Dec
04

Contracts For Relievers: Paying For Consistency

By

Very few things in baseball receive quite as much derision as large contracts given to relievers. Relievers have come to be seen as fungible, volatile assets who are poor investments. Many view the contracts given to established closers as being entirely based on saves, a stat that is rightfully maligned and makes a poor basis for a multi-year multi-million dollar contract. However, the logic underlying these complaints has holes large enough to push Phil Hughes through, and a closer look suggests that the truly large reliever contracts may actually make a modicum of sense.

My theory is that general managers who hand relievers big money have not been looking for saves per se. Rather, they have been looking for pitchers who have provided consistent performance on a regular basis. To test this hypothesis, I decided to take a look at the largest contracts given to relievers since 2000, as well as the most consistent performers over the same time period. For the contracts, I limited my search to 3+ year contracts worth at least $7 million per season. 3+ year deals tend to reflect a level of trust by the club in the player, and $7 million struck me as a reasonable cutoff between the deals handed to top players and to those a level down on the talent chain. For measuring performance, I used a simple ERA+ and IP combination to try and isolate the most consistent performers (a search for relievers who have racked up 35+ saves on a yearly basis unearthed a similar list. Players who provide that many saves regularly tend to have strong underlying numbers, so saves can serve as a proxy for performance when addressing a multi-year sample).

Here’s the list of pitchers who had at least 3 seasons with an ERA+ of 150 or better and at least 65 innings pitched:

1 Joe Nathan
2 Billy Wagner
3 Mariano Rivera
4 Francisco Rodriguez
5 Keith Foulke
6 Mike Adams
7 Joakim Soria
8 Carlos Marmol
9 Jonathan Papelbon
10 Jonathan Broxton
11 B.J. Ryan
12 Juan Rincon
13 Brad Lidge
14 Francisco Cordero
15 LaTroy Hawkins
16 Luis Ayala
17 Eric Gagne
18 Jason Isringhausen
19 Octavio Dotel
20 Armando Benitez

It is important to note that when the search was expanded to players with at least 2 seasons of this sort of performance, an obvious drop in quality could be perceived. To my eye, 3 seasons turned out to be a very good parameter by which to evaluate consistent success. Looking at the list, Adams, Soria, and Marmol have not yet reached free agency, while Broxton, Dotel, Rincon, Gagne and Ayala all suffered injuries that hurt their performance and value before they could cash in. That leaves us with 12 pitchers relevant to our purposes.

Here is the list of relievers who have received large contracts, meaning deals for 3 or more seasons at an AAV of at least 7 million dollars (this is the list I was able to construct. It may not be complete. Please correct me if possible):

Jonathan Papelbon
Mariano Rivera
Rafael Soriano
Francisco Rodriguez
Francsico Cordero
Joe Nathan
Heath Bell
Brad Lidge
Billy Wagner
BJ Ryan
Armando Benitez
Jason Isringhausen

Soriano and Bell are the only players on the “got paid” list not on the “consistently performed” list, and Bell has two seasons of requisite performance and a third that falls just short (146 ERA+). Soriano is the only real outlier here, as he has never had a season meeting the performance criteria yet was paid like the more consistent elite performers. Conversely, Foulke and Hawkins are the only two of the 12 relevant players from the “consistently performed” list who failed to make the “got paid” list, and Foulke missed it by .25 million (3 years, 20.75 million).

Basically, when looking at the two lists, we find that the pitchers who have performed at a high level on a regular basis are the ones who are getting the big money. Now, correlation is not causation, but it does seem reasonable to say that large contracts for relievers have been largely reserved for pitchers with established levels of consistency and performance. Now, the next question to ask is whether it makes sense to be giving those pitchers large contracts. The obvious retort to this is that:

1) relievers are a volatile commodity, and
2) past performance does not guarantee future results, and
3) relievers are fungible and good relief can be acquired cheaply.

As for #1, Stephen Rhoads addressed this very issue in this space a few weeks ago:

In any walk of life, one quick way to open yourself up to embarrassment is to assume that those around you are either unable or unwilling to comprehend the complexities of your worldview, to borrow a turn of phrase from Confederacy of Dunces. I’d wager that most General Managers have a pretty good idea that relievers are volatile creatures, and that they are also aware of the failure of these relievers to live up to the contracts given to them. So, avoiding the arrogance that would suggest that they’re just irrational actors, what would drive a GM to pay a premium for a reliever? It boils down to predictability.

Paradoxically, the volatile nature of relief pitchers drives GMs to pay big money for relievers whom they don’t believe will be volatile. Thus, relievers with a long track record of health and consistently superb performance are the most likely candidates to get big money.

Essentially, reliever volatility actually makes handing big contracts to those relievers who have proven to be more of a sure thing a logical decision. As for #2 and #3, they can both be answered by the same point. While it is easy to look back at the end of a season and find relievers who provided great results for few dollars, it is much more difficult to identify those pitchers ahead of time. For every Joaquin Benoit there are 10 Buddy Carlyles and Lance Pendeltons, pitchers who are blanks in the game of reliever roulette. Additionally, while some of these large contracts have flopped, that is a risk that comes with any free agent contract. In the right context, it makes sense for clubs to take that risk rather than cross their fingers and hope to stumble upon the right reliever. Although past performance does not guarantee future results, it does make good results significantly more likely and predictable.

Relievers being fungible and volatile does not mean that their talent changes yearly. It means that in a small sample, you can often get statistical anomalies in both directions. Since relieving is by nature a small sample, there is more volatility and more risk. But if you have identified relievers who you think are more talented and more consistent, you lower that risk of volatility. There is value in that certainty, such that it makes sense to pay those relievers more than a pure talent to dollars evaluation might suggest. This added level of predictability is why general managers have been paying a premium for top relievers on the free agent market.

Categories : Analysis

25 Comments»

  1. john k says:

    Excellent article! Your conclusions make sense and go beyond the normal ranting heard around the web. What I’m not sure of is if your consistent relievers made the “got paid” list after demonstrating that consistency or if GM’s took a risk and paid up before the 3 years of 150 ERA+? Also, would like to see results during the big money period. Did they keep up the performance? Or even more specifically, how their performace rate changed relative to their past performance and compare that to how the performance of starters and postition players who got big money varied compared to their past performance. Would show who is a safer investment and by how much. Would be fun to do if I had a week with no job, family, or other committments!

    • Moshe Mandel says:

      You just pointed out a minor flaw in this that I missed. Lidge and Cordero had one of their qualifying years after the signing.As for keeping up their performance, Colin Wyers showed that a similar group had some decline in the post signing period. However, as I said, I would contend that it still makes sense to pay for slightly lesser performance than to play reliever roulette, in the right context. But good points all around, all of this bears further research and thought.

  2. Jamey says:

    It always amazes me that with how much you hear about “the closer’s mentality” & how it is a totally different thing than pitching in any other relief role teams still hand out years & closer dollars to guys to assemble a “dream bullpen” with multiple closers. Has it even come CLOSE to working for anyone? I mean has anyone had a dominant lights out bullpen consisting of 2-4 legit closers? I’d guess even the best case example would be something like Rivera-Soriano where at times it worked great. I’d count Mariano-Wetteland but at that time no one still saw him becoming the Mo we all know & love now. So I’m saying, bullpens stocked with expensive guys who have been the undisputed closer for a team before accepting a set-up role? What’s the best example.

    • Steve (different one) says:

      Milwaukee this year? What about tom Gordon?

      • Jamey says:

        Gordon was really only a closer like 3 or 4 seasons, he was always pretty much a set-up man. I wouldn’t really count The Brewers this year because they didn’t sign K-Rod to a deal, they just picked him up for the year when The Mets unloaded him. I’m talking a team with a top closer targeting another top closer in free agency & turning them into setup guys, like Yankees did with Soriano.

  3. Rich in NJ says:

    I have no problem with closers being compensated with high AAV. My problem is with length of contract.

  4. Colin says:

    The only reason Soriano didnt reach the criteria is the lack of innings pitched. He had been consistently good up until last year, so I look forward to a good season from him next year. Hopefully him returning to form will help mitigate whatever regression we see from Robertson

    • whozat says:

      Isn’t being able to take the field an important part of a player’s production? Especially for a player whose job is to be on-call in the highest leverage situations?

  5. Matt says:

    OK. So this article does a pretty good job explaining the bigger reliever contracts we’ve seen. But I wouldn’t say it speaks either way to whether or not they are justified. It may be true that front offices are willing to pay top dollar and years for these guys because of established consistency, but that doesn’t mean this is the correct way to go. There’s got to be some procedure to evaluate the performance after the deal, or this analysis is incomplete (if you are looking to combat the derision of these deals.

    It should be pretty easy to get some gauge on the performance of these guys over the contract years. Of course, the harder part is figuring out what to compare it to – a group of more inexperienced guys that the “saber” community might tell you to to throw into the closer role based on peripherals? I don’t know. Could it be that stretches of prolonged reliever dominance are so rare, that by the time a guy has “established” himself on this list with 3 good years, he is unlikely to continue it for 2 or 3 more years? I don’t know.

    • Moshe Mandel says:

      This is fair, which is why I tried to stay away from saying their decisions make perfect sense. I think the scarcity of consistent relievers warrants a premium, but Im not sure whether they are meeting that premium or paying even more than it. It isn’t an easy question and I’m not sure the answer is out there without a really intensive look at the market for relievers, the amount of times teams ‘hit’with when playing reliever roulette, and the true value of an elite reliever to different types of teams.

    • Ted Nelson says:

      Good points. For the Yankees, an extreme example, I think you just do both. They seem able and willing to afford several expensive RPs, while still spotting/developing the cheap ones to support and insure the expensive ones. That’s why I don’t understand Yankees’ fans rants and raves about relievers… Marte’s busting didn’t seem to dissuade the Feliciano signing nor take them out of the Cliff Lee hunt, nor has Feliciano apparently dissuaded interest in Gonzalez and maybe a high-priced starter like Yu or someone… I suppose you could argue that the money should be reallocated to just overwhelm and never miss out on a Cliff Lee or Yu… which has some merit but also a counter-argument against it in terms of roster balance and spreading risk.

      For the Rays, the other extreme basically, I think they’re right to mostly just swear off the expensive guys rather than pay like 25% of their payroll to one reliever.

      In the middle is where I suppose the question becomes more important, though one could still argue for a case-by-case basis approach. The expensive relievers approach would require a hybrid approach for most teams, since even the Yankees don’t have 7 $10 million guys… so it will always behoove a team to find or develop a cheap option. One can certainly argue for only dumpster diving and prospect developing, and taking an extreme approach on that side. I think that can work and is a valid strategy, but I just don’t like the ideologues who suggest it’s the only approach to take… especially when it can be taken alongside signing an expensive guy or two or three.

  6. Plank says:

    Steve Karsay comes close on both the contract and the performance leading up to the contract way back in 2002. That worked out…not so well.

  7. CJ says:

    Great analysis and research! Relievers are a frustrating puzzle in MLB, one that had yet to be solved. How can a team preferably the yanks figure out how to scout and assemble a successful bullpen? Luis Ayala, wade, rauch aceves, Benoit (before big contract) Balfour and the Kyle farnsworth are just a few examples of relievers that are discarded only to return to lock it down at affordable cost. How can this be forecast to capitalize on inconsistency vs affordability?

  8. Matt says:

    One other thing that I’ve recently tried harder to bring into my opinion on big reliever deals is the way the rest of a team’s roster is set up. Maybe the saber community is too hardcore on the issue, but I still think I’d need to be shown some compelling evidence to be convinced that its an efficient way to improve your team. Sometimes, though, a roster can be such that its just not that easy to improve in the starting 9 or the rotation. Whether its contract commitments, scarcity in the FA market, or just the fact that you have solid to good players in alot of positions, sometimes it can be tough to upgrade your team. If relief pitching provides a hole for you to fill with an elite player, so be it (even if it might be a bit of an overpay).

    But I think it should really be the last shopping item on the list (if not chronologically, at least in the planning of offseason strategy). That was my reaction to the Papelbon deal. The Phillies are the type of team for which that deal can be justified – trying to win a WS in the next two seasons and willing to pay premium on marginal improvements. But I think they had a few gaping holes that should have been addressed first. If they have earmarked money for those spots and wanted to get Papelbon with a remaining budget, I’m not going to kill them for it. They are as all in as it gets. But if it unfolds that the Pap deal prevents them from doing things that should have taken precedence (SS, OF, Hamels), then yes I think they will have overvalued established closer experience.

    I guess if you carry this logic out, teams below a certain talent level (payroll level?) should rarely be giving out big deals for relievers. You’d think they’d typically have more holes (more replacement-ish players getting time) that could be filled by adding payroll outside the pen. The question for bigger market teams with decent talent in alot of spots (and who “know” they are going to the playoffs) seems more complicated to me.

    • Moshe Mandel says:

      This is exactly what I mean by the right context. Things like window of contention, revenue, payroll, and expectation of winning all factor into areas where it makes sense to pay a premium for consistency.

    • bexarama says:

      Perfect comment. From a First Name Only Male Handle Rule too o.O

      • Matt says:

        i am unfamiliar with this First Name Only Male Handle Rule. Does that mean I’m an idiot, secretly a female, or the author of the blogpost chiming in to support himself?

    • Ted Nelson says:

      I definitely think you have a point. Just for the sake of conversation, not to disagree with you…

      I do wonder if the value of a top closer like Papelbon isn’t higher for a team that already feels like it has its playoff ticket punched. Sure, they could get a good position player with the same money who will help more over the course of a season. However, in a short series (or now in a 1 game playoff…) the closer who can appear in every game and close the door at a higher rate than average against top offensive clubs might actually have more value (I think one could at least argue, though the opposite is probably true) than the position player who gets 1 of 9 PAs and is subject to hot/cold stretches and variability. Maybe a top hitter is more likely to have an 0-5 (or otherwise inconsequential to scoring runs) night in that one game playoff compared to the average hitter than a top closer is compared to the average reliever.
      Don’t know if that’s the case… but I do think some people would argue rightly or wrongly that a closer becomes more important in the playoffs.
      I would hope the Phillies specifically at least plan to re-sign Hamels after signing Paps. Rollins I could argue for letting walk, though SS is pretty scarce.

      I tend to agree with you to prioritize $ towards “larger” roles, but I could see an argument that a team plans to fill in the other roles through prospects it already has approaching the majors and other relatively cheap means, so a truly, truly elite closer is a bigger free agent priority for them than a larger role even though they’re not good yet… maybe the Royals right now… or the Braves if they didn’t already have a really good pen. Then again either team could stick one starter from an overabundance there in the pen… or trade for a cheap young reliever with one of them. And I suppose that added fungibility–flawed starters become relievers–is a justifiable reason people can’t see paying relievers big bucks.

  9. I love this piece. It should be required reading for the Blue Jays blogging elite who have decided the Blue Jays, despite their 55m payroll, aren’t allowed to spend money on FA relievers because it’s all a waste of money.

  10. Jose M. Vazquez.. says:

    Very well elaborated article and excellent, comprehensible presentation. As a Yankee fan, I am very happy that we have had a 16 year run of almost flawless closers, and a very good supporting cast to said closers. I do not believe that any Yankee reliever has ever gotten more than 3 yrs. in length of contract. Even the great Mo had some difficulty getting 3 yrs.

    • Plank says:

      Steve Karsay got 4 years. Marte got 3 with a year 4 option.

      Almost no relievers get more than 3 years.

      • Jose M. Vazquez.. says:

        Thanks Plank. This and BJ Ryan whom I would have signed years ago if I had been the GM goes to show the volatility of relievers that Mandel espouses. If I had been the GM I would have been burned or better yet, fired for this.

  11. Gonzo says:

    I likey. I wonder if the rising costs will get more teams to try drafting potential closers. Drew Storen ain’t exactly Mike Trout, but they are hoping not to have to wade in the Paps, Bell, Madson pool for a while.

  12. Ted Nelson says:

    Great article. One of the best I have ever read on RAB. As a few other commenters–especially john k–point out there are still some unanswered questions and it’s not a game-set-match conclusion that relievers should be paid… but I think it does a very good job of exploring why teams are willing to

    It definitely drives me nuts when people assume that GMs just irrationally throw crap at the wall. I’m sure that happens sometimes, but overall I don’t think it’s the rule.

  13. Lynch says:

    Thanks for actually writing an article this weekend, since the two “weekend writers” are not up to it.

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