This post was written by Adam Guttridge and David Ogren, the co-founders of NEIFI Analytics, an outfit which consults for Major League teams. Guttridge began his MLB career in 2005 as an intern with the Colorado Rockies, and most recently worked as Manager of Baseball of Research and Development for the Milwaukee Brewers until the summer of 2015, when he helped launch NEIFI. As part of their current project, they tweet from @NEIFIco, and maintain a blog at their site as well.

Much has been made lately of “title inflation”; the presence of multiple personnel above the role of assistant GM within MLB front offices. That’s a symptom of something larger, rather than a phenomenon unto itself. Front offices are growing, and most rapidly through analytics-centric staff of some type. Critically, though, they’re mostly proceeding with a classically hierarchical (vertical) structure. As a result, specialization is now at an all-time high.

40 years ago, a general manager’s duties extended to such perfunctory tasks as preparing operating budgets and arbitration presentations. In 2016, those may be functions of people who report to people who report to the GM (and perhaps the GMs themselves are reporting to yet another non-owner above them). Even just 10 years ago, well into post-Moneyball times, general managers would occupy barstools in the open lobbies of winter meetings hotels, and talk trades over drinks. That’s simply not how it is any longer, as the mechanics of trades (and evaluations) are more sophisticated.

Certainly, not all organizations have taken the vertical route. But many (or most) have, and it has several effects, as one might imagine.

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On Saturday, the Orioles agreed to re-sign star first baseman Chris Davis, and the price tag was staggering given his limited market: $161 million over seven years. Except, they aren’t really paying him $161 million over the next seven years; as part of the deal, the Orioles have deferred about a quarter of the contract, pushing $6 million per year of his annual salary into the years after the contract has expired, and pushing some of it way into the future. Under the terms of this deal, Baltimore will now be sending Davis checks for the next 22 years, with the $42 million in deferred money being paid out from 2023 through 2037.

So while the $161 million number is a headline-grabber, the actual value of this deal is quite a bit lower than that, since money loses value over time. We talked about this last year with the Max Scherzer deal, and not surprisingly, Davis and Scherzer are both represented by Scott Boras; he’s clearly willing to create long-term payment structures in order to get a larger total payout numbers when the deals are announced. And for the owners, these types of deals help them acquire (or retain) star players while potentially pushing the future costs of the deal onto another ownership group; Peter Angelos is 86 years old, and will probably not be alive for the entire duration of Davis’ payments.

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Way back on April 11 of last year, when the Matt Williams-led Nationals were still World Series favorites and Jed Lowrie was still the starting shortstop for the Astros, an unassuming at-bat took place between Matt Carpenter and Johnny Cueto in Cincinnati, Ohio. Cueto, facing his 45th batter of the season, quickly got ahead in the count, 0-2, spotting consecutive fastballs on the outer edge against which Carpenter could only muster a foul ball. Carpenter, who led the league in pitches per plate appearance in 2014, with 4.4, took a third-pitch fastball just inside for ball one. Then another fastball, outside, for ball two. Then a similar fastball, this one a bit lower and still outside for ball three. With the count now full, Carpenter took one more pitch, a low slider, for ball four, laid down his bat and took his base.

It’s not the kind of thing that makes fans jump up out of their seats, or really have any kind of reaction from their seats. It’s just a walk, seemingly as unremarkable as any other, especially given Carpenter’s role in the event, if not for the fact that it came after an 0-2 count, something Chris Sale only let happen once in 854 batters faced last year. Cueto did it in his second start, and then nine more times throughout the course of the year, more than anyone else in baseball save for Baltimore’s Ubaldo Jimenez.

Cueto was one of only four pitchers to break the 10-walk threshold after 0-2 counts, joining Jimenez, Trevor Bauer and Gio Gonzalez. Given enough tries, a hardcore baseball fan probably could have guessed those three names. Bauer, Gonzalez, and Jimenez are the kind of guys who issue plenty of walks all season long, so they’re the kind of guys one might expect to issue plenty of walks after 0-2 counts, too. Those three each routinely post walk rates close to or north of 10%. Cueto, on the other hand, walked just 5% of his batters last year, and is known for possessing impeccable command.

Going back several seasons, Cueto’s place on the leaderboard of 0-2 counts lost to walks remains equally eye-popping:

Cueto is the only pitcher in the top five with an overall walk rate under 8%, and therefore leads the top 10 in the percentage of his total walks that come after he’s ahead of the batter 0-2. Putting that into more perspective: since 2013, Cueto’s walked 129 batters, and 15% of those walks started out as an 0-2 count. As effective and entertaining as Cueto may be, this must be the sort of thing that’s downright maddening for fans, coaches, and teammates alike.

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The minimum-wage lawsuit that a group of former and current minor leaguers is bringing against Major League Baseball could mark a paradigm shift in the industry. In a nutshell, a ruling in favor of the plaintiffs would fundamentally change the business model of the game, both at the minor league and major league levels.

As legal analyst Nathaniel Grow details as part of his running coverage of the suit, the plaintiffs contend that MLB violates federal and state minimum-wage and overtime laws by paying many minor leaguers as little as $3,300 a year. If plaintiffs were to obtain a favorable ruling, the cost of doing business for major league teams would increase dramatically. In all likelihood, major league clubs would try passing down that cost to minor league affiliates. In one extreme yet plausible scenario, we could see retraction in the minor leagues, which would have ripple effects on player development, the amateur draft and the international signing period. And that’s just the baseball side of it, saying nothing of the impact on regional economies that rely on their minor league franchises.

When a verdict is handed down, there will be plenty of time to assess its impact, the good and the bad. For now, I want to look at an issue that is getting less attention than the lawsuit’s hypothetical fallout: the risks that current minor leaguers must accept if they decide to join the lawsuit.

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Ben and Sam talk to incoming Los Angeles Times Dodgers beat writer Andy McCullough about the Players’ Tribune, the Dodgers and Royals and, for some reason, Sublime.

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Sarah Gelles was recently given a new title. The Baltimore Orioles’ Director of Analytics since April 2014, she is now the Director of Analytics and Major League Contracts. Based on her career track, don’t be surprised if she one day becomes a general manager.

In 2010, Gelles graduated summa cum laude from Amherst College with a degree in Law, Jurisprudence & Social Thought. Along the way, she interned for the Pirates in their baseball operations department. Upon leaving school, she worked for Major League Baseball’s Labor Relations Department. After that, she served a year-long internship with the Orioles before being hired full time when Dan Duquette became team president in November 2011.

She began making her mark even before Duquette arrived. While still an intern, Gelles “identified an area of need in the organization, and started to build out our first internal database.”

Think about that for a moment. One year out of college, an intern initiated one of the most-meaningful advancements in team history. Read the rest of this entry »

At the kind of money he wanted, Chris Davis basically had a one-team market. Other big-spending teams didn’t have openings at first base, and other big-spending teams weren’t buying Scott Boras’ pitch of Davis as a versatile could-be outfielder. The Orioles sensed even a month ago they would be bidding against themselves, and they attempted a couple leverage plays to try to force Boras’ hand. Yet Boras won, as he almost always does. Here’s what’s being reported: Davis re-signed with Baltimore for a seven-year deal worth $161 million. Somehow, the commitment got bigger from what was reported weeks back. The Orioles were the only team around $150 million, and Scott Boras got them to add on more.

That makes it kind of a bad look for Baltimore. The easy takeaway is that Peter Angelos just got played. And at the end of the day, it’s highly unlikely another team would’ve been willing to come close to this, had the Orioles walked away. But for one thing — however much this is worth — this does send a good message that the Orioles will spend to keep good players around. People have doubted that in the past, and now Davis joins Darren O’Day as a returning key player. And there are other factors, as well, in support of the idea this isn’t a certain catastrophe. This isn’t quite a straight-up $161-million commitment. There are, let’s say, special considerations.

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You could say the market has agreed upon a price for mid-level innings-eaters around 30 years of age. The Kansas City Royals reportedly agreed on Saturday morning to sign right-handed starter Ian Kennedy to a five-year deal worth $70 million.

It’s a big contract, a surprising contract, but one that falls right in line with similar deals inked by Mike Leake (5/80), Wei-Yin Chen (5/80) and Jeff Samardzija (5/90). Looking back at our crowdsourced contract estimates, it’s clear that nobody expected this class of durable, mid-rotation starters to get paid the way they did:

It’s not the biggest “overpay,” relative to the what the crowd expected, but it’s close. Samardzija, Leake, Chen, and now Kennedy all received an extra year or two, and an extra few million dollars per year more than the crowd expected, adding up to each starter receiving between $20 and $30 million more than what folks thought.

But Kennedy’s contract leads the way, in terms of surprise. Thought was, Kennedy would get something like three years and $36 million. He got an extra two years, opposed to the extra one that the rest of the group received, and a larger AAV. When the crowdsourcing took place, an extra question was included, asking the crowd whether it thought Kennedy would accept the qualifying offer, a one-year deal worth just over $15 million. Nearly 40% of the crowd expected Kennedy to take the qualifying offer, more than double the number of people who thought Leake or Chen might accept. If Kennedy rejected the qualifying offer, there was fear among many that no team would be willing to concede a draft pick to sign Kennedy, even at the terms of 3/36.

Reason being, Kennedy simply hasn’t been as good as his peers. Last season, he allowed the highest OPS among any qualified starter, and whether you go back more years, or look toward the future, it’s tough to find any way to include Kennedy in the same class as Samardzija, Leake or Chen:

Last year, Kennedy was a replacement-level pitcher. In 2013, Kennedy was a replacement-level pitcher. He should be expected to do better than that, but odds are that Kennedy’s true-talent level lies a bit above a +1 WAR starter, with the most optimistic of projections putting him around +2 WAR, in the present. The contract runs for five years. Even if you start with Steamer’s more optimistic 2.2 WAR projections, it’s hard to justify, in a vacuum, Kennedy being worth $70 million:

The estimate comes in $20 million shy of the actual contract, and that’s not including the loss of a late first-round draft pick, likely valued somewhere around $10 million, and the fact that there’s an opt-out for Kennedy after two years, which shifts the needle even more towards Kennedy’s side. If he’s good, he’s gone after two years, and if he’s bad, the Royals are saddled with his salary for the duration.

Of course, moves are to be evaluated in context, and each team’s situation is unique, as well as each player’s situation. There’s more to every deal than the dollars and years.

For instance, maybe the Royals just aren’t too concerned about the loss of the 24th overall pick in the draft? The window of contention might not be open for too much longer with this roster. Lorenzo Cain, Eric Hosmer, Mike Moustakas, Wade Davis, Alcides Escobar, Edinson Volquez and more will all be free agents by 2018, the same year in which Kennedy’s opt-out resides, and so perhaps they just care more about maximizing their chances of winning again during that two-year window, rather than maybe winning down the road. It’s a reasonable thought to have, and you’ve got to applaud the World Series champs, a team that’s always been ran on the tightest of budgets under owner David Glass, for opening up the pocketbook in an effort to continue Going For It. Kansas City’s Opening Day payroll is going to be something like $130 million dollars, up $20 million from last year and up $100 million from five years ago.

At the same time, if Kennedy is bad, as he’s been in two of the most recent three seasons, then Kansas City might have a replacement-level albatross on their hands in the very near future, and it’s the kind of move that might keep the Royals from retaining one of their star players in a couple years, when the franchise isn’t coming off the high of a World Series victory and swimming in extra postseason revenue.

The Royals needed a pitcher. They needed a pitcher who was likely to give them plenty of innings. Banking on the health of Kris Medlen, Danny Duffy and, to an extent, Yordano Ventura, is a frightening proposition, and the Royals wanted to mix in some certainty. In terms of innings, Kennedy will give them that certainty, but at one point due the value of a pitcher’s ceiling, and his floor, outweigh his durability?

Kennedy has thrown plenty of innings lately, but most of them haven’t been good innings. The big problem, for Kennedy, has been the fly balls. He doesn’t induce any grounders, and way too many of the flies have been leaving the park. True, Kaufman Stadium has a massive outfield that suppresses homers, and true, Kansas City has an incredible outfield defense that turns would-be fly ball hits into outs. But Kennedy recently pitched his home games in PETCO Park, a stadium just as pitcher-friendly as Kaufman, against teams that batted with a pitcher in their lineup, and even the greatest outfield defense in the world can’t turn fly balls that land halfway up the bleachers into outs.

Jeff recenty ran through all the pros and cons of Kennedy as a pitcher, and while it’s hard to be overly pessimistic, it’s equally difficult to come away feeling encouraged, and that was before we knew the terms of the deal. On the surface, it seems like an overpay. Kennedy isn’t Samardzija, or Leake, or Chen, and yet he gone Samardzija/Leake/Chen money. But the Royals needed a pitcher, and Kennedy’s a pitcher, and the Royals are better today than they were yesterday. Is the rotation good enough to contend again? Only time will tell, and maybe Dave Eiland can work his magic again, reuniting with Kennedy from their days with the Yankees. It sure looks like an overpay, but maybe that isn’t the point. We always want to see teams boost up their payroll after a World Series run, and the Royals have done just that. They’ve got another two years until things could get ugly again, and doing everything they can to keep this run going. It’s hard not to like the decision to commit to that, and to spend some money. It’s just a little harder to like where the money went.

This morning, after a long and protracted negotiation that finally resulted in the team threatening to pursue alternative free agents, the Orioles reportedly agreed to re-sign their slugging first baseman Chris Davis. The price? $161 million over seven years, giving Davis the same annual average value as Jason Heyward, the winter’s best available position player. And Davis was able to land this contract despite the fact this contract is probably going to be a disaster and that the market for hitters has been quite frigid this winter.

Given the limited suitors looking for a first baseman, the remaining crop of quality outfielders, and the risks surrounding Davis’ skillset, this might be Scott Boras’ most impressive victory over reason yet. As an agent, he has perfected the ability to go around the baseball operations department, dealing directly with owners who simply don’t have the same level of knowledge as the people they employ to run their team on a daily basis. Except in this case, even Peter Angelos had to know he was bidding against himself.

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