One of the topics on Pittsburgh sports radio this morning (“Vinnie and Cook Show”) was over-and-underpaid baseball players. They asked “which players were most over/underperforming relative to their salaries?” I looked for a statistical answer to that question, and applied it to the Pirates.
- Gather the actual Pirates Opening Day salaries from baseballreference.
- Generate a report from Fangraphs.com which includes their “Dollar” metric. “Dollar” is explained 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 what salary a player who generated X number of wins above a replacement player would likely fetch in a completely open free agent market. (Think of a replacement player as a so-called 4A guy – or Mario Mendoza, or Brian Bixler.)
- Prorate the actual salaries to 22% (36 games / 162 games)
- Subtract “Dollar” from the prorated salary to get the “Difference”
(Remember, Major League Baseball does not have a completely open labor market. High performing players with less than three years service times 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. Also, it highlights the importance of drafting and developing young talent. If done well, teams should get good “value” from their younger players, which will be reflected in studies like this.)
I’ve divided the roster between “Position Players” and “Pitchers.” Red means that the Pirates are “overpaying”; Black means they are getting more production than they are paying for – i.e. getting value.
The results are not very surprising (they shouldn’t be!). The Pirates are receiving a better return on their investments in pitchers than on position players.
Given current free agent market prices, the cost of 1 WAR worth of production is $4.5. Fangraphs.com estimates the number of wins for a team of replacement players (i.e. a team of Mario Mendozas or Brian Bixlers) 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 may result in more or less actual wins.)
The challenge for small market teams is to maximize WAR/DOLLARs at the lowest possible salary. The Pirates are not paying much for position players – $2.6 so far this year – and they’re not getting many DOLLARs in return $3.5 (.7 WAR). The Pirates are paying more for Pitchers – $8.8 so far – and they’re getting a solid $14.9 DOLLARs (3.3 WAR) in return.
Another way of looking at this is as follows: For position players, the Pirates are realizing a 35% return on their investments; a 69% return on their investments in pitchers.
The numbers are much worse if you pull Andrew McCutchen out of the calculation. Without McCutchen, the Pirates would be receiving $-2.7 DOLLARs on their $2.5 salary investment, a loss of 208%
The Pirates did not invest much in position players for 2012. Roughly 76% of the money they are paying in salaries is going to pitchers. In other words, they are not paying for much additional offensive WAR. The money they are investing is not bringing the type of returns they will need to reach .500 (obviously).
The free agent signings are the biggest problem. The Pirates bought $13.24 worth of position players in the off season (Barajas, Barmes, McLouth, and McGehee). In a perfectly efficient market, that should result in roughly 3 WAR by the end of the season. That isn’t much additional WAR. Worse, they have already paid out $2.952 in salary to these four players this season, and received back $-4.5 DOLLARS, or -1 WAR; a loss of 252% on their investments so far.
The Pirates did invest more in pitching, and they are getting that value back, plus 69% more. Bedard has cost $1.0 so far, and has returned $4.7 DOLLARs (1.04 WAR), a 370% gain. While Burnett has not returned a gain on the investment in him, he is breaking even. At his high salary, breaking even means 3.6 WAR over the course of the season.
In the coming days I’m going to expand on this study. I am intrigued by this approach.
Take this for what it is – i.e. a snapshot early in the year. The season is only 22% complete, so obviously a lot is going to change. I find the results interesting, and they do provide an accurate description of where things stand, but we should keep everything in context.
Thanks for stopping by
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Also, you might be interested: “Pirates Baserunnig: Update 2″ ; “Return to Average: Week 5“; “Pirates “Core Four” Defense”; “Positional Comparisons by OPS”; “Pens Goals vs. Pirates Runs: Through 32 Games”; “Pirates Baserunning” and “NL Sacrifice Bunt Attempts Compared (AKA #Hurdled).”