MLB proposes using this advanced stat to determine players’ salaries

With the clock ticking ever closer to Dec. 1, the date MLB's collective bargaining agreement runs out, MLB and the MLB Players Association are continuing to try and come to terms on a new deal. The Athletic reported on Thursday the details of a new proposal from MLB, which includes a new way to pay players before they enter free agency.

This new payment structure depends on the use of one stat: fWAR.

What is the new payment structure, and what is fWAR?

Right now, the way players are paid before they hit free agency is salary arbitration. In front of a neutral arbitrator, the player's agent and an MLB lawyer each present their case for why a player should or shouldn't be paid a certain amount.

MLB's new proposal gets rid of the arbitration process. It would still pay players based on performance, but instead of having two people argue about how much a player's performance is worth, MLB would instead rely on a formula for wins above replacement (WAR). Specifically, MLB would use FanGraphs' calculation, which is known as fWAR. Additionally, a player's service time and their career fWAR would be part of MLB's overall performance formula.

If you have watched a baseball game in the past 10 years, you are probably already aware of fWAR. The stat was created in an attempt to quantify a player's value to their team. If Bryce Harper got hurt and had to be replaced by a Triple-A player, how much would that hurt the Philadelphia Phillies? That's the type of question fWAR tries to answer.

Creating a singular stat to try and quantify a player's value is a noble goal, but even FanGraphs admits fWAR is not meant to "be a perfectly precise indicator of a player’s contribution, but rather an estimate of their value." The website acknowledges fWAR is an approximation, a quick and dirty way to compare players.

That can be helpful as long as one recognizes the shortcomings in that approach. Players who put up 6 fWAR in a season most likely performed better than a player with a 4 fWAR. But in cases where one player posted a 5.3 fWAR and another posted a 5.9 fWAR, that's not as clear. There's a margin for error in fWAR. It's not meant to be definitive stat.

FanGraphs is not the only website with its own WAR stat. Baseball Reference has its own version, referred to as bWAR, and Baseball Prospectus uses WARP. All three stats have similar goals, but differ enough in their formulas to make them completely unique.

It's not uncommon for a player to have a different WAR — or WARP — number on each site. Toronto Blue Jays infielder Marcus Semien, as an example, posted a 6.6 fWAR, a 7.3 bWAR and a 5.6 WARP in 2021.

Certain stats are weighted differently — or not at all — depending on what version you are using. FanGraphs' version of WAR relies on FIP to calculate pitching stats. Baseball Reference's version relies on runs allowed. Both websites use different defensive metrics when trying to evaluate a player's prowess in the field. FanGraphs' version relies on UZR to calculate defense.

There's no perfect, agreed upon way to distill a player's value into one stat, which is why all three sites have their own version of WAR. Each site provides explainers on their version of the stat, shedding light on how those WAR figures are calculated.

Why the players will almost certainly reject this proposal

To start with, the new proposal isn't all that different than the one they binned in August. It still proposes letting players reach free agency at age 29 1/2 instead of after six years of major league service time — which would negatively impact players who make their MLB debut at age 23 1/2 or younger and keep them under team control for even longer — and still gets rid of arbitration.

But the pre-free-agency payment structure is new. In August, MLB reportedly proposed paying players with at least three years of service time from a predetermined sum of money. That was essentially a step backward from arbitration, since players would have no opportunity to argue for more money, the distribution wouldn't be based on performance, and everyone would be at a disadvantage since there's only a set amount of money available to distribute.

MLB's new proposal isn't much better on that front. While using fWAR means that performance will be taken into account, there's still no opportunity for players to advocate for themselves. MLB would also be relying on a third-party statistic to evaluate its players' performance, which leaves the door open for statistical manipulation. (There are already several distinct WAR formulas out there, and each calculates wins above replacement differently.) Plus, if the money being distributed is from a set amount determined by MLB, it still means that players aren't being paid what they're worth, and players are still at a disadvantage.

And those are just the issues with the overall process. No WAR formula is perfect, including fWAR. When you drill down deeper into using a third-party stat to determine player salaries, entire groups of players could be at a major disadvantage due to how the formula is built. The pitching component focuses mainly on walks, homers and strikeouts, which means that anyone who pitches to contact is going to be hurt. Relievers, who have become a majorly important component of the modern game, are also undervalued. And as far as defense, there has yet to be a single stat (or even a group of stats) that adequately quantifies defense and how valuable that is for a team.

One MLB player agent told The Athletic that this proposal has absolutely zero chance of being accepted, and summed up the problems with the proposal pretty neatly.