Nationals Arm Race

Ohlendorf’s old-school/new-look windup has resurrected his MLB career. Mandatory Credit: Evan Habeeb-USA TODAY Sports

In 2012, the Nats had no less than 10 arbitration candidates once the dust settled on the Super-2 cutoff.  The team cut ties with three of the players (Jesus Flores, Tom Gorzelanny and John Lannan) and then subsequently struggled in areas where Gorzelanny (left handed matchups) and Lannan (5th starter) may very well have helped during hte 2013 season.  We predicted these three non-tenders and mostly agreed with the thought process behind each decision at the time.  This is a complete “hindsight is 20-20” analysis, but it does go to show that perhaps instead of dumping $11M/year onto a mediocre closer they could have fortified their ranks and kept all three players (who together wouldn’t have totaled the $11M Rafael Soriano got) and perhaps wouldn’t have struggled in these areas for so long.  Or perhaps not.  I digress.

For 2013, the Nats have 8 Arbitration-eligible players.   They had a few other candidates before some demotions (Danny Espinosa, Ryan Perry) and releases (Roger Bernadina and Henry Rodriguez) cleared out potential non-tender/additional arbitration candidates early.  Unlike last year there’s really not much argument about nearly any of our arbitration-eligible players (even mlbtraderumors does not list any Nats in its non-tender candidate list).  Lets take a look at the 8 guys, their 2013 salaries, their 2014 estimates, and discuss.  The salary projections are from Matt Swartz‘s mlbtraderumors model, and I’ll discuss if I think they’re slightly over- or under-representative.  As with all salary discussions, all information comes from Baseball Prospectus’ Cots page.

Frankly, the only possible non-tender candidate I see here is Ross Ohlendorf.  He signed a minor league free agency deal with Washington whose terms were never released, so one can only assume it was for the major league minimum or near it.   He went through arbitration once already, earning more than $2M/year from Pittsburgh in 2011 before bottoming out as a starter.  He’s reinvented himself this year though and merits a tender.  Paying anything less than $2M/year for what we got from Ohlendorf would be a bargain.  If the Nats got him for Swartz’s estimate of $1.3M that’d be fantastic.

Speaking of Swartz’s estimates, lets take a look at his 10 predictions from last year versus what transpired:

(* Stammen signed a 2 yr/2.25M deal paying him 875k and $1.375M his first two arb years.  After non tenders Lannan signed a 1yr/$2.5M deal with Philadelphia, Gorzelanny signed a 2yr/$5.7M deal that pays him $2.6M and $2.8M and which gave him a $300k signing bonus.  Flores signed a minor league deal).

I’m not sure I’d call Swartz’s model the self-titled “very accurate” based on these numbers.  He was significantly wrong on the three biggest cases the Nats faced last year but proved be much more accurate on the lesser players.   It sounds to me like his system does a great job of predicting arbitration figures for bit players but struggles with significant players.  I also get the feeling that the Nationals are less willing to argue with their players than other teams, after a series of brusing and self-defeating fights over a few hundred thousand dollars under the previous regime (relative pennies, all things considered).

With that in mind, lets do a little arbitration salary analysis for our 8 guys.   The general rule of thumb with arbitration salaries is that they are intended to ramp up the full FA value of the player over the three arbitration periods.   So in the first arbitration year, the salary should be roughtly 40% of the full FA value.  60% in the second year and 80% in the third year.  Players with a fourth year are tricky; generally i’ve just assumed that by the 4th year you’re paying them nearly full FA value (we don’t have any 4th year arbitration cases this year, so we don’t have to guess).  The table below contains the Swartz estimates, then has calculations of the player’s full FA value based on the Swartz estimate, then my own personal estimate of each player’s full FA value, and a working-backwards arbitration salary guess for each guy:

Lets go player by player:

• Jordan Zimmermann: 2013 Salary was $5.3M.  Swartz guesses he’ll get $10.5M while I think he’ll get more.  If Zimmermann hit the open market right now you have to think he’s at least a $15M/year guy, and I think the team will have to pay him as such after his 2013 season.   The Nats face an interesting decision with Zimmermann; they clearly waited one season too long to lock him down and he now may cost double what it cost the team to secure Gio Gonzalez‘s services.
• Tyler Clippard: 2013 salary $4.0M.  Swartz guesses he’ll get $6.2M.  Clippard represents a different arbitration case; by virtue of the fact that Clippard went from being the 2012 closer to being the 2013 setup guy, he’ll have a harder time arguing for additional money despite his excellent season.  Why?  Because arbitration is driven by the same old-school stats (Wins, Saves, ERA, RBI) that drive sabrematricians crazy, and unfortunately Clippard didn’t get them in 2013.  So even though I think he’s a $8M/year closer for a team that gives him that opportunity, he won’t get that value in arbitration.  I’ll be surprised if he gets near to Swartz’s estimate of $6.2M.  Honestly the team should look to buy him out of his last two arbitration seasons and look to move him to a team in need of a closer.
• Stephen Strasburg; 2013 Salary $3.9M.  Swartz guesses he’ll get $3.9M again?  Clearly something is wrong with his system.  No matter what you think about Strasburg’s 2013 season … by nearly any measure available he’s one of the 10 best pitchers in the game.   If he hit the open market right now I’d guess he’d command at least $20m/year, but for simplicity’s sake I’m putting his FA value at a conservative $15M, which would equate with a $6M valuation for his first arbitration season.   Do the Nats just buy him out of his arbitration figures, much as the Giants did with Tim Lincecum?
• Ian Desmond: 2013 salary $3.8M.  Swartz guess: $6.9M.  Again, I feel like Swartz is undervaluing a significant player here.  Desmond has now established himself as one of the best shortstops in the game.  If you want a comp, look no further than Elvis Andrus‘s $15M/year contract.  I think Desmond is absolutely worth a 6/$90M deal or higher right now, and I think we’ll see it in his arbitration case.
• Drew Storen: 2013 salary $2.5M.  Swartz estimate: $3.6M.  Here I think Swartz is right on; because Storen’s not getting saves right now, and because of his crummy 2013, I’ve got his FA value pegged at a mid-range closer cost of $6M/year.  Which puts him right in line for a $3.6M payday in his second arbitration year.  As with Clippard, I think Storen’s value is limited as long as he doesn’t get saves, and the team should look to move him before he gets too expensive.
• Ross Detwiler: 2013 salary $2.3M.  Swartz Estimate $2.8M.  Frankly Swartz may be over-estimating on Detwiler, based on his 2013 season.  At this point in Detwiler’s career its hard to say he’s any more valuable on the FA market than John Lannan was last year (getting a 1yr $2.5M deal).  Which means that any arbitration award above $2.5M may mean Detwiler enters non-tender territory if he struggles in 2014.  Nonetheless, I think he’ll end up getting just a modest raise and an organizational ultimatum for 2014.
• Wilson Ramos: 2013 salary $501k.  Swartz Estimate: $2.1M.   Here, despite my thinking that Ramos is eventually going to be more valuable than Swartz’s estimate indicat es, I believe that his number will be about right.  Ramos needs to stay on the field consistently to realize his full FA value, and right now that just hasn’t happened.
• Ross Ohlendorf: 2013 salary unknown.  Swartz Estimate: $1.3M.  This guess is as good as any; at best Ohlendorf is a $2.5M player on the FA market and even that might be a stretch.  A right-handed long-relief guy isn’t going to command a ton of money.

Total payroll hit: $37.3M if all of Swartz’s estimates come true exactly.  $44.7M if all of my estimates above come true.  Honestly I think my calculated estimates are slightly high in a couple of cases, so I think the arbitration bill will come in at around $42.5M.  Which, by the way, would put 2014’s payroll at around $122M before signing a single free agent.  So think about that and think about what the Nats “real” payroll budget is before thinking that they’ve got some significant signing in their back pocket.

Tyler Clippard faces what could be a very interesting arbitration case this offseason. Photo Jonathan Newton/wp.com

Once the dust settled on this year’s Super-2 cutoff (and we discovered that Drew Storen will be arbitration eligible this year while Ryan Perry will not), the Nats will have no less than TEN arbitration-eligible players this off-season, setting the stage for some non-tender decisions, some possible contract extensions, and (hopefully not) some arbitration cases.  The Non-tender deadline isn’t until November 30th, but its never too soon to talk about what the team may do.

Here’s the 10 players eligible, a discussion as to what kind of salary they may obtain and whether or not the team will even tender a contract.  Note: the salary estimates are from mlbtraderumors Matt Swartz‘s arbitration projections model, with my own thoughts adjusting up or down based on opinion and noted as such).  Arbitration salaries essentially try to project the full FA value of a player and then award 40%/60%/80% of that FA salary in each of the three typical arbitration years.  For guys getting a 4th, I generally assume they’re getting nearly 100% of their FA value in the last year.

Locks to get a Contract Tender

• Ian Desmond. 1st year Eligible/$3.2M estimate: Breakout season in 2012 will earn him plenty of dollars in his first and subsequent arbitration cases.  $3.2M equates to nearly a $10M/year full FA value, probably fair for now but could escalate if Desmond continues to provide Gold Glove calibre defense to go along with middle-of-the-order power.  It may be slightly early to think about a longer-term contract extension for Desmond; I’d want to wait and see if his 2012 production continues into 2013.  Remember; he’s just one year removed from a time when most Nats fans wanted him replaced.
• Drew Storen: 1st year Eligible/$1.7M estimate: Storen will get a 4th year of eligiblity by virtue of a quick call-up after getting drafted.  $1.7 over 4 arb years equates roughly to a FA value of $7M/year, which seems a bit low for a good closer.  I’d guess Storen could get slightly more money, though the team probably argues that his injuries in 2012 prevented him from giving full value, and is probably why he’s estimated at $1.7 instead of nearer to the $4M that Chad Cordero got his first arb year with this team.  Rizzo has dangled Storen in trade talks in the past, but seems likely to keep him (at the possible expense of Clippard) for the coming season.
• Craig Stammen: 1st year Eligible/$900k estimate: Another super-2 guy who was incredibly valuable to the team this year.  I’d guess he’ll get more than 900k despite his role as a middle reliever, since 900k is barely more than the typical veteran minimum (which is roughly $800k, what Mark DeRosa made in 2012).  Though, 900k equates to roughly a $3.5M FA value, which seems high for the kind of middle relief right-hander that are a dime a dozen in this league.  I’d guess Stammen is the right kind of guy for the team to buy out a couple of arbitration years, much as they did with Sean Burnett a couple years ago.   But, being a fungible middle-relief arm, don’t look for anything other than a 2 year deal so the team is protected in case of injury.
• Jordan Zimmermann: 2nd year eligible, $4.9M estimate: Another super-2 guy who will get a 4th year of arbitration, this estimate also seems low considering the season that Zimmerman just put in.  It also roughly equates his FA value at roughly $10M a year, which I’d guess is also undervaluing Zimmermann.  Ask yourself; if he was on the open market, you’d have to think he’s getting more than $10M/year (point of comparison: Kyle Lohse turned down a 13.3M qualifying option and may get 4/60; who would you rather have?)
• Tyler Clippard: 2nd year eligible, $4.6M estimate: I see this estimate as high frankly, as being too much of a raise over his 2012 salary of $1.625 despite his being the closer most this year.  Clippard said it himself; its better to be the closer, get the saves and get the salary.  But $4.6M for a setup guy is way too hefty.  If Clippard comes in this high with his demand, look for an ugly arbitration hearing.  Honestly, I could see Clippard being a trade candidate and making this arbitration decision someone else’s headache, and the team goes into 2013 with Storen firmly entrenched as the closer with the likes of Mattheus, Garcia and Henry Rodriguez vying for the 8th inning role.
• Ross Detwiler: 1st year eligible, $2.2M estimate: This seems right in line with what Jordan Zimmermann got last year ($2.3M in his first eligible year).  A successful young starter going through this process the first time.
• Roger Bernadina: 1st year eligible, $1.1M estimate: A year ago I thought Bernadina was going to get DFA’d at the end of spring training.  Now I wonder if he’s got enough value to be flipped in trade after a standout season for this team as its 4th outfielder.  $1.1m is very reasonable for a 4th outfielder with his defensive skills, so don’t be surprised to see Bernadina remain in this role with the team for several years.

Most likely Non-Tender candidates

• Jesus Flores: 4th year eligible, $1.2M estimate.  Flores represents an interesting test case.  Clearly he no longer has a 25-man catcher spot, having fallen behind both Wilson Ramos and Kurt Suzuki on the depth chart.  The team also has shown itself to have decent rising catcher depth in the likes of Sandy Leon and Jhonatan Solano.  And Flores really regressed this year both offensively and defensively, so much so that the team had to go out and acquire Suzuki late in the season.   So I completely understand those that think that Flores is a non-tender candidate.  BUT, you don’t just cut loose valuable commodities, and a healthy catcher who can serve as a backup in the majors is still worth keeping.  That being said (as I reported in an earlier post), Flores seems to have achieved 5 service years, meaning that despite his option availability he’d have to agree to be assigned to AAA.  Which means his flexibility is completely compromised for this team in 2013.  The only remaining reason to sign him would be as insurance in case Suzuki or Ramos get hurt in spring training.  If he doesn’t get traded in the next two weeks, look for a non-tender.
• Tom Gorzelanny: 4th year eligible, $2.8M estimate.  I’m not sure I agree with the MLBtraderumor estimate here, because the likelihood of players getting pay DECREASES in arbitration is pretty slim.  Its not like Gorzelanny posted a 6.00 ERA in 2012 after all.  Gorzelanny made $3M in 2012, where he predominantly served as our long-man/mop-up guy out of the pen.   The question the team has to ask itself is this; is $3M too expensive for the last guy out of the pen?  I believe it is, and thus I believe Gorzelanny is destined to get non-tendered.  I believe the team likes him but his salary isn’t matching up to his role any longer, so I see him being forced to take a significant salary cut if he wanted to stay here.  Were I the Nationals, I’d rather take a shot at a MLB-minimum guy (or even a rule-5 guy) in that mop-up role.  The only thing that gives me pause in declaring that the team is ready to cut ties with a lefty reliever is the apparent sky-high cost of lefty relievers on the market; Jeremy Affeldt just signed a 3 year $18M deal to stay with San Francisco.  Would this contract convince the Nats management that perhaps Gorzelanny is a player worth hanging on to?
• John Lannan: 3rd year eligible, $5M estimate.  There are two schools of thought with Lannan in the Natmosphere right now.  One group believes that the team will let Edwin Jackson walk, Lannan will naturally take his place as the 5th starter and the team won’t pursue any starter talent in trade or in free agency.  The other school of thought (and the one to which I subscribe to) states that Mike Rizzo values power arms and doesn’t rate Lannan at all, that $5M (which I think is a low estimate if he were to actually reach arbitration) is far too expensive for a soft-tossing 5th starter, and that the team will be actively searching for a 5th power arm to replace Jackson in the rotation.  I think the team would rather take that $5M+ and use it to pay an acquisition versus continuing to fund Lannan’s sub 100 ERA+ exploits.  This opinion ignores the rising cost of lefty starters, and the relative dearth of quality starts on the FA market, so perhaps the Nats hang on to him one more year.

Having so many arbitration eligible guys means that the Nats payroll will take a significant hit.  Assuming that the team tenders the above 8 players (including Flores), here’s what the payroll implication will be:

The team needs to plan on paying more than twice it did in 2013 for the services of the top 8 arbitration eligible players in 2012.  Most of that money can be made up by non-tendering both Gorzelanny and Lannan … except that those players would need to then be replaced on the roster.   Still, getting these 8 players for less than $20M a year while the Yankees owe Alex Rodriguez $28M for 2013 alone sort of puts things in context.  It is a good problem to have, having to pay your arbitration-eligible stars more and more each year.