Arbitration Roundup

MLB's arbitration process just wrapped up one of the busier offseasons in years, and the owners continued their dominance. Out of a total 112 players eligible for arbitration, the largest amount since 1993, 48 failed to sign contracts with their ballclubs prior to the deadline. Only eight of those players went to the arbitrator's table and just two of them, Ryan Howard and Oliver Perez, were awarded their requested salaries.

Some players gained more than others, which raises the question: How do the arbitrators' decisions fit in with market values?

Because of the difficulty in comparing across positions, we will look to win shares for a baseline:


*"Winners" and "Losers" indicates whether the
player won or lost their arbitration claim*

Howard is the clear-cut champion here, receiving a massive bump up from last year's $900,000 to $10 million, the highest amount ever awarded to a first-time eligible player. What exactly is Philly getting for their $10m? In 2007, Howard hit .268/.392/.584 with 47 bombs and 136 RBI and is just one year removed from swatting his way to the MLB home run title in 2006. It's hard to deny his tremendous value to this team, despite flirting with 200 strikeouts every season, especially considering he hit to a clip of .260/.413/.630(!) in September, when Philly made their exciting push to the playoffs.

Yet Howard's 26 win shares seem a bargain compared to K-Rod's 12 WS for the same salary. Granted, K-Rod is clearly one of the most consistent closers in baseball, with an 89.8% save percentage since 2005, slightly edging Trevor Hoffman (89.7%) and Billy Wagner (89.6%) over that same time span. Only Mariano Rivera has a higher closing rate, with 90.7%. Nevertheless, is a closer worth the same price as a superstar slugger? The Angels are paying more than twice as much per win share for their All-Star closer, which is another symptom of big-money clubs drastically overpaying for closers.

Jose Valverde was even more dominant in '07, notching the same amount of win shares, an MLB-leading 47 saves, and a 2.66 ERA, yet his market value is less than half of K-Rod's. Houston is getting great value for their new closer, who dominated hitters in Arizona with a BAA of .196, plus the club will no longer have to worry about Brad Lidge's visions of a towering Pujols homer that has yet to land. Compare his $4.7m salary to the ridiculous $11.5m paid by Cincinnati for Francisco Cordero (79.8% save pct.) and it's easy to see Valverde is a bargain.

Another area we see some disparity is in starting pitching. Chien-Ming Wang, the Yankees' most consistent starter, gets a huge bump up from his $489,500 in 2007 to $4m, bringing his value to $250K per win share. Not too shabby for an opening day starter with about 200 innings and 19 wins in each of his last two seasons. Shouldn't the Yankees really be paying this guy, considering he's been the only reliable part of their shaky rotation?

Perez, on the other hand, was awarded $6.5m, despite having just one good year since 2004. It's curious that a starter with a 5.02 ERA and a losing record over the past three years gets awarded $2.5m more than Wang, who is better in just about every statistic. The discrepancy can only be explained by MLB service, as Perez has been in the league for three more years. Nevertheless, we can expect to see a big payday for Wang once he reaches free agency.

All in all, the arbitrators' decisions are fairly consistent with clubs' spending tendencies in the market, namely, overpaying closers and sporadic valuation for starters. It begs the question of what factors and statistics the arbitrators consider relevant, especially with the proliferation of sabermetrics in regard to the economic aspects of the game. Value is somewhat easier to define for some players, but agents will need to find new methods of doing so if they want to take down the owners in the future.

Welcome to the site

Before we get cracking with some real posts, I thought I should do a quick introductory post. As you can see on the mission statement to the right, our goal is to provide you with unbiased baseball commentary. Matt and I will strictly try and keep our own personal biases out of our writing, as that is our first priority.

Here is a little background on us for you. We are both fans of smaller market teams( Rays and Marlins), so we have seen our fair share of bias in the media. If I see Clemens on TV one more time, I will most likely purge...but hey, at least I wouldn't have perjured. We are both graduate students at the University of Florida, and together we coach a local middle school baseball team. Often times we find ourselves completely opposing the others point of view, and we think that is something that will make this blog unique.

There are many plans for this site, including the following: Weekly Power Rankings(once the season begins), Transaction Analysis, Prospect Lists, Weekly Podcasts, and much, much more. We hope you enjoy our new site.