and misses and limit the long ball (in 2018). His average sinker velocity rose 1.6 mph (according to FanGraphs), which subsequently enabled Gibson to generate more whiffs on his slider and curveball (greater speed differential between his off-speed and hard stuff)…

2017

  • Curveball SwStr%: 14.0
  • Slider SwStr%: 21.8

2018

  • Curveball SwStr%: 16.0
  • Slider SwStr%: 26.6

There appears to be interest from both sides in regards to a potential contract extension, as conveyed below by Steve Adams of MLB Trade Rumors…

“It’s really just trying to figure out what makes sense for the Twins and if it is something they want to do as well,” Gibson told Miller, adding that Minneapolis is “definitely” somewhere he wants to be beyond the 2019 season.

For the purpose of this investigation, let’s assume Gibson loses 0.5 WAR annually starting in 2020 (his age 32 season) and that the cost per 1 WAR is ~$8 million…

2020: 2.0 WAR [Steamer’s projection for 2018: 2.5 – 0.5 = 2.0]; $16 million

2021 (age 33 season): 1.5 WAR; $12 million

2022: 1.0 WAR; $8 million

2023 (his age 35 season): 0.5 WAR; $4 million

Gibson contract possibilities:

  • 1 yr, $16 million
  • 2 yr, $28 million
  • 3 yr, $36 million
  • 4 yr, $40 million

Prediction: 3 yr, $36 million

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