Nationals Arm Race

Remember when the team took this guy to Arbitration? Photo: Nats official photo day via deadspin.com

Just as the optimism of the new baseball season begins to flourish every February, as pitchers and catchers report and fans start to get excited for the newseason, some teams and players get to experience one of the more unpleasant realities of the modern baseball game; Arbitration hearings.

The 2013 “arbitration season” was the first since 1974 that didn’t feature a single case of player versus club, perhaps a sign that teams are finally understanding just how damaging these cases can be.  Players are forced to sit and listen to their clubs argue just how mediocore or awful they are just to save (in some cases) a few hundred thousand dollars.  The teams use whatever statistical slant they need to prove or disprove their points, depend heavily on out-dated/old school stats (Wins, Saves, RBI) to make their cases, and generally speaking do their best to save a buck.  I read an example of a catcher who was in the top 10 in the league in batting and mentioned that as a stat in his favor, only to watch the team pull out a COMPLETE list of catchers (including guys who had like 10 at-bats) and show that the player wasn’t even in the top HALF of hitting for catchers.  And the team representative stated it with a straight face.  Meanwhile, these same teams generally have no issues signing veteran guys to multi-million dollar salaries to serve as middle relievers, backup outfields or 5th starters.  It seems like a completely demoralizing process and I’m surprised teams even come close to arguing with their players any longer.

However, as it stands now there’s a whole slew of potential cases out there where players and clubs couldn’t come to an agreement ahead of the Jan 17th 2014 deadline.  None more important than the Nats two open cases with Tyler Clippard and newly acquired Doug Fister.

Thanks to Maury Brown of the bizofbaseball.com blog, who keeps fantastic notes on Arbitration case results over the years for the core of the data that I used to make this post.  This link shows all the argued cases from 2005 to 2012 and this link shows the settled cases to 2011 (needs updating; mlbtraderumors also keeps similar information that is up-to-date for 2012, 2013 and 2014).

Commenter Luke S. asked whether there was a relationship between teams who took their players to arguments and eventual retention.  I thought that was a fascinating question, so I did some digging.  Borrowing from Brown’s aforementioned links and then adding in some “player disposition” information, I’ve created an XLS (uploaded to Google Docs here and added to the NAR creation links to the right) that tracks all arbitration cases going back to 2005 with the disposition results.  I’ve cut and pasted the core of the data here (leaving out the salaries and the description of what happened to the player).

Now, thanks to some pivot table work in XLS and some other interesting analysis, here’s what we can glean from the 45 cases that have been argued going back to 2005:

• Clubs are 28/45 (62%), players are 17/45 (38%) in the last nine years of cases.  Per Brown’s overall stats, Clubs hold a 291-214 lead in these cases  historically, a 57% success rate, meaning the clubs are getting better at these hearings over the past decade or so.
• Washington is the  leading “arguing” club with 8 of 45 cases since 2005.  This is not a category with which we want to be a leader.  I attribute a lot of these cases to an antagonistic former GM (Jim Bowden) who had no issues going to war over relatively small amounts, coupled with a new owner who had a very bad reputation for penny pinching in the early years of his tenure.  That doesn’t absolve Mike Rizzo though; he’s already had 3 cases argued in his four seasons of management.
• 42% of all cases since 2005 by just 3 clubs (Washington, Miami and Tampa).   The two Florida clubs are both notorious for squeezing money, albeit for different alleged reasons.  Miami because their owner is well established as being in the game for the money, and Tampa because they’ve long since established the revenue issues their stadium situation places on the franchise.
• 12 of 30 clubs in the game have not had an arb argument/case dating to 2005.  To me, this means 12 of the 30 clubs have figured out that $200,000 isn’t worth destroying a player’s ego.
• Smallest amount argued over: $125k by Miami in 2007 and $150K by Wash in 2010 w/ Sean Burnett.   Again, no real surprise here that Miami went to arguments over $125k.
• Largest amount argued over: $3M by Philadelphia w/ Ryan Howard (player won)
• Biggest player demand: Francisco Rodriguez $12,500,000 (player lost).
• Biggest club offer ($10M twice; both club wins).  One of these was Washington’s Alfonso Soriano case in 2006.

So, based on these numbers, lets think about the two cases Washington may have pending.  The amount delta with Washington’s two 2014 cases is $3M with Fister and $1.9M with Clippard.  So for comparison purposes, the $3M delta with Fister would tie the largest ever delta argued before the court.   The $1.9M delta with Clippard is large as well, in the top 5 deltas ever taken to arbitration.  Clearly, the team and these players have some serious work to do.  Clippard is seemingly in more jeopardy of losing an arbitration case, thanks to his “demotion” and sudden lack of save opportunities.  The fact that he is easily argued as our best reliever and has some of the best BAA/BABIP stats in the league is meaningless; no saves means less money in front of the panel.   And what a welcome to the organization it would be for Fister to arrive and before throwing a pitch in anger having to hear how crummy a pitcher he is.  I feel its vital to clear these cases up, extend the guys, do whatever you have to do in order to avoid the arbitration hearing.

Lastly, here’s a couple of interesting player retention stats related to those who go to arbitration:

• Just 2 of 45 players who have argued arb cases remain with their teams to this day; Jered Weaver and Ryan Howard.  That seems like an awfully small number until you consider the nature of player movement in the game.  The fact of the matter is this; players are constantly on the move in baseball, especially once they hit arbitration age where their salaries quickly overshadow their value.  Teams have no issues employing pre-arb guys who are replacement level players.  But once their salaries start jumping up and you have ready made replacements in AAA who cost 1/3rd or 1/4th as much as a 2nd or 3rd year arbitration player, it becomes pretty easy to trade, non-tender or DFA the near replacement level guy.  So while it seems natural to think that players who argue with their teams are more apt to leave … I think perhaps its more common for guys to just end up leaving thanks to the huge churn and burn that exists at the back end of rosters.That being said, I’m sure something could be gleaned by doing this same “disposition analysis” for the 100s of players who settled their arbitration cases without hearings … but that’s just far too large a project for today’s little blog entry.

• Here is something rather interesting though: 23 of 45 players who argued w/ their clubs were traded or released THAT same season.  Including a number of the Nationals argued cases.  John Lannan lost his arb case in 2012, was relegated to AAA and was non-tendered.  Bruney was released just two months into the 2010 season.  Both Shawn Hill and John Patterson were cut in spring training before their salaries could even kick in.  Felipe Lopez moped his way into a July release the summer after his hearing.   And generally speaking about half of all players who had arguments ended up in new organizations either during or just after the season in which they argued with their teams.  Is this a statement about player-club relations?

Anyway; just some interesting Arbitration Case stuff for you this cold January friday day.  Extend Fister!  Sign Clippard!  Don’t go to hearings!

First we saw what happened to Puerto Rico as a Baseball talent source once it was included as a US territory and made part of the Rule 4 Amateur Draft.  In a nutshell; all the US teams closed whatever academies they may have had on the island and cut back on scouts because there was no longer any competitive advantage to being there and developing talent, and thus the number of players from Puerto Rico has drastically fallen as compared to 20 years ago.  The best article on this topic i’ve seens is by Jorge Castillo of the New York Times in Jan 2012.

Next we saw the gutting of the Amateur draft compensation limits, along with limits on International free agency spending as ramroaded into the latest CBA.  These guidlines were seemingly put in by cheap owners with poor executive staffs who were tired of having the lower payroll teams eat their lunch by spending a few more million dollars on scouting and player development to gain competitive advantages.  You know, instead of just having tens of millions of extra dollars handed to them by Regional Sports Networks in large markets (Jerry Reinsdorf, i’m looking at you here, complicit with the notoriosly cheap Bud Selig).

Now this; now we’re hearing that MLB is actually considering putting in place an International draft.  A June 1st deadline exists to take action and apparently both sides (the owners and the Players association) seem to be in favor of this draft in some form.  MLB is so interested in getting an international draft that they’re willing to give (per Buster Olney) “significant concessions” to the players union (up to and including higher minimum salaries and lowering the time to arbitration) in order to make it happen.  The Union’s argument (as it always has been) goes along the following; amateurs and foreigners aren’t union members, so to hell with them.  If we can guarantee ourselves more money, lets do it.

Why is this bad?

Simply put, I do not trust MLB executives and the collective penny pinching, revenue hounding ownership-driven management of the sport to put in place the appropriate resources to off-set what is sure to be a massive pull-out of Latin American countries by all 30 teams if an International Draft is put in place.  What possible incentives would a team have to develop talent in a place like the Dominican Republic via a privately funded academy, if their rivals could just swoop in and draft them after they’ve been developed for years on end?   I feel that an international draft would destroy the pipeline of Latin American talent into the sport, and it would significantly harm the future of Baseball.  It would be like Puerto Rico, only on a grand scale for every country south of the Rio Grande.

All so that the owners can save a few million dollars.  The average MLB salary last year was $3.2M, or less than most teams now have as budgets for the entire annual Rule 4 draft.  Pennies all-told when compared to the typical 9-figure payrolls they maintain and the hundreds of millions of dollars they earn from gate, concessions, parking, merchandise and TV revenues.

I’m not saying the current situation where 16 year olds are signed and then discarded as washed out 19 year olds in America (and left with no English skills, little education and no future) is good.  I’m not saying that a system controlled by underworld Buscones is good either.  But I have no faith that MLB will take the proper steps and will invest enough money in these countries to offset the impact of a draft.  Zero faith; this is after all the same instution that is currently trying to kill pensions for non-uniformed employees!

I don’t entirely understand why the Players Association is for this either; don’t they understand the long term ramifications of these policies?  I mean, amateurs aren’t part of the union … but EVERY major league player once was an amateur and faced all these same issues (whether they were subject to the Rule 4 draft or they had to deal with international free agency or had to deal with the Posting system).   Are the players so myopic in pursuit of short-term financial gains that they can’t see what the long term effects will be?

Now, the above alarmism being said, there are pretty significant barriers to an international draft.  Take for example the situation going on in Mexico.  Mexican clubs demand large transfer fees for their players, and nearly every player of any consequence over the age of 13 “belongs” to a club (much like the old Reserve Clause in the majors, only its even MORE restrictive); how would you draft someone who has a price tag associated with them?  The issues with the Mexican league are detailed and highlighted in this excellent SportsonEarth.com story by Jorge Arangure Jr about a lawsuit being filed on behalf of a Mexican prospect who is alleging that he’s being tied to a Mexican club via forged documents.  Meanwhile a “handshake” deal exists between MLB and the Japanese league preventing MLB teams from signing Japanese players as youths so as to allow them to go through the “posting system,” which enriches clubs in the country.  How do you handle Japanese players in the draft?  Does the posting fee count against the international FA limit?  It clearly doesn’t now, allowing teams to spend tens of millions of dollars just to acquire the rights to negotiate with Japanese FAs (who come from the industrialized and wealthy Japan) but meanwhile FA teenagers from impoverished Latin American countries now face cap limits on bonuses that often times were little more than a few thousand dollars.  How is this situation in any way justifiable?

This isn’t Professional Basketball, where professional leagues are now established and are popular the world over and an international draft in the NBA makes sense because player development occurs naturally without the required investment of the US professional league.  There’s no summer-long pro baseball in the Dominican Republic or Venezuela where so many of these players come from; there’s barely organized amateur baseball there outside of the academies run by teams.  Sure there’s Winter leagues … but are these winter leagues more for returning players from stateside or showcases for local talent?

If you take these Latin American academies away … you will destroy baseball in the country.  And you’ll shut down the pipeline of talented players coming to play in America, which will lessen the sport.  Is that really what these owners want?

(Here’s some additional reading material on the topic: Maury Brown‘s BizofBaseball take, MLBTradeRumors’ running blog of updates on the topic, and Jay Jaffe‘s op-ed piece).