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  • Betting Against The House

    The latest casino project in Las Vegas is going to cost seven billion dollars. That is an incredible gamble (*1), but there are reasons that investors make it. The first is that in the long run, the house always wins. But the second is equally important: in the short run, anyone can win. If that wasn’t true, nobody would go to the casino, and there would be no reason to invest.

    Mike Pelfrey, who the Twins will be signing for $11 million over two years, is an investment too. In the long run, he’s averaged out to a 4.48 ERA return, but that's like saying a roulette spin will come up blackish-red. He’s thrown about five-and-a-half seasons in the majors, and only once (4.74 ERA in 2011) has he ever come anywhere near that career ERA. Instead, he’s crushed it twice (3.72 in 2008 and 3.66 in 2010) and been crushed three times (5.57 in 2007, 5.03 in 2009, 5.19 last year). It doesn’t take a lot of advanced analysis to tell you that the Twins are betting against the house.

    But the advanced stats tell us the same thing. Pelfrey’s success or failure each year has been almost entirely based on how many home runs he has given up. Home runs are highly dependent on whether or not a pitcher tends to be a ground ball pitcher or a fly ball pitcher, and Pelfrey is the latter. It’s hard for any pitcher to control what percentage of those fly balls turn to home runs, but there is some long-term trend to it, and Pelfrey has been very good at keeping fly balls from turning to home runs. Every year he has pitched in the majors, Pelfrey has been in the top half of pitchers in home run to fly ball ratio (HR/FB).

    But the two years he was really good, he was elite in HR/FB, ranking 4th among qualified pitchers in 2008 and 9th in 2010. The other years, he wasn’t bad, but merely slightly above average. When Pelfrey has been successful, he’s been elite at doing something in which pitchers have very limited control. I don’t like to call that “luck,” but I also don’t like to call a good run at a blackjack table “luck.” I go with “secret sauce.” But whatever I call it, I don’t rely on it.

    If this was a one-year deal, I could say that the Twins won’t need to rely on it either. But a multi-year deal changes how teams react. If Pelfrey isn’t effective, whether it’s luck or skill or the wind blowing out in Target Field (*2) this spring, it’s going to be hard to push him out of the rotation. Nobody is going to be anxious to give up on a player with that contract, especially given that Pelfrey is by all accounts a good guy and hard worker.

    So the Twins are making a bigger bet than they should have against the house. They might have been emboldened to do so by their success with Kevin Correia, who paid off handsomely in his first year. The Twins have responded by doubling down instead of walking away with their winnings.

    That’s a natural, human reaction. It’s also why they still keep building casinos.

    ~~~

    *1) We tend to read numbers and blow right past them, but think about what it means to build a seven BILLION dollar casino. That’s the value of thirteen of MLB teams, including the Twins, combined. And that money needs to be raised and paid UP FRONT in cash. And it’s not like casinos never go bust – several of them have over the last decade or ended up being partly built and then stalled out. Just what kind of return do you have to anticipate to make a seven billion dollar bet like that?

    *2) Target Field is probably worth addressing. HR/FB rate is also influenced by ballpark, and it would make sense that Target Field would help pitchers, especially right-handed pitchers, in that regard. But it’s worth noting that Pelfrey’s team, the Mets, also have a home ballpark that has suppressed home runs. For instance, in 2010, the Mets and their opponents hit 110 home runs in CitiField, but 153 home runs on the road.
    This article was originally published in blog: Betting Against The House started by John Bonnes
    Comments 48 Comments
    1. Mr. Ed's Avatar
      Mr. Ed -
      So when Pelfrey labors through 4 or 5 innings this year, fans should applaud and be proud when he says that it's on him again? Feh. Bad signing.
    1. TheLeviathan's Avatar
      TheLeviathan -
      I say the Twins are hoping to recoup his salary in having extended open times for the concessions every fifth day. We're talking like 20-30 more hours of beer and nacho sales baby!
    1. Dman's Avatar
      Dman -
      Other than Nolasco all of our pitching is a gamble or faith based in my opinion. There are Stats to suggest that these guys can rebound in a big way but odds are they are what they are and that is not a major improvement. I don't think this staff is going to be playoff caliber, but I don't think they are going to be as bad as last years staff either.

      Personally I like the plan. Bridge the gap to the younger players. See what you have and you should have money available again to fill in the holes as you hopefully become relevant. Lots of risk in that approach but unless they are willing to buy an ace they are going to have to wait to develop one before they can compete with the big boys.
    1. PseudoSABR's Avatar
      PseudoSABR -
      Part of the Twins gamble (and I don't know that I approve the deal) is that even if they lose on their bet they still get something of value particularly to the Twins (non-totally awful pitching); so in that sense, with the extra money to spend, a gamble where you obtain something of value even when you lose and potentially something of great value when you win is a good bet.

      Another risk, of course, is the notion that Pelfrey will keep a better pitcher out of the rotation either now or in the future because of his contract. Unless you're completely sold on both Deduno and Gibson, I'm not sure that's going to be the case for the early part of this season, and undoubtedly we'll see a number of pitchers more undesirable than Pelfrey take the mound whether the Twins sign him or not.
    1. Jdosen's Avatar
      Jdosen -
      I can't stand this deal. If the Twins were just to bring him back for 1 year, I could handle that, but as one of you said on the podcast, Mike Pelfrey or someone pretty much equal is out there EVERY offseason. Mike Pelfrey isn't a guy you need to lock up.
    1. Thrylos's Avatar
      Thrylos -
      ERA?

      Please.

      How about some W-L or "quality starts"-based conclusions?

      Pelfrey led the team in FIP, K%, and pitcher WAR, in a season that he made a record recovery from TJ surgery. The best pitcher they had last season and at 29 years old, his next 2 seasons (at around what the Twins paid Nick Blackburn not to play last season, btw) are a great bet for a middle to end of the rotation guy.
    1. MNfan34's Avatar
      MNfan34 -
      This deal isn't worth getting upset about. So much complaining about a FA signing. You would think we traded Ramos again or something.

      This contract will not limit them in any way. They are limited in the fact that decent players are passing up offers we put down to play in more desirable situations. We know AJ got a bigger offer from us, but chose to play elsewhere.

      Would I rather have Garza on a 3 year deal? Of course. Would I rather have Kazmir? Yes. Arroyo? Maybe. Until the Twins start winning, they won't sign many players without a big overpay.

      I don't see this contract meaning that he is blocking anyone. Still, I am in no rush to get Gibson or Meyer to the majors until we are sure they are actually ready and we can put a real team in the field behind them (2015)
    1. Reider's Avatar
      Reider -
      There's no point in getting worked up. It's difficult to turn the worst starting rotation into an above average rotation in one off season. Secondly, like was already mentioned, we can't force people to sign here. We have to take what we can get. If guys like AJ, Salty, and Garza prefer not playing in Minnesota this year, we have to deal with it and move on. Thirdly, it seemed like there was a general consensus that fans felt the Twins needed to sign 2 or 3 starting pitchers. The Twins went and signed Nolasco and Hughes and brought Pelfrey back. And now everybody is whining, when the Twins went out and did what they set out to do and what the fans wanted them to do. What more do you want in one off season? Would you rather Terry Ryan sat on his hands like he's been doing up until now? Unbelievable.

      Who did you expect the Twins to sign?? The Twins couldn't have signed guys like Scherzer because they aren't even free agents. Yeah, there were and are guys out there like Kazmir, Arroyo, and Garza, but what if they won't sign with Minnesota? What if one of them will sign with Minnesota soon? Will the crying stop?

      Lets look on the bright side, I'm sure to the surprise of everyone, the Twins are still hot after starting pitching as it was reported a couple hours after the unofficial Pelfrey re-signing announcement that they are strongly interested in Arroyo. Perhaps Garza (or a trade for another good pitcher) is still on the radar? It doesn't sound like the Twins are done looking at their options.

      Fans need to realize that the Twins can only play the hand that they are dealt. The rebuilding of the starting rotation is only beginning. They can still develop, sign, and trade for pitchers moving forward.We all knew that 2014 would likely be another -.500 year, so lets just see how things play out before we get too excited.
    1. MNfan34's Avatar
      MNfan34 -
      Quote Originally Posted by Reider View Post
      There's no point in getting worked up. It's difficult to turn the worst starting rotation into an above average rotation in one off season. Secondly, like was already mentioned, we can't force people to sign here. We have to take what we can get. If guys like AJ, Salty, and Garza prefer not playing in Minnesota this year, we have to deal with it and move on. Thirdly, it seemed like there was a general consensus that fans felt the Twins needed to sign 2 or 3 starting pitchers. The Twins went and signed Nolasco and Hughes and brought Pelfrey back. And now everybody is whining, when the Twins went out and did what they set out to do and what the fans wanted them to do. What more do you want in one off season? Would you rather Terry Ryan sat on his hands like he's been doing up until now? Unbelievable.

      Who did you expect the Twins to sign?? The Twins couldn't have signed guys like Scherzer because they aren't even free agents. Yeah, there were and are guys out there like Kazmir, Arroyo, and Garza, but what if they won't sign with Minnesota? What if one of them will sign with Minnesota soon? Will the crying stop?

      Lets look on the bright side, I'm sure to the surprise of everyone, the Twins are still hot after starting pitching as it was reported a couple hours after the unofficial Pelfrey re-signing announcement that they are strongly interested in Arroyo. Perhaps Garza (or a trade for another good pitcher) is still on the radar? It doesn't sound like the Twins are done looking at their options.

      Fans need to realize that the Twins can only play the hand that they are dealt. The rebuilding of the starting rotation is only beginning. They can still develop, sign, and trade for pitchers moving forward.We all knew that 2014 would likely be another -.500 year, so lets just see how things play out before we get too excited.
      haha we practically double posted.

      He had a better season than Hughes did. Less dollars and years. It is just because Pelfrey takes 15 minutes between pitches.
    1. Jim H's Avatar
      Jim H -
      When he was healthy, Pelfrey was a mid-rotation starter. That is really all Garza has been. Arroyo is nearing 40 and Kazmir has had all sort of health issues. It would not be too farfetched if Pelfrey pitches better than these 3 over the next 2 years. Even if he doesn't, if the Twins are going to have a strong rotation soon, it will likely be because of Meyer, Gibson, and maybe May, Darnell and Worley. Not likely all of them, but some 2 or 3 that figure it out pitch well in the majors within the next 2 to 3 years.

      Pelfrey is at best, a placeholder for what we hope will be a wave of young talent working its way to the majors. In fact that is what Correia, Hughes and Nolasco are, hopefully. I am not going to get very worked up over which mid-rotation starters the Twins have signed this winter. Hopefully, the young talent can begin to replace them as soon as this year.
    1. johnnydakota's Avatar
      johnnydakota -
      It simply comes down to Hughes and pelfrey workout , or terry and gang are gone....
    1. OldManWinter's Avatar
      OldManWinter -
      Maybe in other organuzations ... but I think TR has a way longer leash than that with Pohlads.
    1. howieramone's Avatar
      howieramone -
      Quote Originally Posted by johnnydakota View Post
      It simply comes down to Hughes and pelfrey workout , or terry and gang are gone....
      Terry Ryan has a lifetime deal with the Pohlads, in fact they are negotiating an extension. They want to make it hereditary.
    1. johnnydakota's Avatar
      johnnydakota -
      Quote Originally Posted by howieramone View Post
      Terry Ryan has a lifetime deal with the Pohlads, in fact they are negotiating an extension. They want to make it hereditary.
      Sick, A legacy employee who has failed at the teams mission statement for 20+ years continues to be given more and more chances, if so it simply comes down to money in the owners pockets and less about a winning a World Series.
    1. Outlier's Avatar
      Outlier -
      Quote Originally Posted by Thrylos View Post
      ERA?

      Please.

      How about some W-L or "quality starts"-based conclusions?

      Pelfrey led the team in FIP, K%, and pitcher WAR, in a season that he made a record recovery from TJ surgery. The best pitcher they had last season and at 29 years old, his next 2 seasons (at around what the Twins paid Nick Blackburn not to play last season, btw) are a great bet for a middle to end of the rotation guy.
      Can you or anyone please explain why Fangraphs WAR (Pelfrey at 2.1) is accurate and Baseball Reference WAR (Pelfrey at -0.3) is not.
    1. ND-Fan's Avatar
      ND-Fan -
      The Twins have run out faith in counting on Diamond, Deduno, Worley, and Albers. They will keep as many of these pitchers as they can at the Triple A and I believe they are in no rush to bring up Gibson or Myer until they are sure they can compete at major league level. This reaction by organization to stock pile some pitching and if need be move some of the pitching into reliever roll. I also think the Twins have been signing pitchers to longer term contract as hedge against major league inflation for pitching. Its also may pay returns in that if these pitchers do have better years they still have control and will give twins a lot of value or cost savings. Look at Kansas City they got Santanna on one year deal and he had great year but lost control of him and are looking for pitching to replace him. Same thing for Cleveland they had Kasmir and Jimenez they both became free agents and above Cleveland's ability to resign them. Kasmir was one year deal last year on minor league contract and now look it took 22 million to sign him this year and Jiminez is still to be signed at least they will get a draft pick here. So you can see a little the Twins are investing in long run and my bet is they are going to strike pay dirt more than they are going to loose on these deals. Look at Major league baseball there's real shortage of starting pitching and a lot of the pitchers are near the end of there careers. High Quality starters are either been locked up in contracts or are traded near the end to teams that need that kind of pitching to get over the hump and will become free agents in a year or two. John I thought same thing last year when Twins signed Correia and they could sign another pitcher if they needed to again next year but look what pitcher of Correia caliber is signing for anywhere from 6 to 10 million this off season. If we have another year of this were going to see pitcher like this range 8 to 12 million a year. I wonder what the top of line pitching is going to command when Price and Kershaw hit the market. Look next year Yankee's are going to be looking for number of pitchers, Boston very likely too with number of pitchers getting near end of their contracts so you can see coming year there's going to real demand for pitching by teams with big payrolls. I also think the Twins are trying to time some of their pitching and young players in field to be coming up in similar time frames to maximize depth of team when they have control of these players during there peak years.
    1. Brock Beauchamp's Avatar
      Brock Beauchamp -
      Quote Originally Posted by Outlier View Post
      Can you or anyone please explain why Fangraphs WAR (Pelfrey at 2.1) is accurate and Baseball Reference WAR (Pelfrey at -0.3) is not.
      In a word, it's not. Fangraphs uses FIP, which attempts to remove fielding influences from a pitcher's WAR. It's a fine metric but is representative of what should have happened, not what actually happened.

      When it comes to the value of a pitcher's performance, I prefer to go with what actually happened.

      When it comes to projecting a pitcher's performance, I prefer to go with what should have happened.

      Past performance, I believe BB-Ref WAR is a better metric. Future prediction of performance, I believe FG WAR is a better metric.
    1. cmathewson's Avatar
      cmathewson -
      This reminds me of the Correia signing. The Twins are looking for a bargain to fill out the back of the rotation. They think he will be better in 2014 than 2013. The bet is not entirely like roulette. It's more like poker. They have counted the cards, and they expect a good hand based on what's left in the deck.

      In this case, the card counting amounts to the known phenomenon of guys doing better in their second year after TJ surgery. The odds are long enough that they can make a relatively small bet and get a relatively high reward. But they also might end up needing to fold. In that event, they are hedging their bets by signing multiple guys and hoping some of them pan out.

      The worst case is a season like last year, when he was just good enough to make us keep betting on him by giving him innings and he wasn't bad enough to make us dump him (fold). It's like that three of a kind you have when the guy you're betting against has a full house. You just keep tossing in your chips until the hand is called and you lose.
    1. mike wants wins's Avatar
      mike wants wins -
      The issue will be if others are better in AAA, but stuck there because he's "acceptable" enough. I don't particularily like this deal. I also don't know how they plan to score any runs next year, and if you aren't, what is the point of signing a stop gap pitcher?
    1. Brock Beauchamp's Avatar
      Brock Beauchamp -
      Quote Originally Posted by mike wants wins View Post
      The issue will be if others are better in AAA, but stuck there because he's "acceptable" enough. I don't particularily like this deal. I also don't know how they plan to score any runs next year, and if you aren't, what is the point of signing a stop gap pitcher?
      Do you really see that happening in 2014, though? This season, it's going to be Worley, Deduno, and Diamond fighting for one spot in the rotation. At some point, a pitcher will fail or go down with injury and a second guy will get a shot, probably around the time Gibson is throwing his hat back into the mix.

      Next season, Correia is gone. The Twins will (theoretically) have two open rotation spots for Deduno, Worley, Diamond, Gibson, and Meyer. At least two of Deduno, Worley, and Diamond will be gone at that point through trade or ineffectiveness.

      I don't see it becoming a problem, really.
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