Surplus Value Contract Analysis, 2020-present

Overview

Using fWAR and salary data from FanGraphs and Spotrac, this project evaluates the surplus value of Major League players signed to contracts of four or more years, dating back to 2020. By comparing cumulative player production against salary earned during their contract years through 2026, the database highlights contracts that have delivered positive or negative value relative to their cost.

Surplus Value = (total fWAR accumulated during contract × price of WAR) − contract earnings through 2026, with $10,000,000 as the standard market value for one WAR.

Team Data

Seattle leads all teams in cumulative surplus value at +$292.4M, followed by Atlanta (+$249.5M) and the Chicago Cubs (+$248.9M). Atlanta (5/5) and the Cubs (4/4) stand out for consistency, with every contract producing positive surplus value. The Dodgers have also generated +$214.9M despite only 50% of their 10 contracts being positive.

The San Diego Padres have the most contracts in the dataset (12), split evenly between positive and negative, averaging just +$3.0M per contract. Oakland, Toronto, Boston, Houston, Milwaukee, and Philadelphia also sit relatively close to break-even on an average-contract basis.

Interestingly, Toronto has a 60% positive rate but sits at −$9.7M overall, while Colorado has two positive contracts out of three but totals −$120.7M. These results demonstrate how significant negative contracts can outweigh positive outcomes. The Chicago White Sox stand out for consistently negative results, with all three contracts underperforming and combining for −$85.4M.

Player Data

Across 130 contracts analyzed, 74 (56.9%) have generated positive surplus value, compared to 56 (43.1%) with negative value. The average contract has produced +$14.7M, with a median of +$11.4M.

Age at signing shows a notable relationship with contract performance. Players signed at 24 or younger have generated positive value 70.6% of the time, averaging +$41.6M per contract. That falls to 56.7% (+$8.6M) for ages 25–29 and 44.4% (−$0.4M) for players 30 and older.

Position-player contracts have outperformed pitchers, generating positive value 63.1% of the time (+$20.4M average) compared to 45.7% for pitchers (+$4.3M). Starting pitchers are evenly split at 50%, while only 25% of relief pitcher contracts have produced positive value. By position, center field (80%) and shortstop (63.2%) have been particularly successful.

Interestingly, contracts lasting eight or more years have generated positive value 72.2% of the time, averaging +$41.3M, compared to just 40% (+$0.45M) for four-year contracts. However, seven-year contracts demonstrate the potential downside, splitting evenly between positive and negative outcomes while totaling roughly −$180M in surplus value.

By contract start year, the 2022 (69.6%) and 2023 (63.6%) classes have produced the strongest established positive rates. These findings suggest that age, position, and contract structure play important roles in long-term financial value, although many contracts remain active and their final outcomes have yet to be determined.