So, you’re probably wondering just what this XVAL thing really is. Simply stated XVAL represents the eXcess VALue produced by a professional athlete. The XVAL metric is derived by calculating the total value produced on the field of play by a professional athlete and subtracting the salary the athlete is paid to produce that total value. This seemingly simple calculation requires several key factors. We created the XVAL metric for baseball by utilizing the following inputs:
1. A baseball WAR statistic (we use Baseball-Reference’s WAR): The WAR (which stands for Wins Above a Replacement player) statistic is critical because it measures a baseball player’s overall performance in terms of wins produced.
2. The value of a win in Major League Baseball: This can be calculated in various ways with significantly different outcomes. XVAL places the value of an MLB win at $3 million. Although this gets a bit technical, we feel it is important to briefly explain how we come up with this value.
- We take the total salaries and total wins of the entire league.
- Because we are measuring the wins above replacement players, we subtract out the total salaries and total number of wins that would be experienced if the entire league consisted of replacement players.
- We divide the remaining salaries by the remaining wins.
- This amount is just under $3 million and we rounded up to get to our final figure.
3. Actual player salaries
From here we multiply the WAR statistic times the value of a win to find the player’s total value produced. Then we subtract out the salary that player was paid for that production, which provides us with the player’s “eXcess VALue” = XVAL.