The Benefits of Letting the Closer Market Settle

The Phillies made the first major splash of the offseason by signing Jonathan Papelbon to a borderline absurd four-year, $50 million contract. The market was clearly flush with closers, or relievers capable of closing, and the Phillies paid a max type of contract for a 65-inning pitcher. Financial wiggle room was a concern before the move and the opportunity costs both realized and hypothetical — bidding farewell to homegrown talent Ryan Madson and perhaps prohibiting themselves from making more important moves elsewhere, respectively — suggested it was a poor move.

However, even without the Phillies context, signing any closer for that much money, over that many guaranteed years, is foolish. Relief pitchers are statistically fickle and don’t really offer a decreased level of injury risk. Over such a small sample of innings, it’s easy to temporarily mask true talent levels, especially when considering the general difficulty in evaluating relievers. By signing Papelbon to such a large deal that early in the offseason, the Phillies explicitly acknowledged their view that he was, by far, the best available option, and one worth spending big bucks on.

In this particular offseason, with so many viable closing options available, nobody is worth spending much money on since the differences between the closers are mostly nominal. The fact that so few closers were signed early in the offseason — besides Papelbon, both Joe Nathan and Jonathan Broxton signed lower-risk deals — indicates that teams are growing wary of doling out big bucks to pitchers occupying an overstated role. In the context of the current offseason, many teams are waiting to sign a closer, allowing the market to settle in order to ink one to a team-friendly deal.

The Marlins were the first to strike, by signing Heath Bell to a relatively reasonable three-year, $27 million deal. While even that might be considered an overpay, Bell on that deal is far less risky than Papelbon is on his. Signing Papelbon to that deal suggests one of two things: either the Phillies anticipated a rush on closers, which wouldn’t make much sense when so many were available, or his performance was so exemplary relative to everyone else that it was a no-brainer.

To the first point, while the saves statistic is still prominent, teams are beginning to gravitate towards turning certain relievers into closers instead of paying the premium for a veteran stopper. Not only aren’t teams rushing to sign closers, but some are actually going to fill the role internally, meaning even more of the free agents will have to settle for lesser deals. While it’s usually thought that the number of free agents at a position equals the amount of openings, the use of internal options limits the number of opportunities.

Secondly, sure Papelbon has pitched well over the past few seasons, but watch what happens when we play everyone’s favorite game — Guess That Pitcher!

Pitcher A (2009-11): 10.0 K/9, 3.0 BB/9, 2.87 SIERA, 3.32 xFIP
Pitcher B (2009-11): 10.8 K/9, 2.8 BB/9. 2.60 SIERA, 3.23 xFIP

Pitcher B is Papelbon. Pitcher A is Frank Francisco, who will probably end up signing for something like two years and $16 million. Papelbon has performed better over the past three seasons, but nowhere near enough to mitigate the cost differential. This game could be repeated with many of the free agent closers, even excluding Papelbon, and it would be tough to tell the differences. When that’s the case, how can any team justify paying one member of that group so much more than the rest?

None of this is meant to rail on the Phillies, or Papelbon himself, but rather to illustrate that making a splash when many viable options were available was risky and foolish.

The point was furthered when Bell signed his deal Thursday night, and will get cemented when Francisco signs the type of deal mentioned above, or Madson signs for three years, $24 million. Ultimately, that’s the major problem with jumping on closers. By waiting, even the good ones will end up accepting lesser deals out of sheer necessity. If it isn’t less overall dollars, the team-friendliness will come in the form of years committed. This is a situation where many of the options are similar enough that if Plans A and B sign elsewhere, Plans C-E are still enticing, without feeling like a team settled.

The Phillies didn’t avail themselves to this opportunity, and instead stubbornly stuck to Plan A. When spring training rolls around, it’ll be very interesting to look back at all the deals these free agent closers signed, because many are similarly talented, and most will sign for much less than they would in a more typical offseason.