Arbitration Breakdown

Arbitration Breakdown: Cole, Odorizzi, McHugh, Fiers

By Matt Swartz | January 7, 2017 at 12:04am CDT

Over the next few days, I will be discussing some of the higher profile upcoming arbitration cases. I will 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.

As I discussed in my write-up on Jacob deGrom and Carlos Martinez, it has been difficult for starting pitchers to top Dontrelle Willis’ arbitration salary of $4.35MM in his first year of arbitration eligibility back in 2006. Dallas Keuchel finally broke that record last year, but otherwise many pitchers have fallen short. In many cases, pitchers have gotten close only to sign multi-year deals to remove themselves from the list of comparables, and other times they have settled for numbers at or just short of Willis’ old record.

My model has trouble with these symbolic barriers, and I have written many articles about why pitchers projected to earn slightly more than $4.35MM would earn slightly less. Mathematical modeling is a science, but it does not pick up on the psychological nuances of a precedent being broken. It remains to be seen whether Keuchel’s new record makes it easier for pitchers to out-earn Willis—and Carlos Martinez this year could be a great case. However, despite Gerrit Cole of the Pirates, Jake Odorizzi of the Rays, and Collin McHugh and Mike Fiers of the Astros all projecting near the $4.35 mark—Odorizzi and McHugh are projected slightly above it—I suspect all four will earn slightly less than their projections because of this barrier.

All four of Cole, Odorizzi, McHugh, and Fiers have at least 30 career wins, 500 career innings, 400 career strikeouts, and 100 platform year innings. All of them also have relatively average ERAs in the 3’s or 4’s. None won the Cy Young Award last year. There are only four such pitchers who met these criteria to receive one-year arbitration deals as first-year starting pitchers in the last three years, and all four earned in a tight range of $3.63MM to $4.35MM. These include Shelby Miller, Chris Tillman, Mike Minor, and Jake Arrieta. It is difficult to see any of these four pitchers falling out of that range.

Gerrit Cole is projected to earn $4.2MM, but his case is somewhat unique in that he had a relatively weak platform year despite a strong career. He went 7-10 last year, but his 47-30 in his career. His 3.88 last year is worse than his 3.23 career mark. He only threw 116 innings with 98 strikeouts last year, but he has thrown 579.1 innings with 538 strikeouts in his career. Good comparables will include players with high career wins but low platform year wins. Ivan Nova is a reasonable comparable, although he earned just $3.3MM three years ago. He had a 9-6 record with a 3.10 ERA in 139.1 innings, but was 38-20 in his career with 4.04 ERA in 517 innings. Cole’s career numbers are definitely much better than Nova’s, but Nova makes sense as a floor. I suspect Cole will get a raise over Nova’s salary plus some extra money for inflation and will end up in the $3.5MM to $4MM range, probably right in the middle—well short of his arbitration projection of $4.2MM.

Jake Odorizzi went 10-6 last season with a 3.69 ERA in 187.2 innings along with 166 strikeouts. He only has 30 career wins, fewer than the other three guys on this list, but he does have 562 career innings and a 3.75 career ERA, along with 516 strikeouts. His best comparable is probably Doug Fister four years ago, who also won ten games and had a similar ERA at 3.45. Fister also had 30 career wins and a 3.48 ERA in 610 career innings. Fister struck out over a hundred fewer batters in his career at the time he earned $4MM exactly, so adding in some salary inflation should be Odorizzi comfortably in the low 4’s. However, it is hard to find a reason why Odorizzi would top Matt Harvey, David Price, Shelby Miller, or Chris Tillman, all of whom earned between $4.32 and $4.35MM. My model projects Odorizzi at $4.6MM but my gut says $4.2MM.

Collin McHugh had a 4.34 ERA last year and has a 4.13 career ERA, so his run prevention resume is unimpressive compared to the other pitchers in this group and many other potential comparables. However, McHugh won 13 games last year and has won 43 in his career, which is a rare feat. There are only two pitchers in the last six years who have won at least 12 games in their platform years and 40 in their careers while having ERAs above 4.00. These include Ian Kennedy, who earned $4.26MM in 2013, and Tommy Hanson, who earned $3.72MM in the same year. Kennedy’s numbers are largely similar to McHugh’s, but slightly better in many aspects. Hanson was slightly behind McHugh in most categories. Given how stale these comps are, I think McHugh should pass the midpoint of around $4MM, but I also see him struggling to make a case for besting $4.35MM. I think something like $4.1MM or $4.2MM is likely, which is also below his $4.6MM projection.

Michael Fiers 4.48 platform year ERA will definitely dent his case, although his 3.87 career ERA is more impressive. He also has 11 platform year wins and 34 career wins, along with a platform year of 168.2 innings with 134 strikeouts. Jeremy Hellickson’s 2014 case is a great match. He had only one fewer loss, although Hellickson’s 5.17 ERA is definitely much worse than Fiers’ 4.48. His 39 career wins to that point best Fiers, but his 409 career strikeouts fall far below Fiers’ 542. Hellickson earned $3.63MM back in 2014, so with a more impressive platform year ERA plus three years of salary inflation, we would expect Fiers to easily top Hellickson’s salary. It is difficult to find much evidence that Fiers will hit his $4.3MM projection, though, since many of the pitchers in that range have much better cases than he does. I suspect he may be able to get close to $4MM, but probably not top it.

All four of these pitchers are likely to earn a few hundred thousand dollars less than they are projected to earn. My arbitration model tends to miss these sorts of subtleties, and a longstanding symbolic barrier at $4.35MM definitely has skewed salaries in this range down a few hundred thousand dollars. Keuchel’s new record is much higher than Willis’ old record, but several other pitchers will probably need to top $4.35MM before the model results are smooth enough that we can stop shaving money off these projections.

Arbitration Breakdown: Jacob deGrom & Carlos Martinez

By Matt Swartz | January 5, 2017 at 11:22pm CDT

Ever since Dontrelle Willis received $4.35 million in arbitration in 2006, it has been hard for first-time eligible starting pitchers to top his salary. The record stood for ten years, until last year Dallas Keuchel took home $7.25 million following a Cy Young Award-winning season. In the decade since Willis received his record first-year salary for starting pitchers, many pitchers have come extremely close to hitting his $4.35 million or have actually hit it. David Price matched Willis’ $4.35 million in 2012 and Shelby Miller did so last year. Seven other starting pitchers have earned between $4 and $4.35 million in the last decade as well.

Other pitchers who would likely have exceeded Willis’ record received multi-year deals, which usually removes them from consideration when looking for comparables. Tim Lincecum and Clayton Kershaw were both coming off Cy Young seasons when they received multi-year deals, and Lance Lynn and Cole Hamels also received multi-year deals and subsequently missed out on breaking the record as well. Many elite starting pitchers are worthwhile candidates for multi-year deals, so it is not surprising that few of them actually receive one-year deals and become comparables. Among pitchers in the last decade with 30 career wins, 450 career innings, career ERAs below 3.50 and at least 100 platform year innings, five of nine signed multi-year deals before reaching agreement on one-year deals for their first year of salary arbitration.

Modeling arbitration salaries is obviously something that requires much precision, but the psychological barrier of $4.35 million is something that emotionless mathematical modeling will miss. As a result, I have written several articles over the years in which I explained that certain pitchers who were projected just over $4.35 million probably would not actually do so. Jacob deGrom and Carlos Martinez may be two such pitchers today, although Martinez is more likely to best that amount.

Jacob deGrom is coming off a mediocre platform year (for arbitration purposes) where he only won seven games amidst throwing 148 innings. Although his ERA was 3.04, lack of counting stats is likely to hurt his arbitration case. His career numbers may offset this—he has 30 career wins and a 2.74 ERA across 479.1 innings and has struck out 492 batters. He also won Rookie of the Year in 2014. His projection is $4.5 million, although I think there is good reason to believe that he will fall short of this.

Carlos Martinez has a much stronger case, and is projected to earn $5.3 million. He went 16-9 with a 3.04 ERA in 195.1 innings with 174 strikeouts, and has a career 34-21 record with a 3.32 ERA in 492.2 innings with 466 strikeouts. Few pitchers can match his performance, and he may be able to top the old record of $4.35 million, although he will come nowhere near the new record. The peculiarity of Martinez’ case is that is that there are no comparable pitchers with salaries in the range between $4.35 and $7.25, so he will be filling in some empty space if he does exceed the old Willis number.

In the last five years, there have only been five pitchers who had 25 career wins, 400 career innings, 400 career strikeouts, and career ERAs under 3.50 who did not sign multi-year deals. All five received between $3.97 and $4.35 million in arbitration. These include Shelby Miller at $4.35 million, Matt Harvey at $4.32 million, Doug Fister and Alex Cobb both at $4 million, and Stephen Strasburg at $3.97 million.

It is difficult to see a good reason why Jacob deGrom would earn above or below this range as a result. Although he had slightly fewer innings than all of them, Doug Fister in 2013 was coming off just 161.2 innings and Alex Cobb was coming off 166.1 innings. Both won 10 games, more than deGrom’s seven, but neither had a Rookie of the Year Award under his belt and deGrom’s career ERA is lower than both of theirs. He also has more strikeouts than either had in their careers at this point as well. As a result, I think he will probably top their $4 million salaries.

I think deGrom will struggle to top Matt Harvey’s $4.32 million from last season, though. Harvey had a better career ERA and a better platform ERA, along with many more platform innings. Something around $4.2 million seems likely for deGrom—below his $4.5 million projection.

Martinez, on the other hand, does seem like a likely candidate to top the five aforementioned starters’ earnings. None of them had more than 13 platform year wins, and Martinez had 16. His 3.04 ERA is in the middle of the pack for the group, but his 195.1 innings total is only bested by Miller. His 34 career wins are bested by Alex Cobb, but exceed the other four starters. His innings and strikeouts are similar to them as well.

All things considered, he has a clear cut case to beat the $4.35 million mark. Comparing him to Shelby Miller alone, he went 16-9 as compared with Miller’s 6-17 in his platform year. His platform year ERA was nearly identical and he threw only 10 less innings but had three more strikeouts than Miller. In his career, he has two more wins than Miller but 14 fewer losses. He also has a relatively similar ERA. Although he has thrown about eighty fewer innings, he has only struck out seventeen fewer batters. Martinez is likely to succeed in asking for a number higher than Miller’s $4.35. But given that the main difference is ten platform year wins, I believe he will probably not get the $5.3 million projection my model estimates. I think something between $4.5 and $5 million is likely for Martinez.

Both of these pitchers are projected for slightly more than they will probably earn. The symbolic barrier at $4.35 million is still a factor despite Keuchel’s new record, which was set up by his 232 innings of 2.48 ERA pitching and the hardware to match. Because of that, the model is likely to miss on starting pitchers near that until that symbolic barrier has been passed enough times.

Arbitration Breakdown: J.D. Martinez

By Matt Swartz | January 15, 2016 at 9:46pm CDT

Over the last few weeks, I have been discussing some of the higher profile upcoming arbitration cases. I will 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.

After struggling earlier in his career with the Astros, J.D. Martinez has come into his own with the Tigers and had a career year in 2015, making a strong case for a large raise in his second year of arbitration eligibility. Martinez had 38 home runs and 102 runs batted in, while hitting .282. After earning $3MM in 2015, our model projects him to get a healthy $4.8MM raise to $7.8MM.

As it turns out, that projection does fall within the filing figures submitted today when the sides were unable to work out a deal before the deadline. But the model is closer to Martinez’s own $8MM submission — which would reflect a $5MM raise — than Detroit’s $6MM figure — which would give him just a $3MM bump.

As player and club work to reach a compromise — or, if not, to prepare for a hearing — they will be looking closely at similarly-situated past cases. But it is difficult to find reasonable comparables for Martinez. After a player’s first year of arbitration eligibility, arbitration salaries in subsequent years are generally based only on the most recent year. For Martinez, this puts him in an esteemed class of hitters who were in the signature 30/100 range for home runs and RBIs, most of whom get healthy raises. In the previous nine years, only two such players received one-year deals in arbitration—mainly because the other seven guys who would have been eligible inked multi-year deals instead.

Notably, both of those players had much better cases than Martinez: Chris Davis hit 53 home runs with 138 RBIs in 2013, leading to a $7.05MM raise, while Jacoby Ellsbury hit .321 with 39 stolen bases in addition to his 32 home runs and 105 RBIs in 2012, en route to a $5.65MM raise. These players certainly look like ceilings for Martinez, so it seemed unlikely he could pin down $5.65MM or above — a doubt that his representatives obviously shared, as reflected in the filing number.

However, nearly everyone else in Martinez’s service class in recent years appears to be a floor. In the last nine years, the third highest raise for a second-year eligible hitter who did not sign a multi-year deal went to Hunter Pence, who received only $3.4MM in 2011. He hit .282 with 25 home runs and 91 RBIs. Although Pence stole 18 bases, far more than Martinez’s three, I have found that power is much more important than speed in arbitration cases and Martinez’s superior power numbers should help him easily out-earn Pence’s $3.4MM raise. The fact that Pence’s cases was five years ago only makes that clearer.

Lucas Duda was another recent player with 30 home runs going into his second year of eligibility, but he only hit .253 and only had 92 RBIs, so his raise was just $1.6375. He seems like an even less relevant comparable.

The fact that no player in Martinez’s service class has gotten a one-year deal with a raise anywhere between Pence’s $3.4MM raise and Ellsbury’s $5.65MM raise made it difficult to tell how accurate our $4.8MM projection might be. It may be that some other player could be discussed as a comparable, but it is hard to see who’d be suitable.

In cases like this, there are often multi-year deals that teams and players are both willing to sign in the face of this type of uncertainty, so that could happen here — as they’ve previously discussed — especially now that there’s a fairly sizable gulf to bridge. But even in that case, it is not clear who could be a model, since most of the multi-year deals for similar power hitters have been inked earlier in player’s careers.

In the end, I view the $4.8MM raise as a reasonable mark, with the entire $3.4MM to $5.65MM range appearing defensible. Given the filed values, Martinez seems to have the more reasonable position, though both parties will have plenty of incentive to work something out rather than trusting the decision to an arbitration panel.

Photo courtesy of USA Today Sports Images.

Arbitration Breakdown: Dallas Keuchel, Shelby Miller, Matt Harvey

By Matt Swartz | January 15, 2016 at 8:25am CDT

Just like last year, our arbitration model expects three pitchers to break the decade-old record for starting pitchers reaching their first-year of eligibility for arbitration. As is generally the case, these pitchers are excellent extension candidates, and extensions are a big part of the reason why Dontrelle Willis’ $4.35MM arbitration salary from 2006 has stood this long as the record.

In reality, the record really should have been broken several times already. Most notably, Tim Lincecum was offered $8MM in 2010 when he requested $13MM upon exchanging figures with the Giants. He ultimately earned $9MM as part of a multi-year deal, but Willis’ record technically still stood, because Lincecum had not signed a one-year deal. Clayton Kershaw in 2012 was offered $6.5MM when requesting $10MM and ultimately signed a multi-year deal, giving him $7.75MM his first year. Just last year, one of the three pitchers projected to break Willis’ record, Lance Lynn, made $7MM as part of a multi-year deal, although it is less clear he would have earned that much had he not signed his three-year deal.

The strongest of the three cases this year is that of the reigning American League Cy Young Award winner, Dallas Keuchel. He went 20-8 in 2015 with a 2.48 in 232 innings. The only other two platform-year Cy Young winners in recent history have been Lincecum and Kershaw, but both of them clearly had stronger careers than Keuchel before winning their Cy Young Awards. Lincecum had a 2.90 career ERA and Kershaw’s career ERA was 2.88, while Keuchel only has a 3.58 career ERA and was at 4.16 before his Cy Young season. Similarly, Lincecum was 40-17 career at the time, and Kershaw was 42-28, while Keuchel is only 41-35.

In addition to Keuchel, two other pitchers are projected to top the $4.35MM record for first-time eligible starting pitchers. Shelby Miller only went 6-17 in 2015, but his 3.02 ERA in 205 1/3 innings in his All-Star platform year, along with his 3.22 career ERA in 575 1/3 innings give him a strong projection anyway. Matt Harvey went 13-8 with a 2.71 ERA in 189 1/3 innings in his platform year, and he has a 25-18 career record with a 2.53 career ERA in 427 innings. While Keuchel is projected to earn $6.4MM, Miller is projected to earn $4.9MM, and Harvey is projected to earn $4.7MM .

Despite no hurler topping Willis’ $4.35MM record, a number of pitchers have gotten very close in recent years. Five players in the last six years have landed between $4MM and $4.35MM on one-year deals, and many more have received multi-year deals. Comparing Keuchel, Miller, and Harvey with these five hurlers, along with a few other players who fell just short of $4MM will help figure out whether our projection for these pitchers is appropriate.

Keuchel seems like a safe bet to break the $4.35MM record if he does have a one-year award or goes to a hearing. David Price, who tied Willis’ $4.35MM record, was 14-10 with a 3.09 ERA in 224 1/3 innings in his platform year, which Keuchel bested in each category. Keuchel also has the same number of wins as Price did for his career at the time (41) and a similar ERA (3.38 for Price, 3.58 for Keuchel). Strengthening Keuchel’s argument is the fact that Price had nearly 100 fewer career innings when he tied Willis’ record.

Chris Tillman, who earned $4.32MM last year, did so after a 13-6 record with 3.34 ERA in his platform year and only a 4.00 career ERA with 45 career wins. Keuchel clearly should out-earn Tillman, Price and Willis handily, although he is likely to fall short of the respective $8MM and $6.5MM figures that were offered to Kershaw and Lincecum prior to their multi-year deals. I suspect Keuchel will miss the $6.4MM projection, but could easily get close to $6MM — comfortably establishing a new record.

Shelby Miller may have a harder time hitting his projection. I suspect that the model is struggling to find pitchers with an ERA as good and with as many innings who did not have many wins. A couple of recent comparables emerge, both of which had single-digit wins in their platform year with low ERAs. Stephen Strasburg in 2014 earned $3.97MM a couple years ago after going 8-9 with a 3.00 ERA in his platform year, but his 183 innings that year are short of Miller’s 205, and Miller’s 575 career innings handily top Strasburg’s 434.

Travis Wood earned $3.9MM two years ago with a 9-12 platform year record, 200 platform year innings and 564 career innings, although his career ERA was 3.83. Miller easily bests that mark with 3.22. Their platform year ERAs were similar, however, with Wood at 3.11 and Miller at 3.02. Miller also struck out a few more hitters than Wood had. Overall, both Strasburg and Wood getting just shy of $4MM two years ago with worse pre-platform performances suggests that Miller should get over $4MM, even if his $4.9MM projection will be harder to land. Most likely, he will end up between $4MM and the $4.35MM record, unless Keuchel or Harvey re-sets the market and pushes his number upward.

It’s difficult to find comparables for Harvey, partly because of his injuries and partly because his playoff performance in 2015 could help his case. Cole Hamels’ case after his 2008 playoff success (although he was the World Series MVP) would have been a good match, even though it is stale, but he signed a multi-year deal instead. He did earn $4.35MM in a multi-year deal that could be a useful comparison. Hamels similarly did not have many platform year wins despite a strong ERA — he went 14-10 with a 3.09 ERA, which compares somewhat favorably to Harvey’s 13-8 with 2.71. Hamels did have 227 innings though, compared with Harvey’s 189. On the other hand, Harvey’s 2.53 career ERA clearly outdoes the 3.43 ERA held by Hamels at the time.

Mike Minor got a one-year deal for $3.85MM a couple years ago after going 13-9 with a 3.21 ERA in 204 2/3 innings, although his 3.90 career ERA is clearly worse than Harvey’s. However, his 507 1/3 career innings at the time exceed Harvey’s 427.

It is not too challenging to make a case that David Price’s numbers when he got $4.35MM are similar to Miller and Harvey. Both Miller and Harvey possess superior ERA marks, although they each also had fewer innings. Harvey’s record was better (13-8 versus 12-13) but Miller’s was worse (6-17). Price’s 3.38 career ERA was similar to Miller’s 3.22, but Harvey’s 2.53 is better. On the other hand, Price and Miller had matching innings totals, while Harvey was about 150 innings short.

It does not seem obvious that Harvey or Miller can top the Price/Willis record, so I suspect both of them will end up in the $4MM to $4.35MM range. Obviously, if Keuchel shatters Price’s record in advance, Harvey or Miller could have a better opportunity to top that figure themselves, but I would bet the model’s projections for this pair ultimately proves to be too high.

Photos courtesy of USA Today Sports Images.

Arbitration Breakdown: Aroldis Chapman, Mark Melancon, Kenley Jansen

By Matt Swartz | January 14, 2016 at 8:25pm CDT

As young fireballers have gotten more opportunity to close, more arbitration cases with few comparables have emerged. Last year, I wrote about such a foursome of closers who had reached second-year arbitration eligibility, and this year I am writing about two of those closers, Aroldis Chapman and Kenley Jansen, along with Mark Melancon (who I wrote about separately last year). My arbitration model projects each of these pitchers to get raises between $4MM and $4.85MM this winter, each of which would break Jim Johnson’s current record of a $3.88MM raise for a third-year eligible closer.

Depending on how different statistics are weighed, they all have a compelling case to break this record. Johnson’s $3.88MM raise came after he had a 2.49 ERA and 51 saves in 68 2/3 innings, but Johnson struck out just 41 batters that season. He also only had 72 total saves at that point in his career. Although pre-platform performances generally do not matter outside of first-time-eligible arbitration salaries, one large exception I have found is career saves for closers. It is clear that having a history of being a closer matters, which means that Chapman’s 146 career saves, Melancon’s 121 saves, and Jansen’s 142 saves will all help them have better arbitration cases than Johnson did with 72 career saves.

Melancon also had 51 platform-year saves, matching Johnson’s 51 in his platform year in 2012. Along with his 2.23 ERA in 76 2/3 innings, he should have little trouble topping Johnson’s $3.88MM raise after his 2.49 ERA in 68 2/3 innings. Melancon’s $4.6MM projected raise seems about right.

Although Chapman only had 33 platform-year saves, his 1.63 ERA and aforementioned 146 career saves have led him to get an even bigger projected raise than Melancon. His projection actually slightly exceeded the Kimbrel Rule maximum, which is why he is projected for $12.9MM instead of the $13MM figure that was actually forecast by the model. In spite of the lower platform-year save total, Chapman’s vastly superior ERA and greater bulk of career saves give fair reason to assume he will probably get a bigger raise than Melancon, whose case is a straightforward improvement over Jim Johnson’s 2013 case. Both pitchers are likely to get raises between $4MM and $4.85MM.

Kenley Jansen is projected to land a $4MM raise, which would just barely top Johnson’s record. Jansen had 36 platform-year saves, but 142 career saves, so he has fewer platform-year saves but almost double Johnson’s career saves. His platform-year ERA (2.41) is a bit better than Johnson’s was, although it came in fewer innings (52 1/3 versus 68 2/3) due to the fact that Jansen opened the season on the disabled list with a foot injury. I could see Jansen failing to make the case that he should get a larger raise than Johnson did, although if Melancon or Chapman set new records, he could easily argue that those are more applicable comparisons.

It is difficult to find pitchers other than Johnson that would apply to this trio of players. Jose Valverde had 44 platform-year saves going into his 2009 case, in which he earned $3.3MM, and he did have 142 career saves. However, his ERA was 3.38. A year prior to that, Francisco Rodriguez had a $2.95MM raise with similar numbers, but that case would be even more stale than Valverde’s. Joel Hanrahan got a $2.94MM raise with 36 saves going into his 2013 case, but he only had 96 career saves at that point. Johnson’s case against appears more applicable for all three of these closers.

Each of these three players could set the market for each other, so their raises are likely to be highly interdependent. They are also likely to set the market for future closers, now that more players will presumably reach their third year of arbitration eligibility with a career of closing behind them. I think that my model probably has appropriately guessed their salaries for 2016, but if it is wrong, it will probably be either too high on all three, or too low on all three.

Photos courtesy of USA Today Sports Images.

Arbitration Breakdown: Nolan Arenado

By Matt Swartz | January 14, 2016 at 3:07pm CDT

Over the next few weeks, I will be discussing some of the higher profile upcoming arbitration cases. I will 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.

Nolan Arenado broke out offensively in 2015 with 42 home runs, 130 runs batted in and a .287 batting average to go along with his third Gold Glove Award. Arenado was not a prolific power hitter before this year, so he only has 70 career home runs, including this year’s 42. This jump in power in his third year in the league is unique and makes it harder to find appropriate comparables for him when building an arbitration case. Our model has him at $6.6MM, but I could easily see this being either a big miss or a big win for the model.

It has been eight years since the last time a hitter entered his first year of arbitration after clubbing at least 40 home runs in his platform year. That was when Ryan Howard beat the Phillies in an arbitration hearing to earn $10MM. However, Howard also had been a power hitter for over two seasons beforehand and had 129 career home runs, nearly twice as many as Arenado brings to the table. It seems very unlikely that Arenado could get $10MM.

Another case that is old enough that it might not be applicable is Ryan Ludwick from 2009, although his numbers are at least closer to Arenado in that he had a huge jump in power in his platform season. Ludwick’s 37 homers in his platform season were five fewer than Arenado his this season, but the two had identical marks of 28 homers combined in their careers prior their platform arbitration year. Ludwick also had a lower career batting average, 34 fewer career RBIs and 17 fewer RBIs in his platform season, although he did post a higher average in his platform (.299). All that said, Arenado should surpass Ludwick’s $3.7MM by a substantial margin.

Another thing that makes Arenado unique is his defense. No player in my dataset, which goes back nine years, has had three Gold Gloves before reaching arbitration eligibility. Only Matt Wieters had two, and he was a catcher. Wieters did earn $5.5MM, and while he’s a totally different position than Arenado at third base, the concept that he had such a high salary with one fewer gold glove and worse power numbers (23 HR, 83 RBI platform year; 65 and 249 career), could help Arenado argue that he deserves more. However, it is rare that a catcher would be a comparable player for a third baseman.

Few other players seem like reasonable comparables. Chris Carter hit .227 with 37 home runs and 88 RBIs in his platform year in 2014, and had a career average of .222 with 85 home runs and 216 RBIs. Carter got $4.175MM. Other than career home runs, Arenado clearly has bested Carter on all of these fronts. Pedro Alvarez had very similar numbers the year before that (.233/36/100 platform, .235/86/268 career) and got $4.25MM, making that $4.175-4.25MM range seem like something of a floor in Arenado’s case.

How much higher than $4.25MM we would expect Arenado to go is tricky. Dan Uggla got $5.35MM in 2009, with a worse platform year (.260/32/92) but decent career numbers (.262/90/270). However, the age of that case makes it a potentially stale comparison. Giancarlo Stanton had only 24 platform year home runs when he got $6.5MM, but he had 117 career home runs at that point. Mark Trumbo had 34 platform year home runs, but 95 career home runs, although his batting average was just .234 in his platform year. None of these players can boast the defense that Arenado can, either.

Another factor that could play into Arenado’s case is where Manny Machado lands. Machado is similar to Arenado in that he had an explosion of power in his platform year, hits for average, and plays third base very well. Both of these players are likely to earn similar amounts, although Arenado led the league in home runs and runs batted in, plus he has three Gold Gloves, which should give him a leg up on Machado. Both players will pay careful attention to where the other guy considers signing. Ultimately, I suspect both will fall short of their projected salaries (Machado’s projected $5.9MM is $700K less than Arenado’s $6.6MM projection). However, if one player does indeed reach his projection (which is certainly possible), the other is likely to have a better chance to do so as well.

Photo courtesy of USA Today Sports Images.

Arbitration Breakdown: Manny Machado

By Matt Swartz | January 13, 2016 at 7:56am CDT

Manny Machado has reached arbitration eligibility at the young age of 23, and has already put up solid numbers in his career, including a breakout year in 2015. Machado hit .286 this past year, which is not all that much better than the .278 career mark he had going in, but his 35 home runs more than doubled his career high. After Machado’s 51 doubles in 2013 suggested he would eventually show more power than the 14 home runs that accompanied them, injuries in 2014 limited him to 354 PA. As a result, Machado’s pre-platform performance and overall career numbers are not as strong as his platform year, which makes him somewhat of a tricky case. Few comparables cases present themselves, so although his $5.9 million projected salary seems plausible, it could easily miss by a lot.

Machado’s strong defense also makes his case trickier as well. Although my model has repeatedly shown that defense does not consistently affect arbitration cases, many of the hitters who could be considered comparables for Machado were far worse fielders, and this could certainly help him earn more than them. Just because the model does not prove the importance of any specific defensive statistic, that does not mean that defense never enters into a case—we know from firsthand reports that it does. Machado’s relatively low number of RBIs for a guy who hit 35 home runs also makes his case unique as well.

Perhaps the best comparable could be Chris Davis’ case three years ago, although nearly everything about Davis’ case is slightly worse. Davis hit .270 with 33 home runs and 85 RBIs, which is a near match of Machado’s .286/35/86 in his platform year. Davis also did not have many home runs pre-platform, so his career 77 home runs at the time are not much different than Machado’s 68. However, Davis’ career average of .258 is way below Machado’s .281. Davis also plays an easier defensive position than Machado. However, the Orioles could certainly try to argue that Machado should not out-earn Davis’ $3.3 million award by too much.

Although it was seven years ago, Ryan Ludwick’s case looks very similar to Machado’s when Ludwick earned $3.7 million in 2009. He hit .299/37/113 in his platform year and had .273/65/209 career numbers, and although Ludwick’s platform numbers were slightly better, Machado’s career .281/65/215 is extremely similar. The Orioles could try to argue that a little salary inflation on Ludwick’s $3.7 million would put Machado between $4 and $5 million.

If Machado wants to argue for a salary closer to his $5.9 million projection, one potential comparable that Machado could consider is Dan Uggla, who had 32 home runs and 92 RBIs in his platform year before reaching arbitration eligibility, and who received $5.3 million. However, this was back in 2009 and cases that old are rarely used. Uggla also only hit .260, although he did have 90 career home runs, far exceeding Machado’s 68.

Another possibility Machado could use to try to push his salary closer to his projection, who is more recent than Uggla, is Giancarlo Stanton’s case just two years ago. Although Machado could be a similar match in terms of stardom, Stanton’s injuries kept him to 504 PA in his platform year and only 24 home runs, while he hit .249. He did have 117 career home runs though. While he played a different position, Stanton could be considered a comparable. He earned $6.5 million in 2014. Like with Uggla, the difficulty for Machado if he tries to argue for Stanton as a comparable is that both Uggla and Stanton had many more career home runs than Machado does.

Other potential comparables that Machado could use are Mark Trumbo, Chris Carter, and Pedro Alvarez, who all reached their first year of arbitration eligibility in the last couple years and earned $4.8, $4.175, and $4.25 million. They each hit between 34 and 37 home runs and between 88 to 100 RBIs in their platform year. Although they had more career home runs than Machado, ranging from 85 to 95 between them, their batting averages are much worse than Machado’s. They each hit between .227 and .233 in their platform year and between .222 and .250 in their careers. Machado could make the case that he had similar power to them, but a better average, so he deserves to have somewhere above $5 million.

It is difficult to find obvious cases where Machado exceeds his $5.9 million projection. There are a number of players with higher salaries who had similar platform years, but more home runs, while there are a couple of players who earned less money with career numbers that look similar to Machado, but whose cases are weaker in one way or another. Machado has a better batting average and defense than just about all of these players, including the players with more career home runs. However, I think Machado is probably likely to under-earn his projection.

A potential wild card that could come into play is a similar player who is also reaching his first year of eligibility this year, Nolan Arenado. With a similar breakout performance in 2015 along with strong defense at the same position, Arenado could easily help or hurt Machado’s case for arbitration this year if he reaches an agreement first.

Arbitration Breakdown: Josh Donaldson

By Matt Swartz | January 7, 2016 at 8:48am CDT

The reigning Most Valuable Player of the American League enters his second year of arbitration eligibility due for a healthy raise on the $4.3MM he earned in his award-winning season. Josh Donaldson hit .297 with 41 home runs and 123 runs batted in 711 plate appearances, with an All-Star appearance and a Silver Slugger Award to add to his MVP honors.

It was the third baseman’s first year with the Blue Jays after a solid career in Oakland, and he certainly made a great impression on his new employers. Now, they will have to pay up in his second year of arbitration. Our model and several knowledgeable sources have confirmed that after the first year of arbitration eligibility, most players’ cases are treated as raises based almost exclusively on the previous year’s statistics. This helps explain why the model projects that Donaldson will receive a $7.7MM raise to a total of $12MM, which would be a record raise for a second-time eligible player.

The model’s projection of a record raise seems appropriate. The current record belongs to Chris Davis in 2014, who did not win an MVP Award when received a $7.05MM raise. Davis did out-homer Donaldson, 53 to 42, and had 138 RBIs — 15 more than Donaldson — as well. But, Donaldson had a higher average, .297 versus .286, and played a harder defensive position (third base versus first base) and is known for his excellent defense. While defensive performance usually does not matter much in arbitration cases (other than position played), I believe that Donaldson should be able to use his defense and his hardware to argue that he should have a bigger raise than Davis did– probably something in line with the $12MM projection, I would guess.

The last hitter to enter his second year of arbitration eligibility after winning an MVP Award was five years ago, when Josh Hamilton earned a $5.5MM raise. Hamilton had hit .359 with 32 home runs and 100 RBIs, but in only 571 plate appearances. Donaldson’s 140 extra trips to the plate with nine more home runs and 23 more runs knocked in should help him argue for a much larger raise than Hamilton received on the heels of his MVP season in 2010. Even if Donaldson cannot effectively argue that his raise should be larger than Davis’ due to the power gap, he should have less trouble arguing that he is deserving of a bigger raise than Hamilton received five years ago.

Few other players seem likely to make better arbitration cases for Donaldson than Hamilton and Davis. As a result, I think the case will likely come down to an argument about whether Donaldson should get something like a $6MM raise to top Hamilton by a decent margin, or whether Donaldson should get a $7.5MM raise to set a new record beyond Davis. It’s unlikely that Donaldson out-earned the $12MM salary I have projected for him, but I think it is more likely than not that he is close to this range. If he cannot argue that his case is stronger than Davis, though, he might end up around $10.3MM — a hefty raise, to be sure, but a fair margin shy of the current record increase that our model currently projects.

Photo courtesy of USA Today Sports Images.

Arbitration Breakdown: Tyson Ross

By Matt Swartz | January 6, 2016 at 7:52pm CDT

Tyson Ross enters his third year of arbitration eligibility coming off a very strong performance but a weak win-loss record which, while not indicative of his actual talent and performance, still holds weight in the arbitration process. Ross finished below .500 with a 10-12 record, although he had a 3.26 ERA in 196 innings and struck out 212 hitters. The strong performance combined with his poor record have given our model some trouble this year, and I believe that the $4.75MM raise it projects him to get to reach $10MM for 2016 is probably too high. However, I do still think that Ross is due for a large raise.

One of the benefits of using a quantitative model to project arbitration salaries is that it enables us to get reasonably accurate estimates for players with atypical numbers. Few pitchers with ERAs as low as Ross have had losing records, and fewer still have been held to only 10 wins. However, the model still had some trouble with Ross this year. So, let’s examine a few pitchers that stand out as reasonable statistical comparables but got raises less than Ross’ projected $4.75MM.

Last year, Jeff Samardzija had a losing record of 7-13 despite a fantastic 2.99 ERA in 219 2/3 innings, ultimately resulting in a $4.46MM raise. Although he had 10 fewer strikeouts overall than Ross and obviously had three fewer victories, his ERA and innings were much better, and I suspect it would be tough to argue that Ross should get a raise $300K larger than the one awarded to Samardzija. If those three victories loom important, it’s conceivable that Ross will in fact hit his projection, but other players suggest more downside is possible.

Two other recent pitchers had exactly 10 wins in their third year of arbitration eligibility and also had about as many innings. In 2012, Matt Garza went 10-10 with a 3.32 ERA 197 strikeouts in 198 innings. He received a $3.55MM raise. Although Ross had two more losses, his case looks similar otherwise. More recently, David Price in 2014 had a 10-8 record with a 3.33 ERA in 186 2/3 innings, but he only struck out 151 hitters. Price had generally similar numbers to Garza but with fewer strikeouts, resulting in a raise of $3.89MM. Price’s similar numbers and larger raise suggest that a panel would agree that the market has shifted, making the Garza result stale. As a result, Ross could argue that Price’s $3.89MM raise a couple of years ago should be a floor, considering Ross’ similar ERA and innings total but vastly superior strikeouts numbers.

Digging further yet, Justin Masterson could also be a plausible ceiling. His 14-10 record clearly topped Ross’ 10-12 record, while his 3.45 ERA was similar to Ross’ 3.26. Masterson had 193 innings and 195 strikeouts, which are not that much less than Ross’ 196 and 212. As a result, the extra wins could suggest Masterson’s $4.07MM raise might be a ceiling for Ross.

Putting these together, it seems clear that the range of potential raises for Ross is probably around $3.9MM to $4.45MM, which would put him between $9.15MM and $9.7MM in 2016. While this is not appreciably less than his $10MM salary projection, it does appear that guessing low on this is the safer bet.

Photo courtesy of USA Today Sports Images.

Arbitration Breakdown: Jake Arrieta

By Matt Swartz | January 4, 2016 at 12:42pm CDT

Over the next few weeks, I will be discussing some of the high-profile upcoming arbitration cases. I will rely partly on my arbitration model developed exclusively for MLB Trade Rumors, but I will also break out some interesting comparables and determine where the model might be wrong.

Jake Arrieta enters his second year of arbitration coming off a Cy Young Award and is due to get a large raise from his 2015 salary of $3.63MM. Our model technically has him projected to receive $10.9MM next season — a $7.27MM raise — but due to our “Kimbrel Rule,” this has been revised down to $10.4MM. The Kimbrel Rule states that no player can receive a raise more than $1MM larger than the current record raise for a player in his service class. The rule was named after Craig Kimbrel a couple of years ago when his track record entering arbitration so far outdid potential comparables that we did not believe the result the model produced. Given that there are generally limits to the extent by which players break existing arbitration records, we have adjusted the model to reflect this and come up with a number of around $1MM.

Arrieta’s case is a good application of the Kimbrel Rule, considering the fact that no player in recent years has matched Arrieta’s achievements heading into his second year of arbitration eligibility. The only recent player to win a Cy Young in Arrieta’s service class was David Price three years ago, who went 20-5 with a 2.56 ERA. Comparatively, Arrieta won a couple of extra games and recorded a far superior ERA: he was 22-6 with a 1.77 ERA. Additionally, Arrieta’s 229 innings and 236 strikeouts surpassed Price’s respective totals of 211 and 205 by a significant margin. Price received a $5.76MM raise, so the Kimbrel Rule gives Arrieta projected $6.76MM raise — good for a $10.4MM salary projected for 2016.

Another potential comparable that could come up in a hearing is Felix Hernandez’s 2010 season. Although Hernandez ultimately signed a multi-year deal, he initially exchanged figures with the Mariners after going 19-5 with a 2.49 ERA. The Mariners offered a $3.4MM raise, while he asked for a $7.7MM raise. Since Price ended up roughly between these two numbers three years later and had won a Cy Young, though, it would be tough for the Cubs to argue that the Hernandez case is more applicable than the case of Price. Hernandez did have the lowest ERA of any pitcher entering his second year of arbitration eligibility in recent seasons, however, but even this was nearly three quarters of a run greater than Arrieta’s 1.77 mark.

Although Price did not and Arrieta has not yet, pitchers get multi-year deals in most cases like these. The downside risk of injury for a pitcher usually encourages them to hedge and cash in on their success, and the risk for the team to have to bid against other teams in the free agent market encourages them to cut a deal as well. As a result, it is difficult to find many elite pitchers who go year-to-year in arbitration. Price was the only pitcher in recent years entering his second year of arbitration eligibility as a 20-game winner, in addition to being the only Cy Young winner. However, Arrieta’s far superior ERA makes Price a weak potential comparable, certainly more of a floor than a ceiling.

If Arrieta does not sign a multi-year deal, he is likely to set a record for second-year arbitration-eligible raises for starting pitchers that will set the baseline going forward. Where he lands will be an excellent test of the Kimbrel Rule, since he perfectly fits the example of pitchers who outperformed their service class in recent years on all arbitration-relevant statistics.

Photo courtesy of USA Today Sports Images.

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