I really don’t think I have to explain that it’s been a frustrating few months for Jays fans, or how antsy everybody is getting about just what the hell is happening with the remaining pitchers on the free agent market. It’s a fact of life at this point, even if it’s one that’s maybe making us not quite as panicky as we were a few weeks ago.
The plan, it seems, is working. Buster Olney tweeted yesterday that Ervin Santana may settle for a three-year deal, and Tony Lastoria of Fox Sports Ohio wrote that Ubaldo Jimenez is now looking at three years as well. It also feels like the number of teams involved in the pitching market is no longer near as robust as it was back when Masahiro Tanaka was all that anybody could talk about.
Teams like the Dodgers, and Diamondbacks, and Orioles still seem to be in on the Bronson Arroyos of the world, but when it comes to Ervin and Ubaldo — the guys with the draft picks attached — few teams other than the Jays are being linked, and Alex Anthopoulos is said to hold a “commanding position.”
So, before that’s no longer the case, why don’t they just sign one of them??!?!!?
It’s a question many, many have been asking. One such instance came yesterday in Richard Griffin’s chat with readers at the Toronto Star — reader “Tim” wrote, “Hi Richard, is AA tempting fate by continuing to wait out the Jimenez & Santana? Granted their prices appear to have dropped significantly since the start of free agency but isn’t there a point where their price becomes too appealing for other teams to pass up? Seems to me AA is playing a dangerous game” — and Griff not only indulged the question, but said, “I agree. Do it now if you can.”
This would make sense to me if free agents were analogous to an Xbox One on Black Friday, but that’s hardly the case. Santana and Jimenez are auctioning off their services, and most plausibly, it seems like the Jays waiting for one of their preferred player’s agents to come to them and say, “OK, we’ve decided we’re going to move forward with an offer of X-dollars from team-X, will you beat it?”
If the Jays are willing to pay the most, they’ll get the player, and that won’t change whether it happens now, a week from now, or if it had taken place earlier in the off-season — the final price, though, may change, and most likely in their favour.
That’s not to say that there is no aspect of timing involved in free agent negotiations, but if a team is going to come out of the woodwork willing to pay far more for either of these free agents than they had shown all winter, that too will happen regardless of whether the process moves forward now, or a week from now.
Granted, waiting this long means there will be fewer remaining pitcher left to turn to if the Jays don’t land the arm they want, but they seem content with an Ubaldo/Ervin Or Bust strategy, and I think that makes total sense, though I suppose I understand how it might be making fans twitchy.
Thing is, the way it looks right now, once the agents say they have an offer they’re willing to take unless anyone can beat it, a few teams may bid the price up, but the expectation is that the Jays will be comfortable going higher, largely because of their protected draft picks.
We’ve been through this all before. What we maybe haven’t been through before, though, is just why the draft pick advantage is so compelling.
There are, of course, the basic facts: the Jays have two protected first round picks, and would then have to give up only a second-rounder if they were to sign one of these guys, whereas two thirds of the league will need to give up a first-round pick — assuming they haven’t already done so.
To really grasp the degree of the difference, though, I think we need to think about more than just a single pick. Let’s think about the first three picks for each team potentially involved.
The precise order for certain teams in the 2014 draft isn’t quite set yet, thanks to the free agents still out there with picks attatched to them, so some of the later round numbers may change slightly (the draft order page at MLB.com explains), but based on how it currently sits, if the Jays sign one of the free agents we’ve all been talking about, their first three picks in next year’s draft will be selections nine, eleven, and eighty-three.
The Angels and Diamondbacks are two teams who’ve been rumoured to be on the lookout for pitching, but neither club has a protected pick. The Angels have verbally committed to keeping their first-rounder, so let’s consider the Diamondbacks. If they go for either Santana or Jimenez, their first three picks in the draft become numbers 54, 70, and 71 (the latter two are competitive balance picks — one their own, one obtained from San Diego).
Of course, there are other teams with protected first-rounders, and some of them have been sniffing around pitching too. The Mariners are one, and though they’ve already given up a pick for Robinson Cano, it’s really just going to cancel out the one they will receive, assuming that Kendrys Morales signs elsewhere. Their first three picks, should they sign Santana or Jimenez, would then be six, 75 (a competitive balance pick), and 81. For the Phillies it would be seven, 82, and 113.
Granted, because of the two protected picks the top end of the Jays’ draft is going to look better than most regardless, but having those locked in means that losing a second-rounder does a much lower percent of damage to the total total value the Jays can “expect” to get out of the draft, and that’s perhaps why the Jays can feel better than others might about doing so.
Yes, yes, the draft is a crapshoot and all that, but… actually not really, as the chart below, which comes via Camden Depot, pretty clearly illustrates.
In fact, in 2005, Nate Silver of Baseball Prospectus tried to put a monetary number on the value of draft picks by looking at the average WARP produced by players picked in certain “tiers” over their first six years of Major League service, then subtracting the average signing bonus for those picks and the “marginal cost” of the players (i.e. what they would be expected to earn based on the typical percentage of market value players are paid during those years of service). Andrew Ball updated his work in 2013 at Beyond the Box Score, though he used a what looks to be the wrong calculation for marginal cost.*
I’ll use Ball’s numbers anyway, just because they’re current, and because precision isn’t really a requirement for what I’m driving at here anyway — it’s more about the relationship between the numbers at each tier — but keep in mind that the figures might be a little high.
In his piece he determines that the net value of players picked eight through fifteen is about $15.2-million. For the rest of the first round, the average net value is about $7.2-million, and for picks 31 through 60 it’s $3.6-million — and by then you’re already getting deep into diminishing returns, as he calculates the average net value of picks 61 to 100 as $2.58-million.
Sure, those are big, fuzzy groupings, and pick 16 is going to be worth more than pick 30, but it still gives you a better idea of just what teams are going to have to give up when they forfeit a draft pick to sign one of these guys. The Angels, were they to forfeit pick 15, would be losing an asset that, on average, would provide them with… I dunno… $11-million in net value. For Jays, Mariners, and Phillies, all of whom would give up picks in the late 40s, it’s closer to $3-million. And those are just the averages. Anaheim has a much better shot at hitting a home run with their pick.
That potential value loss has to be taken into consideration when trying to make a deal with Santana or Jimenez, and while it’s not so big that it can’t be offset, the asking price on the free agent arms has to come down quite a bit more to do so for the Angels than it does for the three teams with protected picks. Obviously. They may want to add one of these arms badly enough not to care, but you don’t get the sense that either of these guys is particularly wanted.
As for how the Jays may hold an advantage over those other teams who would be giving up a late-40s pick, we’ll again look at multiple picks and add up the expected net value.
If the Jays sign one of the gruesome twosome the expected net value out of their first three draft picks is still about $34-million, and the pick 49 they forfeited will only be worth about 10% of that total. For Seattle and Philadelphia it’s about $19-million in “expected” value, with the each team’s forfeited pick representing about 20% of their total.
OK, so maybe that’s a bit convoluted, and maybe it takes a bit of a leap to say that the Jays may be any much more comfortable divesting themselves of a second round pick than those Philadelphia or Seattle — or any of the other teams with protected ones – but there are other factors to help us feel comfortable here, too:
The Mets (10) don’t appear to have the money to be interested in adding these guys, and seem set in their rotation with Colon, Niese, Gee, Wheeler, Mejia, and some kid in double-A knocking on the door.
The Rockies (8) aren’t a team any pitcher is going to choose to sign with, all things being equal.
The Phillies (7) aren’t necessarily desperate for starters, with the former Fausto Carmona (Roberto Hernandez) and Cuban wild card Miguel Alfredo Gonzalez newly added behind Lee, Hamels, and Kendrick. If they are interested, and have the money to do something about it, it seems like A.J. Burnett — who won’t cost them a pick — is the one they’re most linked to.
The Mariners (6) seem somewhat set on the mound with Felix, Iwakuma, Scott Baker, Taijuan Walker and James Paxton, and while there was talk of them trying to trade for David Price this winter, it’s not like they would have been able to keep both of those two youngsters if they managed to get a deal done, meaning they’re not necessarily looking to add. But they reportedly still have cash to play with, and while they might prefer to use it on a bat, they’re a potential suitor.
Minnesota (5) has already made its rotation additions, and the Cubs (4) are reportedly not interested in giving up any compensation for either of the two.
The White Sox (3) made an offer on Masahiro Tanaka. GM Rick Hahn has said that was more of a special case, but they could certainly still use rotation help, with Felipe Paulino currently looking like their number five. They could give the Jays a run for their money, if they were willing to give up the 43 pick in next year’s draft.
Miami (2) and Houston (1) don’t seem like viable free agent destinations at this point, unless you’re Jarrod Saltalamacchia.
Beyond that, the Yankees have thrown caution to the wind and have David Phelps as their five, but perhaps a returning Michael Pineda, too, so I’m not sure they’re a fit. The Orioles are in the same boat as the Angels and Diamondbacks, and not particularly likely to give up a pick, while Cleveland and Kansas City could still be in play, though it would mean giving up picks in the low 30s for both.
In other words, there isn’t much in the way of competition for signatures here. The Jays, the White Sox, the Phillies, the Mariners, and maybe Cleveland and Kansas City. Maybe the Yankees. I’m sure it will be pointed out that I’m missing somebody, but really, that’s about it — for two guys. And with the Jays having available payroll (at least according to the team itself, and to any number of media reports from earlier this winter), a stated willingness to give up a pick to get a deal done, and the ability to feel better than all of those other clubs about what such a signing will do to their draft — save, I guess, for the Yankees, who’ve already blown theirs — you can see why the whole “commanding position” label really does work. Sort of.
Even if it doesn’t, like I say, as long as they’re willing to pay more than anybody else, they’ll get the player they want. No need to rush like the sale is going to end, or like someone ahead of you in the aisle is going to scoop him up. They’re in a good place sitting and waiting right where they are. No, really.
* Based on the study of arbitration year salaries by John D. Burger and Stephen J.K. Walters of Loyola College in Maryland, Silver used 500K and 750K as the standard earnings for first- and second-year players, while calculating the average earnings of players in years three through six as 31%, 44%, 61%, and 64% of their market value. Ball, on the other hand, simply calculated the marginal cost as 31% of the total market value produced over six years of service time.
Image via SalesLoft.com.