Pitchers’ Arbitration Salaries

In the past couple days, I have been discussing some of the factors that play into arbitration salaries and the new model that I have developed for MLBTR to predict them. Yesterday, I discussed what gets a hitter paid. Today, we’ll look at pitchers.

One thing that advanced statistical analysis of pitchers has taught us is that luck, teammates, and opportunity play large roles in a pitcher’s success. A good defense can end rallies and convert a sure extra-base hit into an out, while a good offense can put you in the position to get a win or a save. The free agent market has clearly adjusted to this knowledge—Cliff Lee had just 12 wins and finished 21st in ERA in 2010. He still got $120MM as a free agent, because his peripherals indicated he was a better pitcher than that—his SIERA was 3rd in the league. This year, his ERA was 3rd in the league too and he got 17 wins, thanks to more support from his teammates. Even recent Cy Young Awards have gone to Zack Greinke, Felix Hernandez, and Tim Lincecum, who fell far short of the standard 20-win Cy Young Award winner. However, arbitration panels have not made these same adjustments. The statistics that matter to panels remain IP, W, and ERA for starting pitchers, and IP, ERA, saves and holds for relief pitchers.

Playing time is crucial for pitchers’ arbitration salaries, just as it was for hitters. Accumulating innings gets you a big raise, even with a mediocre season. Joe Saunders got a $1.8MM raise last year, with 203 1/3 IP despite a 4.47 ERA and a 9-17 record. This year, we project Mike Pelfrey to get a $1.9MM raise to about $5.8MM for his 193 2/3 IP, despite a 4.74 ERA and a 7-13 record. Both pitchers will get raises for bad performance, since IP reign supreme.

Wins are pretty important as well. Jorge de la Rosa had 16 wins in 2009, despite a 4.38 ERA, which got him a $3.6MM raise. Our model predicts that for each four wins a pitcher gets, he will receive about a 10% larger raise, even with all of his other statistics unchanged. For example, our model has Cole Hamels getting $14.0MM in arbitration this winter with a solid ERA but only 14 wins. On the last day of the season, Phillies skipper Charlie Manuel used Hamels as a reliever in the 5th inning with the hopes that he could back into his 15th win. It didn’t work, but our model says that if it had, he could have expected an extra $200K in arbitration with a little help from his teammates during his throw day.

Relievers get paid by role. An elite closer with a history of saves gets paid far more than a set-up man, who gets paid far more than a middle reliever, even with similar performances. Andrew Bailey is slotted for $3.5MM this winter, but turn his 24 saves into 24 holds and he’d only get $2.1MM with the same elite ERA of 2.07, even with his 51 career saves prior to 2011 still on his record. Take all those saves and holds away, and he’d get under $1.0M with 174 career IP of a 2.07 ERA. Tyler Clippard had 38 holds this year for the Nationals, which boosts him up to a $1.7MM salary estimate. Take away 33 of those 38 holds to make him a middle reliever, and he only projects to get $1.3MM.

Even more so than hitters, one of the best ways for a pitcher to woo an arbitration panel is to have good teammates and a manager that puts him in a position to accumulate the right statistics. He’ll get more wins, saves, and holds with an offense that puts him in front, and more IP with a lower ERA with a defense that turns hits into outs.

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