Winning the Pitching Offseason

The 2015-16 offseason has been heralded as a historic one in terms of the volume of starting pitching projected to be available on the free market. There’s star-level talent (some of it already signed), in the persons of Zack Greinke, David Price and Johnny Cueto, as well as a bevy of mid-range targets certain to pull down three or more guaranteed years at a minimum of $10-12 million per season. The first big deals are in the books, and the prices in terms of dollars and years have been higher than the already elevated expectations.

What is the track record of both huge and mid-sized investments in starting pitching, and what does it portend for the clubs who have already made a splash in this year’s market? Does landing the big fish really mean you’ve “won” the offseason? Or might the clubs that either didn’t buy a lottery ticket — or held on to their own, suddenly more valuable tickets — come out ahead?

It’s difficult to fathom that just a few short years ago, the industry shunned the pitching mega-contract. After Kevin Brown cleared the $100 million guarantee mark in 1999, the bar was nudged upward by Mike Hampton’s eight year, $121 million agreement with the Rockies in 2001. That conflagration seemed to teach front offices a thing or two about massive investments in pitchers.

Free agency has generally been an inefficient proposition both for position players and pitchers. Teams often pay players based on what they have done, rather than what they are going to do. Most players don’t hit the free market until after their 30th birthday, quite often with their best seasons behind them. The game is rigged even more for free-agent pitchers, who get hurt at a significantly higher rate than their position-player brethren.

Every free-agent contract that’s signed, however, is seemingly greeted by a barrage of analysis justifying it as a wise investment on the club’s part. It’s a pet peeve of mine, the tendency to assume a deal is a good one based merely on the fact that a club is paying $7.5 to $8.0 per win in 2015 dollars.

Accumulating surplus value above that level should be the goal, and the very real possibility that the free-agent pitcher receiving such lavish guarantees might disappear completely from the scene due to injury or ineffectiveness is totally discounted when these pitching deals are analyzed. The limitations of a pitcher’s ceiling, and the unlimited nature of his floor, are both often ignored.

Today, let’s allow our recent past to inform our present. First, let’s look at what I would consider mid-range free-agent pitching contracts from 2012 to 2015. In this case, I’ve defined them as such: at least three guaranteed seasons at $10 million per year, with a total guarantee below $80 million.

That’s pretty grim: $8.5M per WAR on average, even for contracts moving forward from 2015 is a subpar return. Remember, the break-even $/WAR rate back in 2012-13 was well below today’s level. There is not a single clear winning deal among this group, though Francisco Liriano’s contract well positioned to be one after his first guaranteed season.

Each and every one of these pitchers was in his 30s when the contract period began. Liriano’s 2015 was the best of the 25 seasons above, at 3.6 WAR. Only three of these 25 seasons resulted in 3.0 WAR, and less than half of the seasons resulted in 2.0 WAR.

You’d hope, at a bare minimum, that a pitcher in whom you’re investing three or more years at $10 million or more per season would at least qualify for the ERA title over the life of the contract. In only 15 of the 25 seasons above — that is, just 60% of them — did the 2012-15 free-agent pitcher qualify for his league’s ERA title.

Looking back at this list, I recall liking only the Liriano and Ubaldo Jimenez deals when they were signed. While they retained the risks carried by all starting pitchers, they also possessed upside. Reasonably high K rates, reasonably strong contact management potential. In Liriano’s case, specifically, Pittsburgh was a perfect landing spot: they know how to get ground-ball pitchers to get more ground balls than ever, as evidenced by their work with A.J. Burnett, J.A. Happ, Charlie Morton, Vance Worley, and others in recent years.

So recent history suggests that if you’re going to wade into the mid-range free-agent marketplace, your rate of return is likely to be below average, thanks to an almost universal lack of upside, and a 40% chance of not even getting a full season out of your signee.

Let’s move up the pitching food chain, and perform a similar analysis with the largest pitching contracts of all time, a list which includes a handful of extensions to pitchers before they reached the free market, as well as a couple of huge deals that were reopened thanks to opt-out clauses.

We get a $7.0M-per-WAR average, but the break-even point was way below that back in the pre-2010 era when many of these deals were consummated. That said, there do appear to be at least a couple clear winners on this list.

Clayton Kershaw, for one. His rate of $3.8 million per WAR works for me. Of course, the Dodgers jumped in early here and locked him up. Those are his age-26 and -27 seasons, peak prime, an anomaly on this list. The version of CC Sabathia that preceded his opt-out with the Yankees is also a clear winner. Max Scherzer’s first year was very strong, and Felix Hernandez, three years in, looks good, though these are his age-27 to -29 years being measured, and he did experience a steep dropoff in 2015.

Kevin Brown’s contract looks good in today’s dollars, but when you get down to it, it’s a lot like Cliff Lee‘s just-completed pact: a couple huge years early, a fair deal without much excess value in its totality. And then there’s the disasters: Hampton, the second Sabathia contract, Barry Zito, Carlos Zambrano and Matt Cain’s ongoing deal.

In 44 of the 69 seasons listed above, the pitcher qualified for the ERA title. That’s 64% of the time, just a touch higher than the mid-range pitcher group. Interestingly, the pitchers with the ten richest contracts listed above (through Cole Hamels) qualified 86% (18 of 21) of the time, while the others qualified at only a 54% (26 for 48) clip. Bottom line, once you get past the no-brainers, the cream of the crop — and, perhaps most importantly, if you’re able to buy out pre-free agency peak years (see Kershaw, Felix, Masahiro Tanaka, Sabathia Part I) — you are playing with fire.

So what does this mean for this year’s group? To kick off this discussion, I’m going to once again use a table included in my Mike Leake article earlier this week:

The K/BB Contact Score Multiplier is the average number by which a pitcher’s Contact Score (production allowed on all BIP scaled to league average of 100) is multiplied to derive his calculated component ERA. K rates increase from right to left in the above table, walk rates decline from top to bottom. Each cell is valued by the number of standard deviations better or worse than league average.

Below, some selected 2015-16 free-agent starting pitchers are listed, along with their three-year average Adjusted (for BIP mix and authority) Contact Scores and K/BB Multipliers. Those two factors are then multiplied together to obtain each pitcher’s estimated current true-talent ERA-.

As you might expect, we’ve got a couple of stars at the top in Greinke and Price, followed by a near star in Johnny Cueto. The measurably above-average group, populated by John Lackey, Jeff Samardzija and Jordan Zimmermann, follows.

As good, or even great, as Greinke and Price are right now, their windows for greatness are quite limited. Both have begun to move in the wrong direction on the K/BB Multiplier grid, a trend which almost never reverses. In addition, Greinke’s three-year average Adjusted Contact Score is a bit misleading, as it is grounded more in limitation of BIP authority than it is in optimization of batted-ball mix. The latter is much more predictive moving forward. The first half of both contracts will likely need to pay for the back half. If they stay healthy, of course.

As for the rest of the group, the only players I thought were particularly interesting heading into the free agency period were Lackey and Samardzija. The former was a short-term reliability play, the latter was much better than his 2015 numbers thanks to the horrendous White Sox team defense. Lackey has been fairly priced by the marketplace, while the final numbers on Samardzija are just a little rich for my blood.

The chief minefields are Leake and Yovani Gallardo. Leake’s young, but lacks any sort of upside scenario. Gallardo can’t strike out anyone anymore, and his contact management skills are nothing special, with no foundational long-term trait.

So, who then wins the pitching offseason? As in your state lottery, the first tier of winners includes those who don’t bother to play. History is likely to again declare the majority of 2015-16 free-agent pitching contracts to be losers.

You want bigger winners? How about teams like the Indians and Rays, who have watched the value of their young, established, affordable starting pitchers dramatically soar from already high levels. Corey Kluber, Danny Salazar, Carlos Carrasco, Trevor Bauer, Chris Archer, Jake Odorizzi, Drew Smyly, Matt Moore and friends are worth their weight in titanium right now. Hold them, they provide scads of surplus value; trade them, you get a mother lode of talent.

You want the biggest winners of all? How about the Atlanta Braves, who took advantage of the shifting sands of the market to move Shelby Miller, a good starting pitcher, for the equivalent of the GDP of Lesotho.

Quality starting pitching — if you want to win, you’ve got to have it. There are some hits in the free-agent pitching market, but you’ve got be rich, smart and lucky to find them. The best practice is to grow your own via the draft, international talent procurement, and development, and quickly lock up the best of them through their peak period. You’ll whiff every now and then, but those whiffs will be a lot less costly.