Matt Swartz | MLB Trade Rumors

Arbitration Breakdown: Josh Harrison

By Matt Swartz | December 14, 2014 at 10:19pm 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.

Josh Harrison will enter his first year of arbitration this winter after having a great year. From 2011 to 2013, Harrison had irregular playing time and bounced between the minors or majors, but in 2014 he firmly cemented his starter status with a .315 average and 58 extra-base hits. Harrison had a .347 OBP after failing to crack .290 in his previous three seasons, and slugged .490. Although his high OBP, 38 doubles and 7 triples made him a tremendously valuable 4.9 WAR player in 2014, they unfortunately (for him, at least) are not the kind of contributions awarded generously through the arbitration process.

Harrison had just 13 home runs, along with only 52 RBIs. The limited runs batted in are not surprising given that he hit out of the leadoff spot the majority of the time, but leadoff hitters usually offset some of their lack of power numbers with stolen bases when they go to arbitration. Harrison had 18 stolen bases, which is solid but not elite. In Harrison’s case, the value he added in 2014 does not typically get rewarded in arbitration. Harrison also loses out relative to other players because he only had 550 PA in his platform season. Playing time is perhaps the most crucial characteristic of a good arbitration case, and Harrison loses out to players who have more PA.

On the other hand, Harrison does benefit from the fact that arbitration rewards a strong platform season far more than performance in recent seasons. In his previous three seasons, he had only 575 PA combined, with just 7 home runs, 46 RBIs, and 13 stolen bases. And with only a .250 average in his pre-platform seasons, Harrison hurts his case, but far less than if he had struggled to hit safely in his platform year.

As a result of this, the model projects him to earn $2.2 million for 2015 and I do not think the model is far off in this one. Combining the peculiarity of the pairing of his strong platform season and his weak pre-platform years, the high average with lack of major power or stolen bases out of the leadoff spot, and his low playing time totals, it is difficult to find comparables for Harrison, but as we discuss some options below, the $2.2 million estimate starts to look pretty appropriate.

Looking for comparables, there were three key features that I searched for first. One was having between 400 and 600 PA in his platform season, so that the player was a starter but did not get too much playing time. I also initially looked for players who hit .300 since that is such a strong part of Harrison’s case, but who had less than 20 home runs, since power would have really helped his case. That left two players in the last five years.

Nyjer Morgan’s 2012 case is a pretty strong one, and he earned $2.35MM. He hit .304 with 4 home runs and 37 RBIs, and stole 13 bases over 498 PA. So he had less power and plate appearances than Harrison in his platform year, but was otherwise similar. Morgan did have 1403 PA in his pre-platform years, more than double Harrison’s 575 PA. Morgan also hit .283 in his pre-platform years, also beating Harrison’s .250 average handily.

Rajai Davis’ 2010 case is a little old to be used a typical arbitration case but also looks similar despite only getting $1.35MM. He hit .305 with 3 home runs and 48 home runs, and actually stole 41 bases, all with 432 PA. His .256 average and 462 PA pre-platform do look a lot more like Harrison, though. Even still, that case looks pretty out of touch with more recent numbers.

Expanding the group of potential comparables by looking for guys who hit between .290 and .300 in their platform year adds a couple names. David Murphy in 2011 got $2.4MM for a .291 average, 12 home runs, 65 RBI, and 14 steals in 467 PA in his platform year, and 1085 pre-platform PA in which hit .278, with 35 home runs and 147 RBI, along with 16 stolen bases. Tyler Colvin’s 2013 case is especially similar, and he got $2.275MM. Colvin hit .290 with 18 home runs and 72 RBI, along with 7 steals, although he only got 446 PA. In his pre-platform years, he had 636 PA and hit .215 with 26 home runs and 78 RBI, adding in six stolen bases.

The main issue with this group of four guys is that none of them had 500 PA, let alone 550 like Harrison. Eric Hosmer in 2014 could perhaps be a solid comparable for his platform year, with a .302 average, 17 home runs, 79 RBI, and 11 stolen bases. But Hosmer’s pre-platform years sum to a much loftier line than Harrison’s. He had 1161 PA, again about twice Harrison’s total, and he also hit 33 home runs and 138 RBI, far more than Harrison’s seven home runs and 46 RBI. Hosmer’s $3.6MM salary seems pretty unattainable for Harrison. Austin Jackson and Billy Butler both earned $3.5MM with similar lines to Hosmer, and both seem unlikely matches for Harrison because of their far greater pre-platform playing time.

Sometimes in arbitration cases, it is useful not just to look for comparable players, but to sandwich a player between a ceiling and a floor player. The ceiling player would clearly have superior numbers and should have a salary above the player in question, while the floor player would have inferior numbers and a low salary.

Alejandro de Aza’s 2013 arbitration case netted him $2.075MM, which seems like a reasonable floor for Harrison. He had a similar number of PA, 585, but hit just .281 and only had 9 home runs and 50 RBI, although he did steal 26 bags. His pre-platform years are worse, with only 388 PA to Harrison’s 575, and only four home runs and 36 RBI, both less than Harrison’s seven and 46, and with a similar number of stolen bases. De Aza did hit .280 in his pre-platform years, but that difference is not as large as the platform year batting average advantage that Harrison enjoys. As a result, it is difficult to see Harrison getting less than $2.075MM.

Jay Bruce looks like a ceiling. He had 573 PA going into his 2011 case, and he hit 25 home runs with 70 RBI. Bruce did have a .281 average, which is less than Harrison’s .315, but it seems unlikely that Harrison’s batting average could be more important than his lack of relative power. Bruce also had 839 PA pre-platform, and although he hit just .240, he had 43 home runs and 110 RBI. The fact that Bruce went into arbitration with 68 career home runs, more than triple Harrison’s 20, makes him a ceiling. Harrison is unlikely to match Bruce’s $2.792MM salary.

So it seems likely that Harrison will fall somewhere between $2.075MM and $2.792MM, and probably closer to $2.075MM. Tyler Colvin’s 2013 earnings of $2.275MM seem like the best comparison, which further cements Harrison around that range. I could see Harrison getting somewhere in between my $2.2MM estimate and maybe $2.5MM, but it will be hard for Harrison to go much past that point.

Arbitration Breakdown: Rick Porcello

By Matt Swartz | December 12, 2014 at 11:24pm CDT

Rick Porcello enters his fourth and final arbitration year coming off of a career year — and heading to a new team. With a 3.43 ERA, he bested his career ERA by over a run, and he had personal records with 15 wins and 204 2/3 innings too. Porcello had never had an ERA better than 3.96—and that was his rookie year—and he had gotten 14 wins a couple times, although not since 2011. Porcello had also never thrown more than 182 innings, yet he beat that handily this year. After establishing himself as a slightly below average starter whose best characteristic was that he was durable, Porcello emerged as an important contributor in 2014.

Those three key statistics for which Porcello had a career record in 2014 (ERA, wins, innings) are by far the most important ones for starting pitchers in arbitration. Furthermore, in general only the most recent season counts towards a player’s arbitration raise once they have reached their second year of eligibility or later. The previous years’ performances only really matter in as much as they affect the salary base from which the player will earn a raise. As a result, Porcello is likely to get a healthy raise from his $8.5MM salary in 2014, and my model projects his raise to be $3.7MM, putting him at $12.2MM. By looking at other comparables, this looks like a reasonable estimate.

Shaun Marcum in 2012 received a $3.30MM raise after going 13-7 with a 3.54 ERA in 200.2 innings. Although strikeouts do appear to have some effect on starting pitchers’ arbitration cases, and Marcum had 158 to Porcello’s 129, the rest of Marcum’s case seems to be slightly worse across the board. His ERA is barely higher, his innings are barely lower, yet he won two fewer games. As a result, Marcum is likely to be seen as floor for Porcello. This means that Porcello is likely to be able to argue that any agreement should give him a raise of more than the $3.3MM than Marcum received.

A possible ceiling for Porcello could be Justin Masterson’s $4.07MM raise last year. Masteron had a 14-10 record, so he did win one fewer game than Porcello, and his 3.45 ERA was similar. Masterson also had 193 innings, which is less than Porcello’s 204.2. However, all of those numbers are similar and Masterson had 195 strikeouts, beating Porcello by 69. If strikeouts are given any real weight in Porcello’s process (which does not always seem to be the case), they are likely to make Masterson look like a ceiling because of the similarity of his case otherwise. However, if they are not considered strongly, then Masterson would look more like an even comparable for Porcello.

Another possible comparable could be Jason Vargas from 2013, who got a $3.65MM raise—just $50K less than my model predicts. Vargas went 14-11 with a 3.85 ERA, so he had one fewer win and an ERA 0.42 higher. But Vargas had 217.1 innings, topping Masterson by 12.2 innings, and he struck out twelve more batters. The case is definitely similar, with the extra win and better ERA not necessarily giving a better case because of the 12.2 fewer innings and twelve fewer strikeouts. As a result, the $3.65MM seems likely to be close to what Porcello earns.

I suspect that the model will nail this case based on these three comparable pitchers. This would put Porcello at $12.2MM in his last year before free agency.

Arbitration Breakdown: Mark Melancon

By Matt Swartz | December 3, 2014 at 9:36am CDT

Mark Melancon has mostly bounced back and forth between closing and set-up roles over the last few years, but after starting 2014 as a set-up man, he finally put together a 30-save season. Since Melancon also had 14 holds accumulated early in the season, he became a rare player who had both solid set-up numbers and solid closing numbers in the same season. Saves and holds are highly dependent on factors outside of a pitcher’s control — mainly when he gets used — but they both factor into arbitration prices. Melancon also was great at performing well independent of context. With a 1.90 ERA in 71 innings, his run prevention skill adds to his arbitration case this winter, too.

One of my goals for the arbitration model that I always strive for is to mimic real life to the extent possible. However, since the model is an algorithm, it cannot mimic the process perfectly, and I think the model really overstated Melancon this year. The model itself projected a $5MM raise from $2.6MM to $7.6MM, but the application of “The Kimbrel Rule,” which states that a player cannot beat the previous record for his role and service class by more than $1MM, keeps Melancon at a $4.275MM raise (topping Francisco Rodriguez’s $3.275MM raise in 2007 as an Arb 2 reliever), which would put him at $6.875MM. Even still, it is hard to make the case that Melancon will actually be earning that much next season.

The reason that the model is so bullish on Melancon is because he has impressive numbers in three different important categories: ERA, saves, and holds. The model knows that relievers who excel in a couple of these categories earn much more than those who only thrive in one, and it has inferred that Melancon’s success should translate to a record-breaking number. He is getting credit for being a full-time closer—because many solid closers do not get enough opportunities to rack up 33 saves in the first place—and for being a semi-regular set-up man with 14 holds. Many set-up men who share the role do not even top 14 holds in a season. On top of that, his 1.90 ERA puts him in elite status.

Of course, despite my belief that the model exaggerated Melancon’s likely salary, it was difficult to find many comparables. I tried to look for anyone in recent history who had at least 25 saves and at least 10 holds in his second year of arbitration eligibility. The only such pitcher that existed was Tyler Clippard, who had 32 holds and 13 saves two years ago, but Clippard had a 3.71 ERA, almost double that of Melancon. It seems likely that Melancon has a strong enough case to crush Clippard’s $2.35MM raise. Clippard also did not have the same history of saves that is often important in arbitration cases. He had only one career save before his 2012 season, but Melancon had already accumulated 47 saves before 2014.

I tried to look for pitchers who had just 20 saves and five holds, and only one extra pitcher emerged. Juan Carlos Oviedo had 30 saves and 5 holds four years ago, but he also had a pedestrian 3.46 ERA. His $1.65MM raise is very unlikely to look appropriate for Melancon. Going back further than five years added a couple more hybrids to the bunch—Brad Lidge in 2007 and Kevin Gregg in 2008. They got raises under $2MM as well, and neither had an amazing ERA or even had 10 holds. Looking for hybrid closer/set-up man types was not producing guys who had great seasons. Instead, it was finding guys with talent but who allowed a few too many runs.

That led me to abandon the holds criteria altogether. If we start with the idea that Melancon is a closer, and then give him a little bump for his set-up numbers, we may get somewhere more quickly. How many closers had 30 saves and ERAs under 2.00 like Melancon over the last few years? A very stale case, Francisco Rodriguez’s $3.275MM raise in 2007, arose as a possibility. He had 47 saves along with 1.73 ERA. Although that case is typically too old to be considered, it could serve as a clue. If Melancon’s 14 holds had all been saves, his case would look very similar. However, with eight years of salary inflation on top of that, Melancon could be in a position to get a more notable raise.

Jonathan Papelbon got a $3.1MM raise in his second year of arbitration eligibility in 2010 with a 1.85 ERA and 38 saves. Of course, he had 113 career saves going into his platform year, so he may have a slight advantage over Melacon’s 47. Joel Hanrahan in 2012 got a $2.7MM raise after a 1.83 ERA season in which he accumulated 40 saves. That could also serve as a solid comparable for Melancon, but without the set-up credentials. Hanrahan only had 20 pre-platform saves. No one else even managed a 2.50 ERA, so the other historical raises for second-year arbitration eligible relievers are less applicable. However, it is worth noting that several guys did get raises over $2.5MM.

Putting all of this together, Melancon’s case does seem genuinely unique. Hanrahan’s $2.7MM and Papelbon’s $3.1MM both look like reasonable comparables, with a few more saves and far fewer holds. I could see Melancon being able to successfully argue past K-Rod’s $3.275MM raise from eight years ago, but that could be challenging because of the 47 saves that K-Rod had in his platform season. On the other hand, an argument of Papelbon/Hanrahan’s raises near $3MM, plus a set-up man bonus of $500K or so, could put Melancon past K-Rod. My best guess is that Melancon gets a raise of about $3-3.5MM, good for a $5.6-6.1MM salary in 2015. That is nowhere near where the model puts him, but it seems more realistic in light of the relevant comparables that could be drawn upon.

Photo courtesy of USA Today Sports Images.

Arbitration Breakdown: Jeff Samardzija

By Matt Swartz | December 2, 2014 at 10:21am CDT

Jeff Samardzija enters his third year of arbitration eligibility this winter following an excellent season in which he struggled to get run support. Samardzija threw a total of 219 2/3 innings with a 2.99 ERA and 202 strikeouts, but the Cubs and Athletics each failed to score runs behind him, and he finished with a 7-13 record (and remember that for all the problems with the Win statistic, it’s still a notable component of arbitration valuation).

It is rare that a player has a sub-3.00 ERA in over 200 innings yet fails to win more than seven games. However, that type of odd case is what my arbitration model is designed to handle. By putting the right weight on the right statistics, the model strives to match players like Samardzija up with the comparable players that are likely to come up in a potential arbitration hearing. The model has projected a $3.85MM raise for Samardzija in 2015 to take him from a $5.35MM salary up to a $9.2MM salary.

Trying to find actual comparables for Samardzija was tricky. There were no Arb 3 starters with an ERA under 3.50 who had single-digit wins at all in the last eight years, at least among those with 180 innings pitched. There were also no pitchers under a 3.30 ERA with under 13 wins either with that number of innings either. No one with an ERA under 3.50 with less than 13 wins had more than 210 innings. However, three pitchers were close to these criteria.

David Price got a $3.89MM raise last year with a 10-8 record and a 3.33 ERA in 186 2/3 innings. Homer Bailey had an 11-12 record with a 3.49 ERA in 209 innings last year too, which got him a $3.65MM raise. A couple years earlier, Matt Garza had a 10-10 record with a 3.32 ERA in 198 innings, which got him a $3.55MM raise. Each of these three guys had more wins than Samardzija’s seven, but they also had fewer innings and higher ERAs. Samardzija also passed 200 strikeouts, something that none of those three did (though Bailey had 199 and Garza had 197). With the extra innings and lower ERA, it seems likely that Samardzija could pass this group. One potential roadblock is that Price’s track record and the fact that he was over .500.

In cases like these, it can be helpful to try to establish a floor and a ceiling player. In other words, players that are likely worse than/better than the player in question, whose salaries are close enough together that you can find a solid range for the player.

One reasonable floor for Samardzija could be Brandon McCarthy from 2012. He had just a 9-9 record with a 3.32 ERA in 170 2/3 innings and struck out only 123 batters. Although he did have two more wins that Samardzija, it’s unlikely that a 9-9 record bests a 7-13 record by enough to offset the 49 extra innings and 79 extra strikeouts. McCarthy got a $3.28MM raise that year.

A potential ceiling for Samardzija could be a pitcher with a sub-3 ERA with a similar number of innings, but double digit wins. However, finding such players was tricky. Max Scherzer went 21-3 with a 2.90 ERA in 214.1 innings last year, which is obviously better. It did net him an $8.8MM raise. Carlos Zambrano way back in 2007 got a $5.9MM raise after a 16-7 season with a 3.41 ERA in 214 innings. But his case was obviously better than Samardzija’s, so he does not look like a useful comparable.

Justin Masterson’s case last year could be appropriate to establish a ceiling, but he falls short of Samardzija’s case in a few ways. He had a 14-10 record with a 3.45 ERA in 193 innings, and he struck out 195 batters. Masterson got a $4.07MM raise. Doubling up Samardzija’s win total is probably enough to offset to extra innings and lower ERA after Samardzija, but he doesn’t quite work like a typical ceiling.

Using McCarthy and Masterson as a floor and a ceiling leaves a pretty wide window between a $3.2MM and $4.07MM raise for Samardzija to fit in. All three of the aforementioned comparables (Price, Bailey, Garza) fell in that window. In the end, there’s a strong case for Samardzija to get a raise somewhere in the $3.55MM to $3.89MM raise range from those three players, and the $3.85MM that the model projected fits in there as well. It’s possible that Samardzija’s record hurts him enough that he ends up with a good deal less, or that his ERA and innings place him above this group, but a safe midpoint is probably the model’s projection.

Photo courtesy of USA Today Sports Images.

Arbitration Breakdown: Todd Frazier

By Matt Swartz | November 27, 2014 at 9:57pm CDT

Todd Frazier enters his first year of arbitration this winter coming off a career year. In 660 PA, Frazier hit .273, stole 20 bases, smashed 29 home runs and collected 80 RBIs. The Reds’ third baseman has some solid pre-platform year numbers as well, having already accumulated 44 home runs and 155 RBIs before 2014, as well as 10 steals and a .249 average in 1186 PA. Several players have entered arbitration with similar numbers in recent years, but Frazier has somewhat of a leg up on many of them. As a result, my arbitration model projects him to get $4.6MM this winter. While I think that is more likely to be high than low, I do not think he is likely to miss this mark by much.

One promising comparable for Frazier could be Jason Heyward in 2013. He earned $3.65MM after 650 PA with 27 home runs and 21 stolen bases, along with 82 RBI and a .269 average. Basically, his platform season is a dead ringer for Frazier’s but Frazier’s pre-platform power numbers are better, as Heyward hit 32 homers (12 less than Frazier) and 114 RBIs (41 less than Frazier). Both had similar averages in their pre-platform years (Heyward hit .255), and Heyward stole 20 bases to Frazier’s ten. Frazier also had amassed 1186 pre-platform PA, to Heyward’s 1077. Since Heyward is so similar to Frazier in his platform year, yet Frazier clearly has him beat in his pre-platform years, it seems likely that Frazier will beat Heyward’s $3.65MM mark. The fact that salaries have grown over the last couple years also factors into Frazier’s higher projected salary.

CAA Sports, Frazier’s agency, could try to argue for Dan Uggla on the high side. Uggla earned $5.35MM in his first year of arbitration, although that was six years ago and thus less likely to be used as a comparable. Furthermore, Uggla was a second baseman, and Frazier is more apt to be compared to outfielders or other corner infielders. This being said, Uggla’s case is somewhat similar — he had 32 home runs and 92 RBI in 2008, so his power numbers bested Frazier’s 29 and 80 in his platform year, and he also had better numbers in his pre-platform years (58 HR and 178 RBI) than Frazier (44 HR and 155 RBI). Frazier had a slightly better platform-year average (.273 versus .260) though his .249 average over his pre-platform years was lower than Uggla’s .263 mark. Overall, Uggla’s $5.35MM number seems like the absolute ceiling of what Frazier can expect to earn.

A couple other players between Heyward’s $3.65MM and Uggla’s $5.35MM are possible comparables for Frazier as well. Pedro Alvarez agreed to a $4.25MM deal last year after having better power numbers, but a lower average and fewer steals than Frazier both in his platform and pre-platform years. Alvarez had 36 HR and 100 RBI in his platform year and 50 HR and 168 RBI in his pre-platform years. Alvarez’s averages, however, in his platform (.233) and pre-platform years (.237) fall short of Frazier’s .273 and .249, and he only had two steals both in his platform and pre-platform years, falling well short of Frazier’s 20 and 10 steals in each respective period. Overall, depending on how power gets treated relative to average and steals, Alvarez could be seen as a superior or inferior case to Frazier.

Another possibility is comparing Frazier to Mark Trumbo, who earned $4.8MM last season. Trumbo had a .234 average, but 34 HR and 100 RBI with five stolen bases in his platform year, and he hit .259 with 61 home runs and 184 RBIs with 13 stolen bases in his pre-platform years. Trumbo has better numbers across the board in his pre-platform years, but his platform year again asks the question of whether power or batting average and stolen bases are more important. Given all the factors that could eliminate Uggla — 2B vs. 3B, 2008 vs. 2014, etc. — from being a comparable to Frazier, Trumbo’s $4.8MM will in all likelihood be seen as the true ceiling for what Frazier can earn in arbitration.

My best guess is that Alvarez is seen as the most appropriate comparable for Frazier. Alvarez has something of the edge in power numbers while Frazier has the edge in the batting average/stolen base numbers, though there isn’t really a huge gap in any of the categories. Frazier could potentially earn a slight increase representing inflation over Alvarez if they are seen as similar, however. While the model projection of $4.6 is probably too high, I think the Reds third baseman will get relatively close to that number.

Arbitration Breakdown: Greg Holland, Aroldis Chapman, Kenley Jansen, Steve Cishek

By Matt Swartz | November 27, 2014 at 10:23am CDT

Four relievers enter their second year of arbitration eligibility this winter, with a chance to collectively make a huge impact on that market. Each will influence each other’s salary as they did last year, and will influence many players that follow in the coming years. Greg Holland, Aroldis Chapman, Kenley Jansen, and Steve Cishek each became full-time closers during their second full seasons in 2012, and have dominated hitters since.

Becoming a closer so early was a rare feat just a few years ago. Teams used to give three-year or four-year deals worth upwards of $10 million per year for an “established” closer. Players like Francisco Cordero, Joe Nathan, Mariano Rivera, Brad Lidge, Francisco Rodriguez, Rafael Soriano, and Jonathan Papelbon signed such deals that began between 2008 and 2012, and few of those worked out. As I wrote several years ago, teams were paying far more per WAR for relievers than any other position on the diamond by far. Obviously the measurement of WAR is tricky, but regardless of how it is measured, it was clear that allocating $10 million to a guy to throw 60 innings three years down the line was not working out for many teams.

Fortunately, something happened that gave a number of teams the opportunity to change their ways. An onslaught of talented young pitchers emerged onto the scene with incredible fastballs, and many were given the opportunity to be closers quickly. Craig Kimbrel is actually from the same service class as these four players but he signed a four-year deal last winter. However, that makes five teams who quickly established a young arm in the closing position and had some success with it. Of course, now that these guys have some experience, the price has gone up.

Holland had the best year of the foursome, with a 1.44 ERA and 46 saves. Jansen was no slouch with a 2.12 ERA and 44 saves, Chapman’s ERA was just 2.00 and he had 36 saves, while Cishek had 39 saves but a more pedestrian 3.17 ERA. As a result, the model predicted a $4.62MM raise for Holland, $3.5MM for Jansen, $3.1MM for Cishek, and $3.05MM for Chapman. The model weighs heavily on saves since the market for relievers has done so in recent years, so it has unsurprisingly ranked their raises by saves. Holland’s raise is actually subject to “The Kimbrel Rule,” which states that a player cannot beat the record for his role and service time by more than $1MM, so his projected raise is limited to $4.275MM (topping Francisco Rodriguez’s $3.275MM raise from 2007 by $1MM), which gives him a $8.95MM projected salary.

What makes these guys even more unique is the fact that so few teams have gone year-to-year in arbitration with their closers. Jason Motte, Jonathan Broxton, and Carlos Marmol have each gotten two-year or three-year deals in recent years. Obviously Kimbrel’s four-year deal meets those criteria as well.

In fact, the only closer with 30 saves in his platform season, 45 saves in his pre-platform seasons, and an ERA under 3.50 in the last five years who did get a one-year deal during his second year of arbitration was Jonathan Papelbon. He got a $3.1MM raise from the Red Sox in 2010 after putting together 38 saves and a 1.85 ERA. Before him, Francisco Rodriguez’s 2007 raise of $3.275MM is a possible clue (1.73 ERA and 47 saves), as could be Jose Valverde’s $2.7MM raise in 2008 (2.66 ERA, 47 saves), or Chad Cordero’s $2.05MM raise in 2008 (3.36 ERA, 37 saves). However, those last three cases are very old and are less likely to be considered in an arbitration case.

All four of the closers in question will basically have Jonathan Papelbon’s $3.1MM raise and whatever each other get as a reference. I think that there is a strong possibility that Chapman and Cishek do get right around their projected numbers, which are within $50K of Papelbon’s raise. I could see Chapman’s reputation pushing him a little higher, though. And I’m also inclined to agree with the model that Kenley Jansen and Greg Holland, with similar ERA’s and more saves than Papelbon, plus a few years of salary inflation behind their cases, are likely to top Papelbon’s raise. Jansen’s $3.5MM raise seems about right, and while I think the model’s estimate for Holland of a $4.62MM raise strikes me as unlikely, a Kimbrel rule-adjusted $4.275MM raise sounds reasonable.

If I had to guess, I think that these four guys will follow the model well. However, I think that they will either all collectively make the model look good, or the first guy will make it look bad, and the following three guys to sign will make it look worse as they affect each other’s cases. Without many historical comparables that look anything like this foursome, they will all become comparables for each other. Unless their teams follow the Braves and ink a multi-year deal, I would not be surprised if these four guys affect each other’s 2016 salaries as well.

Arbitration Breakdown: Bailey and Masterson

By Matt Swartz | November 26, 2013 at 8:30am CDT

Over the next few months, 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.

Both Justin Masterson (pictured) and Homer Bailey enter their third year of arbitration with relatively similar credentials this year, and both are projected to get very similar raises around $4MM. Since both players are not first-time eligible players, the rules of arbitration generally dictate that pre-platform year performances are not very importance. Rather, the current salaries on top of which they will receive raises suffice as summaries of their pre-platform year performance.

Masterson and Bailey had pretty similar pre-platform salaries too: $5.35MM for Bailey and $5.6875MM for Masterson. In 2013, Masterson went 14-10 with a 3.45 ERA in 193 innings with 195 strikeouts, while Bailey went 11-12 with a 3.49 ERA in 209 innings with 199 strikeouts. Obviously the ERA and strikeout numbers are almost identical, and the model seems to think that Masteron’s three extra wins only help him a tiny bit more than Bailey’s 16 extra innings. Playing time is extremely important in arbitration hearings, so it is not too surprising that they are still seen as similar by the model. At the same time, Masterson will definitely get some benefit from his wins. We project him to get a $4.0125MM raise as compared with Bailey’s $3.95MM raise, leaving them with $9.7MM and $9.3MM projected salaries respectively.

The comparable starting pitchers in the last few years seem to reinforce these raise approximations. In the last seven years, I looked for third-time arbitration eligible starting pitchers with ERAs in the 3.00-4.00 range, between 10-20 wins, and within 175-225 innings, and found nine guys who met those criteria. They received raises ranging from $2.5-5.9MM, which is obviously a pretty big window, but other than Zambrano’s $5.9MM raise in 2007 (which is largely viewed as an anomaly), the raises fall in the $2.5MM-$4.075MM range. Of course, the lowest raise in there was Wandy Rodriguez’s $2.5MM, but that came as part of a multi-year deal in which he was initially offered $3MM, so maybe the real range is from Kevin Correia’s $2.85MM in 2010 to Oliver Perez’s $4.075MM in 2008. In general, these seven guys are all pretty similar to Masterson and Bailey but I suspect that both inflation and slightly better performances will push them both to the high end of this spectrum.

The limitation on Bailey’s performance is definitely his win total. With just 11 wins in 2013, his team’s poor run support will cost him. A few pitchers in the aforementioned group seem to meet these criteria pretty well. One is Matt Garza, who in 2012 was coming off a 10-10 record to go with a 3.32 ERA in 198 innings. He also had 197 strikeouts, very similar to Bailey’s 199. Of course Bailey had a slightly worse ERA at 3.45, but he also had eleven extra innings pitched. Given the similarity of their numbers but with the extra win and eleven innings, it seems likely that Bailey could argue that Garza’s $3.55MM raise could be a floor for his 2014 raise.

Another possibility that Bailey could use to justify a raise closer to $4MM is the $4.3MM raise that Anibal Sanchez won in a hearing in 2012. He had even fewer wins than Bailey that year, amassing only an 8-9 record, and his 3.67 ERA was worse than Bailey’s too. He did have 202 strikeouts, but had under 200 innings (196 1/3, to be exact) which could give Bailey a leg up on him. Arbitration cases that go to hearings are often tough to use in newer hearings because obviously $4.3MM was seen by the Marlins at the time as too high and chances are a settlement would have come in below $4.3MM (the Marlins offered Sanchez a $3.2MM raise). But nonetheless, both Sanchez and Garza could help Bailey argue for the $3.95MM raise that I’m projecting for him.

This is not very different from the $4.0125MM that I have down for Masterson, even though Masterson had 14 wins. To try to find a good set of comparables for Masterson, I honed the win range to 13-15 wins, and looked for guys with ERAs in the 3.00-4.00 range who also had 175-225 innings. Perez got a $4.075MM raise from the Mets in 2008 when he won his arbitration hearing. Like Sanchez’s raise, Perez’s raise needs to be taken with a grain of salt because it was the result of a hearing, not a settlement, but the fact that Perez’s 15-10 record and 3.56 ERA looks so similar to Masterson’s 14-10 ERA with his 3.45 ERA, that it does warrant a comparison. Perez also only had 177 innings, compared with Masterson’s 193.

Another good, more recent comparable for Masterson is Jason Vargas' raise last year. Vargas got a $3.65MM raise after going 14-11 with a 3.85 ERA in 217 1/3 innings. Of course, Vargas only had 141 strikeouts which puts him well below Masterson’s 195. The extra innings and equal number of wins are a good starting point for the Indians to try to argue that Masterson shouldn’t top the $3.65MM number. Masterson would be better off trying to argue similarity to Sanchez and Perez, whose raises exceeded $4MM after winning cases, but it remains to be seen how much weight those will carry.

Overall, it’s not hard to see that both pitchers will fall reasonably close to a $4MM raise. Some of this is going to come down to how inflation is treated this year, and that is always a bit of a wild card. I suspect that if I’m off in my projections, I’m probably more like to be a few hundred thousand low for both pitchers than high, but if either one of these pitchers settles first and beats $4MM, I suspect the second player to settle to use the first as justification for a larger raise himself.

Photo courtesy of USA Today Sports Images.

Arbitration Breakdown: Jim Johnson

By Matt Swartz | November 19, 2013 at 10:40am CDT

Despite a slow start due to an awful May, Jim Johnson put together another big year as the Orioles' closer. He led the league in saves for the second consecutive season, again hitting the 50-save mark. Entering his fourth year of arbitration, Johnson looks poised to get a big raise on his $6.5MM salary, and my arbitration salary model projects him at $10.8MM for a solid $4.3MM raise. Last year, Johnson set the record for a closer with his service time during his third year through the arbitration process, earning a $3.875MM raise on top of his $2.625MM salary.

It is difficult to find comparable pitchers for Johnson, because It is very rare for closers to go year-to-year for as long as he has. In fact, in the last seven years (for which I have collected arbitration data), there have only been 20 relievers to reach arbitration eligibility with at least 5 years and 120 days of service time. Johnson has 5 years and 165 days of service time entering this offseason.

The largest raise that any reliever has gotten in this service class for the last seven years was in 2012 when Brandon League got a $2.75MM raise. He only had 37 platform-year saves, far fewer than Johnson’s 50. League also had a 2.79 ERA, which is roughly in line with Johnson’s 2.94 this past season. Since their other numbers are similar, it would seem that League is the absolute floor for what Johnson’s raise could be.

In general, raises through arbitration do not seem to vary much with performance before the platform year for players who are re-entering arbitration. First-time eligibles do get paid for career performances too, but second-time, third-time, and fourth-time eligibles generally get paid based on platform seasons. However, this is not entirely the rule for closers. Pre-platform saves seems to be correlated with arbitration outcomes even after accounting for other factors. I suspect that this may have more to do with reputational effects rather than directly considering the save numbers of past seasons, but either way, this gives Johnson a substantial advantage over League, who only had eight pre-platform saves going into his 2012 arbitration discussion. Johnson had 72 already, thanks to his 51-save 2012. This suggests that Johnson is likely to crush the previous record.

Few other pitchers in Johnson’s service class are even all that close. The next biggest raise went to Santiago Casilla in 2013, who only had 25 saves in his platform season and 12 saves beforehand, and no one else even topped a $2MM raise or 20 saves. League would appear to be the only reliever in his fourth year of eligibility who could even be in the discussion.

Dipping into a slightly larger group and looking at anyone who was entering arbitration eligibility for their third or fourth time, there still aren’t many comparable pitchers. Ironically, the most similar player in the last service class was Johnson himself, who broke the third-time eligible reliever record with his $3.875MM raise last year. His 51 saves and 2.49 ERA in 2012 are actually pretty comparable to his 50 saves and 2.94 ERA in 2013. I doubt that Johnson in a previous service class would make logical sense as a comparable for Johnson this time around, but it does show that raises in the $4MM region are pretty reasonable to expect.

Heath Bell got a $3.5MM raise in his third year of arbitration eligibility (with 5 years and 99 days of service time) back in 2011, when he was coming off 47 saves and a 1.93 ERA. Johnson could argue that is comparable but inferior, and with three years of inflation, something north of $4MM is reasonable.

Jose Valverde could come up as well—with 5 years of service time and 44 platform-year saves, he got a $3.3MM raise back in 2009. Francisco Rodriguez had 40 saves when he entered arbitration with 5 years of 15 days of service time the year before that, and he got a $2.95MM raise.

Johnson’s case is unique because of the lack of comparables, but it seems like a very reasonable argument for “significantly north of $3MM” could be made. While I am not sure he will necessarily hit the $4.3MM mark, I suspect he will get close and the Orioles should definitely budget for somewhere around $10-11MM of salary for their closer in 2014.

Photo courtesy of USA Today Sports Images.

Arbitration Breakdown: David Price

By Matt Swartz | November 14, 2013 at 8:02am CDT

After earning $10.1125MM this past season, David Price already seems to be pretty close to uncharted territory for his third year of arbitration eligibility. Given his career accomplishments, including a Cy Young Award, three All-Star appearances, a 71-39 record in the toughest division in baseball, as well as a 3.19 career ERA in 973 innings, Price seems to be a rare breed.

However, one of the most glaring results that I noticed when putting together my arbitration model for MLB Trade Rumors was that career statistics just don’t matter much for players who reach arbitration unless it’s their first time. Actually—that’s a bit of an overstatement. You always earn more if you have better career statistics before your platform year, but the only channel through which that happens is by affecting your current year salary. For Price, this is why his arbitration case will come down to the question of, “How much of a raise on top of his current $10.1125 million salary will he earn?” However, the size of his raise will have almost nothing to do with his statistics prior to 2013.

His 2013 statistics were decent, but not spectacular compared with previous years. He won only 10 games, his lowest total in four years, and he failed to reach 200 innings for the first time in the last four years as well. Innings and wins are the most important statistics in arbitration for starting pitchers, and since Price was atypically pedestrian this year with respect to these statistics, his raise will be pedestrian as well. We have him projected at $13.1MM for 2013 and looking through comparables, this seems very likely to be near where he lands, or slightly below it.

In my first search for players with similar statistics to Price’s 10-8 record, 3.33 ERA, and 186 2/3 platform year innings, I decided to look for pitchers with between 8-12 wins, ERAs between 3.00 and 3.70, and anywhere from 175-200 innings in my database. This database includes all pitchers in Price’s service class during the previous seven years. Three names emerged as possibilities, and they seem to sandwich Price’s salary pretty well.

Anibal Sanchez went to a hearing with the Marlins in 2012 to earn a $4.3MM raise. He had only gone 8-9 with a 3.67 ERA, but he did have a few more innings than Price at 196 1/3. Sanchez also had 202 strikeouts, far more than Price’s 151. However, the combination of a mediocre record with a good ERA does make him a reasonable comparable for Price. Of course, the fact that the case went to a hearing that the player won means that the actual salary might have been an overpay, due to the Marlins’ low counter-offer of a $2.6MM raise.

Wandy Rodriguez’s $2.5MM raise in 2011 as part of a three-year deal could be a floor as well, but he had actually been offered a $3MM raise when numbers were initially submitted (and he requested a $5.25MM raise). He went 11-12 during the previous year with a 3.60 ERA, while amassing 178 strikeouts in 195 innings. Again, his numbers are very similar to Price’s.

Matt Garza got a $3.55MM raise in 2012 after going 10-10 with a 3.32 ERA in 198 innings, along with 197 strikeouts. Except for the fact that Garza came in with a higher strikeout total, he looks like a very good comparable for Price. Citing Garza may be a good way for the Rays push down Price's raise below Garza’s.

Expanding the innings criteria a little more, we can see a potential comparable in Brandon McCarthy, also in 2012. He went 9-9 with a 3.32 ERA in 170 2/3 innings with just 123 strikeouts. He got a $3.275MM raise, which might be where Price should try to aim. Another possibility for the Rays to throw into the mix is Kevin Correia, who got a $2.85MM raise in 2010. That came after he went 12-11 with a 3.91 ERA in 198 innings, with 142 strikeouts. Correia might serve as a decent option for the Rays to suggest as a comparable for Price, and may be enough to keep his raise under $3MM.

Regardless of which of these players looks like the best match for Price, it’s pretty clear that he is going to stay well within the range of a $3MM raise, which is right where the model predicts him. Although I think he may be able to push his raise up to $3.5MM, meaning that he will earn a little more than the model projects, he still represents a very knowable cost for any team looking to trade for him, which is probably where this is headed anyway.

Photo courtesy of USA Today Sports Images.

Arbitration Breakdown: Giancarlo Stanton

By Matt Swartz | November 13, 2013 at 7:50am CDT

Giancarlo Stanton has the types of skills that arbitration often rewards most, which is good news as he heads into his first year of eligibility. While players who get on base and play good defense contribute a lot of value to teams, and even get paid handsomely in free agency, they still do not get much recognition in arbitration. The rules of arbitration are not based on estimates of value, but rather on comparisons of salaries of previous players with similar performances (regardless of whether those salaries were fair or not). Stanton has the most important skill that the arbitration process values: power.

However, there is another way in which the arbitration process hurts Stanton. Although he contributes a lot of value while on the diamond, arbitration awards are based heavily on playing time, regardless of how much value was actually added above a hypothetical backup. Very good players who are often injured can get paid handsomely on the free agent market because of the value they do provide when on the field. However, arbitration panels are typically composed of labor lawyers, who see a lot of merit to the concept of “went to work every day,” so playing time is treated very differently and often treated as more important than the standings treat it.

Stanton has only played in 123 and 116 games the previous two seasons, although he did manage 150 games in 2011. As a result, he has barely cleared 500 plate appearances in each of the past two seasons. This makes predicting his salary somewhat challenging. Our arbitration salary model here at MLBTR pegs Stanton for a $4.8MM salary in 2014, but I could really see that missing in either direction because of how few comparable players there have been in recent years. Although gifted sluggers often get injured more as they age, it is not very common for players like Stanton to miss significant time early in their careers.

So, some of the more classic sluggers to go to arbitration in recent years have had considerably more plate appearances (and the counting stats that go with that). Stanton enters arbitration with 504 PA in his platform season, along with a .249 average, 24 home runs and 62 runs batted in. Prior to his platform season, he had 1498 PA and hit .270 with 93 HR and 232 RBI. Despite the 117 career home runs that Stanton has hit, he is probably going to fall short of the earnings of the three other most recent players to enter their first year of arbitration who can claim triple-digits in career home runs. These include Ryan Howard who had 129 career HR and earned $10MM, Prince Fielder who had 114 career HR and earned $7.5MM, and Miguel Cabrera who had 104 career HR and earned $7.4MM. Although Stanton’s very high service time (just missing Super-2 status last year) has led to similar cumulative career PA, he had far fewer platform-year PA (which are more important) than any of these three, who had 648, 694, and 676 PA respectively, compared with Stanton’s 504. As a result, I don’t expect that any of these three will make for good comparables in negotiations.

Instead, it might make sense to look at players who meet more Stanton-like criteria in terms of PA and HR. There have been a couple players who have fit the mold of having fewer than 600 PA, but at least 20 home runs in their platform season, as well as at least 50 home runs prior to then. One of these was Nelson Cruz in 2011, who had 445 PA, but hit 22 home runs to supplement his 55 home runs before his platform year. He earned $3.65MM, which could be a floor for Stanton, even though Cruz did hit .318, far better than Stanton’s .249.

Another possible comparable might be Carlos Quentin in 2010, who earned $3.2MM and hit only .236, while amassing 21 HR in 399 PA. Quentin only had 50 career home runs before his platform season, making him a more obvious floor than Cruz on all fronts.

Josh Hamilton could be considered a floor as well at $3.25MM, since he only had 11 home runs in his platform season, but had hit 51 leading into that year.

Another possibility is that the case may focus on pre-platform statistics. I looked for players who had hit between 10-29 home runs their platform year, but had hit 60 before their platform year. This produced only one player, Jeff Francoeur in 2009, who earned $3.375MM after struggling through a 2008 season in which he hit just .239 with 11 HR and 71 RBI. Francoeur did have 62 pre-platform HR though, which is still a far cry from Stanton’s 93. That would make a salary of $3.375MM look extremely low as well.

Between Cruz, Francoeur, Quentin, and Hamilton, we have four guys that all earned between $3.2-3.65MM and Stanton seems to have a leg up on each one of them. If nothing else, this should be able to convince all involved to see $3.65MM as a floor for Stanton, while Cabrera’s $7.4MM can serve as a ceiling. The problem is how few players seem to fit in that large window.

Few power hitters have fallen in that range. One exception is Dan Uggla, who is a second baseman, so he wouldn’t usually be used as a comparable but his low-average high-power history might make him a useful comparable. He earned $5.35MM after hitting .260 with 32 HR and 92 RBI in 2008, which followed up on a career .263 average, with 58 HR and 178 RBI prior to his platform-season. Given his 619 PA in his platform season, along with clearing 30 home runs, he might be seen as a ceiling for Stanton as well, but the fact that the projection is now five years old calls into question how useful it is or whether it would be taken seriously in negotiations.

Otherwise, it is very challenging to find good comparables for Stanton and that is why I think that he has such a tough case to guess. I do think that any offer under $4MM by the Marlins will probably be seen as too low, and any request of $7MM or more by Stanton’s team at Wasserman Media Group would be seen as overvalued. I also think that even inching up towards $6MM might be too much of a gamble as well. In the end, the model’s $4.8MM projected value doesn’t seem entirely out of whack, but if he came in closer to $4MM or $6MM, I also would not be surprised. As an added wrinkle, if Stanton does end up getting traded this offseason, and he gets traded before reaching an agreement, his future team may decide that breaking rapport with an ugly negotiation or a hearing is too risky and may offer him more money to avoid such a scenario. This may not end up happening anyway, but it shows how much of challenge it will be to guess Stanton’s 2014 salary.

Photo courtesy of USA Today Sports Images.

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