Did you ever buy something and immediately regret it? Instead of just throwing it away, you kept it around looking for ways to use it because of the price tag you paid for it? Humans do this all the time.
The perfect example is a gym membership. New Year’s is around the corner and people want to get in shape. They drop all this money and then you know what happens. They either don’t go or go a few times a month to make themselves feel like they are getting their money worth and just waste time.
You would think MLB front offices are smart enough to avoid what’s called the sunk cost fallacy. Except, the people that run MLB teams are humans too.
Keith Law is one of the few journalists I respect. In his book and during a recent MLB Network appearance, he talks about the sunk cost fallacy. No matter how many years go by, MLB teams continue to fall into that same trap. It needs to be highlighted further.
There are two big notable examples in baseball today: Albert Pujols and Chris Davis. Instead of just releasing them and moving on, the Angles are Orioles continue to play them because of the money that’s already invested in them. Of course, baseball contracts are guaranteed so you have to pay them regardless of if they’re on your roster or not.
The Angels signed Pujols to a 10-year contract worth $240 million that finally expires after the 2021 season. It will go down as one of the worst contracts in the history of the sport. Pujols was one of the best players in the sport with the Cardinals. Quickly, Pujols got old fast and tanked the Angels roster.
When you can’t win with Mike Trout, there’s a problem. Pujols’ egregious contract was one reason why. The contract had an ascending average annual value made it worse as time went on. It prevented Los Angeles from landing several players that likely would have gotten the Angels into the problem.
However, Pujols’ contract is only half the problem. A big problem that hasn’t been talked about enough is the fact that the Angels keep playing him. Trout provides tremendous surplus value. Pujols creates negative surplus value. The Angels despite having Trout have found ways to neutralize his value.
Pujols is not a guy that should get 500-600 at-bats anymore. The Angels’ first baseman played 39 of a possible 60 games and recorded a negative WAR number. Making mistakes is one thing. Refusing to admit you made the mistake is an even bigger mistake. If the Angels were smart, they would just flat out release Pujols and give those at-bats to a younger and better player.
The Orioles are doing the same thing with Chris Davis. The only difference is the Orioles are not ready to win and the owner wouldn’t have it any other way. Davis is Peter Angelos’ favorite player. He still thinks Crush Davis is still a thing. Davis’ inclusion in the lineup isn’t as damaging because this team is actually better off losing right now. Davis is the worst player in baseball and plays virtually every day.
The Angels are a team that has the best player in baseball and still cannot build a winner. Keeping Pujols on the roster is damaging in more ways than one. A large part of what has separated the big markets from each other isn’t just the way they spend money. It’s a way they handle the bad contracts as well.
The Boston Red Sox have been the most successful franchise since the turn of the millennium. They have signed plenty of bad contracts while simultaneously winning championships. Unlike the Angels, Boston has admitted when they make mistakes and pivot quickly.
The Red Sox signed Carl Crawford to a 7-year contract worth $142 million in December of 2010. Crawford was traded to the Dodgers in August of 2012. Whatever it took to get rid of Crawford, the Red Sox were willing to do so. If it meant trading someone like Adrian Gonzalez along the way, the was just the cost of doing business.
Pablo Sandoval was signed to a $95 million contract after a magical World Series run with the Giants in November of 2014. Sandoval was designated for assignment in July of 2017 with a lot of money still remaining on the contract.
Instead of lying to themselves, the Red Sox acknowledged they were better without Sandoval on the roster. When Boston won the World Series in 2018, they did so while still paying Sandoval. Boston found a young player in Rafael Devers that was simply going to do the job better and helped propel them to a title.
A more recent example is the Seattle Mariners. Seattle was a team that was stuck with the albatross Robinson Cano contract. The Mariners used a young player to rid themselves of the Cano sunk cost. It was a defining point for the franchise who ended up scoring Jarred Kelenic.
The Mets viewed Cano as an asset when it should have never been the case. Players like Cano that carry that contract are more of a burden than a help. Brodie Van Wagenen made a foolish trade and lost his job for it.
Making a mistake is one thing. Refusing to move on and compounding the mistake is just as bad. Chicago Bears fans know this all too well. Why is Mitch Trubisky still on the roster? You know why.
So who’s the next team to get hit with the sunk cost fallacy? Easy… that’s the Philadelphia Phillies. The Phillies should be looking to rid themselves of Bryce Harper by any means necessary. Instead, they will lie to themselves and dig further into a hole.
It’s already started to happen. Giving up someone like Sixto Sanchez for two years of JT Realmuto should have been unthinkable. It also doesn’t happen if Harper doesn’t push for the trade. Things are getting worse in Philadelphia way before they get better. Harper will provide a 13 year curse to the franchise.
Be very careful who you pay and be willing to move on quickly.