Archive for Arbitration Case
As we sit and wait for the Yankees to make some kind of transaction this month (just to liven things up for cryin’ out loud, forget about strengthening the team at this point), there’s some in-house stuff to be taken care of behind the scenes. Teams and players are currently in the process of filing for arbitration, and will exchange salary figures six days from now. Brian Cashman recently told Chad Jennings that the team always looks to have a contract in place before a hearing (just like everyone else), but they’re not afraid to go to one if they feel the player is asking for unfair compensation. Chien-Ming Wang learned this the hard way back in 2008.
The Yankees have just three arbitration-eligible players this winter, and we’ve already covered Phil Hughes’ case as well as Joba Chamberlain’s. That leaves Boone Logan, who has already been usurped as the club’s primary lefty reliever by Pedro Feliciano this offseason. This is actually Logan’s second time through the arbitration process since he’s a Super Two. That just means he’s eligible for arbitration four times instead of three because he’s going to fall a few weeks short of qualifying for free agency in a couple of years. It’s just a way of making that extra three-fourths of a year of team control slightly more fair to the player. Logan pulled down $590,000 in 2011, not all that much more than the league minimum. He’ll get a decent raise this offseason after a fine second half that saw him strike out 25 batters and hold opponents to a .247 wOBA in an admitted small sample of 21.2 IP.
Remember, arbitration cases are built on old school stats that are simple for the three-person panels to understand, so that’s what we’re going to stick with here. It was real tough to find comparables for Logan, since lefty relievers come and go like buses at rush hour. I did the best I could, and here’s who I came up with…
So yeah, they aren’t perfect comparables, but that’s life. If we apply the 137.6% average raise (which is weighted by innings pitched) to Logan’s 2010 compensation, we get a projected 2011 salary of $811,840, which is still dirt cheap. Because he was so good late in the season, I’m willing to bet he gets a slightly larger raise than that, and frankly I wouldn’t be surprised if he ended up making a million bucks or so this coming summer.
Logan’s arbitration case will be little more than a nuisance to the front office given the relatively small amount of money at stake (less than one percent of the payroll even if he beats them in a hearing), but it’s a sizable raise for him. It does a good job showing you how much the arbitration process keeps salaries down though, because he’s going to earn about a quarter of what Feliciano will for similar work and what could easily be similar performance.
All told, the Yankees are looking at about $7M in 2011 payroll obligation through their three arbitration cases this winter, about $5.5M more than what Hughes, Joba, and Logan earned in 2010. I thought it would be a lot less than that coming into the offseason, but that’s because I didn’t have a firm grasp on the salary scale. Given how much money the team is paying some its older stars, getting cheap production from players like this is imperative to balance out the payroll and keep spending in check.
While all the fun comes in trying to figure out who the Yankees will sign as free agents and how much they’ll pay them, we can’t forget that they have quite a few players already in house that need new contracts. Phil Hughes is the team’s most notable player heading into his first season of arbitration eligibility, and we broke down his case yesterday. We can’t forget about his running mate Joba Chamberlain though, he’s headed to arbitration for the first time as well.
Joba’s in a unique spot because he’s bounced back and forth between the rotation and bullpen. The Yankees have explicitly stated on more than one occasion that he’s a reliever going forward, so that’s the role and demographic we”ll use as a basis for his 2011 salary. He’s not a closer, so we have to compare Joba to some other non-closers when they were headed into their first season of arbitration. Here’s a list of some statistical comparables that I dug up…
A few of these guys are closers now but weren’t before they hit arbitration for the first time. Broxton had just taken over that role for the Dodgers midway through his final pre-arbitration season, so he’s the outlier here, evidenced by his relatively massive raise. Saves equal money, no matter how dumb the stat is. The average first year arbitration salary and percent raise in the table are a weighted average based on innings. Players that threw more innings should have a bigger impact on our end result, and this ensures they do.
I’m extremely pleased with how close the strikeout and walk numbers are, and the differences in saves (which don’t matter much anyway) and ERA+ are not outrageous. Applying that 232.3% raise to Joba’s 2010 salary of $487,975, we get a projected 2011 salary of $1,133,566. That’s reasonable for an above average short reliever his first time through the process, in fact it might even be a tad generous.
Here’s the thing though: we can’t completely forget about all the time Joba logged as a starting pitcher because his agent sure won’t during negotiations. In fact, just 37.3% of Joba’s career innings (131.2) have come as a reliever. The other 221.2 IP have been as a starter. If we use the 684.4% raise applied to Hughes yesterday, then Joba’s staring at a $3,339,701 payout next season. Let’s combined the two projected salaries (starter and reliever) based on the percentage of innings he’s thrown in each role…
(37.3% x $1,133,566) + (62.7% x $3,339,701) = $2,516,813
That seems too high and frankly the ~$1.13M from earlier seems a little too low, so let’s split the difference and call it $1.825M. As you can see, we take great pride in our accuracy.
In all seriousness though, that salary passes the sniff test and seems appropriate for a player of Joba’s caliber and with his level of accomplishment. Of course it’s entirely possible that none of this will matter to the Yankees. Joba’s name figures to pop up in trade rumors this winter, and if they pull the trigger on a deal, then he and his 2011 salary become another team’s responsibility. Either way, the the days of getting cheap production out of Chamberlain are pretty much over.
The Yankees have a few players eligible for arbitration this offseason, none more notable than first-timer Phil Hughes. After earning the league minimum or close to it over the last four seasons (or parts of them, anyway), Hughes will see his salary bump up into the seven figures this winter. How much exactly? Well let’s try to figure that out.
The entire arbitration process is pretty archaic, relying on old school stats that don’t tell the whole story to compare players with similar amounts of service time. Hughes will be compared to other pitchers when they hit arbitration for the first time, and his salary will be based on what they earned. Of course both the Yankees and Hughes want to avoid an arbitration hearing and agree to a contract beforehand, but his salary will still be determined in a similar manner.
Because of his 2010 season, Hughes has himself a damn fine arbitration case. He won 18 games and was an All Star, a huge feather in his cap. It’s basically irrelevant that he had the best run support in baseball even though it absolutely inflated that win total. The wins and All Star Game alone are enough to get him a substantial raise, but his other numbers stack up as well. I ran a B-Ref Play Index search to help dig up some similar pitchers, then picked out the best matches. As it turns out, Jeff Euston (the man behind Cot’s) published an article at Baseball Prospectus today (subs. req’d) looking at AL East arbitration cases, so that was helpful as well. Here’s who I came up with…
Those stats are leading up to each player’s first year of arbitration only; career stats don’t do us any good in this situation. I also ignored players that had signed contract extensions buying out their arbitration years because it skews the salary data, otherwise Randy Wolf, Gavin Floyd, Fausto Carmona, and Chris Young would have been included as well. For shame. The average salary in the player’s first year of arb and percent raise is a weighted average based on innings pitched. Nolasco’s relatively small workload will count less than Felix’s mammoth innings total; it’s only fair.
Garza might be the best overall comparison, though Capuano fits as well. Hughes’ strikeout rate is inflated a bit by his 2009 stint as a reliever; as a starter he’s got a 7.3 K/9 in his career, right on par with just about everyone else listed. If we apply that 684.4% raise to Phil’s 2010 salary of $447,000, he’s looking at a 2011 salary of $3,264,588. If we remove Felix since he’s clearly a notch above the other guys, it’s a 679.5% average raise and a projected $3,241,215 salary for Hughes next year. It’s a negligible difference as far as we’re concerned. Remember though, Phil’s got that All Star berth on his resume, something only two guys from the above table (Verlander and Capuano (naturally)) had at the time. That could push Hughes’ salary up towards $3.5M, and that’s a damn fine estimate of what he’ll be paid next season.
One thing is for sure, I had been grossly underestimating Phil Hughes’ earning potential. I had been under the assumption that he’d get a deal worth $2M or so for next season, maybe $2.5M if the Yankees were feeling charitable because I was ignorant to the comparables. He’s going to blow right by that amount and land a contract around three-and-a-half million bones, quite the payday for a 24 year old and a decent dent in the team’s bottom line.