(Work in Progress)
Neal Huntington’s free agent signings have been the source of much discontent among Pirates fans. A common critique is that he “doesn’t know how to evaluate major league talent.” I think that analysis is premature, though taken at face value the results shown here will not make my case very well. As in all things, context is necessary.
I think the argument is premature because it does not take seriously enough the Pirates stated strategy. Many of the free agent pickups made by the Pirates are not designed to make them a winning team now. The goal is to win in the future (next year or two), and to sustain the winning. This requires building a solid core, and that process is well underway with good results.
The free agents the Pirates acquire are generally stop-gaps, which allow them to field a competent major league team; and from whom they might catch lightening in a bottle. The long-term goal is to sell off these players at a value that brings in younger, cheaper, league average talent. Sure, they hope to get lucky and put together a contending team, but that has not been the most important concern that last few years – nor should it have been.
In recent years, the Pirates have entered the free agent market with a set of goals different from many other teams. Their approach was bound to be inefficient in the short term, and it has been. A potential problem is that it has been too inefficient.
The key to Neal Huntington’s, and by extension the Pirates, success, is the core of low-cost, high production players they are putting into place. Once that is accomplished (and it almost is), free agent acquisitions that bring a one-to-one ratio between dollars spent and production will be the key. In the meantime, as we will see, they are overspending for very little free agent production. At least that is the story from 2011.
2012 could be different, as Bedard and parts of the bullpen, especially Hanrahan, Resop, Cruz, should produce, and likely will return some nice value via trades. Ideally, Correia, Barmes and McGehee will regain value, as well. I am not saying the Pirates will trade all of these players (indeed, they won’t), but certainly they would be wise to, if they can get low-priced, league average talent in return.
Below I look at the return the Pirates realized on their 2011 investments. I break up the roster into “Core/Homegrown” players and “Free Agent/Mercenaries.”
As I see it, the Pirates have a two-pronged strategy, and I think breaking up the roster in this way reflects that. Core/Homegrown is self-explanatory. These are guys that the Pirates consider having a future with the club. Free Agent/Mercenaries, were likely never considered as long-term Pirates.
I have left out some players who were acquired in trades in recent years because I’m not sure if they are “core” or not. Moreover, I included some players in “core” who may not actually be here when the “winning years” come – i.e. Hanrahan, Jones, McKenry, Harrison, Presley. Finally, I included Brandon Wood in Free Agent/Mercenaries, but a good argument could be made that he deserves a completely different classification – one that would include a player like Xavier Paul. (If I had time to remake the graphs, I’d probably remove him.)
Finally, even if you find my explanation and classifications above incorrect – perhaps the Pirates strategy is not as I interpret it – I think you’ll find the numbers interesting.
This study follows the same methodology that I used in this post. I’m looking at the return the Pirates are getting on their investments in players.
What follows will make much more sense if you know about the WAR and DOLLAR metrics. I am going quick introduction here, but if you are familiar with both WAR and DOLLAR feel free to skip the next section.
WAR and DOLLAR
WAR (Wins Above Replacement) is the number of wins that a player adds above what a “replacement player” could provide. For position players, it takes into account offensive production, defense, baserunning and the importance of the position played. WAR for pitchers takes into account runs allowed above what a replacement pitcher would allow, with adjustments for relievers and starters.
A replacement player is a so-called 4A guy – think Mario Mendoza or Brian Bixler. Fangraphs sets the number of expected wins from a team with only replacement players at 48. (Link to WAR explanation at Fangraphs.com). So, adding a player with a 1 WAR to a team of all replacement players, would increase the wins expectation to 49.
DOLLAR is simply WAR transformed into a monetary value. It is explained at Fangraphs as follows: “the best description of the question that the valuation is answering is ‘how much would you expect to have to pay to replace this performance in free agency if you knew that you were going to get this level of value exactly?’” (Full explanation here.)
It is important to note, this is NOT a salary predictor. It simply tells us the salary a player who generated X number of wins above replacement (i.e WAR) would be expected fetch in a completely open and efficient free agent market.
Given current free agent market prices, the cost of 1 WAR worth of production is estimated at $4.5. So, a team could expect to have to spend $4.5 to purchase 1 WAR in a free and open market.
As mentioined, Fangraphs.com estimates the number of wins for a team of replacement players at 48 games, so, to reach .500, a team will need about 33 additional WAR - in the range of $148.5 DOLLARs. (Of course, luck can more or less affect a team’s actual record. So gaining 33 WAR often will not necessarily result in exactly 81 wins.)
However, it is important to remember that Major League Baseball does not have a completely open labor market. High performing players with less than three years of service time have their salaries controlled by their teams. After three years, players become arbitration eligible. I mention this because the DOLLAR statistic is built off the assumption of a completely open labor market that doesn’t exist. More importantly, it highlights the importance of drafting and developing young talent. If done well, teams should get a very high DOLLAR to salary ratio – i.e. lots of production at low cost. In other words, team’s don’t have to spend $148.5 to gain 33 WAR. In fact, if the players they have under “contract control” over perform at a high enough level, they should be able to spend much less.
The challenge for small market teams like the Pirates is to maximize WAR/DOLLARs at the lowest possible salary. We might call it maximizing efficiency (perhaps there is better terminology), and it relies on a combination of a lot of production from underpaid players and smart, efficient, free agent acquisitions.
- Gather the 2011 Pirates end of year salaries from Pirates Prospects.
- Generate a report from Fangraphs.com which includes the DOLLAR and WAR metric for the 2011 team.
- Subtract DOLLAR from salary to get the “Difference.”
I have divided the 2011 roster between Core/Homegrown and Free Agent/Mercenaries.” Red means that the Pirates “overpaid”; Black means they got more production than they paid for. (Bonuses and prorated salaries are factored in thanks to PiratesProspects.com)
2011 Free Agents and Mercenaries:
Total salary spent/DOLLAR received:
2011 Core and Homegrown:
Total salary spent/DOLLAR received:
If you followed the 2011 Pirates, the results are not very surprising. The Pirates received a better return on their investments in Core/Homegrown players than in Free Agent/Mercenaries.
They realized a 675% return on their investment in Core/Homegrown; and a 101% loss on their investment in Free Agent/Mercenaries.
The Pirates Core/Homegrown generated 17.7 WAR last year; while the Free Agent/Mercenaries performed below replacement level -.1.
The Pirates Core/Homegrown largely carried the team last year, and they provided excellent salary-to-production value (a very good sign!); the Free Agent/Mercenaries cost a lot of money, and only produced at replacement level. Worse, Free Agent/Mercenaries did not bring much in return, in terms of trades. It this regard, 2011 was a failure, and adds ammunition to the “Neal Huntington doesn’t know how to evaluate Major League talent” argument.
However, I would contend that the Pirates approach to purchasing free agents was bound to lead to more failures than pay-offs overall. Last year, was particularly bad. But, 2012 is showing signs of turnaround in this regard.
Later on this season I’ll run a similar analysis of the 2012 team. My guess is that things will look better.
That is all for now, I’m off to Detroit for the upcoming series. Please remember this is a work in progress. Any and all suggestions for improving it are much appreciated. Over the coming days, I’m sure this will be changed to reflect those suggestions.
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