Free agent rankings hurt middle relievers

Open Thread: Accessing RAB
The last Yankee days of Shelley Duncan

After looking at the free agent class of setup men, last weekend, I thought that “the ideal solution is for the guys already on the roster…to step up and take the late innings.” I based that conclusion mainly on the strength of the middle relievers on the market. The only attractive name is Rafael Betancourt, who will command a multi-year contract. Signing this type of pitcher just doesn’t seem to be the Yankees M.O. While I still stand by the guys already in the system, there is one aspect of the argument I left out, and which should solidify the Yankees position as non-buyers of free agent relievers: draft pick compensation.

To acquire Betancourt, the Yankees would not only have to offer a multi-year contract, but they’d have to forfeit their first round draft pick to the Rockies. That pick, No. 30, certainly has value to the Yankees. There’s an outside chance they can recover a first round pick if they offer arbitration to Johnny Damon and he signs elsewhere, but an arbitration offer in this case is no guarantee. Even if the Yankees did offer him arbitration and he declined, the market for his services would be depressed, because a team signing him would then have to forfeit their first round pick to the Yankees.

Of course, if Betancourt is worth more to the Yankees than the value of that first round pick, they’d consider signing him. But what is the value of that pick? It’s very difficult to say, because at this point we haven’t a clue who will fall to the No. 30 spot. After that, we have no idea if this draftee will pan out. Still, Sky Andrecheck examines the value of a first round pick.

The value depends on exactly where the pick lies. Since compensation rules protect the first 15 picks of the draft, the Cubs, at No. 16, have the most valuable pick, valued at $4 million. The Brewers, who pick 15th, would lose their second round pick by signing a Type A free agent, which would be somewhere around the 60th overall, depending on the size of the supplemental round. That pick is worth an estimated $2.5 million. The Yankees’ No. 30 pick would be valued somewhere between $3 and $3.5 million.

For deals like Mark Teixeira‘s eight-year, $180 million, the value of the compensation pick isn’t much of a concern. It’s just the cost of doing business. CC Sabathia‘s and A.J. Burnett‘s contracts cost even less, as they cost the Yankees their second and third round picks, valued far, far less than the first round pick. Even if those deals would have cost a first round pick, it shouldn’t have deterred the Yankees. This becomes a concern, however, when signing a player to a lesser contract.

The problem isn’t just with Betancourt. The Elias rankings simply label too many middle relievers as Type A. Andrecheck explains:

The reason is that players are ranked within various positional groups, and relief pitchers have their own group. The problem with this, of course, is that unlike, say, shortstops or first basemen, most relief pitchers have relatively low value. Of relievers, only a small fraction are high-impact players such as stud closers. Therefore, when Elias rates the top 20 percent of relievers as Type A free agents, it ends up including some very mediocre pitchers. As a result, 10 out of the 23 Type A free agents are relievers, including immortals such as Oliver and Hawkins. Such players have no business being classified in the same category as Holliday or Bay, and the fact that they’re overrated by the rankings can really hurt them.

Last season we saw Juan Cruz, who pitched well in 2008, go through the winter months with few teams interested in him. Because he was a Type A free agent and had declined the Diamondbacks’ offer of arbitration, few teams were willing to pay both with money and with a draft pick. The situation got so desperate for Cruz that in late February, the Diamondbacks and Twins discussed an unprecedented sign and trade deal. Thankfully, that never came true.

I doubt many free agent relievers want to go through this again over the winter. Therefore, if Type A free agents like Darren Oliver, Kevin Gregg, Jose Valverde, and Betancourt receive arbitration offers, they might just accept. Oliver accepted last year, making his Angels return quick and painless. Still, teams like the Astros might not be so inclined to take back Valverde at an arbitration salary, and therefore might decline to offer him arbitration. That changes the landscape of the free agent setup man/closer class.

Situations like this highlight the absurdity of the free agent compensation system. It’s an anachronism, and the players would do well to get it out of the CBA in the next round of labor negotiations. I totally agree with Tango: “t doesn’t exist in other sports for ‘free’ agents, and it would not exist in MLB if we started from scratch.” I also agree to glove slap Tommy for the pointer.

Open Thread: Accessing RAB
The last Yankee days of Shelley Duncan
  • radnom

    Eh. It doesn’t exist in other sports, but the other major sports have a salary cap.

    I think its good that they tried to institute a system based purely on stats and not subjective analysis (we all see how well that works out for post-season awards).

    The thing is, the way things are calculated right now, non-closers get jobbed. If they fix that, I wouldn’t have a problem with the system as a whole. Its not perfect, but I think its a matter of tweaking rather than scrapping.

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  • The Artist

    The only attractive name is Rafael Betancourt, who will command a multi-year contract.

    Mike Gonzalez and Rafael Santana don’t do it or you, Joe? Both are still relatively young (32/30), have outstanding SO rates, Soriano’s BB/9 is excellent while Gonzalez’s is acceptable. Gonzalez is another much-needed lefty who could reduce Coke’s role to where it belongs.

    Both are Type A’s and I would LOVE to sign them, the biggest question for me would be whether or not they would accept a setup role. Gonzalez probably would, since his role was mixed with the Braves. I’m not sure about Soriano.

    • The Artist

      If you want to tell me “We have Marte” on Gonzalez, look at what Marte has done with the Yanks. His rates are OK, but he’s 35, was hurt both years with the team and last year he barely pitched.

      NYY (2 yrs)
      W-L 2-6
      ERA 7.11

    • Slugger27

      i think the whole point of the post was about middle relievers…. soriano and gonzalez are both closers (well gonzalez is always going back and forth) so i dont think he included those names with the statement “the only attractive one….”

      the rankings dont hurt closers as much, because theyre usually much better and in much higher demand… but for a standard middle reliever (again, soriano and gonzalez dont really qualify as middle relievers) betancourt really is the only attractive one, and because hes a type a, he wont get as much interest, and thats a shame

  • The Artist

    Another thing to consider about Elias free agent compensation is this. If you signed Pitcher X with the 30th pick, and after 3 years in your farm system he turned into a solid reliever, you’d be happy. If he was hurt after 3-4 years with the team and/or lost his effectiveness, you wouldn’t be all that surprised.

    Given the attrition rates on pitchers (especially draftees) it’s tough to go nuts about losing a draft pick when you sign a proven MLB reliever for multiple years. I know MLB relievers can be up and down as well, but that applies every bit as much to home grown relievers as it does FA’s, if not more. Will anyone be shocked if Phil Coke pitches his way off the Yanks and is DFA’d next season? Not me. Yet if Gonzalez or Soriano bombed out here (far less likely) they would still have value on the trade market. All of this should be factored in.

    Draft pick compensation for pitchers doesn’t bother me. Pitchers get hurt so often whether they’re home grown or not that rolling the dice on a draftee makes even less sense. I value filling that need with a proven MLB player more than the prospect Yanks are a win now team, this is one of the times when that changes how you approach things. The only real argument I can see is the money you lost, and for the Yanks that’s no big deal.

    • The Honorable Congressman Mondesi

      “I know MLB relievers can be up and down as well, but that applies every bit as much to home grown relievers as it does FA’s, if not more. Will anyone be shocked if Phil Coke pitches his way off the Yanks and is DFA’d next season?”

      I think you’re overreaching a bit with this argument. You’re implying in your argument that both drafted-relievers and free agent relievers are volatile, so why not just sign the free agent reliever, but that’s not an accurate depiction of the choice between a draft-pick and a free agent reliever, I think you’re setting up a false either/or. The Yankees do not draft relievers in the first round, they draft guys they hope will become regulars as position players and starting pitchers. There’s a certain level of satisfaction even if a first-round starting pitcher makes it as a reliever, but that’s not the happy conclusion to the story as much as it is a decent fall-back option.

      Phil Coke was not a first round draft pick who made MLB as a reliever 3 years after being drafted, per your references. Phil Coke was drafted in the 26th round and spent almost 6 full seasons in the minors before making his late-season debut with the MLB club. If anything, referring to Phil Coke hurts your argument.

      The Yankees are a win-now team, but I think they’ve shown pretty clearly in the last few years under Cashman’s control that they’re also a team that’s cognizant of the long-term and is planning for long-term success. A major part of that planning takes the form of an improved player development system that provides high-level, cheap talent to the MLB club. This not only guards against the club skewing too old and forcing the Yanks to lock into too many bad contracts but also helps them target and sign the big free agents they want the most – the CCs, AJs and Teixeiras of the world (by freeing up some money since the young players are cheap). It seems like the opposite of their M.O. to go and sign a middle reliever in exchange for their first round draft pick (and their second round pick, if they take your advice and sign both of them).

  • Januz

    The entire ranking system should be scrapped. One example is giving John Lackey amd Darren Oliver a ranking of A. Except for the fact they pitch for the Angels, no one in their right mind can equate the two. Even the compensation system itself is unfair (For example: Because the Yankees signed Teixeira, who was ranked ahead of Sabathia, Milwaukee failed to get a first rounder for a guy who is clearly in the top ten at his position). There is little doubt in my mind, that getting Tex for essentially a THIRD-ROUNDER, (As opposed to waiting a year, and signing Matt Holliday (Who would have cost a first rounder) played a role in Cashman’s thinking (I bet even Scott Boras would admit that Tex and Holliday are not worth the same, when placed in the context of losing a THIRD rounder as opposed to a FIRST rounder)) (Keep in mind, this year’s first and second were already gone for Sabathia and Burnett). In the end, this decision quite likely led to Championship # 27.
    Baseball is finally going to a free-market system, with laws of supply and demand taking over instead of artificial limitations, which is why you have hundreds of free agents this year (This is what Charlie Finley favored thirty years ago, and was condemned over). Oddly enough, this is EXACTLY what the players DON’T wamt (Marvin Miller himself said that). Which is why they are charging “Collusion”. What will save the owners this time, is the team everyone loves to hate… the YANKEES, who spent almost $500m on players. A reasonable argument can be made that if they spent so much, they were colluding with no one.
    A system where everyone is free to sign, and receive what the market will bear, is much better than a system where a Darrin Oliver is considered “ELITE”, and is punished for it.

  • toad

    Another interesting thing is the sandwich pick. So the Yankees sign Sabathia, Burnett , and Teixeira, and the Brewers, Jays, and Angels get sandwich picks. Everyone else’s picks, staring in the 2nd round, are three notches worse than otherwise.

    Last year there were seventeen sandwich picks. That seems to make difference. At what point in the draft does quality drop off so sharply that any further picks are simply speculation, or minor league fodder?