Do MLB Teams Get What They Pay For?

The Boston Red Sox spent about $47 million more than the league average on their payroll last year. Their 2014 won-loss record, however, was 20 games below average at 71-91.

The Red Sox response?

Spend more.

In the last 24 hours, the Red Sox have agreed to sign free agents Pablo Sandoval and Hanley Ramirez to contracts worth 5-years/$95 million and 4-years/$88 million, respectively.

And that gives me a perfect opportunity to present my statistical analysis of 2014 payrolls, won-loss records, and dollars spent per Win.

I took an interest in that analysis when I read the following statement, regarding MLB payroll, that was recently made by a commenter on Bob Smizik’s blog:

That old adage seems to make sense. People want to believe that they get what they pay for and that if they pay more for a product, they will get more out of the product. But I wasn’t willing to simply assume that MLB teams “get what they pay for very close to 100% of the time.” So, I took a close look at payrolls and wins.

The 30 major league teams spent a total of $3.45 Billion on payroll in 2014. And they played a total of 2,430 games; which, of course, means that there were 2,430 “wins” in 2014.

So, to determine the amount MLB teams spent per win, I divided $3.45 Billion by 2,430 wins and got the result of $1.42 million per win.

To determine the number of games a team should have been expected to win, based upon the theory that “they get what they pay for,” I divided their payroll by $1.42 million – the MLB average dollars spent per win.

For instance, the average amount that teams spent on payroll was $115 million per team. Therefore, if teams really do “get what they pay for,” a payroll of $115 million should result in a won-loss record of 81-81. (115 million divided by 1.42 million is 80.99)

But the research says that teams rarely got what they paid for in 2014.

Only 5 teams came within 5 wins of the number that would have been expected, based strictly upon their payrolls – if they do, indeed, “get what they pay for.” And the median average deviation from payroll win expectation was a whopping 20 wins!

At a median average deviation of 20 wins, a team with a league average payroll, which (based on the theory that get what they pay for) would be expected to go 81-81 – could actually end up being anywhere from a 101-win team to a 101-loss team. Therefore, the notion that “teams get what they pay for” simply wasn’t anything close to true in 2014 – unless it meant that a team with a league average payroll “got what it paid for” as long as it ended up being anything from the best team in the league to the worst team in the league. In other words, payroll told us almost nothing about how a team can be expected to perform.

Payroll as a predictor of winning percentage was a nearly complete failure in 2014.t

Here are the results for each of the 30 MLB teams, beginning with the 3 who won exactly the number of games that their payroll would suggest. The accuracy of payroll as a predictor of wins drops quickly from there.

Braves:  Payroll: $112 million;     Win Expectation: 79;     Wins: 79;      Deviation:  0

Rockies: Payroll: $94 million;     Win Expectation: 66;      Wins: 66;      Deviation: 0

Nationals: Payroll: $136 million;  Win Expectation: 96;     Wins: 96;      Deviation: 0

Twins:  Payroll: $92 million;        Win Expectation: 65;       Wins 70;      Deviation: 5

Reds:  Payroll:  $115 million;       Win Expectation: 81;      Wins 76;      Deviation: 5   

Cubs:  Payroll: $93 million;        Win Expectation: 65;        Wins 73;      Deviation: 8

Brewers:  Payroll:  $104 million;  Win Expectation: 73;      Wins: 82;    Deviation: 9

White Sox:  Payroll: $90 million;  Win Expectation: 63;      Wins: 73;    Deviation: 10

Angels:  Payroll: $158 million;  Win Expectation: 111;        Wins: 98;    Deviation: 13

Padres: Payroll: $91 million;     Win Expectation: 64;          Wins; 77;     Deviation: 13

Blue Jays: Payroll: $137 million;     Win Expectation: 96;   Wins 83;      Deviation 13

Cardinals: Payroll: $110 million;     Win Expectation: 77;    Wins: 90;     Deviation 13

Diamondbacks: Payroll: $112 million;    Win Expectation: 79;   Wins: 64;  Deviation: 15

Giants:  Payroll: $148 million;    Win Expectation: 104;       Wins: 88;     Deviation: 16

Mets:  Payroll: $85 million;         Win Expectation: 60;         Wins: 79;     Deviation: 19

Orioles:  Payroll: $107 million;     Win Expectation: 75;       Wins: 96;    Deviation: 21

Mariners: Payroll: $92 million;     Win Expectation: 65;        Wins: 87;    Deviation: 22

Rays:  Payroll: $77 million;        Win Expectation: 54;        Wins: 77;      Deviation: 23

Indians:  Payroll: $85 million;     Win Expectation: 60;     Wins: 85;        Deviation: 25

Royals:  Payroll: $91 million;    Win Expectation: 64;      Wins: 89;         Deviation: 25

Tigers:  Payroll: $165 million;     Win Expectation: 116;   Wins: 90;        Deviation: 26

Rangers:  Payroll: $134 million;    Win Expectation: 94;    Wins: 67;      Deviation: 27

Athletics:  Payroll: $81 million;    Win Expectation: 57;     Wins: 88;      Deviation: 31

Astros: Payroll: $52 million;       Win Expectation: 37;      Wins: 70;       Deviation: 33

Pirates:  Payroll: $72 million;       Win Expectation: 51;     Wins: 88;      Deviation:  37

Red Sox:  Payroll: $162 million;   Win Expectation: 114;   Wins: 71;      Deviation: 43

Marlins:  Payroll: $44 million;       Win Expectation: 31;     Wins: 77;      Deviation: 46

Phillies: Payroll: $178 million;      Win Expectation: 125;    Wins: 73;      Deviation: 52

Yankees:  Payroll: $197 million;  Win Expectation: 139;      Wins 84;      Deviation: 55 

Dodgers:  Payroll: $236 million;   Win Expectation: 162;    Wins: 94;      Deviation: 68

The “mean” average deviation between payroll win expectation and actual wins was 22.4 wins. The median average (same “deviation” number above as below) was 20.

This does not mean that teams should seek to have the lowest payroll in the major league baseball. But the evidence does lead to the conclusion that spending according to revenues – whether they are large or small – is just as likely to lead to on-the-field success as spending abundantly.

Bitching About “Dumpster Diving”

The Pirates recent signings of SS Pedro Florimon and pitcher Radhames Liz has brought on the Spend-Crazies’boringly predictable “Dumpster Dive!” bitch.

One would think they might have learned, after moaning the same miserable moan about the Pirate acquisitions of Jason Grilli, Mark Melancon, Edinson Volquez, Vance Worley, John Holdzkom, Chris Stewart, and Gaby Sanchez . . . But we’re talking about the Spend-Crazies, who focus all of their energies on Bob Nutting’s finances. They feel that success is having a mid-tier payroll, rather than a top-tier organization.

And the Pirates have, indeed, re-built themselves into a top-tier organization. So, the Spend-Crazies must ignore the fact that the Pirates are one of only 6 MLB teams to have reached the playoffs in both 2013 and 2014; and that they consistently have had one of the top rated farm systems in baseball. In fact, they must resort to the lowly “Rule 5 Draft” in order to find some feeble way to criticize the Pirates minor league organization.

So, let’s take a look at what the Nutting-obsessed have called “Dumpster Dives.”

Jason Grilli was at AAA when the Pirates acquired him from the Phillies in 2011. He was 34 years old and had not pitched in the major leagues in two years. From 2011 – 2014, Grilli saved 47 games for the Pirates, while posting a 3.01 ERA and 2.94 xFIP in 161.2 innings pitched.

Mark Melancon had a 6.20 ERA when the Pirates traded Joel Hanrahan and Brock Holt to the Red Sox for him and Jerry Sands, Ivan DeJesus, and Stolmy Pimentel. In two seasons, Melancon has saved 49 games and pitched to a 1.65 ERA and an outstanding 2.26 xFIP in 142 innings.

Vance Worley had just posted a 7.21 ERA for the Twins in 2013, when the Pirates acquired him. He gave the Pirates 110.2 innings of 2.85 ERA and 3.54 pitching

Edinson Volquez had a 5.71 ERA for the Padres and Dodgers in 20134. The Spend-Crazies cried when the Pirates signed him for $5 million. He had a 3.04 ERA and 4.20 xFIP for them this past season, while pitching 192.2 innings.

“Chris Stewart?!” they moaned. “That’s our big off-season acquisition.” Stewart went on to hit .294 with a .693 OPS in 2014 (the MLB average for catchers was .687). And he played average to above-average defense, while providing pitch-framingthat was just as good as that of Russell Martin.

“Gaby Sanchez?! That’s the bum we get for the pennant race at the trade deadline?!” Since being acquired in 2012, Sanchez has hit for an .846 OPS against left-handed pitchers – the exact job he was acquired to perform.

“Now, their diving all the way down to the Independent Leagues for pitchers?! C’mon, man,” they say, a bit less than creatively, “John Holdzkom?! Really,” they echo the meaningless cliche.

And we hear the very same things now about two players about whom they heard for the first time when the Pirates signd them; Pedro Florimon and Radhames Liz.

“Woo-hoo!! The dumpster-dive season has started early this year. . . Well, it is what it is,” they whine-out another meaningless cliche. (When is “It” ever not what “It” is. I would think that “It” cannot ever be what “It” is not. But that’s just me. Probably a result of my graduate degree in existential psychology.)

Of course, the Spend-Crazies neglect to consider that Pedro Florimon is an excellent defensive SS. He had a +12 Defensive Runs Saved and +9.9 fangraphs defensive rating, when he played 134 games for the Twins in 2013. That’s Clint-Barmes-level fielding at a premium defensive position.

Florimon’s OPS was only .611 in his 134 games for the Twins in 2013. That’s not good. But it is quite good enough for an excellent-fielding, back-up SS.

The Spend-Crazies conveniently forget the Michael Martinez experience of 2014, which happened when Barmes and Neil Walker went down with injuries at the same time.

Radhames Liz was once an excellent prospect, but control problems washed him out of the Major Leagues. However, his fastball is now hitting 97-98 mph in the Dominican Winter League and he is throwing what one scout called a “vicious curve.” He has K’d 29 and BB’d only 5 in 23 innings in the Dominican. And it’s not as if the Pirates don’t have solid reports on him. Dean Treanor, who manages the Pirates AAA team, is Liz’s current manager in the Dominican.

Sure, there have been waiver claims and low-level acquisitions that did not work out for the Pirates: Jayson Nix, Michael Martinez, Chris Dickerson, Jonathan Sanchez.

But there is little to no risk involved with bringing these players into the fold . . . and they could become Jason Grilli . . . Mark Melancon . . . or John Holdzkom, Edinson Volquez, Vance Worley, Chris Stewart, or Gaby Sanchez, who all helped the Pirates succeed to the point of reaching the playoffs.

Keep on diving into that kind of dumpster, Neal. You’ll be doing the Nutting-obsessed a favor. They’re not happy unless they’re bitching.

Another Absurdity Revealed by the Russell Martin Free Agency

I just saw this quote from a Pirate “fan” regarding the team’s acquisition of catcher Francisco Cervelli from the Yankees.

“Nutting Regime followers have already been in a frenzy by painting GM Neal Huntington’s answer to Russell Martin (Franciso Cervelli) to be something he’s not.
Cervelli is and has been a back up catcher….Another Chris Stewart.
To anoint him as anything else is pure, Grade A propaganda at its worse.
“Could Cervelli turn out to be something special?….
Sure!….And the Steelers could win the Super Bowl in February too.”

 

Perhaps, the above quoted astute observer does not realize that, in four of the past six seasons, Russell Martin’s OPS has been lower than Francisco Cervelli’s career OPS; or that – when the Pirates out-bid the Yankees for Russell Martin, prior to the 2013 season – the Yankees chose to replace Martin with Cervelli and Chris Stewart. I guess New York was taking the cheap way out.

The New and Improved Pedro Alvarez Trade Market

When Pedro Alvarez hit for a .717 OPS in 2014, provided a 0.2 wins below replacement level, and suddenly lost the ability to throw a baseball within the vicinity of first-base, his trade value went down. But things just changed.

Free agent Billy Butler signed a 3 year, $30 million contract, yesterday, to become the Oakland Athletics designated hitter. That’s a pretty high value for a player who was even less productive than Pedro Alvarez last year. Butler hit for a .702 OPS in 2014 and had a -0.3 WAR.

MLB Trade Rumors published a free agent profile of Butler on Tuesday, in which they cited the Mariners, Blue Jays, and White Sox as teams in need of a DH, who might have been interested in Butler.

With the A’s believing that Billy Butler is worth 3 years and $30 million; the Mariners, Blue Jays, and White Sox in need of a DH; and the Pirates already having a more productive first-baseman on their roster, there is suddenly a significant trade market for Pedro Alvarez.

I’m not going to speculate about whom the Pirates may be able to acquire in exchange for Alvarez, but Neal Huntington should be taking a good look at the pitching staffs in Seattle, Toronto, and the south side of Chicago.

Should the Pirates Really “Step Up” Like These Teams, Mr. Smizik?

Bob Smizik of Post-Gazette.com trotted out a tried and true issue this morning: the size of the Pirates payroll.

In support of his stance that the Pirates can – and should – increase payroll, Mr. Smizik cited the $320 million contract that the Marlins recently gave to outfielder Giancarlo Stanton, the $82 million contract the Blue Jays gave to catcher Russell Martin, and the $15 million contract that the White Sox gave to reliever Zach Duke yesterday.

However, Mr. Smizik and the Payroll-Crazies who commented in response to his column failed to mention some integral elements of the issue.

Over the four years, the Marlins have a record of 280 wins and 368 losses. The White Sox have a record of 300 wins and 348 losses. And the Blue Jays have a record of 311 wins and 337 losses.

The Pirates, over those four years, have a record 333 wins and 315 losses and have reached the playoffs in both of the last two years.

The White Sox last saw the post-season in 2008.

The Marlins last reached the playoffs in 2003.

And the Blue Jays have been absent from October for the 21 seasons.

Perhaps, it is time for the White Sox, Marlins, and Blue Jays to follow the successful Pirate model.

Pirates Sign “Washed Up” Pitcher

Former Pirate pitcher and 2006 first-round draft choice –  Brad Lincoln signed a minor league contract with his old team, today; and Bob Smizik of Post-Gazette.com immediately characterized Lincoln as “washed up.”

That got me thinking.

Do you remember 2011, when the Pirates traded for the “washed up” Jason Grilli.

2012, when they traded for the “washed up” A.J. Burnett?

2013, when they traded for the “washed up” Mark Melancon and signed the “washed up” Francisco Liriano?

Last off-season, when they signed the “washed-up” Edinson Volquez?

Last spring when they acquired the “washed up” Vance Worley?

Last week, when they signed the “twice-washed-up” A.J. Burnett?

Let’s hope Neal Huntington manages to sign a few more of those “washed up” pitchers before the start of Spring Training.

A Player the Pirates Should Have Brought Back.

Jon Paul Morosi of Fox Sports is reporting that the Chicago White Sox have just signed a former Pirate, who would have been a good addition to the Bucs 2015 roster.

Left-hander Zach Duke could have convincingly replaced lefty Justin Wilson, who was recently traded to the Yankees for catcher Francisco Cervelli. In fact, Duke had a much better 2014 than Wilson.

Duke had 11.35 K/9, 2.61 BB/9, and 0.46 HR/9; which added up to a stellar 2.09 xFIP.

Neal Huntington likes to have left-handed relievers who can do more than just come into a game to retire one left-handed batter and Duke fits that bill. He faced 105 left-handed hitters last season and limited them to an excellent .569 OPS and .258 wOBA.. But he was equally excellent against the 133 right-handed hitters he faced. They hit him for just a .586 OPS and .262 wOBA.

UPDATE: I wrote this post before the terms of Duke’s contract were announced. I believe that 3 years and $15 million is too much for Duke.