From Ace to Albatross?

Ben Sheets is finding himself in a most precarious situation this offseason. He had started to become the face of a franchise, the once in a decade find that a general manager finds solace in. Now Ben Sheets finds himself in the purgatory of the oft-injured. No one doubts his usefulness as the ace of a staff when healthy, but all too often the Milwaukee Brewers found themselves waiting for his return to the disabled list.
Even after a relatively healthy season by Sheets' standards, GMs are reluctant to commit to him even for a short-term deal.
How big of a risk is Sheets?
Let's take a look at Sheets' projected value over the next couple of years. According to CHONE, Sheets will be worth $12.6 million in 2009 and $12.0 million in 2010. This factors in Sheets' injury history by projecting him to pitch 148 and 133 innings in 2009 and 2010 respectively.
Let's suppose that things are even more dire than that. Suppose that there's a 75% chance that Sheets pitches 148 innings next year and a 25% chance that Sheets does not pitch at all. Similarly for 2010 assume there is a 70% chance that Sheets pitches the 133 innings as expected, and a 30% chance that he doesn't pitch at all.
These are very extreme assumptions, especially considering that Sheets is yet to miss an entire season in his major league career. Furthermore, there is strong evidence that Sheets is less of a health risk than A.J. Burnett who just signed a 5 year $82.5 million deal with the Yankees. (This is something we will take a closer look at in another post).
Using a similar 6.75% discount rate as in the Lowe article we find that a 2 year deal for Ben Sheets worth $17.9 million paid out under equal annual amounts is a fair deal. But of course this amount takes into account the worst-case scenarios, i.e. Sheets doesn't pitch at all. Strictly using the dollar amounts above, we have Sheets' value at $24.62 mil over two years (payments distributed evenly). But if Sheets is able to perform at the level he has most of his career his value would be slightly higher, at roughly $26 million.
Now projecting in a best-case/worst-case scenario let's suppose Sheets has a 20% chance of pitching 200+innings, a 25% chance of not pitching at all and a 55% chance of pitching based on the above projections. Sheets' value then becomes $23.79 million. Making a 20% assumption that Sheets pitches 200+ innings is not that far-fetched considering that he has pitched 200+ innings on three occasions in his career and he's coming off of a 198.1 inning season.
It seems that the market for Sheets is currently moving toward roughly 2/$20. That would be quite the bargain based on CHONE's standardized projections.