25 November 2015

How Much MASN Money Is At Stake?

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The Washington Post recently claimed that:
"Television contracts play a major role in the sport’s finances, which for the Nationals prevents an obstacle. They suffered a major setback last month in their legal fight with MASN and the Baltimore Orioles over how much money they should receive in rights fees. Their television contract with the Orioles, put into place by Major League Baseball before the Lerners purchased the team, ensures they cannot reap profits from their rights fees as much as other teams in their situation could.
The fate of MASN and Harper are intertwined. It’s why Boras, in December 2014, attended one of the New York Supreme Court hearings in New York regarding MASN."
Thomas Boswell has also wondered whether having that money would have impacted their last offseason. Camden Depot and others have discussed the implications of Justice Marks ruling in favor of MASN and vacating the RSDC's decision. What hasn’t been well defined is how this decision financially impacts the Orioles and Nationals or the amount of money that is actually at stake. Could this decision potentially cause the Nationals to lose Bryce Harper?

The Washington Post has stated that the difference between the RSDC decision and MASN's offer is $20M per year in annual TV rights fees. This is technically accurate, but misleading because it ignores changes in equity stake distributions and impacts of revenue sharing. Basically, suppose someone worked at a job where they received both a salary and an end of the year bonus. If ones' salary increased $20,000 but their bonus decreased by $20,000 then they wouldn't see an increase in income. These extra annual TV rights fees come out of profits and means that the Nationals receive less in profits then they would otherwise.

Documentation filed in the court case shows that the actual difference between the two offers is $9.2 million in 2012 (plus $4.2 million in interest and tax rebates), $10.9 million in 2013 (plus $180,000 in interest) and $10.6 million in 2014 resulting in a total of $30.7 million. There has been no documentation provided to the public discussing the difference for 2015 and this figure probably hasn't been calculated yet. MASN disagrees with these figures in part because they don’t account for all the cash that MASN has given the Nationals.

However, as first publicized by Jonah Keri, MLB decided to compensate the Nationals for the difference between these two scenarios for both 2012 and 2013. The Nationals requested and received documentation from MLB stating that they don’t need to repay this money regardless of how this situation is ultimately resolved. MLB further reiterated this in court in December. If the Bortz Methodology is ultimately implemented, then the Nationals will keep the $25 million from MLB and the extra profit distributions from MASN. This will result in them receiving more money than they're supposed to receive.

In any event, the Nationals have received all of the money that they're supposed to for 2012 and 2013. The only money that the Nationals haven’t received already is the $10.6 million in 2014, whatever they’d receive in 2015 and relevant interest and tax compensation.

The documents that MLB provided explaining why the Nationals were owed what they were in 2012 and 2013 can help determine what they might be owed in 2015. Below is the document describing what MLB thought that the Nationals were owed in 2013.

Basically, there are five steps involved. The first step is to determine the difference in media rights fees between the two offers. The second step takes into account revenue sharing and the Market DQ. Subtracting these two numbers from each other is the difference in media rights fees after taking revenue sharing into account.

The third step is to determine the much interest MASN owes the Nationals for not paying them right away as well as the taxes the Nationals owe due to receiving money as profits as opposed to rights fees.

The fourth step is to determine the difference that the Nationals receive in profits due to these two decisions and the fifth step is to simply add the increased rights fees to the interest and subtract from the reduced profits.

In order to determine the difference for 2015, the first step is to determine the difference in media rights fees between MASN's offer and the RSDC's decision. For 2015, the RSDC decision was that the Nationals TV rights were worth $62,611,974 while MASN's argument was that they were worth $42,044,874. Multiplying this number ($20,567,100) by two ($41,134,200) is the entire extra amount that MASN needs to pay both teams and therefore the amount that comes out of MASN's profits.

The second step is determining the amount of media rights fees that goes towards revenue sharing. Teams do not need to pay revenue sharing taxes (32.866%) for money distributed by RSNs via equity rights distributions but do for money earned via media rights fees. The RSDC decision would increase media rights fees at the expense of equity rights distributions and therefore trigger larger revenue sharing taxes. 32.866% of $20,567,100 is $6,759,583 and therefore the extra amount that each club would owe via revenue sharing taxes.

However, in the latest CBA (Attachment 26), a new clause was created called market disqualification. Prior to the current CBA, large market clubs (top fifteen clubs by market rank) were able to receive revenue sharing funds if they had below average revenue. This led to a situation where teams in small markets such as the Cardinals were forced to subsidize teams in large markets such as Nationals or Mets because they were successful and the other teams were less so. Teams earning a large amount of revenue could accept the need to help subsidize teams like the Rays, Marlins and Orioles that are in small or mid-sized markets but didn’t think it was fair to be forced to subsidize teams in large markets such as the Mets.

The current CBA has a rule that prohibits large market teams like the Nationals (ranked #12) from receiving revenue sharing funds. It was scheduled to start in 2013, when large market teams were to receive only 75% of what they would if they were small market teams and decrease by 25% for the next three years.

The Nationals were receiving money from revenue sharing from 2012 to 2014 and therefore had below average (mean) revenue in those years. If this trend continues in 2015, then it is possible that they wouldn’t pay any revenue sharing taxes on this extra revenue. If the Nationals did have above average revenue in 2015, then they would be taxed as much as $6,759,583. The Orioles are ranked twentieth and therefore would pay revenue sharing taxes on this revenue regardless of whether they had below average revenue.

The third step is to determine the difference that each team receives via equity rights distributions based on MASN's proposal and the RSDC ruling. The RSDC ruling states that an extra $41,134,200 should be awarded to the teams’ via media rights fees. The Nationals control 16% of MASN as of 2015, and therefore would lose $6,581,472 in equity rights distributions while the Orioles would lose $34,552,728 in equity rights distributions.

It is safe to say that the Nationals would receive no more than $14 million and earn no less than $7.2 million before interest and tax payments while the Orioles would lose roughly $20.75 million in 2015 if the RSDC decision was implemented instead of Bortz.

Of course, all of this revenue wouldn’t necessarily go to payroll. The rule of thumb is that 47% of revenue goes towards payroll suggesting that the RSDC decision would increase the Nationals payroll by between $3.4 and $6.6 million and decrease the Orioles payroll by about $10 million. Matt Swartz argues that only 40% of revenue now goes to payroll and therefore the impact on payroll is even lower than the above figures. This would seem to have a minimal impact given the amount that the Nationals spend on players and therefore would mostly be a non-factor when deciding to extend Harper. It could potentially have a larger impact on the Orioles.

It is important to understand that if the Nationals have above average revenue then they’ll receive a minimal amount of cash from MASN. If the Nationals have below average revenue then they may receive a good chunk of change from MASN in this situation but then they have below average revenue.

In the meantime, they had a $165 million dollar payroll in 2015 or the fifth or sixth highest in the majors. If they did have below average revenue then this means that the Nationals payroll was $30 to $40 million more than their revenue would suggest and therefore that they lost a lot of money in comparison to other teams. It would seem that having below average revenue but above average payrolls would have a bigger impact on the Nationals' future payroll decisions then how this case is ultimately resolved.

The Nationals spent so much money on payroll because they had a chance to sign Max Scherzer in free agency and were unwilling to pass up the opportunity. It’s hard to argue with that decision given that he threw two no-hitters, had an ERA of 2.79 and an fWAR of 6.2 in nearly 230 innings despite somehow having a 14-12 record. He may have been expensive but was certainly a dominant starter.

Instead of praising the Lerners for being willing to absolutely shatter their budget and suffer significant losses in an attempt to win, the Washington Post argues that this signing was simply an example of the Lerners trying to do too much. Boswell argues that the Lerners set sufficient yet inflexible budgets and that therefore made it impossible for Mike Rizzo to make in-season additions such as Gerardo Parra or Tyler Clippard. Mr. Wagner argued that this was a clear flaw in the Nationals’ process since “Because of ownership, the front office had little wiggle room in adding payroll.” The Post further argued that: “this will be the Lerners’ toughest offseason to show good judgment, respect their baseball people and do enough but not too much. And it will be the roughest winter for Rizzo, whose astronomical batting average has been seriously dented by hiring Matt Williams and trading for [Jonathan] Papelbon.”

These hometown writers seem to believe that the Lerners’ made a mistake by signing a genuine ace rather than having flexibility to trade for an outfielder that had a .237/.268/.357 line, an OPS+ of 69 and -1 fWAR after the trade deadline. If I had the option, I’d rather have the ace and damn the midseason flexibility.

The Lerners recently were involved in picking a new manager for their club. They ended up in the enviable position of deciding they were interested in both Bud Black and Dusty Baker. They were unsure which one they wanted so they started negotiations with both with compensation being a deciding factor. The Nationals were able to reach a mutually beneficial deal with Dusty Baker albeit not with Bud Black. Instead of praising the Lerners for properly using leverage to save money to go after top free agents, the hometown paper decided to write a number of articles criticizing them.

The Washington Post called this decision “a fiasco” and said that the Lerners should know better by now. They further wrote that "This season, the Lerners shelled out $165 million in payroll for players, sixth in the majors. Good for them. They still lack an understanding of how to treat people within their industry." They also claimed that “the Lerners are generally unwilling to spend freely on big free agents” despite the fact that the Nationals have signed high profile free agents such as Jayson Werth, Rafael Soriano, Dan Haren, Adam LaRoche and Edwin Jackson from 2011 to 2014. My datafile that tracks free agent spending has the Nationals ranked a respectable #10 in the majors over that four year period. It certainly seems like they were willing to spend on high profile free agents.

It is unclear why the Washington Post wrote what it did. Perhaps their writers really think that having the flexibility to trade for Parra and Clippard is more valuable than adding Scherzer. Maybe they believe that paying a manager a few million more than necessary will somehow help his performance and improve chemistry. Or maybe the real problem that the Washington Post has with the Lerners isn’t about their decisions but that they declined requests to comment through a team spokesman to talk during the season as well as declined repeated requests  for comment during the late-inning slide.

It is worth noting that the Braves general manager is also receiving his share of criticism. Mr. Coppolella recently had a phone conversation with reporter Bob Nightengale in which he complained about all of the accusations he's been receiving. He said "I’m getting so tired of this. If guys want to take shots, or (degrade) us, fine. But let’s let it play out for a few years before we start branding our pitchforks and torches. I feel in my heart this is the best for the Braves." This is despite the fact that Atlanta media has been supportive of his moves. If nothing else, it appears that high ranking officials are aware of what both the fans and media say about them and take it to heart.

The Lerner family has been reported to be frustrated due to the team’s competitive struggles despite their high payroll. This should come as no surprise as they lost tens of millions of dollars last year to try and build a winner and got savaged by their hometown media. They probably weren't happy to see article after article insulting them.

Given the Nationals’ inability to produce in 2015 and the excellent depth created by Rizzo, it would not be surprising if their payroll dropped in 2016. Why spend extra money if it isn’t appreciated and not necessary to build a winner? Why spend extra money if it just results in being mocked by the press?

If their payroll does drop, it won’t be due to an adverse decision in the MASN situation. This situation will have a minimal impact on year-to-year spending and is primarily valuable for maximizing long term asset value. And it's preposterous to argue that this situation could cause the Nationals to lose Harper. The Lerners have shown a willingness to lose money to build a top baseball team and it's unlikely that having a few million less in revenue will make them decide they can't afford to keep a Hall of Fame player. The only reason that their payroll may drop is because the Nationals lost a significant amount of money in 2015 and their reward was to be called inflexible for busting their budget signing Scherzer instead of going after Parra and Clippard as well as being called incompetent for negotiating for a manager.

24 November 2015

Chris Davis' Contract: Using A Comp Model

Yesterday, it was reported again that Peter Angelos is personally involved in talks concerning Chris Davis.  This was considered a given after he had publicly stated an interest in resigning Davis the first week of October.  Angelos has never lost a signing that he publicly acknowledged an interest in making.  With this in mind, I decided to go back and try to figure out just what might make sense.

Last week, FanGraphs put forward an article considering their top statistical comps for Chris Davis and looking forward to see where that population of comps wound up in order to illustrate what potential outcomes we might see in Davis.  This is not an uncommon way to determine what just might be in store for a player, but if can be a pretty dodgy comparison.  I had some concerns about the methodology Fangraphs used.  Davis notoriously is a late bloomer and career comps by age will throw in players who are more a product of long term accumulation as opposed to the short burst of performance Davis has seen.  Second, I think by focusing on wRC+ and ISO, it obscures specific aspects of Davis that get lost in that metric flattening performance to a single number.  Finally, I think the position pool is too large and should be restricted to similar players.

For my comp pool, I only looked at player seasons from age 26 through age 29 for first basemen, left fielders, and right fielders with a wRC+ above 120, an ISO more than 125% than league average, and an OBP less than 115% of league average.  That led to the following list:
Sammy Sosa 
Jay Buhner 
Frank Howard 
Lee May 
Cecil Fielder 
Adam LaRoche 
Kirk Gibson 
Jose Canseco 
George Scott 
Bobby Bonds 
Andres Galarraga 
Darryl Strawberry 
I used this population to project performances from age 30 through age 39, a ten year outlay.  To accommodate for survivor bias, performance for players who no longer were playing were accounted for by regressing performance to the mean with an age factor included.  Going back to the list, we see a similar player emerge.  These players largely depend on hard contact and not much else.  Some of these players developed a few seasons in their later career where they figured out how to walk for a couple seasons, but that skill was not typically found through out their careers.
2016 30 518 26 .263 .333 .482 2.2 15.4
2017 31 522 28 .265 .339 .498 2.5 18.4
2018 32 560 29 .271 .356 .501 3.2 24.7
2019 33 509 26 .261 .346 .481 2.4 19.4
2020 34 481 20 .248 .334 .438 1.5 12.8
2021 35 381 17 .243 .316 .438 0.9 8.0
2022 36 404 16 .237 .310 .418 0.6 5.6
2023 37 385 16 .222 .299 .405 0.2 2.0
2024 38 355 13 .211 .283 .379 -0.3 -3.1
2025 39 357 12 .200 .270 .356 -0.7 -7.6
Mean 203 .251 .333 .457 12.5 96
The mean player in this population remained a viable starter through age 34 (five seasons).  However, they performed at a first division level (above 3 WAR) for only one season.  That season was not age 30, but actually age 32 as several players tend to mature a bit later than normal in this group.  Unfortunately, we project that one season as the only season where Davis would be worth more than the expected 20+ MM he is expected to earn this off season.  It should also be noted that I compared this mean expectation with two proprietary models and mine was modestly optimistic.  The proprietary models were more in line with the FanGraphs mean.

Now, the mean result does not mean much without some concept of range.  To illustrate range, I divided this group into top and bottom halves and am reporting the averages of those groups to give some idea of what is a reasonable boom or bust.
Year Low Mean High
2016 1.3 2.2 3
2017 0.9 2.5 4.1
2018 1.5 3.2 5
2019 0.9 2.4 3.9
2020 0.7 1.5 2.2
2021 -0.1 0.9 1.8
2022 0.1 0.6 1.6
2023 -0.6 0.2 1.7
2024 -0.2 -0.3 0.3
2025 -0.5 -0.7 0.3
Above, we see the top half projection would be a first baseman who perform as a first division first baseman for four seasons before performing as a second division (1.5 - 2.9) first baseman for an additional four seasons.  Those first four years help keep the contract on value for several years after he no longer warrants a 20+ MM salary.  Of course, if his play collapses (a la 2014), then the Orioles would be stuck with an albatross.

Here is the value outlay:
5 6 7 8 9 10
High 141 157 172 190 192 196
Mean 91 99 104 106 103 96
Low 41 39 40 35 32 27
I would assume that you would rarely see a player signing for the mean because with player evaluation someone is likely to appreciate the player and expect better production than the mean.  That said, I would not want to push the club beyond paying for what Davis might be worth if he winds up being more like the players in the top half.  With that thought in place and with the assumption that he will command 25 MM a year, six years would be where I would stop (6/150).

Our BORAS model pegged Davis at five years and 104 MM, which would be a slight overpay given the comp player pool.  Based on the current chatter though, that sounds like a low ball offer.  This comp group appears to value Davis slightly more than other models of which I am aware.  In other words, all models that I know of think a deal of 6/150 or along those lines with be a loss of payroll flexibility.

20 November 2015

Do The Orioles Already Have The 'Next' Darren O'Day?

In early September, I looked at Mychal Givens and the impressive company he was keeping. And just to be clear, he ended the season with 30 innings pitched. So there's far from a large sample to draw anything conclusive.

That being said, it's hard not to at least be intrigued by the following table. Here's a list of relievers in 2015 who pitched at least 30 innings, had an ERA under 2.00, had a strikeout rate over 11, and a walk rate under 2:

Rk Player SO IP ERA SO9 BB9 Year Age Tm FIP ERA+ OPS+
1 Darren O'Day 82 65.1 1.52 11.30 1.93 2015 32 BAL 2.49 274 48
2 Mychal Givens 38 30.0 1.80 11.40 1.80 2015 25 BAL 1.73 232 45
Provided by Baseball-Reference.com: View Play Index Tool Used
Generated 11/20/2015.

Going back to 1961, only 10 other pitchers have accomplished that feat. Obviously it helps Givens to be at the bottom of the innings spectrum, but it does show how dominant he could be.

There's no one quite like Darren O'Day in the majors, but the Orioles may just have the closest thing to him. Perhaps that's why the O's were so reluctant to include Givens in any potential trade during last season's non-waiver deadline. There's no real way of knowing until we get to see him pitch more.

If O'Day does depart, which grows more likely every day, then Brad Brach may get the first crack at the set-up role. But Givens could easily be thrust into set-up duty as well. Is it ideal to use a 25-year-old with limited experience in the majors (and with pitching, in general) in that role? Maybe not. Sometimes that's what teams have to do when they have limited resources -- in this case, a mid-market team -- and are trying to decide which players to sign to fill a number of holes.

There's a case to be made that the Orioles should trade Zach Britton now, reap the benefits of the increased value of dominant relief pitchers (see Craig Kimbrel), and re-sign O'Day. Britton, O'Day, Brach, Givens et al. is a very solid group of relievers, but even one of Britton/O'Day is still pretty good. If the O's aren't at least exploring a Britton trade, they should be.

If Givens ends up being anything close to O'Day in the next few years, the O's will be thrilled. And even if they don't end up in the same bullpen in 2016 and beyond, at least Givens got to work with O'Day for a while and hopefully absorb what he could.

19 November 2015

Getting Rid Of Gausman

The title gives away a little bit of the following role play between me and fellow Depot writer, Joe Reisel.  The idea is to try to figure out how to improve the Orioles in a meaningful way through trade.  Yes, the club is thin and has few assets, but it does have some pieces that are of interest to other teams.  The following interchange has been lightly edited (Joe can yell at me if he sees fit).
Dan Duquette: Jed, baby, it is the Double D.  Congratulations on getting the playoff spirit back in Wrigleyville.  Not sure how you got Arrieta his groove back, but you are welcome.  I noticed that you have been shaking the bushes for cost-controlled pitching as well as looking to lower payroll.  While we do not have as impressive of budget capacity as you all do, we are able to take on some salary and you have a player that interests us: Jorge Soler.
His potential power and his...well, potential everything...is what we are looking for.  We know you guys are frustrated with him and that he has yet to become the hitter you all thought he could be.  We are willing to throw him out there over the next few years and see what shakes.  You asked about Mike Wright last summer and we are willing now to deal him.  You think we can do a Soler for Wright deal or center it around Wright?
You might be asking two questions: why Soler?  Why Wright?  Those are fair questions.  First, Jorge Soler's prospect sheen has been tarnished by unimpressive play and nagging injuries.

201220-0.72 Teams2 LgsA-Rk14951219.299.369.463
201422-3.03 Teams3 LgsAAA-AA-Rk236153348.340.432.700
MLB (2 seasons)MLB5011538145.268.325.433
Provided by Baseball-Reference.com: View Original Table
Generated 11/18/2015.

Those numbers alone appear as if there may be some grand next step waiting to happen, but they do not show how dreadful he was in the outfield.  He certainly has value and is locked into a 5/23 MM contract.

Mike Wright?  Yes, that is a low ball offer.  Opposing scouts gave Wright rave reviews in the Spring and he produced in Norfolk.  He certainly was a bigger chip in the early part of the 2015 season than he is now, but he is someone to wave around.  One person told me in March that Wright was by far the most interesting pitching prospect the Orioles had and that he was on their radar.  I do not know where he stands now.  Certainly, the season has not been kind to Hunter Harvey or Dylan Bundy.
Jed Hoyer: We're not in a position to swap our projected starting right fielder for a high-risk, medium-reward gamble. You do remember that Soler will play 2016 as a 24-year-old and Wright will play 2016 as a 26-year-old, don't you? Yes, Soler's had injury problems, but he has both a higher floor and a higher ceiling than Wright.
We're in a position to win now. If we're going to deal Soler, we're going to need someone who's going to really make a difference. You have exactly one of those - Kevin Gausman. Gausman, like Soler, has tantalized with sporadic brilliance but hasn't been consistent. Both have legitimate chances at being key components of championship teams. Financially and in terms of team control, they're pretty much a wash.
Given your organization's position, I know you can't swallow a Soler-for-Gausman even-up trade. So, we're prepared to help you by giving you assets for your system. Jeimer Candelario would instantly become at least your second-best position player prospect and he's blocked here; we'll include him. We have two major-league-ready, hard-throwing right-handed relief pitcher candidates in Corey Black and Carl Edwards Jr.; we can't use both of them so take your pick. And we've got a number of good arms a long way from the majors; might you be interested in a Carson Sands? 
So, my counter-proposal for Soler is Soler, Candelario, Black/Edwards, and Sands for Gausman. 
If you're willing to wait awhile, we need to see who's going to play center field for us next year. If we do get someone, or perhaps more accurately if we know who'll be playing there next season, I might be interested in Wright for the right price - say, Arismendy Alcantara. Or, we could explore something entirely different ...
Do not get me wrong, this is a fantastic deal.  Candelario and Sands are solid prospects and I would think to be able to get both of them would be a major get for the Orioles.  However, it concerns me that the net change here is an increase in money and the hole in right simply being pushed over to starting pitcher.  If the Orioles were in a rebuilding mode, this would be an excellent deal to seek and I would not think twice about it.  However, I need to find something more useful for the MLB club, so, regrettably I have to decline even though this deal looks great for the club long term.
DD: Understandable, we had to start somewhere and I thought Wright might be a good kernel to build upon.  As you, we have discussed Gausman and he is not off limits.  Losing him will put us in a tough position for 2016, but it is something to explore.  However, your offer points toward a rebuild and we need more value now for us to compete today.

Soler costs a little bit and if we lose Gausman we need some savings in cost in order for us to be able to go out into the market and find a dependable backend rotation arm.  As such, we need some cost defrayed.  We also are aware that in the next few years that you have some big arbitration raises that you will need to deal with.  What I will suggest might be a difficult loss, but I think it works for both of us.

We think the following makes sense: Soler and Starlin Castro for Gausman and J.J. Hardy.  Yes, we all remember you all calling around to everyone this past summer about whether anyone was interested in Castro.  We were not then, but we could be now.  This deal will not only net you a potential top of the rotation pitcher, but you would be dealing out two, admit it, spare pieces for roughly 20 MM in long-term savings.  We can handle that bump up in salary, but you may have some troubles with guys like Bryant breaking the arbitration bank.   
Yes, you may be worried about Hardy.  His shoulder is a mess, you have to check off on that.  However, it is his non-throwing shoulder, so he still is a great fielder.  His bat?  It probably is no worse than what Castro did this season.  If Kris Bryant's defense becomes a concern, you can push him into the outfield and have Hardy's defense soak up batted balls.  Plus, if Hardy breaks down, you have Addison Russell waiting to move over.  You get that flexibility, plus you get to turn Kevin Gausman into another pitching God.

For us, we hopefully solve one of our corner outfield spots and settle on an infield.  Yes, both Soler and Castro have question marks attached to them, but we like that we know how much they are going to cost and how it enables us to chase a decent arm for our rotation.  Losing Gausman most certainly hurts, but this would be worth it to us.

Are we closer?  Do you want to talk Kyle Schwarber for Gausman straight up?
This was a direction I did not want to go in.  Gausman is a cost controlled pitcher who is at worst an average pitcher and at best is a near ace.  However, I feel more comfortable dealing him out if I can essentially use Hardy's salary to replace Hardy and fill left field.  That is like finding another 13 MM in my pocket.  Only issue I really see from the Cubs is whether they can spin Castro for a deal better than an effective salary dump in Hardy.  Hardy is a pretty expensive defense minded utility man.
JH: When I first saw your proposal, I was not positively disposed. Not only were we giving up two of our most valuable tradable assets for an unproven pitcher, we would be taking on $40 million in dead money over the next three years. Upon further review, I think this trade might work for us. 
Let me start by describing the worst-case scenario for us, excluding serious injury. Kevin Gausman doesn't develop; J.J. Hardy becomes the infield equivalent of Edwin Jackson, and Jorge Soler becomes Nelson Cruz. (We're not ready to right Starlin Castro off, but we won't regret trading him in this deal even if does find himself.) The big disadvantage of this might be the money; we lose our flexibility to fill our holes in the future. We'd be entering 2016 without a center fielder if Fowler leaves, and also without a right fielder. But further reflection leads me to conclude that this deal is certainly worth bringing to my bosses. 
Let's look at the money. Hardy's 2018 option becomes guaranteed after this trade, so we're on the hook for $40 million over the next three seasons. Over that time, we'd be paying Castro about $28.5 million. I believe that Gausman is arbitration-eligible after 2016; I don't have any real idea what he'll earn in arbitration but let's assume it'd be a total of $25 million over 2017 and 2018. So, essentially, we'd get Gausman for three years and roughly $40 million. Comparing that to the probable $60 million it'd cost to add a Jordan Zimmermann, Gausman could be a bargain. We should be able to fill our center-field hole for the difference. 
Of course, with Addison Russell inked in at shortstop, Hardy won't play there. We'll be hoping he can play second base, which would allow us to move either Kris Bryant or (more likely) Javier Baez to Soler's corner outfield spot. If Hardy fails there, we'll have to scramble or hope Chris Coghlan is for real. 
But the upshot is that Gausman and Hardy for Castro and Soler is a deal worth considering, and one I'll definitely mention to Theo and Tom.
So we wound up on the following deal:

Baltimore Orioles receive RF Jorge Soler and SS Starlin Castro
Chicago Cubs receive SP Kevin Gausman and SS J.J. Hardy

From my view (and I think Joe's), this seemed like something slightly in the Orioles favor because Hardy is in no way worth 3/40 and to what extent does Gausman's value make up or surpass that?  To get some idea, I asked someone in the industry what they thought and he responded, "That is generally not a crazy deal.  Hardy is worthless to them, but Gausman is a big prize and saves them a great deal of room in their roster.  I would want to shop Castro around to others to see what I could get for him, but this would be something I would keep in my back pocket.  For the Cubs, I'd probably downgrade the talks and focus on something like Soler for Zach Britton.  That should work for both sides.  If I was the Orioles, only way I would want to deal Gausman would be if Kyle Schwarber was coming back."

I sent a poll out while we were doing this for you all to answer on Twitter.  The terms in the poll are less favorable with the 3MM difference for 2016 tossed in.  Still, you all were slightly in agreement to make the deal.

18 November 2015

Is A Reunion With Jim Johnson A Good Idea?

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It was reported last week that Jim Johnson could be a potential free agent target for the Orioles this offseason, even as a starting pitcher. Between 2008 and 2013, he was an effective reliever for the Orioles, throwing 395 innings to the tune of a 2.92 ERA (3.48 FIP) while producing a total of 5.5 WAR (according to Fangraphs). This fWAR number was good enough to place Johnson 16th among relief pitchers over that time period (minimum 300 IP). Johnson sticks out on that list, as the majority of pitchers ahead of (and behind) him include closers and other relievers one would likely consider “dominant”. That is of course a subjective term, but in this case I’m specifically referring to pitchers with high strikeout rates. Despite ranking 16th in fWAR, Johnson ranked 51st (out of 53 pitchers) in K/9, with a paltry 6.02. There is however, “more than one way to skin a cat” (DO NOT go off skinning cats), and while Johnson never was a strikeout machine, he kept the ball on the ground and in the ballpark, ranking 6th in groundball percentage (58.0%) and 4th in HR allowed per 9 innings pitched (0.52) during that time, both excellent attributes to have while pitching in Camden Yards.
Jim Johnson (photo by Keith Allison)

Prior to the start of the 2014 season (and entering his last year before becoming eligible for free agency), the Orioles surprisingly dealt Johnson to the Oakland Athletics for former prospect Jemile Weeks and a player to be named later (that PTBNL would turn out to be minor league catcher David Freitas). To some however, this trade wasn’t as surprising as it appeared on the surface, as Johnson’s expected $10 million salary was considered expensive for a pitcher with his profile, especially for a team with a limited payroll such as Baltimore. Johnson’s inflated salary of course was a result of the arbitration process, one which rewards relief pitchers for saves (despite it being a dumb statistic), something Johnson had accumulated a lot of over the previous two years.

Since leaving the Orioles, Johnson has travelled quite a bit, performing as two completely different pitchers (but mostly as a bad one), depending on whose uniform he happened to be wearing. This is pretty obvious looking at his numbers in the table below.

So if the Orioles are seriously considering a reunion with Johnson, which version of the pitcher are they more likely to get?

Let’s first focus on Johnson’s “luck” based peripherals over the past two years. It’s important to note that the word luck is in quotes since poor pitching by Johnson could certainly have been a major contributor to his “bad luck”. Everything that could have gone bad in 2014 (and his time with the Dodgers in 2015) for Johnson did, as those numbers look horribly out of whack in comparison to his career norms.

But how much of this was truly a result of bad luck compared to just bad pitching? Obviously, Johnson also didn’t help himself by walking 13.3% of the batters he faced in 2014, although he appeared to correct those problems in 2015. Taking a look at his batted ball tendencies doesn’t really tell us much, as they stayed relatively close to his career levels. Yes, his LD% was up about 2.5% and his percentage of “hard” hit balls (according to Fangraphs) was up about 3.5% in 2014, but both levels were similar (or lower) than their levels in his very productive 2013 season. It’s interesting that he did allow 48.3% of balls in play to be pulled in 2014, which possibly helped contribute to his increase in HR/FB%.

What about changes in the pitches themselves, such as the velocity, movement, etc? Velocity does not appear to be the culprit as his velocity over the years has remained fairly consistent. The quality of his pitches is where we start to see some differences, especially with Johnson’s sinker, which is his main pitch. According to Brooks Baseball, the horizontal movement on the sinker has fluctuated depending on the year, but has been trending in the wrong direction since 2012. Johnson has also been getting less vertical movement on the sinker as well, showing a clear downward trend over the course of his career.

Finally, let’s take a look at pitch location. According to Brooks Baseball, Johnson has thrown his sinker 63% of the time over the course of his career, so we’ll keep the focus on that specific pitch. Additionally, Johnson has never shown a platoon split (.301 wOBA against facing LHB, .310 wOBA against facing RHB), so we won’t limit the analysis to facing certain batters. Here’s how the location of his sinker has evolved from 2012 (arguably his best year) to 2015.

It’s fairly obvious that Johnson kept his sinker out of the middle of the zone in 2012 (effectively working both corners), which could go a long way to explain why he was so good that season. Generally, it also looks like he benefitted from some good fortune during 2013 as his sinker found the middle of the plate quite a bit. It’s possible that an argument could be made for bad luck in 2014 based on the figure, as Johnson generally kept the pitch down and towards his arm side’s edge, but I would hesitate to make that argument based on two things: it doesn’t excuse his walk rate (friendly reminder, it was 13.3%) and he basically abandoned working the pitch to his glove side of the strike zone.

Johnson’s 2015 season is arguably his most interesting, as he was very effective with the Braves, but was “dumpster fire” terrible with the Dodgers, so let’s take a closer look at where he threw the sinker during his time with each team.

The figure depicting his time with the Braves looks awfully similar to the one from 2013, which shows a lot of sinkers thrown middle-middle, indicating that he benefitted from some good luck. However, it looks like he also generally kept the sinker down in the zone better than he did in 2013, which is a good thing. However, there is no getting around the fact that Johnson was just bad in Los Angeles. He left nearly all of his sinkers up in the zone, making it hard to argue that his .446 BABIP and 25% HR/FB rate were just a function of bad luck, even in a very small sample size. It’s true that bad luck may have contributed, but Johnson wasn’t doing himself any favors.

There’s a mantra that hitters are supposed to follow against a pitcher who throws a sinker: “If it’s high, let it fly…if it’s low let it go.” Well, during his time with the Dodgers, Johnson was “pitchin’ ‘em high” and batters were “lettin’ it fly” to the tune of a .184 ISO. Compare that to a 0.046 ISO against his sinker during his time with the Braves and .099 ISO against his sinker over the course of his career.

Jim Johnson will never be a dominant pitcher, especially as the effectiveness and movement of his primary pitch (the sinker) continues to erode, which makes it even more important that he effectively locates the pitches he throws. Over the last couple of years, he’s failed to do that on a consistent basis. At this point, the Orioles would be wise not to offer him a guaranteed major league contract to be a member of their bullpen. And the notion that he’s a potential rotation candidate (as inferred in the link above) is even less advisable. I would never be against a team adding a guy like Johnson on a minor league deal with an invite to spring training, because it’s essentially a move with very limited downside. But even if that’s the route the Orioles take, they should be ready to cut bait at the first sign of trouble.