Royals Bet on Ervin Santana, Inflation

The Angels had until today to decide whether to exercise Ervin Santana’s $13 million option or pay him a $1 million buyout and make him a free agent. After a miserable 2012 season, it was pretty obvious that they weren’t interested in picking up the option, so today, they shipped him to Kansas City.

The deal, as reported by Ken Rosenthal, is Santana and cash for LHP Brandon Sisk. Given that the Angels could have made Santana go away for $1 million and that Sisk is a 27-year-old reliever who has never pitched in the Majors, it’s a pretty safe bet that the Angels aren’t kicking in much more than that $1 million they would have owed either way. The Royals are almost certainly going to have to pay $11-$12 million of Santana’s salary in 2013.

So, is he worth that kind of cash? Well, maybe.

Santana was awful last year, ranking as somewhere between one win below replacement level (by FIP) and exactly replacement level (by RA), depending on how you want to evaluate a pitcher’s results. The problem, as is usually the problem when he’s going badly, was home runs. He gave up 39 dingers in 30 starts, despite pitching in a park that suppresses home runs, especially for right-handed pitchers. His 1.97 HR/9 was the worst in the majors among qualified pitchers, 20% worse than the next highest HR/9 any starter allowed (Phil Hughes, 1.65).

Beyond the homers, though, it was pretty much business as usual. His walk rate, strikeout rate, and ground ball rate were all right around career norms for him, so even though his velocity was down and the results were horrific, he doesn’t seem to have cratered as a pitcher. He just threw too many meatballs and hitters didn’t miss them very often. It happens, but it’s not necessarily the most predictive thing in the world. In fact, if you want to buy low on a starting pitcher, finding a guy with a high HR/FB rate in the previous year isn’t a bad place to start, and no one posted a higher HR/FB rate than Santana last year.

So, I’d say there’s a pretty decent chance Santana bounces back in 2013. This probably isn’t a Jonathan Sanchez situation. There’s not a lot of evidence that Santana is just broken, like Sanchez appears to be.

However, there’s also not a lot of evidence that Santana has the capability of being a difference maker, even when he’s not giving up home runs left and right. For his career, he’s posted a 103 ERA-/106 FIP-/101 xFIP-, making him something pretty close to a league average starting pitcher. He was better than that in 2011, but it was mostly a low BABIP/high LOB combo, and it shouldn’t have come as a huge surprise that it didn’t stick. Given his status as a fly ball pitcher who doesn’t miss a ton of bats and still has some command issues, it’s hard to project him as more than a durable innings eater. And that’s if his home run problem from 2012 wasn’t the sign of a more serious problem.

Durable innings eaters have their usefulness, but $12ish million for that skillset seems steep, especially given how many teams were able to find useful starters for a fraction of that in last year’s free agent class. However, as has been noted many times over, the new television contracts that the league and teams have negotiated are pushing a lot of new money into the league, and it’s possible that we’re in for some pretty gnarly inflation this offseason. If the prices of players are going up significantly, $12 million for a potential league average pitcher on a one year deal might not look so crazy when all is said and done.

And, of course, the Royals have had their problems luring free agents to Kansas City to begin with, so by trading for Santana, they don’t have to worry about the whole “I want to play for a winner” stigma, and there is some value associated with having a bird in the hand. Given their desire to add multiple pitchers to their rotation this winter, this hedge against runaway inflation has some chance to pay off, especially if Santana rebounds and the Royals can make him a qualifying offer next winter, gathering a compensation pick for a one year rental that didn’t cost them any real talent in the first place.

But, of course, we don’t know that Santana is going to bounce back. We don’t know that there’s going to be runaway inflation. We don’t know that the Royals will be able to make Santana a qualifying offer next winter without him accepting it. There are scenarios in which the stars align and this move looks okay 12 months from now, but there’s also a lot of scenarios where the Royals regret spending 15% of their payroll on a pitcher with some glaring flaws. When you’re a middle-to-small market franchise without the financial resources of your own RSN or a huge cable deal, you have to make sure you get some legitimate return on the dollars you invest.

The Royals are now on the hook for about $20 million in 2013 to Ervin Santana and Jeff Francoeur. Optimistically, you might think those two can give you +3 wins, maybe +4. The Royals total payroll in 2012 was $64 million. You just can’t spend 1/3 of your payroll on less than five wins and compete unless your payroll is enormous. And even if it is enormous, there are almost certainly better ways to spend $20 million.

Maybe this works. Maybe Santana has a good year, and he gives them 200 decent innings, and they get a compensation pick in the 2014 draft. More likely, though, they just spent $12 million on a pitcher who will give them what they could have gotten for $5 million, and like with most of Dayton Moore’s Major League moves, it turns out to be too much money for not enough production.