• The rising cost of relief pitching

    If you were going to create a list of the Twins' offseason needs, you would likely write in big, bold letters STARTING PITCHING and underline it twice and put some exclamation points next to it for safe measure.

    Clearly this area of the team put the Twins in significant default night after night. Shackled to the American League's worst earned run average (5.40), the focal point of the front office will be to beg,borrow and steal anything they can that can help deflate that unsightly statistic and give the team an opportunity to win games in 2013. For the most part, this means throwing whatever free cash at a consistent starter or two and potentially trading away a key member of the team in order to acquire more.

    While the starting pitching problem was so big it could be seen from space, perhaps somewhat surprising is what the Twins viewed as their second biggest need is. During an interview with TwinsDaily.com's John Bonnes, Twins general manager Terry Ryan told the incredulous Bonnes that finding more relief pitching was next in line.

    This is interesting for several reasons. Whereas the starting rotation was obviously downright horrendous, the Twins bullpen actually fared well. A pessimist might say that the relief staff's success may be due to the fact that by the time Ron Gardenhire dipped into his 'pen, the opposing team was too tuckered out from all the home run-hitting and base-circling to put forth any real effort. An optimist, on the other hand, would point out that guys like Glen Perkins, Jared Burton and Brian Duensing formed a solid core of late innings options. And,given that those three members will be back in 2013, there would seem to be fewer vital roles to fill in the bullpen which helps redirect the resources back to the starting pitching.

    Here's another thing: The cost of relief pitching could get scary expensive.

    Early this week, the Dodgers made a somewhat surprising move when they extended right-handed reliever Brandon League with a three-year, $22.5 million deal, giving him short of $8 million per year. The hard-throwing 31-year-old comes equipped with the “proven closer”label which may help explain some of the need to pay out that much, but his walk rate has fluctuated that it may be hard to sit still with him on the mound in a close game.

    While that may seem like a steep price, there may be some logic behind why League received $7.5 million per year. In a candid interview,Cleveland Indians team president and former general manager Mark Sharpiro told Fox Sport Ohio's Pat McManamon that, based on growing revenue streams, the cost of purchasing one “win” on the free agent market has increased from $8 million just a few years ago to $9 million this year.

    Per the interview:

    Q: How is that figure determined?

    A: Our analysts can put a value on what it costs in free agency to sign a player and what that means in Wins Above Replacement and what those players end up costing in free agency and that changes every year.They measure all the players signed in free agency and what their history has been and what they offer going forward and they place a value. The challenge in free agency is you're often paying for that in the first year of a contract, and in the out years of a contract the players WAR usually goes down because he's usually past his prime. So it becomes a less efficient contract over time. That's why free agency is never the best way to build. It's a good way to supplement but not build.

    Q: So $8 million for one win?

    A: It's $9 (million) now. It was $8 (million) two yeas ago. I think at the end of this year they figured out it was nine. And when those wins come in the win curve are important. What does that win mean if it's the difference between 80 and 81? Very little. But if that win's the difference between 89 and 90, that could be a meaningful win.
    So,applying this logic to League's contract, we find that over the last three seasons he has accumulated 2.5 wins above replacement which averages out to 0.8 wins above replacement per year. If a team were to purchase that on an open market, that would cost $7.2 million – just shy of the average annual value of League's actual contract of$7.5 million. Provided League performs at or better than his last three seasons, the contract may actually wind up right on the money and not nearly as insane as the initial reactions. Then again, if League under-performs or gets injured, the contract could blow up in their face.


    Needless to say, most teams have to feel confident in their projections in order to dish out $9 million per win on the free agent market. That,or have Scrooge McDuck-type of money. Stupidly rich teams like the Dodgers have the luxury of committing that volume of money to a set-up man/closer and walking away financially unscathed if something goes wrong. Not every team in baseball will be looking to pay the going rate of a relief pitcher. The Twins will need to be smart with their investments and, given their track record of eschewing long-term contracts to free agents and avoiding marquee ones, there are no indications that they would chase any free agent down that rabbit hole.

    Outside of the top relief arms who can anticipate multi-year contracts, there are several players who may be acquired for fewer than three years.There is Kyle Farnsworth who pitched well as Tampa Bay's closer but elbow soreness truncated his 2012 season. Likewise, Jason Frasor also battled an elbow injury but struck out 53 in 43.2 innings thanks to a dirty slider. Mark Lowe, a member of the Rangers and Mariners bullpen, can bring some heat and miss bats but a non-arm related injury (intercoastal) sidetracked this past season. Those are just three of the bargain rate right-handed arms that could be available for the Twins. Heck, if bridges aren't burnt, Pat Neshek, who threw frisbee after frisbee in Oakland, seems to have rediscovered his command and would be a solid option for a season. These kind of arms may give you the same wins above replacement value but will not likely require the $9 million pay out.

    While the more statistically inclined organizations like the Indians may run numbers on everyone until their word processors explode, the Twins have proven quite adept at nabbing arms who require a bit more scouting acumen over the stats. Well, that, and the sheer numbers game. The Twins philosophy when it comes to relief pitching appears to stem from Branch Rickey's farm system mantra: From quantity comes quality.

    Last year the Twins signed a bushel of low cost minor league relief arms including Jared Burton, Jason Bulger, Luis Perdomo, Casey Fein and Joel Zumaya. Of the five, Burton emerged as a legitimate hurler while Fein threw well in the final two months of the season.

    Expect Terry Ryan and the Twins to be very active in the reliever market,just don't anticipate them to pay the going rate. After all, there are bigger fish to fry.
    This article was originally published in blog: The rising cost of relief pitching started by Parker Hageman
    Comments 10 Comments
    1. iastfan112's Avatar
      iastfan112 -
      It's utterly absurd, the 8 million per win(or 9). You're telling me in true dollars Joe Mauer is a 40-45 million dollar player? Or on the opposite end that Alexi Casilla would fetch 8 million a year on the open market. That 8-9 million dollar figure has been looked at with pretty extreme skepticism.

      Not to mention your narrative just doesn't fit. Why would the Diamondbacks decline a reasonable ~4 million option on Matt Lindstrom when @ the 9 million a year figure he'd actually be worth closer to 6. Then lets examine the facts from last year. Taking a nice three year WAR average the vast majority of RP averaged nearer to the commonly quoted 5 million a year then that 9 million figure. Pretty much everyone except Valverde(exercised option) and Papelbon(early FA signing). After that there was value to be had. It's pretty clear the League contract is a significant overpay.
    1. sorney's Avatar
      sorney -
      I think one of the bigger flaws in determining the cost of the win from a relief pitcher standpoint is the super volatile nature of all but the best relievers.
    1. Parker Hageman's Avatar
      Parker Hageman -
      It's utterly absurd, the 8 million per win(or 9). You're telling me in true dollars...
      I'm not saying that, the president of a major league baseball team who is statistically inclined is saying that. As he mentioned in his interview, his office has run all the studies.



      Not to mention your narrative just doesn't fit. Why would the Diamondbacks...
      Of course, as I mentioned, this does not mean that all teams will abide by that pay scale. In the case of the Dodgers, they must have projected that League would fare well in his next three years and compared it to the thin crop of consistent relievers and decided to pay him on that scale. If $9 million, like Sharpiro said, is the actually cost for a win and League performs on par with his prior performances, he will be "worth" that in the end.

      The D'Backs, on the other hand, may have had other plans to spend that kind of money or similar not use the WAR value in that kind of capacity when valuating talent. The Twins, Rays, etc, will certainly not work on that level but it doesn't mean the Dodgers, Yankees, Red Sox, Phillies, Rangers are not working with those dollars.

      Last, one of the reasons that the past contracts (particularly the long-term ones) likely do not match that $8-9M range is because of what Sharpiro said. Players performances tend to decline over the course of a contract and it is likely that teams would adjust their AAV to match that decline.

      In the end, while League's contract may wind up being on the higher end of the spectrum this year, I believe you are going to see larger contracts and dollars going towards relievers than previously anticipated.
    1. Parker Hageman's Avatar
      Parker Hageman -
      I think one of the bigger flaws in determining the cost of the win from a relief pitcher standpoint is the super volatile nature of all but the best relievers.
      It's one of the reasons I commend the Twins front office for not getting involved in signing free agent relief pitchers to long-term deals.
    1. sorney's Avatar
      sorney -
      Quote Originally Posted by Parker Hageman View Post
      I think one of the bigger flaws in determining the cost of the win from a relief pitcher standpoint is the super volatile nature of all but the best relievers.
      It's one of the reasons I commend the Twins front office for not getting involved in signing free agent relief pitchers to long-term deals.
      Yup, totally agree.
      With finite resources, best not to gamble them on long term deals for relief pitchers.
    1. Vervehound's Avatar
      Vervehound -
      when i read this article, all i could think about was how the twins could exploit this annually by flipping relievers when they're out of contention. to me, the relief market is the key to a small market (or medium market) team building assets, whether it be by trading for prospects or acquiring picks via free agency.
    1. Parker Hageman's Avatar
      Parker Hageman -
      You can view the page at http://www.twinsdaily.com/content.ph...-pitching&
    1. diehardtwinsfan's Avatar
      diehardtwinsfan -
      Call me old school, but overpaying for relievers seems foolish and stupid. I'm all in favor of getting some hard throwing relievers for late innings, but those can be added cheaply via draft and free agent scrap heap signings.
    1. kab21's Avatar
      kab21 -
      So this must make the Twins genius's for picking an army of RP'ers?

      I'm not sure I'm buying the whole article though. The data point is League and he was signed by a team that has shown it's basically willing to light money on fire if it feels like it. I also don't really understand this 8-9M/win number that they are throwing out there. Fangraphs has been using 4-5M/win which seems much more reasonable. Greinke is a 5 WAR pitcher and he'll probably get 20M/year. 8-9M/win suggests that Greinke should get paid 40-45M/yr this offseason.
    1. Parker Hageman's Avatar
      Parker Hageman -
      Fangraphs has been using 4-5M/win which seems much more reasonable. Greinke is a 5 WAR pitcher and he'll probably get 20M/year. 8-9M/win suggests that Greinke should get paid 40-45M/yr this offseason.
      Again, that's the Indians assessment of the market so it's possible that they are viewing it incorrectly. But the fact is MLB revenue streams have been increasing (the MLBAM payouts, the broadcast rights, etc) and therefore each incremental win for a team is likely now worth more than when Fangraphs first created the "value" statistic. Teams now have more money to use to purchase this win. This then drives the free agent market higher each off-season. (By the way, a great read on this subject is "Diamond Dollars" by Vince Generro).

      I believe the top of the class free agents will likely get close to the $9M per win per year (or a variation of that). Also, as I mentioned above and as Sharpiro was getting at, is that the 8-9M/win is not applicable to the long-term deal as they take in account a player's declining skills as well. So, it's possible that if you were to sign Greinke to a one-year only deal, he's value would likely be $40-45 million, but over the course of 6, 7, 8 years, the team is projecting diminishing returns and adjusts the AAV accordingly.

      Finally, as I mentioned, not all teams abide by that rules and that's where the notion of market inefficiencies exist. Players who are difficult to project because of injuries, lack of playing time, etc, present an opportunity for team like the Twins to acquire them at a below market rate -- like was the case of Josh Willingham whose age, injury history and defensive liability gave the Twins significant performance at a below market rate.
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