The Weekly Rant: Arbitration and Bullpen Construction

There has been a ton of recent discussion about teams over/undervaluing closers. Most of this comes from the high-profile bullpen additions made by the Tampa Bay Rays and the Oakland A's. Some have asked if the Rays/A's know something we don't know about relief pitching. Others have concluded that these teams were paying at or slightly below market rate for players that could readily improve their rosters.

That's a pretty reasonable conclusion to reach if you look at the acquisitions in isolation. Grant Balfour on a 2-year, $12 MM deal is rock solid with his projected WAR. Jim Johnson on a 1-year $10 MM contract in exchange for Jemile Weeks? Seems reasonable. A couple of duds for set-up men? That's what win-curve sensitive teams should do when they can't upgrade their roster easily at other positions, right?

I think all of that is logical, and in itself could explain these uncharacteristic relief expenditures. But I also think something else could be going on here. We should probably take another factor into consideration when considering these deals. Here's what Matt Swartz wrote on MLBTradeRumors about arbitration eligible relievers:

Relievers get paid by role. An elite closer with a history of saves gets paid far more than a set-up man, who gets paid far more than a middle reliever, even with similar performances. Andrew Bailey is slotted for $3.5MM this winter, but turn his 24 saves into 24 holds and he’d only get $2.1MM with the same elite ERA of 2.07. Even with his 51 career saves prior to 2011 still on his record. Take all those saves and holds away, and he’d get under $1.0M with 174 career IP of a 2.07 ERA.

According to his model (This was written in 2011, so the model has changed since then. Also, the dollar figures are a little low.), changing a pitcher's usage for one year from a closer to a set-up man could save the team $1.4 MM. Those savings would persist throughout the pitchers arbitration seasons, meaning a small role change could mean real money over the period of team control. This applies to a lesser extent to pre-arbitration eligible pitchers, whose career stats influence their salary during their first run through arbitration.

This is a definition of a market inefficiency. The arbitration process overvalues the differences in leverage between relievers. Arbitrary stats(holds and saves) largely account for the differences in salaries of relief pitchers in arbitration. Additionally, the arbitration process lags behind the market in valuing closers, meaning guys with big save numbers aren't coming at a discount through arbitration. It will take some years for the relatively diminished free agent market value of closers to trickle down and influence prices for arbitration players. Until then, elite closers will continue to make more than good starters.

So how would a team take advantage of a situation like this? The answer would be keeping the pre-arbitration pitchers and especially the arbitration eligible pitchers out of the closer role (and to a lesser extent, the set-up role). Bumping these "role-sensitive" pitchers as far down the bullpen pecking order as possible would result in the biggest cost savings.

So if there is a "proven closer" on the market for a reasonable price who is equal to or better than your best reliever, he's going to be worth significantly more than the improved performance of the bullpen. He could save the team a couple of million dollars on the team's "closer-in-waiting" arbitration eligible player in the future. And the trickle down goes all the way down the bullpen. Guys who were in the set-up role are now not getting holds. Read what Swartz says about the savings for that potential pitcher:

Tyler Clippard had 38 holds this year for the Nationals, which boosts him up to a $1.7MM salary estimate. Take away 33 of those 38 holds to make him a middle reliever, and he only projects to get $1.3MM.

And remember, these savings are basically carried over every additional time a player goes through arbitration. Depending on the service time makeup of a team's bullpen, adding a free agent closer for just one season could save the team several millions dollars each year come arbitration season. A free agent "proven set-up" man could mean a few more hundred thousand dollars in savings.

Everybody wants their team to have an awesome young pre-arbitration eligible bullpen. But that pre-arb bullpen would get very expensive, very fast. Adding a good closer through free agency could pay off even before considering marginally better performance.

Overall, I don't think the effect on other reliever's future salaries is getting enough consideration when analyzing free agent reliever deals. In fact, I think the potential cost savings in arbitration could be a driving force in bullpen construction. The Nationals signing of Rafael Soriano on a big 3-year deal makes a lot more sense when considering the cost savings on their talented young bullpen.

The other way to take advantage of this would be to extend young relievers before they rack up saves and holds. Once they are cost controlled, the team can use them however they wish without affecting future payroll. Again, the Nationals may have been ahead of the curve on this, locking up Craig Stammen for two arbitration years before last season.

Not all teams have the right pitchers to take full advantage of this market inefficiency, but generally, the interconnectedness of arbitration costs and bullpen construction needs to be examined thoroughly for any transaction.

A Statistical Dissection of the 2012 Oakland A’s: Billy Beane’s Finest Work

Billy Beane 

The Hollywood blockbuster, Moneyball, ended much like any other feel good film, as protagonist Scott Hatteberg belted a home run that sent the small market underdog Oakland A’s into the postseason. However, unlike most silver screen dramas, the story of the Oakland A’s did not end with a “happy ever after” attached at the end.

After using Billy Beane’s innovative scouting to build teams that posted above .500 records from 1999 to 2006, the A’s could not finish above that mark for the next 5 years. It seemed as though the rest of the league had caught on to the A’s strategy, and that Billy Beane had lost his touch. Using their economical advantage, combined with the sabermetric scouting originally developed by the A’s, other larger market teams seemed to once again hold a competitive advantage over Oakland.

At the onset of the 2012 baseball season, virtually all baseball fans could not imagine the Oakland A’s making much of an impact in an AL West division dominated by the superstar heavy Texas Rangers and Los Angeles of Anaheim. However, 2012 turned out to be Billy Beane’s most masterful work yet as the Oakland A’s finished 94-70, winning the division with a payroll of roughly $99 million less than Angels and $65 million less than the Rangers. So how did this happen? How did the A’s once again use undervalued talent to reach the postseason?

When opposing pitchers stared at the Oakland A’s lineup card during 2012 season, it is hard to imagine any of them shaking in fear. The A’s did not feature any hitter batting over .300 or who drove in over 85 runs, and only had three players finish with more than 20 home runs. However, the A’s use of platooning, a declining trend in Major League Baseball, to account for their deficiencies, led to the underrated effectiveness of their lineup.

At first base for example, Brandon Moss is the regular starter against right-handed pitching, while Chris Carter usually gets the start against left-handers. Moss put up stellar numbers against right handed pitching all season, hitting 19 home runs, while driving in 44 runs and slugging .643 in 207 at bats. Against lefties, Carter hit five home runs, drove in 17, while slugging .494 in 83 at bats. Another platoon employed by the A’s is at designated hitter with Johnny Gomes and Seth Smith. Smith homered 12 times while slugging .454 and having an OPS of .805 against right handers in 313 at bats. While Gomes hit 11 homers to go along with a .413 OBP and .974 OPS against left handers in 164 at bats. The A’s have also prominently used other platoons throughout the season, such as at the catcher spot with Derek Norris and George Kottaras.

While the A’s use of platooning did spark their offense, this success did not stand out in traditional statistical categories. With a batting average of .238 the A’s finished 28th in the league, leaving only two last-place teams, the Houston Astros and the Seattle Mariners, with lower marks. Even On Base Percentage, a statistic prominently featured in the original Moneyball, cannot account for their 2012 success, as their .310 OBP ranks 24th in the league.

However, what Oakland lacked in getting on base and batting average they made up for in the power game. The A’s finished 7th in the league in home runs and while their slugging percentage ranked 15th in the league, that ranking is considerably higher than expected given their lowly batting average. In the sabermetric community, Oakland’s hitters excelled, as well. The A’s ranked 10th in the league in Weighted Runs Created (wRC+), an improved version of Bill James’s original Runs Created statistic, which “attempts to quantify a player’s total value and measure it in runs.” Overall, despite a ridiculously low batting average and lack of star power, the A’s were able to produce the 14th most runs in Major League Baseball, which, with their surprisingly impressive pitching staff, proved to win a lot of ballgames.

Similar to the offense, the A’s pitching staff proved that big names are not a necessity for success. Unlike the hitters, however, more traditional metrics can be used to quantify the A’s pitching staff feats. In 2012 the A’s staff posted a 3.48 ERA, which was good for 6th best in the league to go along with 1.24 WHIP. The one anomaly was strikeouts, in which the A’s finished 26th in the league. This lack of strikeouts, however, was not truly an anomaly, but rather an indicator of a general pitching strategy employed by the A's.

The A’s finished 9th in the league in fewest walks allowed going along with having the 10th lowest walk percentage. The A’s also had the 7th highest percentage of fastballs thrown. These statistics show that A’s pitchers used the strategy of attacking the zone with fastballs and forcing contact in order to limit opposing batters. This strategy does not require having pitchers with dominant strikeout arsenals, a skill set generally more expensive to obtain.  While pitching to contact by attacking hitters with fastballs worked in 2012 for the A’s, advanced sabermetrics suggest that the success of the A’s pitchers might be somewhat attributable to luck. The A’s had the third lowest BABIP (Batting average on balls in play) in the league, the 7th highest xFIP (Expected fielding independent pitching), and the 8th highest SIERA (Skill interactive ERA). Having a low BABIP is a signal that many balls hit by opposing batters went directly to Oakland fielders. Going forward, this might not always be the case and more balls could fall in for hits. xFIP is a statistic that attempts to judge pitchers on entirely what they can control, using a combination of strikeouts, walks, hit by pitches, and “how many home runs they should have allowed” (using home run to fly ball ratios and multiplying it by fly ball rate), to try and determine how effective a pitcher is without the effect of his fielders. The higher the xFIP a team or pitcher has, the worse they were and the A’s xFIP of 4.2 is categorized as “below average” by Fangraphs.

The last sabermetric in which the A’s pitching staff failed to excel was SIERA. SIERA differs from xFIP because it places more emphasis on balls in play, using groundball and flyball rates, as well as walks and strikeouts to attempt to determine a pitchers skill. The A’s finished the year with a SIERA of 4.03, which was the 8th highest in all of baseball. So while the A’s did have one of the most effective staffs in the league according to traditional measures like ERA, advanced sabermetrics predict that the A’s success might soon run out or is unlikely to reoccur. In total, however, the A’s only allowed the 6th lowest amount of runs in the league in 2012, which along with their power and timely hitting led to winning 94 games.

The next question one must ask when dissecting the success of the 2012 Oakland A’s is, how did Billy Beane assemble this team? What changes were made from 2011 to 2012 that led to this significant increase in wins?

The only headlining acquisition was the signing of international free agent Yoenis Cespedes for a 4 year, 36 million dollar deal. Cespedes might have been an international superstar, but many in baseball circles thought that it would take some time for him to adjust to Major League pitching. Yet, the A’s Director of Baseball Operations Farhan Zaidi, felt he could be a key contributor and convinced Beane to make the investment. The 2012 season is proof that Zaini made the right judgment, as Cespedes hit .292 with 23 home runs and 82 RBI’s.

While the Cespedes deal made headlines, it was the more low key moves made by Beane that really boosted the A’s all season long. Similar to the 2002 season depicted in Moneyball, Beane was able to find value in players where other teams did not. In a deal with the Red Sox, Beane sent reliever Andrew Bailey and Ryan Sweeney to the Red Sox for inexperienced outfielder Josh Reddick and two minor leaguers. As stated earlier, Reddick exceeded everyone’s expectations by hitting 32 homers and slugging .463. Also, in a multiplayer deal with the Diamondbacks, Beane traded starter Trevor Cahill and veteran reliever Craig Breslow for rookie Jarrod Parker, reliever Ryan Cook, and Colin Cowgill. In 2012, Parker was arguably the best rookie pitcher in the American League posting 3.47 ERA in 181.1 innings, while Ryan Cook was an All-Star reliever in the set-up role with a 2.09 ERA and 42 holds.

The third trade which significantly increased the strength of the team was the deal with the Nationals, which sent Gio Gonzalez and a minor leaguer for rookie Tommy Milone, Derek Norris, Brad Peacock, and a minor leaguer. While Gonzalez won 20 games, he would have soon been a contract the A’s could not afford. The newly acquired Milone, a soft-tossing righty with an average fastball velocity of 87.7 went on to also be one of the best rookie pitchers in the American League, posting a 3.74 ERA while winning 13 games. Norris also stepped in, playing a crucial role at the catcher position as half of the platoon with George Kottaras.  All of these trades represent examples of Beane dumping established players for relatively unproven talent, yet in all three cases the unproven talent was able to significantly contribute the A's success in 2012; this is a great tribute to the effectiveness of the A's scouting department.. These three trades, along with a trade with the Rockies for Seth Smith and the signings of journeymen Jonny Gomes and Brandon Moss, are all examples of Beane’s ability to trade and acquire underutilized cheap talent.

Though the 2002 season will probably be most remembered when people look at the Billy Beane’s career as General Manager, it is the 2012 season that is by far his finest so far. Unlike 2002, in 2012, Beane did not have the luxury of marching out three all-star quality starters (Barry Zito, Mark Mulder, and Tim Hudson). Instead, in 2012, Beane not only had to piece together a lineup full of mostly unknown veterans and rookies, but he also had to construct a pitching staff of underrated parts as well.

Beane’s ability to assemble talent as well as manager Bob Melvin’s coaching staff’s ability to maximize it, through the implementation of platoons and pitching strategy, led to the 2012 Oakland A’s far exceeding anyone’s expectations and the revival of the belief in Moneyball in its original city.