A Halfhearted Defense of the Kyle Kendrick Contract

This afternoon, as you’ve no doubt figured out by now, the Phillies have avoided arbitration with RHP Kyle Kendrick by signing him to a one-year, $3.585 million contract that seems structured specifically to irritate people who write about such things by making us type out the dollar value to the thousand-dollar place.

As the news broke, my Twitter feed was dominated by reactions to the Kendrick signing, ranging from resignation, to fear, to what I assume is a potshot at Darren Rovell, to mocking incredulity, to more mocking incredulity, to unbridled snark, to a dose of placid rationality with an unflattering comparison. For a while, my window to the internet was almost entirely dominated by Kyle Kendrick, with a little bit of France Football‘s Philippe Auclair musing about the political legitimacy of credit rating systems.

The point is, no one seems to really like that the Phillies re-signed Kyle Kendrick.

So what of Kendrick and his contract? Well, Bill wrote earlier this afternoon in big friendly letters, “Don’t Panic,” and I’m inclined to agree with him. In fact, there’s an argument to be made that Kendrick, an extremely durable swingman who never walks anyone and goes from the rotation to the bullpen to Lehigh Valley without ever uttering a word of complaint, is more valuable a piece than we might realize. Perhaps no team relies more on (or expects more from, at any rate) its starting rotation than the Phillies do, so having a Kendrick to plug in for 15 starts might come in handy if one or the other of Joe Blanton‘s elbow or Vance Worley‘s two-seamer prove to be less reliable than expected. If nothing else, we know that Kendrick can come in and pitch slightly-better-than-replacement-level ball for six innings or so on very little notice.

I probably wouldn’t be making this argument if not for the 2011 Red Sox, who, I would argue, missed out on the playoffs last year for want of a pitcher like Kendrick. While the Red Sox went into the season with a projected rotation of Jon Lester, Josh Beckett, Clay Buchholz, John Lackey, and Daisuke Matsuzaka. That group included the reigning AL ERA champion (Buchholz), one of the four or five best young left-handed starters under 30 (Lester), two guys who, while wildly overpaid, were expected to at least be mediocre (Lester and Dice-K), and Josh Beckett. Not a bad group, on the whole.

Well, in the blink of an eye, Buchholz and Matsuzaka were out for the season, Beckett missed a couple starts (though he went on to post the best season of his career, by ERA+ and bWAR), and Lackey suffered what I’ve come to call the Alex Fernandez Injury. In Game 2 of the 1997 NLCS against Atlanta, Marlins pitcher Alex Fernandez blew out his arm but stayed out on the mound at least an inning after it became clear that someone had set off a grenade inside his elbow. After being horrified and fascinated by this incident, I’ve thought of Fernandez every time I’ve watched a pitcher do his elbow, then try to get by 81-mph arrows in the vain hope of the velocity, movement, or location coming back.

While the Marlins yanked Ferndandez after 2 2/3 innings, the Red Sox trotted Lackey back out there for another two months or so with the inside of his elbow resembling nothing so much as the mangled inner workings of the Cylon Raider that Starbuck fixed up in that episode of Battlestar Galactica. So the Red Sox traded for Eric Bedard, who was hurt and ineffective. Then they found themselves in the stretch run with only two effective, healthy pitchers: Beckett and Lester. The other three spots in the rotation went to the injured Lackey, the aged Tim Wakefield, and the ineffective Andrew Miller and Kyle Weiland. In 1949, the Red Sox reeled off an 11-game winning streak over the last two weeks of the season by going to a two-man rotation–over the last 20 games of the season, the Red Sox only won two games that where neither Mel Parnell nor Ellis Kinder recorded a win or a save. When Beckett and Lester were unable to duplicate that success, the Red Sox were screwed.

The presence of Kendrick, who almost certainly won’t be able to duplicate his 3.22 ERA of last season, makes such a disaster profoundly unlikely for the Phillies in the coming year. Now, is $3.6 million too much to pay for a pitcher with a career 4.65 xFIP? Probably, but not disastrously so. He’s almost certain to come down from his excellent 2011, unless his BABIP stays at .261. But with the cost of a marginal win hovering somewhere north of $5 million for this season, Kendrick doesn’t have to be particularly good to justify his contract–about 2/3 of a win will do nicely, and even if he comes up a bit short, overspending by $1 million or so on Kendrick isn’t a disaster for a team whose utter contempt for prudent stewardship of its monetary resources is made clear by the contracts extended to Ryan Howard, Raul Ibanez, Brad Lidge, and Jonathan Papelbon, while Adrian Beltre, Cole Hamels, and Ryan Madson merited little more attention than a panhandler at the PATCO stop at 8th and Market.

And there’s the old adage about there being no such thing as a bad one-year contract.

All in all, there’s a lot to like about this deal: short duration, relatively low cost and expectations, and it fills a need. All in all, Kyle Kendrick is like a slightly overpriced spare tire–kind of irritating if you don’t need him, but absolutely essential if you do. If you want to feel good about the Phillies, you can stop reading now.

HOWEVER.

Today, MLB Trade Rumors noted that the price has come down for the top starting pitchers remaining in the free agent market, including Roy Oswalt, who, it is said, would accept a one-year, $8 million contract. Hiroki Kuroda could be had for $10-11 million. I’ve always liked Kuroda, but his age and his price probably eliminate the Phillies from contention. Of course, if the Phillies hadn’t signed Joe Blanton, Jonathan Papelbon, and Kendrick to deals no one was crazy about when they were signed, they’d have room on their payroll for Kuroda, Madson, and probably one other pitcher. But hindsight, as they say, is 20/20.

But let’s compare  how the three have done, in terms of fWAR, since Kuroda joined the National League in 2008.

As you can see, Oswalt and Kuroda, each in a relative down year, were each somewhere in the neighborhood of 12 times more valuable than Kendrick was. Of course, Kuroda threw a little less than twice as many innings than Kendrick, so let’s say that Kuroda was six times more valuable than Kendrick, per inning pitched, and set aside the intrinsic value that innings pitched have. Oswalt threw about 20 percent more innings than Kendrick, so let’s call him ten times more valuable in 2011.

This is what drives me absolutely busalooey about the way the Phillies do business. They tendered Kyle Kendrick for arbitration, knowing that he’d be in for a multi-million-dollar payday, when better options were out there. Kendrick had a good 2011, buoyed by unsustainably low batted ball numbers. For reference, Happ posted a .261 BABIP, a 4.43 xFIP, and a 2.93 ERA in 2009. In 2011, Happ’s BABIP returned to a relatively normal .297, and his xFIP rose slightly, to 4.59, but his ERA was 5.35. Amazing what a little bit of luck can do to you.

But the Phillies, because of ontological blindness, naivete, or sheer force of their intractably reactionary institutional philosophy, have once again spent $3.6 million on a pitcher with a career low 4.04 xFIP, when $8 million would have nabbed them a pitcher with a career high 3.97 xFIP, or $10 million would have landed them a pitcher with a career high 3.89 xFIP. Imagine shopping for beer like this. Signing Kendrick to this contract with Oswalt and Kuroda where they are in the market is like going to Canal’s, passing the 24-pack of Sam Adams for $12, then passing the Great Lakes variety 24-pack for $15, then deciding you’d rather spend six bucks on two pounders of Beast Light. Those are not the actions of an informed shopper. I know this and I just spent 20 minutes on Google and three minutes tooling around in Excel. The Phillies are an organization worth half a billion dollars or more, with hundreds of full-time employees. How can they not be aware of this?

In a vacuum, re-signing Kendrick is a nice, if slightly pricey insurance policy. Given that the Phillies appear willing to sign Cole Hamels to a one-year deal rather than locking him up long-term (what possible purpose this could serve is a mystery to me), keeping Kendrick on at this price is hardly the most actively harmful personnel decision the Phillies have made this week. And I’ll grant you, that by price, age, and role, Oswalt and Kuroda aren’t completely fair comparisons to Kendrick. But the Phillies have so gravely miscalculated the value of starting pitchers this offseason that if NASA were so off-base, they’d have sent Apollo 11 straight into the center of the Earth.

So did the Phillies do well to re-sign Kendrick? It depends on how you look at it.

Leave a Reply

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35 comments

  1. John

    January 13, 2012 04:37 PM

    Can we stop using $/WAR as a means of evaluating contracts?

  2. Michael Baumann

    January 13, 2012 05:05 PM

    I didn’t use $/WAR directly, but I sort of alluded to it.
    I know some people aren’t crazy about it, for reasons that were never really explained to me, but the difference between what the Phillies are paying Kendrick and others and what they could have spent on Oswalt or Kuroda (to say nothing of Hamels) is so great I’m willing to accept whatever baggage comes with it as necessary baggage.

  3. Phillie697

    January 13, 2012 05:19 PM

    If you don’t like $/WAR, please enlighten us with your own version of how to calculate how much a player is worth, otherwise comments like that is just useless, no offense.

  4. John

    January 13, 2012 06:13 PM

    Michael, I agree with your general conclusion here and you certainly didn’t use $/WAR in a strict sense as it often is (cough cough Dave Cameron).

    Teams pay for players that will result in additional wins, and these additional wins will result in additional revenue. Each additional win, however, is not worth the same amount, and this is where I find the $/WAR model is pretty flawed. It assumes that total revenue is a linear function of wins, which is not the case. The marginal wins provided by adding a 3-WAR player are intuitively worth more to the 90-win team than to the 75-win team. This explains why the graph of looks like a bell curve instead of a line.

    $/WAR ignores context. It doesn’t take things like expected revenue over expected win-loss record into account. Sure, it serves as a quick check to identify a blatant overpay or steal. But for when the quality of a contract doesn’t seem so obvious, such as this situation with Kendrick, it gets pretty useless. As for alternatives, well, there aren’t many great ones. JC Bradbury has a good chapter in Hot Stove Economics where he uses a model that attempts to bring context into account.

  5. Richard

    January 13, 2012 07:29 PM

    The Phillies aren’t in the market for a full-time starter, though. Nor, when they tendered Kendrick, did it appear that either Oswalt or Kuroda could be had for so cheap. Even if they could, I doubt either are interested in the swing-man role. The first part of your analysis, defending the signing, holds more water.

    One possible reason for a one-year deal for Hamels is to avoid the luxury tax. If they extend him after a certain point in the season (I forget the date), his AAV for the extension will not affect this year. Much like Boston did with Gonzalez. Are the Phillies planning that? I have no idea, but it seems plausible.

    Also, the Blanton deal, at the time it was made, was a good one.

    Other than that, an enjoyable read. (Seriously, not being sarcastic.)

  6. Richard

    January 13, 2012 08:30 PM

    Also, re: Beltre, I believe the word is that the Phillies did offer him a deal, which he turned down, since he wanted to do the very thing he did do: parlay one season at a better hitter’s park into a huge deal after.

  7. SapperB24

    January 13, 2012 09:26 PM

    lol @ “imagine shopping for beer like this”. Great analogy.

  8. Mike Sanders

    January 14, 2012 01:58 AM

    Very well-written article. I guess what it boils down to is we are lucky to follow one of the few teams that can afford a $3.5M insurance policy.

  9. Ryne Duren

    January 14, 2012 09:14 AM

    it amazes me that on the one hand everybody says we NEED to sign hamels asap. yet when they sign a durable, non complaining home grown guy for a mere 3.5m more or less as an insurance policy and other older pitchers with better sabermetrics are preferred over kk. how does that serve the need to sign hamels or ” get younger” (thats another story)maybe they’re just positioning themselves to do just that! (signing hamels). on the other hand is it posible that if blanton does well and now kk being signed and if a minor league pitcher steps up with promise by mid season the phils would have 2 pitchers very tradable for a more pressing need! let it all play out before over analizing the moves and the money!

  10. LTG

    January 14, 2012 10:07 AM

    I’m curious what you meant by “ontological blindness”?

  11. hk

    January 15, 2012 08:01 AM

    If $/WAR is ever going to be used, it is more useful as a descriptive statistic to see how a completed contract worked rather than a predictive tool to assess a newly signed contract. To me, the best way to assess a newly signed deal is to compare it to the deals given to other free agents who can generally be expected to produce similar (or better) results. For instance, when the Phils signed Raul Ibanez for 3 years following the 2008 championship, the immediate criticism on that deal was that they overpaid in years and dollars as the rest of the free agent good hit, bad glove corner OF’s (i.e. Dunn and Burrell) signed for an average of 2 years and around $2M less in AAV. With Kendrick, my contention is that the Phils should have non-tendered him, then considered re-signing him in free agency for ~$2M. If KK signed elsewhere, the Phils could have spent that $2M (or less) on a one year deal for another pitcher to fill the 6th starter role. Every year at the end of free agency, there’s a Bartolo Colon, Jeff Francis, Freddy Garcia or Chien Ming Wang who signs for near the MLB minimum and can be expected to produce similar results to KK. This year, that list probably will include Jeff Francis, Aaron Laffey, Joel Piniero and Tim Wakefield among others, all of whom I would prefer at ~$1.6M over KK at $3.6M.

    I know that ~$2M is not a lot of spilt milk to cry over (when compared to Howard’s deal or even Papelbon’s), but time will tell what the opportunity cost of that ~$2M might be when the Phils make other moves that might be impacted by the $2M.

  12. Ken

    January 15, 2012 11:48 AM

    I’m of the extremely minority view that they should have signed KK to a MULTI-YEAR deal. Yes, he’s by and large a year to year guy, but they like him, he proved of value through diversity, and he could keep playing this arb hedge game up to his free agency through 2014. Maybe he takes a lesser raise for the security, and it costs less. Last year, his salary jumped 5 times, this time, 100 per cent. Even with last year’s seemingly outrageous raise to 2.4 mil, if they signed him for a flat 3 mil this year and next, they’s have saved a million, and that’s if he doesn’t get a raise next year, which might get up near 4.5, at this rate. Halladay, Lee, Hamels, supply and demand of that level quality, you sort of pay first, ask questions later. A guy like Kyle is where you can manage costs a bit more, and save some money that adds up. Right or wrong, they like the guy, and if you’re gonna keep him, cost certainty at controllable levels seems practical.

  13. Bill Baer

    January 15, 2012 11:52 AM

    That’s a very good point. The thought of KK on a multi-year deal makes my skin crawl, but if the Phillies are definitely enthralled by the guy, so it makes sense in that regard.

  14. Ryne Duren

    January 15, 2012 11:59 AM

    i agree with ontalodical blindness? what? your argument that kuroda over kendrick in my eyes is, well!!! he’s what did you say 37? c’mon you’re starting to sound like the guy on phila.com! if they signed kuroda then you’d be complaining about the phils aging staff!

  15. Ryne Duren

    January 15, 2012 12:00 PM

    i meant to say i agreed with LTG

  16. hk

    January 15, 2012 12:49 PM

    Ken,

    With the benefit of hindsight, the time to sign KK to a two year deal was prior to last season when he probably would have jumped at $5M for 2 seasons. Following a season in which he earned $2.4M and posted a 3.22 ERA, which may not carry much weight with this blog’s readers, but I assume is important to most arbitrators, KK (and his agent) might not have signed for $6M for 2012 and 2013 since they pegged his 2012 value at $3.6M.

  17. hk

    January 15, 2012 12:55 PM

    If the Phils are going to extend Hamels and they are going to pay him $120M over the next 6 seasons, which of the following options is better luxury tax-wise?:

    1. Extend him for $15M right now for one season and extend him again in April for 5 seasons at an AAV of $21M.

    2. Extend him right now for 6 seasons at an AAV of $20M.

    Stated differently, is it worthwhile to save $5M towards the luxury tax in 2012 at the expense of an extra $1M towards the tax in each of the following five seasons?

  18. LTG

    January 15, 2012 01:09 PM

    Although I appreciate Ryne’s echoing my question, I want to clarify. I know what I mean when I use the phrase “ontological blindness,” but it wouldn’t apply to anything the Phillies have done and no mistake they have made. So I wonder how Michael is using it such that it does apply. I am genuinely interested in how others use the term “ontological,” which is a pretty odd term to have in the lexicon of the general public.

  19. JB Allen

    January 15, 2012 04:02 PM

    LTG –

    I wouldn’t mind hearing your definition of ontological blindness.

    I don’t use the term “ontological,” although I think about how individuals perceive themselves and their worlds. I sort of figured Michael was just trying to say that the Phillies might not be aware of all the factors that have gone into the Phillies’ place in MLB, and the place of other MLB teams, for that matter. Well, more than that, because this lack of awareness has to be fundamental, such that it not only limits the actor, but prevents the actor from even having a conscious approach to real success. In other words, they’re clueless, and they got lucky, and while some viewers (such as the fine thinkers here) may understand why the Phillies have performed so well the past ten years, the Phillies themselves don’t.

    I google’d “ontological blindness,” and saw it used a lot by people talking about Heidegger, but the only writers who actually came close to defining it were AI people, who I imagine actually have to think about stuff like this.

    Makes me wonder if I should have dropped “ontological blindness” at a party at college. Would I have scored with the ladies that way?

  20. LTG

    January 15, 2012 07:18 PM

    JB Allen,

    No surprise that the Go-ogle search turned up Heidegger, since he tried so hard to thematize our ability to give accounts of what it is to be not just what there is. In fact, my dissertation is on Heidegger, so I have intimate knowledge of what he says about the ontological and what, on his account, would be blindness to it. I can also tell you that the AI stuff is a result of an old intellectual debate about the possibility of creating an AI, the nay-sayer side of which draws on Heidegger (see Hubert Dreyfus’s work) for some of its arguments.

    As to the question of what ontological blindness is, there is probably no way to give an uncontroversial answer, but here is a shot at a rather general answer. Ontology is the “science” of being, that is to say, the attempt to make explicit the criteria by which we individuate entities and an account of their unity as all part of being. Usually people assume that there is just one set of criteria and that the natural sciences have it, but this is controversial and not obviously true. For one it requires the reduction of the norms constituting practices to causal chains, which looks misguided. For two it looks impossible to account for the significance of the exchange of reasons in the terms of natural science. So, if there is more than one set of criteria for individuating entities–which is equivalent to saying that there is more than one fundamental kind of entity (e.g., rocks(1), tables(2), people(3))–then ontology would be both saying what each set is and what makes all of these sets part of being (what determines what is). From this vantage point ontological blindness is the lack of an account of one of the following: a) the individuation conditions of the entities that one deals with regularly (e.g., baseball players); b) the way in which the individuation conditions one understands is like other individuation conditions for other kinds of entities. Since I don’t expect GMs to have either of these accounts, I wouldn’t accuse them of ontological blindness. (If I were to give an account of Heidegger’s conception of ontological blindness I would be more specific, but it is unnecessary here.)

    Your understanding of the phrase is interesting. I would rather call that theoretical blindness, in so far as theory generally means account, and it is possible that the Phillies have no account for why they have been successful in the past decade. But even then I would prefer theoretical myopia because I’m sure they have some theory behind their practice; it’s probably just not a good one.

    Does this answer your question? Was there anything unclear? I’m happy to elaborate.

    As far as using technical phrases to flirt goes, I can tell you that I had a friend in undergrad who would take what I told him about philosophy and tell women his “deep thoughts” and it worked pretty well for him. I prefer not to instrumentalize these things that way.

  21. Phils_Goodman

    January 15, 2012 08:25 PM

    Just a note:

    As far as I see it, good scouting and good analytics should converge far more often than they diverge. Just because there’s not a lot of evidence of the Phillies depending on advanced metrics doesn’t mean that their organizational strategy and talent evaluation and is not largely wise and informed.

  22. LTG

    January 15, 2012 09:08 PM

    Good scouting won’t tell you how to allocate resources as efficiently as possible. And it is unclear whether the Phillies still have the good scouts that got them the talent they are currently running on. Mike Arbuckle is, after all, amassing an army of talent in KC.

  23. LTG

    January 15, 2012 09:18 PM

    But I should also say that I agree that you can do things well without knowing why you are doing them well. You’ll just be in a bind when your usual pattern of behavior ceases to be effective. I would also reserve the terms “wise” and “informed” for those who not only do things well but know why they are doing things well.

  24. Rob SJ

    January 16, 2012 09:32 AM

    I come away with only one question – what is the address of the store selling Sam Adams at $12/case?

  25. Bliz

    January 16, 2012 10:53 AM

    Both the beer and NASA analogies were absolutely brilliant. Nice work.

  26. Dante

    January 16, 2012 04:25 PM

    Nice Hitchhiker’s Guide reference.

  27. Dan K.

    January 17, 2012 01:33 AM

    I think it’s worth pointing out that hk’s comment about getting Pineiro makes at least two instances this offseason of a Crashburn commenter correctly identifying a free agent that the Phillies could and did sign for a bargain. (Granted he said he would have preferred him INSTEAD of KK’ contract, not in addition to, although you can’t really argue with a minor league contract in either case.)

    The other that I’m aware of was my own comment about Willis. Are there others and does this mean someone in a high place reads Crashburn and the comments?

  28. Phillie697

    January 17, 2012 03:06 PM

    @Dan K,

    I doubt it, since anyone who reads this blog would know that we would loath the Papelbon contract, yet it happened anyway.

  29. Dan K.

    January 18, 2012 07:55 PM

    @ Phillie,

    Yeah, it was just a joke. But it is cool that we’ve predicted some unforeseen signings.

  30. JB Allen

    January 19, 2012 06:57 AM

    LTG – Thanks. I still have a few questions. Maybe this is better addressed off-blog?

  31. LTG

    January 19, 2012 07:51 PM

    JB, you are probably right about off-blog. Click my handle and scroll down to Lee Goldsmith and you can use that email address to contact me.

  32. John

    January 23, 2012 12:53 PM

    I’m really not trying to be snarky about this, but here goes.

    1. IMHO, the best defense for KK vs. Oswalt or Kuroda would be his age, and his availability to come in for long relief on very short notice. When there’s a long delay or the starter gets injured, would Charlie really be able to bring Oswalt or Kuroda in to mop up 4 or 5 innings?

    2. I see the valid reasoning in using predictive stats to determine future value. However, I’m not convinced that they are the best way to measure past results. I can agree that going forward, Oswalt or Kuroda is likely to be considerably more valuable per inning pitched than KK, but is there something else that might be better to make comparisons between their performance last year than xFIP? Why not ERA+ or something else that’s more a reflective stat vs. a predictive one?

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