Is Randy Johnson "Worth" $48 Million For the Next Three Years?

Randy Johnson and the New York Yankees have reportedly agreed to a contract extension which will pay Johnson $16 million per year for 2006 and 2007, in addition to the $16 million ($6 m. deferred at 2% interest) he's due to receive in 2005. Johnson turnd 42 shortly before the end of the 2005 season, so we can call these three years his age 41, 42, and 43 seasons.

The answer to the question of what he's "worth" will depend partly on what level of performance might be expected of him, and that's hard to determine. His recent performances have been extraordinary, however.

I've looked at the performances of five other extraordinary pitchers, all of whom aged very well--Steve Carlton, Roger Clemens, Nolan Ryan, Tom Seaver, and Warren Spahn. Here's their average level of performance, first for ages 38 - 40, then for ages 41 - 43, along with RJ:

................................Big 5................Randy Johnson
.......................Age............Age..........Age..........Age
.....................38-40.........41-43.......38-40......41-43 (Proj.)
Starts..............94...............79............88...........75
IP/Start.........7.22............6.60.........7.04........6.44
K/9...............7.14............6.88.......10.88......10.49
WHIP.........10.27.........11.38..........9.31........9.49
HR/9............0.70...........0.88..........0.87........1.10

The projection for Johnson assumes that his performance declines at the same rate as the average for the other 5. Frankly, his age 38 - 40 performance has probably been better than theirs, so even with the same decline, he projects to be an outstanding pitcher for the next three years, but over fewer starts and fewer innings per start than the last three years. (It's worth noting that is 88 starts are 35-18-35--2003 was an injury year for him. In effect, the projection includes the probability of injury in it.)

Is that performance worth $16 million a year? According to J. C. Bradbury's "salary estimator" (on his blog, Sabernomics), a pitcher with Johnson's expected performance characteristics could expect a salary of about $7.6 million. So, based solely on that, Johnson is seriously overpaid at $16 million. But RJ may well be a bigger draw, both in terms of attendance and in terms of media revenue. So the $16 million might not be too big a stretch.