Jan 26

Profligate GMing: How Much Is Too Much?

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I’m working on an article for District that discusses the Nationals recent signing of Max Scherzer and how their starters’ salaries are beginning to get expensive. In short, the premise of the article is to discuss how much ball clubs, particularly the Nats, are spending in real dollars per win share produced by their starters. It’s interesting but due to word count limitations and Fansided’s policy not to bore the hell out of their readers, I couldn’t get too in depth. Fortunately, I have no such “No Boredom” policy at the Natty.

In addition to encouraging yawns, I’d also like to stress that a lot of what I’m doing comes from fumbling my way through statistics and R. It’s a certainty that I will misuse terms, fail to understand the basics of statistical analysis, and include the wrong charts to support my arguments.  You’ve been warned.

Setup

How much should teams spend on starting pitching? Scherzer signed for 7-years/$210M, but because of how the money is being paid by the Nats (with $105M deferred from 2022-28) the deal actually comes out to around $191M in present-day value. In 2020 and 2021, the Nats will be paying him $35M or so. That’s pretty extreme. Will he be worth it? By 2020-21, there’s a 99.99% chance that 35 million dollars will look every bit as awful as it looks right now, but by how much?

Others have looked into the expected return on Scherzer, notably SI’s Jay Jaffe, and he definitely answers Scherzer’s expected breakeven date (if any). Super. The Nats will be overpaying for an aging starter by ‘21, but how does that expensive starter affect the rest of the Nats plans for filling out the rotation? In short, what I’m attempting to identify is how much do teams typically spend on their 5-man rotation.

Is there a certain percentage of a team’s payroll that should be allocated to starting pitching? Where does it reach a point of diminishing returns? Philadelphia spent a whopping 71.5 million on starting pitching in 2014 as per Spotrac, and for that bill they received the second lowest return by fWAR (7.6) in the Majors. Cliff Lee missed 110 games; A.J. Burnett realized he left his heart and control in Pittsburgh; and Cole Hamels pitched well but not $22.5M well and the team sort of stunk and finished last in the East.

Relying on aging pitchers, no matter the bona fides, is a minefield of risk and reward. Caveat emptor since I’m exhausting my basic Latin.

Numbers Are Fun

Using Spotrac, it’s a simple enough operation to determine how much teams were spending on starting pitching over the last few seasons. In 2013-14, the median cost for a starting rotation in the Major Leagues came in around 28-29 million with a few cheapskates like the Marlins ($3.1M and $3.8M) and the Indians ($5M in ‘14) and a few high rollers like the Giants ($70.3M and $64.2M) and the Dodgers ($74.2M and $77.4M). The median is a nice, comfortable neighborhood. For all of those big bucks spent, the median cost of a win came in at 2.3 and 2.6 million over the last two years.

Spending more didn’t necessarily make a team better while outfitting a staff with young, affordable talent didn’t make them demonstrably worse. Jose Fernandez in 2013 is a great example. Teams that finished at .500 or above did pay more for their starting five over the two years with the median at $29.8M and $37.3M respectively with an a win costing roughly the same, between $2.3M and $3.2M. That didn’t necessarily shock me. I expected the better teams to have staffs with older, established pitchers.

The important point here is that these are the median values. Some teams paid much more to fill out their respective rotation and associated cost per win while Cleveland paid less than 300K per win in 2014. Also, note that I’m discussing win shares and not digits in the standings.

None of this, though, really means anything. It’s a certainty that owners and team executives would love to replicate the Indians success from last year, pay around $5M collectively for five starters, and finish above .500. Then again, every fan would want their team to spend like the Nats, forget about trading either Jordan Zimmermann or Doug Fister, extend Stephen Strasburg, and make it rain Benjamins in D.C. Heck, while they’re at it, why not let Fister walk and sign David Price next offseason too?

It really doesn’t work like that.

To begin answering the question of where’s a good place to be, cost-wise, when planning a pitching staff, it might be worth it to look at what actually keeps the costs under control and why Jon Lester and Scherzer both got paid.

The Middle

It likely won’t come as any great surprise to you that talent isn’t evenly distributed across the 30 big league clubs. Each pitching staff doesn’t employ precisely one Corey Kluber, one Garrett Richards, one Anibal Sanchez, etc. While every team certainly wishes it had a roster of All Star to solid hurlers, the ability to do so is subject to identifying and coaching talented players, physical development, opportunity, and a little luck. Richards’ knee injury proves that sometimes bad luck derails even the best seasons. This also isn’t an exhaustive list. Nutrition, psychological hang ups, etc.

Following the same logic, since talent isn’t exactly even across MLB, production is also not equitably distributed. This point is obvious, but I’m making it. There’s a reason that every year we read Top 10 lists that rank the best pitching staffs and fans secretly envy the Dodgers for their pitching riches. Here’s a bar graph to illustrate the point regarding production.1

Qualified Starters by bWARR has a nifty function cut to handle this sort of job, and taking all the data from 1985 for qualified starters, it’s easy enough to see how starting pitchers have fared. 50.4% of qualified starters produced a season worth between 0 and 3 bWAR (see footnote for why I switched to bWAR for this discussion). 66.7%, or 2/3 of all seasons fell between 0 and 4, and nearly 79% between 0 and 5. Baseball-Reference defines 5+ as an All Star quality season while 0 of course is replacement level. So, 79% of all starters who actually qualified for the ERA title dating back nearly 30 years are replacement level to borderline All Star with just over 1/3, or 37.6%, at 2 bWAR or below.

*Update

Inspired by a paper I’m reading on the economics of baseball between 1985-2002, I’ve decided to include a boxplot of all seasons by bWAR since 1985. From this graph you can see the interquartile range for all qualified starters in a given year along with the mean. It also shows a few extreme outliers…aka Dwight Gooden in 1985.

boxPlotInterquartile Range of Qualified Starters by bWAR Since 1985

Want to know why a guy like Scherzer is sleeping atop c-notes? His last two seasons where he’s produced 6.7 and 5.5 bWAR have occurred 14.2% of the time. That doesn’t even account for all the seasons of spot starts and breakdowns due to injury. If you’re betting a guy can stay healthy, like you do with all pitchers, you might as well try to hire the ones that give you a chance for something extraordinary.

By this logic, then, wouldn’t it be in a team’s best interest to sign the best free agent pitchers, budget be damned?

Presuming the team is owned by the Guggenheim Partners, this strategy might work if it wasn’t for things like age and decline. The table below will help explain what teams might expect from their aging free agent starters.

Age Count Mean Median
19 8 2.750 2.70
20 29 3.231 2.90
21 21 2.400 2.40
22 58 2.751 2.35
23 131 2.797 2.70
24 184 2.929 2.75
25 238 3.107 2.90
26 258 3.034 2.90
27 240 2.753 2.60
28 227 2.925 2.70
29 192 2.919 2.80
30 183 2.765 2.50
31 179 2.825 2.40
32 134 2.682 2.45
33 114 2.583 2.50
34 94 2.767 2.70
35 71 2.698 2.40
36 52 2.842 2.85
37 36 2.988 2.55
38 24 3.395 3.30
39 20 3.155 2.85
40 22 3.618 3.50
41 16 2.481 2.50
42 8 3.050 2.15
43 4 1.675 1.50
44 5 2.480 2.40
45 3 1.866 2.00
46 3 0.433 0.30
47 1 0.900 0.90

Mean & Median bWAR by Age

This list includes both mean and median just to show I’m not hiding anything. The median is nice because it dismisses the outliers, and we can look into the data with a general idea of how the middle succumbs to age.

Regardless of which figure you flavor the argument with, or if you believe in this sort of thing at all, both mean and median show that production typically peaks around ages 25-26, stays strong through age 29, then begins to decline. Want to know at what age most free agent pitchers will be signing that lucrative contract?

Since 1985, the average age for a pitcher starting 60% of his appearances is 23.7 years old. That doesn’t even include an innings limit. It doesn’t matter, though, since even with an innings limit the age jumps to 23.9. Depending on six to seven years of team control, seven the way teams manipulate service time now, and a pitcher will probably hit free agency as he turns 30 or 31, or just as he enters those decline years.

What about the extremely productive starters, the ones what produce at an All Star or greater level? How is production affected by age? I’m glad that you asked. Here’s another table for all pitchers who’ve produced one season of greater than 5 bWAR since 1985.

Age Count Mean Median
20 4 5.650 4.6
21 15 2.773 3.4
22 29 3.424 3.7
23 53 3.994 3.8
24 80 3.930 4
25 106 4.240 3.95
26 97 4.280 4.1
27 95 4.004 4.1
28 93 4.246 4.3
29 88 3.832 3.9
30 84 3.806 3.9
31 91 3.788 3.4
32 69 3.657 3.4
33 57 3.318 3
34 52 3.723 3.15
35 44 3.634 3.5
36 36 3.256 3.15
37 29 3.314 2.9
38 22 3.623 3.65
39 18 3.300 3.05
40 18 4.028 4.2
41 14 2.779 2.55
42 7 3.229 2.4
43 4 1.675 1.5
44 4 2.500 2.15
45 2 2.400 2.4
46 2 -0.200 -0.2

Mean & Median bWAR by Age by Starters > 5

From this table, their production remains much higher overall, but the decline still kicks in, though not until age 31.

Filling out a rotation full of big money free agents, no matter how talented, is great in theory, but as you’ve probably heard before, you’re paying for what that player has done in the past. Going forward, it’s not worth it. If a team can get similar, slightly reduced, value from a young pitcher at a cheaper cost, it just makes sense.

The Verdict

Just from these two examples, we can see that it is extremely difficult to hire every mega superstar pitcher due to scarcity, and it’s foolish to try to do so since you’re paying for a pitcher’s best early years. Maybe as a team executive, you’re hoping for the next Roger Clemens, but what happens if you end up with Ubaldo Jimenez or Ben Sheets? Take a look at Bret Saberhagen. Once he hit 31, he hurt his shoulder and was never the same again. He was an amazing pitcher that got bit by injury.

Like I said earlier, all pitchers are injury risks, so my point isn’t Saberhagen was injured because he pitched into his 30s. The point is that 30 years of history has shown that aging pitchers (aging players for that matter) will decline.

I’ll come back later to discuss the cost of pitching staffs since 1985, percentage of team payroll, and production.
Max Scherzer photo credit: Keith Allison via photopin cc

  1. I’m switching gears here and using Baseball-Reference’s version of WAR only because the gathering of that data for next point—starting pitching by age—was easier from their site and I wanted to remain consistent. Also, the use of 1985 is rather arbitrary but it’s the earliest date in Sean Lahman’s database for salary information, so I’m sticking with it for the remainder of this exercise.

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