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Arbitration Breakdown: Jacob deGrom

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Over the next couple weeks, 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. 2019 projections are available right here.

The most interesting arbitration case of 2019 is probably Jacob deGrom. The arbitration system is an antiquated method of player compensation. While teams on the free agent market bid based on innovative stats, other numbers that reflect more accurate player valuations, and detailed scouting assessments, the arbitration system still uses stats like wins, saves, and RBI that teams have since discarded in their player evaluation. The stats remain important because a couple hundred players become eligible for arbitration every year, and everyone knows what criteria the system uses.

But arbitration also rewards hardware. An MVP or Cy Young Award can weigh heavily on the ultimate salary a player will take home, and until recently those awards were often based on antiquated statistics like wins. The press was a few steps behind front offices in innovation—after all, that’s probably how it should be.

All these differing forces crash into each other in 2019, as deGrom enters his third year of arbitration eligibility with a mere 10-9 record, but a Cy Young Award. And it was not just a squeaker he won without real competition —he got all but one first place vote in a year where Max Scherzer won 18 games, had a 2.53 ERA, and struck out 300 hitters. Aaron Nola won 17 games this year with a 2.37 ERA too. There were clearly other contenders, but deGrom won thanks to a more knowledgeable press base that eschewed wins and focused on his sensational overall performance.

Arbitration still uses wins, however. And that could easily downgrade deGrom. In fact, my model—which is backward looking by design, asking what raises players have gotten historically with similar statistics—sees deGrom earning a mere $5.5 million raise, which would bring him up to a $12.9 million salary. Back in 2014, Scherzer himself won a Cy Young with a 21-3 record and a 2.90 ERA, striking out 240 in 214.1 innings. That got him an $8.8 million raise, a record for third time eligible starting pitchers which still stands today. The eleven fewer wins are the main reason the model is more skeptical of deGrom. After all, the strikeouts and innings are similar and deGrom’s ERA was a full point lower.

The model could easily miss here. If a panel decides to ignore wins like the Cy Young voters did, it could easily give deGrom a $9 or $10 million raise (and somewhere around a $17 million salary), possibly setting off a new wave of arbitration cases that could simultaneously give arbitration-eligible pitchers salaries more in line with their relative value, all while forcing the unfortunate arbitration salary modelers of this world to retool their models!

Of course, maybe the model is just right. Maybe the Mets will be able to persuade a panel — or, more likely, persuade CAA Sports (the agency that only recently employed new Mets GM Brodie Van Wagenen) that a panel would be persuaded — that wins will be valued as they have in the past, substantially harming deGrom’s argument. In that case, we would need to look for pitchers with very low win totals and very low ERAs. Only a few names surface.

By far the most interesting is Jeff Samardzija. In 2015, Samardzija went 7-13 with a 2.99 ERA in 219.2 innings, and earned a $4.34 million raise. That seems like an absolute floor for deGrom, who clearly bested Samardzija on every major statistic—even wins. Plus, that was four years ago and is probably a little stale.

There are not even that many very low ERA seasons to look at. Cole Hamels got a $5.5 million raise seven years ago with a 14-9 record and a 2.79 ERA. The model is essentially predicting that deGrom gets Hamels’ raise despite the staleness of that case, and despite the fact that deGrom topped Hamels in every category but wins.

Perhaps another interesting comparable could be David Price, who went 15-12 with a 3.26 ERA in 2015. The most notable aspect of his case though, is the fact that his tally of 271 strikeouts is quite similar to deGrom’s 269. Probably the most compelling aspect of Price’s case, however, was his accumulation of 248.1 innings. That tops deGrom by over thirty frames. Price’s $5.75 million raise could be argued as a ceiling on that front as well. There is a key difference cutting in the other direction, of course, in the form of the extra 1.5 earned runs Price allowed per nine innings.

Whatever deGrom gets, he is sure to set an interesting precedent going forward. Will arbitration panels stop paying as much attention to wins? How will they consider extremely low ERAs? How will Cy Young Awards come into play? The most interesting case of 2019 probably has some light to shine on these questions.

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