Editor's note: We're re-promoting this story from September, 2020 in light of the news that Nolan Arenado has been traded to St. Louis. Although we were wrong about whether the Rockies would trade him, the analysis of his valuation should be just as relevant now.

Will Nolan Arenado be traded this offseason? The rumor mill has already started. With another season of failure in the books for the Rockies, the obvious conclusion would be to suggest there will be personnel changes. And Arenado very publicly feuded with his front office last winter. No way he stays in Colorado now, right?

No. We think he stays.

The problem is that Arenado’s value has collapsed. His surplus has gone very negative: [baseball-trade-values-player-link player="7589"]And that means he’s stuck there -- and they’re stuck with him.

As a reminder, trade value is mostly expected field value minus expected salary. Those numbers are now flashing red. Let’s dig into why that is.

Performance decline

It starts with his performance. Arenado put up only 0.8 fWAR and 0.9 WARP in 2020. That translates to roughly 2.7 blended WAR (which is what we use) if he were to have played a full season. That’s a far cry from his usual numbers in the 5s.

Unfortunately, that hurts his projections going forward. Prior to this season, ZiPS projected him for 4.6 fWAR in 2021, then 3.7 in 2022, then worse and worse each year from there.

But we need to account for the new data, not just the preseason. In a normal year, our model would weigh the most recent year about 30% more than the pre-season projection (based on the Marcel 6-3-1 method, which weighs the most recent year at 60% and the previous year at 30%). 

But this was a short year, you say! Yes, it was -- a little over ⅓ of a normal year, to be more precise. So instead of weighing the new data by the usual 30% more, we are weighing it 11% more than the previous year to account for that smaller sample size. Doing it that way -- which we believe is, if anything, conservative, we get Arenado’s next few years, using our blend of fWAR and WARP, at 3.8, 3.7, 3.2 and on down from there.

It gets worse. His hitting really took a nosedive, which was borne out by advanced stats. His xwOBA was .298, well below league average of .322. His WRC+ was 76, which was 24% below league average. His ISO was .181, well below his usual numbers in the high 2s (which means he lost most of his power); this was confirmed by his barrel %, which had been in the 8s previously, but this year fell to 5.4%, well below the league average of 6.4%. Overall, then, he was a below-average hitter. And even though his defense held up, it’s a truism that the market values offense much more than defense, by a factor of about 80/20, so that won’t matter much to his trade value.

And get this: Away from Coors, in 2020, Arenado hit .227/.302./.333, for a .636 OPS. He had a 66 WRC+. That means he hit 34% below league average in every stadium except his own. (And only a 79 WRC+ in Coors, if you’re wondering.) Potentially moving to a new team means that split takes on more weight, as he won’t be getting the benefit of thin air anymore -- it’s more likely to be below-average to average at best. (For his career, Arenado has a 108 WRC+ away from Coors, which is above average, yes, but not by much, and the trend is definitely downward.)

In our model, that gets us to a preliminary surplus value of $-68.7M. But to account for his market value as a star, we’ve added 10% to his field value and skewed his range to the high side, which gets us to -$43.7M.

Injury risk

Now, one could argue that his poor performance numbers were entirely due to his injured shoulder. What if it was an anomaly, and he comes back healthy in 2021 and reverts to form?

Here’s the problem with that: you have to explain 2020 somehow. If you think the poor numbers were due entirely to injury, it means that another injury could knock him out in a similar way in the future. It’s a red flag. The best predictor of future injury is previous injury.

The play that reportedly caused his injury looked like a fairly routine dive for him. But if that was enough to ruin his whole 2020, does that mean he’ll stop diving to his left? And if he does, will it ruin more seasons?

And he’s now entering his 30s, which means his overall injury risk is increasing. Father Time is undefeated in this regard. So let’s run the numbers as if his 2020 played exactly as predicted, but now we’ll adjust his injury risk number down 20%. We think that’s a reasonable number, given the impact one dive to his left had on his whole season (not to mention any lingering effects from this season’s injury).

Where does that get us? About the same initial result as the other calculation: $-55M. If we make the same adjustments as we did above for stardom, we’d get it up a bit to -$32.5M. That’s not all that far off from our first pass of -$43.7M, where we attribute his 2020 results more to decline. Split the difference if you like; you’ll still be in the same range. And it’s likely that both elements contributed.

The bottom line is that we need to adjust his projections down due to either performance decline, injury risk, or a mix of both. Either way, they’re going down. Quite a bit.

The contract

Meanwhile, Arenado is owed $199M on his contract. He’s set to earn $35M next year, and each of the three after that (plus another $32M in 2025 and $27M in 2026). That’s very close to Mike Trout territory.

Even if he had met his projections for 2020, because of that high salary, he would only have produced about $3M in surplus for each of 2021 and 2022, then the decline years would kick in as he ages deeper into his 30s, and he’d still be underwater overall, by around -$18M. And remember, that’s before accounting for 2020’s underperformance and/or injury and/or away splits.

That’s why he’d be foolish to opt out after next season, at which point he’ll still be owed $164M. Keep in mind he’d only do that if he thought he was underpaid, not overpaid. You never see overpaid athletes opting out. Why would they? Every player wants to maximize his earnings while he can. This is a hard truth. And it seems highly unlikely, to put it nicely, that he would get more than that $35M per year if he re-entered the market at age 31 after next season, even without all these red flags.

And since every team can see this, if they traded for him this winter, they’d actually prefer that he opted out, to save them from the obligation of absorbing all of those negative-value years at premium prices. (Fangraphs once posited that the opt-out had value, but that was before this season; now it has no value at all.) But since they know he won’t, they’re less likely to be interested. Every GM looks at potential deals rationally and analytically these days. 

Budget cuts

And finally, consider the economic climate. Every team in baseball lost a boatload of money in 2020, and is cutting payroll anywhere they can. Front offices are laying off scouts and other personnel right and left. Owners are pressuring their GMs to be even more scrupulous with budgets. (That’s a big reason why no one traded for a highly-paid veteran at the deadline this year; quite the opposite: it created more of a premium in trade capital for low-paid players like Austin Nola.) And estimates are that revenues for 2021 may not fully recover, because attendance will continue to suffer until the majority of the country is vaccinated, which the CDC estimates to be around the third quarter of next year. That means that all team budgets will be even more in the hole.

Now ask yourself, given all that, why would an owner approve of taking on a recently injured player, probably in decline, in his 30s, who’s due to make $35M in 2021, and almost $200M over the next six years? Even if you thought 2020 was an anomaly, and he reverts to form, you’re still taking on a great deal of risk for little reward. Arenado would have to not only meet his original projections as he ages, he’d have to significantly exceed them to make it worth it just to take on the contract. No one’s going to pay 5-6 WAR prices for a 3-WAR player.

And that’s saying nothing of any sort of trade return. As I’ve written before, this resembles the Giancarlo Stanton situation. But in that case, Miami was selling high -- Stanton was coming off his MVP year. And yet the Marlins still had to kick in significant money to unload him. The Rockies would be selling low, and would need to kick in even more cash. 

Couldn’t Colorado do that? Yes, they could. Do you think owner Dick Monfort would shovel a good $50M out the door just to get rid of his franchise player and maybe get a low-level prospect back?

I don’t think he would. All he would gain is cost savings. But the PR outcry would be great, and the loyal fanbase would be incensed if all they got back was a random A-ball player. Keep in mind most fans have no idea what the numbers are (if you’re reading this, you’re more in the know than most fans) -- they just perceive Arenado as a big star, and therefore assume he would return a haul in trade.

Since that’s just not the case, it makes more sense for all concerned to keep him where he is, and finish out his career in Colorado. No outcry, no pushback. They’ll just live with the diminishing returns and eat the difference in value. They can still put him on the cover of their programs and market him in promotions.

And all this nonsense about Arenado opting out to play for a winner? Once his agent shows him the numbers, I think he’ll shut up and toe the line pretty quickly.

So, to summarize:

• *Arenado had a bad year, which decreases his value going forward, no matter the explanation.
• *His contract is steep, which means it is now significantly underwater.
• *Given that, Arenado will not opt out at the end of 2021 and walk away from the remaining $164M. (He’s not getting more.)
• *Baseball teams are cutting budgets, and unlikely to take on big contracts, especially negative-value ones.
• *The Rockies are unlikely to sell low.

 

Hard place, meet rock. 

In other words, Arenado is not going anywhere.