Arbitration Breakdown: Manny Machado

Over the next few days, I will be discussing some of the higher profile upcoming arbitration cases. I rely partly on my arbitration model developed exclusively for MLB Trade Rumors, but will also break out some interesting comparables and determine where the model might be wrong. 2018 arbitration projections are available right here.

Manny Machado had an off year this past season. His .259 average was well below his .284 career number. Unlike many other players this past season, he did not even set his personal home run record. He only had 33, slightly less than his totals for 2015 and 2016. However, with 95 RBI and 9 SB to tack onto his totals, Machado is projected for a $5.8 million raise up to a total salary of $17.3 million.

Part of the problem with determining the accuracy of the model in Machado’s case is something that will affect a great number of cases this year—the high home run level in the league. This past season set a league record with 6,105 total home runs—this was 26 percent higher than the average from the last five years. So when I look at players with similar totals over the last five years, it is unclear whether an arbitration panel (or teams and agents that are negotiating in the shadow of what an arbitration panel would say) would treat home runs from Machado as similar to other players with the same number as home runs, or as someone with maybe 26 percent fewer home runs. My model does not adjust for league run environment in this way; in general the data has shown that run environment is not a big consideration in arbitration. Hitters in high scoring years benefit from being compared to hitters in lower scoring years, and pitchers in low scoring years benefit from being compared to pitchers in high scoring years.

For example, Chase Headley in 2013 is probably a decent comparable, even if his case is a little stale. He hit 31 HR with 115 RBI and batted .286, which bests Machado in AVG and RBI, but is similar to his HR total. With a $5.1 million raise, which would probably be somewhere between $6 and $6.5 million if we adjust for salary inflation,  Headley could serve as a solid analog to Machado. However, if we think of Machado’s 33 HR as more like the equivalent of 25 HR in 2013, then Machado should clearly get less than Headley’s inflation-adjusted raise.

If we want a more recent comparable, we might want to consider Todd Frazier last year, who hit .225/40/98. With the league only experiencing a nine percent increase in HR relative to last year, Frazier might be a more legitimate comparable. He clearly had more HR, but a worse average. He only got a $3.75 million raise, which may suggest that the $5.8 million raise projected for Machado is too high.

Eric Hosmer hit .266/25/104 last year, so he could be a solid comparable as well. He received a $4 million raise, again far less than Machado’s projection. Of course, Hosmer is probably a floor with similar AVG and RBI and notably fewer HR. So maybe we want to consider Machado getting something north of $4 million.

I think it makes sense to view Hosmer’s raise as a floor on Machado, especially because of the large difference in defensive skill. While defense does not appear to make a big impact on arbitration at the model level, it obviously can in some cases. I would guess that it helps Machado move towards a raise closer to $5 million. That would still fall short of his projection, but probably puts him in striking distance of somewhere around $16-17 million.