Some ideas are better in theory than in practice. I was tasked a while back by MLBTR owner Tim Dierkes to come up with a free agent salary system similar to the one Matt Swartz created for arbitration salaries. To put it simply, it was a failure. After coming to a agreement, Tim and I decided to scrap the idea and go our separate ways...until about a week ago when I decided to look at the problem a different way.
By using a weighting of similar production and age, a player's contract can be estimated by using a few comparable contracts. It is way too close to the hot stove season to create an estimate for all players, but I was able to scrap together a list starting pitcher salary estimates.
Below are my model's projected salaries using the top 21 free agent pitchers (ignoring Masahiro Tanaka and the recently extended Tim Lincecum). Also, the expected contracts from MLBTR's free agent profiles were added if one has been given.
Note: The salaries are based on inflation-adjusted 2013 salaries. If salaries increase 10% across the board this offseason, the values need to be adjusted accordingly. A confidence value is added. The closer the value is to 0, the more pitchers are similar in production to the pitcher in question.
|Similarity Projections||Expected Contract|
|Name||Years||Total Salary ($M)||Confidence (0 is best)||Years||Total Salary ($M)|
Overall, the values hold up decently. The Similarity Projections estimate almost the same length in contracts, but thinks about $20M more will be spent. Also, with the the years in decimal format, it can be seen how uncertain a player may be in getting a certain number of years on his deal. For example, I have Tim Hudson at 1.6 years and $17.3M. Adjusting those values to one year, he gets $10.8M. It would increase to $21.6M for two years.
Individually, nothing seems completely out of whack. The one contract with the largest disagreement so far is Scott Kazmir's. Basically, there aren't many pitchers that don't pitch at all for two straight seasons and then come back to post an ERA near 4.00. The three most similar pitchers were Chris Capuano (2011), Jake Westbrook (2011) and Carl Pavano (2010). The trio averaged 155 innings in their comeback season and only 26 innings in the two seasons before their comeback. While I used more than three samples for the above value, the three averaged a salary of $9.4MM for 1.3 years (or adjusted to $7.3M for one season or $14.5M for two seasons).
Also, Roy Halladay's projected salary seems a bit out of place, but not many pitchers his age have gotten huge guarantees after the season he had last year. One of the top comparable contracts was the one Roy Oswalt signed in in 2012 at $5MM. Oswalt was younger and was coming off a better season.
The elephant in the room is Matt Garza. Demand has been limited in the past for starters who have averaged only 150 innings over the past three seasons. Unreliable pitchers have unreliable contracts. In terms of innings total, he is getting lumped in with the like of Shaun Marcum and Francisco Liriano. For example, last season Liriano had thrown 480 innings combined in the three previous seasons, with a noticeably worse ERA, but ended up with only a guaranteed 1-year deal for only 1MM. However, prior to his most recent contract, Jorge De La Rosa had similar numbers and received a three-year, $32MM deal. Right now, I think expectations may be a bit high on Garza's salary, since teams are willing to pay more for a reliable starter.
The model was just a year off with Lincecum, predicting $47.4MM over 2.9 years. That is equivalent to a a two-year, $32.7MM contract. The Lincecum deal is the first salary to determine how much salary inflation there is this season. His two-year, $35MM deal works out to 7% inflation. It is way too early to set an exact inflation amount, but it is something to keep an eye on.
The best part about this finding is that we should be able to complete the projection model well in advance of free agency next season, which could lead to a greater number of predictions. At the very least, the starting pitcher salaries that are handed out this offseason should serve as a reference point for future studies that will allow us to better set expectations for the free agent market.