Guest Post: Expensive Outs: Why Paying a Premium for Papelbon Doesn’t Make Sense

Tom Holzerman (or TH, if you will) is a wrestling blogger found at a few sites on the web, most prominently at his site, The Wrestling Blog. He also has some things to say about other topics, baseball being one of them. If you have any feedback, questions or angry missives, send them to his Twitter, @tholzerman.

Ladies and gentlemen, children of all ages, it’s time for a little bit of cost analysis. We’ll be looking at two pitchers, both who are contracted to the Philadelphia Phillies for the 2012 season, but who serve far different roles. In one corner, we have Harry Leroy Halladay III, the indomitable ace, fantasy zoo companion and rock upon which the starting rotation is built. The workhorse of the rotation signed a contract that was valid from the start of this past season until the end of the 2013 season with a vesting option for 2014. For all intents and purposes though, we’ll only count the guaranteed years, which are worth in aggregate of $60 million. In the other corner, it’s recent Bostonian import and new closer Jonathan Papelbon. This past offseason, he signed a four year contract worth $50 million.

On the surface, the Phillies now have two of the elite pitchers in the league at the same absolute dollar amount. If anything, Papelbon, who right now is at the very least the second best closer in the game after Mariano Rivera, has been gotten more cheaply than Halladay, not only in total, in average as well. Papelbon’s $50 million is spread out over four years instead of three. That would be fine and good if both pitchers had similar roles in the game, which they clearly do not. As established before, Papelbon is a closer, Halladay a starter. Closers pitch in one inning per game on average, whereas a top line starter like Halladay will average seven with a healthy sprinkling of complete games mixed into his season. With that knowledge presented, the amount of innings that Halladay will pitch over the length of his contract, even with the year of shortfall compared to Papelbon, will dwarf his 9th inning counterpart.

Over his career, Halladay’s full season average for innings pitched stands at 240, while Papelbon’s is at 66. Assuming those averages stand for the entire lengths of each pitcher’s contract (and yes, I’m aware that Halladay already pitched a season of his contract, but just bear with me here), the cost per out for each pitcher stands at about $27,000 for Halladay compared to $63,000 for Papelbon. Papelbon’s individual outs more than double Halladay’s. To put things in perspective, the average per capita income for Philadelphia County is a shade over $16,500.

That, of course, operates under the assumption that every out in a baseball game is equal. From a cold, hard statistical standpoint, yes, that ends up averaging out to be true over the long haul, but there are situations where some outs are probably worth more. For example, getting Matt Kemp out is definitely a tougher task than Yuniesky Betancourt. That being said, over the long haul, both Halladay and Papelbon will more than likely have relatively equal distributions of how hard their outs are per inning pitched, so it feels moot. Arguing from an intangible standpoint, there does seem to be a lot more pressure in the 9th inning. Even though there are plenty of arguments that suggest this is a myth, let’s pretend the closer mentality is real.

Papelbon will undoubtedly pitch more 9th innings than Halladay, but he’ll do so with a whole game’s rest. Halladay completes an above average number of games per season; in the last five years, he’s averaged over 8. He obviously enters the game in similar situations, where the game is still pretty close (in blowouts either way, he’s probably out of the game for someone mopping it up for him), with the added strain of having recorded 8 innings worth of outs. Even though Papelbon will have worked on average five to six times more 9th innings than Halladay would have, Halladay’s final frames would almost invariably have a far greater degree of difficulty because of arm strain and fatigue. That gives a little perspective into how “elite” a closer can seem in the face of a real elite pitcher.

So, with that all being presented, maybe all outs should cost the same. If that’s the case, then what should an out cost? If they all cost what the Phillies were paying Halladay, then Papelbon’s contract would be slashed from the $50 million down to $21.3 million. If every out was valued at Papelbon’s costs, then Halladay’s contract balloons up to $136.1 million, the average value of which would make him the highest paid player in the league by far and more expensive than some teams’ entire payrolls. The most galling thing is this is only comparing the elite level of pitchers. My guess is if we compared the lower tiers, the costs would become even more outrageous.

This isn’t the first time I’ve gotten on my horse to decry the overvaluing of the closer position, but at the same time, when the Phillies are going to have to pay valuable dollars to players who’ll have more total value to the team than Papelbon like Shane Victorino, Cole Hamels and Hunter Pence, and when they have holes in the lineup at positions like left field and first base, it just looks silly that there’s so much money tied up into a guy who impacts less than five percent of the regular season. If Hamels ends up in Yankee pinstripes, or the Phillies have the ultimatum in front of them of whether they keep Pence or Victorino in future offseasons, the blame can be placed almost solely on the rash spending on what is a luxury position.

Ed. Note: Thanks to Thomas for the guest post. Check out his blog The Wrestling Blog as well as his Twitter, @tholzerman.

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31 comments

  1. Nick

    February 10, 2012 08:32 AM

    Papelbon will cost us Hamels, 2014 will be the first full year of rebuilding.

  2. hk

    February 10, 2012 10:12 AM

    Let me preface my comment by saying that I agree with the belief that RAJ overpayed Papelbon in both years and AAV. However, I disagree with the methodology that you used in attempting to prove it. First of all, you ignore salary inflation. Halladay’s deal was signed two years prior to Papelbon’s. Secondly, you ignore the fact that ERA, FIP, xFIP and SIERA all say that, in the innings in which they have pitched, Papelbon has gotten better results. Thirdly, comparing any pitcher’s (starter or reliever) long-term free agency deal to Halladay’s below market value deal will almost always make the other pitcher’s deal look bad.

    Cliff Lee’s $120M for 5 years comes with an AAV of 20% more than Halladay, yet Lee averages 12% fewer innings per full season than Roy. Therefore, Cliff is getting paid $37,795 per out (40% more than Roy). By comparison, this makes Cliff Lee’s deal a bad one (albeit still one that is signficantly better than Papelbon’s). Roy’s deal > Cliff’s deal > Papelbon’s deal, but if we are using Roy’s deal from prior to the 2010 season as the benchmark, teams should never sign a free agent pitcher.

  3. Phillie697

    February 10, 2012 11:25 AM

    Sigh, another article reminding of that crappy contract… I don’t think at this point those who thinks that the contract was a good one will be changing their minds no matter how many more of these articles are written.

    hk,

    Salary inflation making Halladay “cheaper”
    is a fallacy; if you don’t think agents realize salaries inflate while negotiating a multi-year contract, you’re out of your mind. Halladay is cheaper not because he signed earlier; he is cheaper because he wanted to be here that bad.

    I know, it’s nitpicking, but it’s Feb :)

  4. hk

    February 10, 2012 12:01 PM

    Phillie697,

    You’re missing my point about salary inflation. I mentioned that Halladay’s deal was below market value and I recognize that this was (a) because he wanted to be here and (b) because he wasn’t a free agent at the time. What I meant was that the AAV of free agent contracts for comparable players generally rise from year-to-year, so contracts signed in 2012 are generally at higher prices than contracts signed in 2010 (again, for comparable players). Therefore, to compare a deal signed in 2010 to a deal signed in 2012 without factoring in inflation is misleading. It is even more misleading to use Halladay’s below market value contract because of the reasons that you and I both mentioned.

    Again, I’m neither justifying the Papelbon deal (which you know I oppose) nor disagreeing with the premise that closers are overpaid relative to starters. I’m just saying that there are better comparisons than using Halladay’s contract signed two yeasr ago as the benchmark for proving this.

  5. Phillie697

    February 10, 2012 12:07 PM

    hk,

    I should have added I agree with everything else you said except that. I just don’t agree with your justification of salary inflation is all. Yes, general inflation itself will drive AAV up over time, but when you’re talking about two contracts starting only a year apart for multiple years, I think that “inflation” is really a non-factor, because if you think we are aware of it, you can bet your ass agents are too and negotiate that into contracts, unless they have a “crazy” client like Halladay (and by crazy I mean the good kind LOL). Like i said, nitpicking :)

  6. B in DC

    February 10, 2012 12:25 PM

    Relievers and starters ain’t the same. I’d suggest that there are more starters who can claim to be “aces” for seasons on end than their are relievers who can claim the same. So you pay a premium. Like you pay more for a comparable hitting backup infielder who can really play SS and handle 3B and 2B than you would for just a guy who can handle 3B/2B.

    Having said that, this deal clearly seems to stink, and the premium they paid was probably too much for any offseason, and in hindsight, looks to be way (WAY!!!) too much for this offseason, though calculating that is impossible with all of the fluid variables of free agency. It’s a bad deal, but IMO, not a great way to prove it. Interesting though.

  7. hk

    February 10, 2012 12:43 PM

    Phillie697,

    I know it’s a nit-pick, but I still want to do a better job of clarifying my point so I’ll use the following hypotheticals to do so:

    1. If right now, Roy Halladay was a Toronto Blue Jay, was coming off his age 32 season in which he produced 7.4 WAR, had one year remaining on his contract and he had made it known that he would like to be traded to a contender, do you think he would settle for a $20M AAV deal with the Phillies, who are paying Cliff Lee an AAV of $24M per year?

    2. If Papelbon had been a free agent following the 2009 season and Lidge was not under contract meaning the Phils GM thought he needed a closer and had to get the best one on the market, do you think Papelbon would have gotten $12.5M per year in that market?

    Obviously, these are hypotheticals, but I suspect that Halladay would have wanted more than $20M – maybe still below market value to come to the Phillies – two years later becaue the cost of players has increased. Similarly, I bet Papelbon would have cost less two years ago than he costs now.

  8. LTG

    February 10, 2012 12:48 PM

    Do we really want to sign Victorino to the kind of contract he is likely to be able to get after this season? I worry that after this year we will see a steady decline in power and speed that will undermine his current value.

  9. pedro3131

    February 10, 2012 05:06 PM

    I think using WPA instead of just flat outs based calculation is a better metric. The value of having a guy like Papelbon versus, say, Jose Mesa, is something that is kind of hard to really quantify. Did we overpay? Probably, but I think it’s better to look at reliever contracts in a vacuum rather then against starters salaries.

  10. Jeff

    February 10, 2012 05:13 PM

    The bottom line is: Halladay = $27k per out, Papelbon = $63k per out. Papelbon costs 2.3x more than Halladay. Does he provide 2.3x more value per out? Are Papelbon’s outs worth 2.3x more than Halladay’s?

    All closers face some number of 9th innings with a 3-run lead and Betancourt hitting, or a 4+ run lead “to get work in” — those outs are clearly less valuable.

    About inflation: at 3% average inflation, Papelbon would need to be paid in 2041 dollars instead of 2012 dollars in order to equalize the 2.3x difference.

    About timing/negotiations: Halladay being more expensive and Papelbon cheaper wouldn’t overcome the 2.3x difference, either.

  11. Phillie697

    February 10, 2012 05:17 PM

    hk,

    Yes, but I think while you don’t normally fall for this, in this case you’re using an observed phenomenon to justify a unproven theory. Do salaries inflate? Over time, yes. Do they inflate so much that if a player signs only a year later, he’d get much more money? No. Case in point: Howard signed that ridiculous contract 2 years ago, for $25M AAV. Yet this off-season, not one but TWO elite 1Bs both better than he is or ever was signed for less than $25M AAV.

    There are many factors that go into this, and you’ve named quite a few, but I don’t think “salary inflation” is a significant factor in the difference of the contracts of Halladay and Papelbon.

  12. Phillie697

    February 10, 2012 05:20 PM

    @pedro3131,

    I disagree. Money is money. There is no money that you can only spend on relievers, and money you can only spend on starters. You HAVE to find a way to compare the two, because money you spent on relievers could be money you spend on starters. Case in point, re-signing Hamels instead of signing Papelbon. Calculating them in vacuum is what GOT RAJ into trouble in the first place.

  13. pedro3131

    February 10, 2012 06:29 PM

    @Phillie, I agree to a point, but if you take this argument then you’d wind up paying Mariano Rivera only a few million for even his best year. The market is never going to bear that out, so you have to look at things relative to other relievers. I don’t think there’s a metric on earth that would quantify this deal as a good one, especially given the teams off-season needs. At the same time, it’s not quite as doomsday a deal if he continues to produce as one of the top 3 closers in baseball

  14. Phillie697

    February 10, 2012 07:00 PM

    @pedro3131,

    I think you just hit the nail in the head :) I would NOT pay Mariano Rivera more than $10M a year. I think the reason why you think the way you do is because you find that proposition to be ridiculous, whereas I don’t.

  15. hk

    February 10, 2012 09:06 PM

    Phillie697,

    While you will never convince me that salary inflation does not play a part in why Halladay’s deal should not be used as the benchmark for comparison to Papelbon’s deal, I absolutely agree that it is less important than the other factors (namely that Halladay is the best starting pitcher in baseball, that Halladay took a below market deal to play here and that Papelbon has pitched more effective in his innings than Halladay has in his.

  16. hk

    February 10, 2012 09:08 PM

    Jeff,

    What’s the point of your comment? It seems that you’re either repeating points made in the article or arguing points with which no one disagrees.

  17. Lefty

    February 11, 2012 09:54 AM

    Nice job TH, good read, thanks

    To me what is most important is not whether the numbers you use for comparison are correct or the best to use or not, what’s most pertinent is your last paragraph. Since the day of the Papelbon signing I have been trying to persuade others, actually “railing” would better describe it, – that it will have a negative effect on all future signings (most notably Hamels) to little or no avail.

    But the agents of all the other upcoming FA’s can use the ” if you paid 5/63 ( I believe he will vest) for a one inning closer, surely my guy is worth well above market value too. People want to look into the vacuum, but that’s not the way this works. Cole’s agent will use the comparable value of other starting pitchers for certain, but IMO- when dealing with the Phillies, the price will be higher due to the Papelbon signing. None of us will ever know it, and I’ll never be able to prove it, but I agree with you, and I believe it strongly.

  18. John

    February 11, 2012 10:10 AM

    I’ll agree that the Phillies overpaid for Paplebon. I’ll agree that in hindsight, they may have ridiculously overpaid. However…

    1. I agree not all outs are created equally. Of Hallday’s 700 or so outs a season, 70 might be the opposing pitcher. For Paplebon, its probably 0 out of 200 outs.
    Halladay will get a weak #8 hitter for maybe another 90-100 outs. I’m making up numbers here, but I’d guess Paplebon gets to face that same weak #8 hitter maybe once every 3 outings, so that’s only 10% of his outs so far, compared to 22-25% of the starter’s outs. The starter might also get another 150-200 outs against the other teams starters that he has a large platoon split advantage over. Lets say the opposing manager uses a pinch hitter in those situations even half the time, and we’re up to 50 “easy outs” (25%) for the closer, vs. nearly half of the starter’s outs being “easy.” Additional value also comes from a series of games with 3 consecutive 9th inning high leverage situations. At most, Halladay would pitch in one of them, getting 3 high leverage outs. Paplebon could conceivably pitch all 3 games, or at least 2 of the 3, getting 6 or 9 high leverage outs. I like the earlier analogy that you might pay a higher premium for a utility fielder with a SS glove, than for yet another corner only player.

    2. Hindsight is wonderful. It lets us see how the closer market shook out, and also pretend that we knew all along exactly what each club would do, and how much each player would sign for. I still think the Phillies wanted Paplebon or Madson, and no one else. What would the comments here look like if they’d signed Bell to the same contract the Marlins gave him? I’m pretty sure we’d all agree he’s in decline and likely a disaster waiting to happen outside of San Diego. All the other available names that floated around out there are reclamation/injury recovery projects like Bailey and Nathan (and Lidge), in obvious decline and/or head cases like K-Rod. I still think if Amaro waits, the Marlins would have thrown piles of money at Paplebon, leaving the Phils with only one (in Amaro’s opinion) viable option, and Boras would have RAJ over a barrel, squeezing out nearly as much for Madson, or getting an extra year. Of course, it could have just as easily gone one of many other ways if the Phils had waited, but there would be a significant number of complaints no matter how things ended up working out, either because RAJ overspent, or because he waited too long and got stuck with an inferior option.

  19. John

    February 11, 2012 10:14 AM

    Just to clarify #1 – I’m not saying half of the PA against the starter are “easy outs,” just that half of the ones that result in actual outs, were probably “easy outs.”

  20. hk

    February 11, 2012 10:27 AM

    John,

    Your point #1 is an interesting one. I suspect, but don’t know, that one of the baseball statistic websites has a database that could show the average OPS or wOBA of the batters that each pitcher faced. Point #2 implies that many of the comments on this blog are made in hindsight when, in fact, many people thought it was a bad contract as soon as they heard the terms and felt is was even worse when they heard that the Phils squandered next year’s 1st round pick because they rushed into it.

  21. John

    February 11, 2012 10:39 AM

    HK
    For #1 – Yeah, I was just too lazy to try to figure out how to find the exact information.

    For #2 – I meant that to apply more towards comments I’ve read either here or other sites that imply Madson would have signed with the Phillies for 1 year and $8.5 million. RAJ either not knowing or not aring about the new CBA rules and draft picks is difficult to understand. Also, we don’t know what RAJ was hearing, either from Boras or other sources, about other “mystery clubs” etc, and what the closer market looked like at the time.

    I think its an overpay, but perhaps not as bad as some think, and I usually try to give RAJ the benefit of the doubt that he’s not a complete moron, just a little impulsive at times. I agree with Lefty that other agents will try to use it against him, but I think he’s already got plans in place to deal with those issues when they come up.

    I might have a little soft spot for RAJ. He tossed a ball to me in the LF stands once at the Vet at the end of an inning. (And to think I’d been dissapointed he was starting that afternoon, because RAJ was NOT very good at baseball)

  22. John

    February 11, 2012 11:04 AM

    HK, again…

    And I think I’m just tired of reading the same contract bashing articles, and want the season to start already. There’ve been too many years in the past where the “big off-season moves” would have been the equivalent of bringing Wiggington in to be the new starting 3B, Nix to be the new starter in LF, and locking up #2 starter Kyle Kendrick for another year, avoiding arbitration for the small to mid-market Phillies…

    I guess it just sounds spoiled to me to complain about getting someone considered to be among the top 2 or 3 at his position, for a salary just a little above what he made last year, and for less than a much older guy who is currently considered the best at the position. But, it’s a great position to be in. I’m going to enjoy this run while it lasts. Sure, its overpaying, but if RAJ thinks they can afford it and stay competitive, then let him try his way until everything collapses, then bring in someone new to clean up his mess.

    Last note, I promise. Then I’ll get off my soap box. For 5 years from 1987-1991, would you rather have been a Twins fan, or a Blue Jays fan (don’t think about 1992 & 1993). Personally, I’d rather be the fan who experienced two rings, even with the last place finish and back-to-back losing seasons in between.

  23. Yo

    February 11, 2012 11:27 AM

    If you decided to spend 20m on a pen (or x % of your budget), isn’t this exactly how you’d spend it? Isnt this less than they spent last year? Buy a big gun, add a vet arm or two and mix in the kids. Especially for a team built to win this year. You can’t hope a Motte drops out of the sky. Easy to point to the Mottes after they happen.

  24. Lefty

    February 11, 2012 11:29 AM

    John,
    I hope I don’t come off sounding like a spoiled fan. I am 54 years old and recall vividly the small-mid market Phillies of the past that you describe. I have never once complained like others, about the Howard deal. It looks now like it may have been ill advised, but at least it was an every day position player.

    This one just rankles me because it is a closer. In my 45 years as a baseball fan, there have been so few of them that played consistently for a long stretch of time, I could count them on two hands. And I don’t mind the AAV, heck I’d even consider giving a quality guy like him him 2/24, it’s the length that bothers me so.

    And I sincerely hope you are right that RA Jr. has plans in place to take care of the future of this franchise.

  25. Phillie697

    February 11, 2012 01:00 PM

    @John,

    Your analysis suffers a fatal flaw. It’s easier to pitch one inning than it is to pitch 7 or 8 or 9. This is why failed starters can become great relievers. There is nothing magical about Papelbon; he just gets to throw harder than Halladay because he only has to throw 20 pitches. So whatever disadvantage he might suffer for having to face on average better hitters is offset by the fact that he only has to face 3 of them (if he’s lucky).

  26. Phillie697

    February 11, 2012 01:02 PM

    Yo,

    Again, you ASSUME we have to spend $20M on the pen. Coming in with that kind of assumption is why you can’t accept these rational arguments.

  27. hk

    February 12, 2012 08:42 AM

    If we are only going to use $/out to assess the relative value of a pitcher’s contract, Joe Blanton is being paid $16,053 per out, making him 40% cheaper than Halladay on this basis.

  28. Yo

    February 13, 2012 07:53 AM

    I don’t assume that they need a $20M bullpen, but RAJ has decided to spend X% on the pen. If that’s the decision, then this is the way I would do it. Re: the $20M, I think the argument for $20M is just as week as the argument for going with 5 kids and hoping for the best. The fact that it has worked (anecdotal) doesn’t mean that it will again. Why take a chance with a team ready to go now?

  29. Phillie697

    February 13, 2012 09:51 AM

    Yo,

    Well I think part of the criticism of Papelbon’s contract IS the fact that RAJ thinks he needs to spend that much money on the bullpen. And no one said NOT to sign a proven “veteran,” but he grossly overpaid for one. Again, to use an analogy that I’ve been using way too much, just because you have a billion dollars doesn’t mean it’s a good idea to spend $200M on a car, even if that car is a Ferrari.

  30. Wilsonvaldezisinthehalloffame

    February 13, 2012 11:04 PM

    we’re not paying for saves, we’re paying for strikeouts and if we win a couple of ws with him and WHEN he breaks Mo’s record in a phillie’s jersey on. we’re paying for a hall of fame hat.

  31. Phillie697

    February 14, 2012 11:51 AM

    I almost can’t tell if that was trolling… You had me until the whole “when he breaks Mo’s record,” LOL.

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