Have We Seen the End of Big-Money Closers?

Free Agent spending is at an all-time high in Major League Baseball, as MLB teams are likely to surpass $2 Billion in spending this offseason, which would eclipse the previous high of $1.75 Billion in 2006. Despite this exorbitant amount of spending, the price for experienced closers is quickly declining. Charlie Wilmoth of MLB Trade Rumors wrote about this shift in the closer’s market when he wrote about the lesser deals that closers have received this year when compared to last offseason. While two closers from 2012 signed for 3 years last offseason, none have done so this offseason. While two big closers remain on the open market, it is unlikely that either closer will receive 3 years.

In the 2011-2012 offseason, the Philadelphia Phillies signed Jonathon Papelbon to a 4-year, $50 Million deal. This signing was immediately criticized and has not fared well through the first two years, as the Phillies are already trying to trade him. Papelbon was the first closer to sign a 4-year contract since 2007 and will likely be the last one to sign such a long deal. But why has the price for closers diminished so much? The main reason is that teams have realized that many good relievers can succeed as the closer. You do not need special grooming or experience to take the ball in the ninth inning. Teams have now signed cheaper relievers and placed them in the closers role and in most cases they have succeeded. Recent examples of inexpensive free-agent closers include Kyle Farnsworth (2011), Jason Grilli (2013), Fernando Rodney (2012-2013), Koji Uehara (2013), and Jose Veras (2013), among others.

Another factor in the diminishing value of closers is the increasing rate with which teams are producing hard-throwing relievers. These young pitchers fit the mold of a prototypical closer, as they throw hard and often have a dominant breaking-ball to turn to for strikeouts. The best quality of these pitchers is that they are under team control at a low price for their first six years in the Majors. More and more teams are turning to inexperienced pitchers to be their closers and often with impressive results. The Braves have baseball’s best closer in Craig Kimbrel and pay him near the MLB minimum. Other young, inexpensive closers include Trevor Rosenthal, Rex Brothers, Addison Reed, Greg Holland, Danny Farquhar, Steve Cishek, Kenley Jansen, and Jim Henderson. All 9 of those pitchers were pre-arbitration last year and the closer of their respective team at the end of the season.

Another issue with guaranteeing more than two years to a high-priced reliever, or any reliever for that matter, is the high rate of injury and failure among these pitchers. According to research by Stan Conte, director of medical research for the Los Angeles Dodgers, 34% of relievers will go on the disabled list during a particular season. Jason Motte, Joel Hanrahan, Ryan Madson, Heath Bell, Brian Wilson, John Axford and Jose Valverde are all among closers who have either suffered a major injury or experienced a significant decrease in performance recently. This is not necessarily new information. Teams are now choosing to invest in less expensive pitchers, who are easier to replace if they experience a decrease in performance or become injured.

Despite the growing revenue in the game, closing pitchers are seeing their contracts diminish in years and money. Teams have realized that it is not necessary to pay extra for an experienced closer, as a pitcher’s ability is more important. As teams continue to develop more hard-throwing relievers, free agent closers will increasingly be paid more like regular relievers than closers.

Anthony Cacchione

A Quick Note on the Shin-Soo Choo Signing

The Texas Rangers have reportedly signed Right Fielder Shin-Soo Choo to a 7-year, $130 Million deal. Choo, 31, finished last season with the Cincinnati Reds and posted strong offensive numbers, while struggling to make the transition to Centerfield. He is known as a player with slightly above-average speed, but more importantly, Choo is an on-base machine. His ability to get on base is easily his best asset, as he consistently posts strong OBPs and carries a .389 career OBP. Before Choo’s signing with Rangers was announced, Jeff Sullivan of Fangraphs wrote an article arguing that it would be more worthwhile to trade for Andre Ethier of the Dodgers, who has 4 years and $72 Million remaining on his deal, than to sign Shin-Soo Choo for nearly $20 Million per year. Sullivan also argues that whoever signs Choo will have to forfeit a draft pick, but trading for Ethier would likely cost little in talent, as the Dodgers would likely take a lesser player if the team takes on his entire salary. However, I am not convinced that the Dodgers are that eager to trade Ethier. They would definitely deal him for a legitimate prospect, but they may also need him as insurance if Kemp continues to miss substantial amounts of time.
In the article, Sullivan pointed to the many similarities between the two players. After reading his post, I looked deeper into the two players to see whether Choo was actually that similar to Ethier. It would not be accurate to only look at each player’s 2013 statistics, as Choo far outperformed Ethier and it is not nearly a large enough sample size. Looking at their career numbers is a good place to start, but it is important to note that Ethier has over a full year of service time more than Choo. Their slash lines are very similar, as Ethier has slashed .288/.362/.470 and Choo has slashed .288/.389/.465.
While Ethier’s career slugging percentage (SLG) is higher than Choo’s career SLG, Ethier’s SLG has drastically declined from .510 in 2008 to .423 in 2013; whereas, Choo’s SLG has increased each of the past three seasons. Ethier’s power numbers have been declining for quite some time, as he has hit 20 HRs just once in the past three seasons, compared with the 3 straight seasons of at least 20 HRs from 2008-2010. Despite Choo not having as many career HRs as Ethier, he has been more consistent with his power numbers. More importantly, Choo profiles more as a leadoff hitter where power is less important and OBP is highly valued. Comparing their OBP, shows a pretty substantial difference of .027, even though their Batting Averages have been identical. This is largely due to the fact that Choo has 2.5% higher walk rate than Ethier and Choo has been hit by pitch 33 more times in his career than Ethier. Both outfielders are below-average defenders at their position, but Choo has been better over the course of his career. Also, it is easy to overlook, but Choo has compiled 4 seasons with at least 20 steals, whereas, Ethier’s career high is 6 steals in a season.
To look at their more recent production, I looked at their past three seasons. Choo has improved each of the past three seasons in many statistics, including HRs, Runs, BB%, K%, Isolated Power, Avg, OBP, SLG, wRC+ and WAR. Ethier has not shown similar improvements, as his statistics have not shown such a steady increase. While Ethier is considered the better power hitter, his 3-year HR total of 33 HRs is lower than Choo’s total of 45 HRs. Choo has also accumulated a higher WAR over the last three years.
It is important to note that Sullivan was suggesting that Ethier would be a better option because Ethier would likely be less expensive and for a shorter period than Choo. I believe Choo is far better than Andre Ethier and worth the difference in both years and dollars, but more importantly, Choo seems to be improving, while Ethier has been declining for some time. I believe the Rangers’ deal with Choo should be worthwhile, as he seems to be aging well. Also, OBP is a skill that usually lasts as the player ages, which means Choo will retain most of his value as he continues to get older.

The Astros Continue to Rebuild the Right Way

Going into last season, the Houston Astros were easily considered to be the worst team in the Major Leagues. By the conclusion of the regular season, the Astros had proven those assumptions to be correct, as they finished the 2013 season with the worst record in the Majors. I will not go into detail on how bad they were last season, but they had few strengths on offense or defense, and especially not with pitching. The Astros hired General Manager, Jeff Luhnow, after the 2011 season, in order to complete a full-blown rebuild. Before becoming their General Manager, Luhnow served as the Scouting Director for the St. Louis Cardinals. With a background in scouting and a clear commitment to analytics, Luhnow is the best guy the Astros could have at the helm to undergo a complete rebuild.

When Luhnow took over prior to the 2012 season, the Astros Farm System ranked among the worst in baseball; however, in just two years, Luhnow has grown the Farm System into one of the deepest in baseball. It is easy to discount much of their Farm System’s improvements to the fact that they have had the 1st overall pick in the Amateur Draft for each of his two drafts; yet, Luhnow has also made several shrewd trades to acquire quality prospects. In just over 2 years after hiring Luhnow, the Astros have made over 25 trades with 20 different teams. Luhnow has also taken advantage of the Waiver Wire to claim good contributors, such as Justin Maxwell and Jordan Schafer.

While the Astros had the lowest payroll in baseball last season, they have shown a clear commitment to add talent this offseason. They are not spending like the Marlins did in 2011-2012 offseason, but they have made two key acquisitions. The first was a trade with the Colorado Rockies for Centerfielder Dexter Fowler. Fowler is just 27 years old, so he is likely entering his prime years. He is regarded as a below average defender, but his offense is certainly above average for a centerfielder. He has slashed a career .270/.365/.423 with a 12.3% and 22.3% BB and K rates, respectively. There are concerns about how he will adjust to leaving Coors Field, but Minute Maid Park was actually more favorable for Home Runs than Coors Field in 2013,according to ESPN Park Effects. The Astros sent young Starting Pitcher, Jordan Lyles, and Centerfielder Brandon Barnes to the Rockies in the trade. While Lyles was once an outstanding prospect, he has struggled to a 5.35 ERA in 377 Big League innings. He still has plenty of potential because he is just 23 years old and his 4.54 FIP suggests he will be more effective in the future; however, a move to Coors Field may hurt him.

The Astros’ other big acquisition of this offseason was their signing of 30-year old Starting Pitcher Scott Feldman to a 3-year, $30 Million deal. The Feldman signing shows a clear commitment to their Major League club and an attempt to move their rebuilding along, as they cannot just rely on their Farm System to fill all their needs. Feldman is no ace, but he will likely anchor the Astros’ rotation and at the least will serve as a very effective innings-eater. Feldman has been inconsistent throughout his career, but his FIP has been very consistent in each of the past three seasons. The Astros are unlikely to be competitive at any point during his deal, but Feldman can still help the Astros future by allowing them to take their time developing young starting pitchers, which they were not able to do with Jordan Lyles.

The Astros are not going to compete in 2014, and likely will not be competitive until 2016. However, the Astros are still showing a clear commitment to winning by sticking to their plan of a complete rebuild. The Astros have made two key additions to their club this offseason without sacrificing much talent. The rebuild will continue this season, as the Astros will again have the 1st overall pick in the Amateur Draft. By staying the course of their rebuild, the Astros will avoid the mistakes of the Kansas City Royals, Miami Marlins and Toronto Blue Jays.

Anthony Cacchione

A Quick Note on the Phil Hughes Signing

The Minnesota Twins have reportedly signed Starting Pitcher, Phil Hughes, to a 3-year, $24 Million deal. Many of the initial reactions to this signing have argued that the Twins gave Hughes too many years in the deal. While 3 years may be longer than Hughes merited, the length may work out well for the Twins.

Hughes has never been able to live up to his full potential, as he has yet to complete a full season with an ERA under 4.00 as a starter. Despite a career 4.54 ERA, Hughes still entered the offseason with plenty of upside in the mind of many executives, as he is just 28 years old, which made him the youngest domestic starter on the open market. Upside without results rarely leads to a multi-year pact, but many pundits believe Hughes will be much more successful in a bigger park.

I agree with this assessment, as Hughes has pitched for the New York Yankees his entire career, and Yankee Stadium in notorious for being a hitter’s park. Among starting pitchers with at least 120 IP, Hughes ranked 6th in HR/9. While this statistic is alarming, it also shows that if Hughes can limit his home runs, then he will be much more successful. This is not groundbreaking news, nor is it special to Hughes; however, he will have a good chance to do this. Hughes will pitch his home games in a much more pitcher-friendly park than he has his entire career. According to ESPN park effects, Minnesota’s home park, Target Field, ranks as the 27th park in allowing HRs, compared with Yankee Stadium, which ranks 9th in allowing HRs. For a Flyball pitcher like Phil Hughes, who ranked 3rd in FB% among starters with 120 IP, a move to a less homer-prone stadium will greatly benefit him.

Many of Hughes’s other peripheral statistics provide even more reason for optimism. According to Fangraphs, Hughes ranked as above-average in K/9 and BB/9, as he had a 7.48 K/9 and 2.59 BB/9 in 2013. Also, while his 5.19 ERA is rather concerning, his 4.50 FIP is much more optimistic. Beyond his high HR rate, Hughes was also hurt by .324 BABIP, which was 30 points higher than his career average. If his BABIP returns to normal and his HR rate drops, then it is easy to see Hughes’s ERA falling back around 4.00.

As I mentioned above, the length of this deal may be good for the Twins. The Twins are not ready to contend in 2014, but have made two nice additions to their rotation, as they have also signed Ricky Nolasco to a 4-year, $49 Million deal. The Twins have, arguably, the best Farm System of all 30 MLB organizations, which could be ready to contribute at the Big League level by 2015 and definitely by 2016. A 1-year deal for Hughes would not have benefited the Twins much, as it is unlikely they will contend this year. However, by the third year of the deal, the Twins will be ready to challenge for a playoff birth, and Hughes will still be with the club. The Twins were also able to lower Hughes’s average annual value by agreeing to give him a third year. While many experts feel the Twins overpaid Hughes in years, I believe the length of the deal will be a positive for the Twins.

Anthony Cacchione