22 March 2018

Baseball Booms, Minor Leaguers Still Exploited

In 1938, the United States was climbing slowly out of the great depression.  It was a time where the free wheeling days of robber barons hoarding cash with largely ineffective charities was more fully understood.  The older generation was familiar with how the poor were treated with grueling work schedules, no days off, chained in work rooms and searched upon exit to ensure no stealing, young children pulling twelve hour days instead of going to school, and little liability when it came to product defects.  The younger generation, informed by the Great Depression, know how the rich did everything they could to remain rich while squeezing every drop out of the middle class.  These experiences led most of the country to embracing Franklin Delano Roosevelt's New Deal approach and believed that the federal government could stop how private businesses abused the poor and middle class.

Hugo Black authored the Fair Labor Standards Act of 1938.  It was a compromise.  His vision of the bill granted more rights to the worker and gave an impression of what we would think of as European socialism-infused democracy.  The final bill had a great impact on society.  It is why we think of eight hours as a work day and 40 hours as a work week.  It established overtime rules.  It put limitations and prohibitions on types of child labor.  The act established the federal minimum wage.

Over time, the act was amended and often extended.  For instance, Dwight D. Eisenhower called for the expansion of coverage for work that fell under the minimum wage laws in 1955.  Typically, the act is altered once or twice every decade.  Minimum wage slowly moves upward.  More and more types of work fall under the scope of the act.  And, powerful lobbying groups are sometimes able to nip lawsuits in the bud by having congress pass special exemptions for types of work.  For instance, the 1996 Small Business Protection Act exempted tipped employees from minimum wage.

Over the past few years, Major League Baseball has been lobbying hard to ensure they can exempt minor league players from FLSA.  It would be beneficial for MLB to get this because they want to end the court cases that might force them to pay minimum wage and overtime.  The claim from Major League Baseball is that minor league players are exempt because they are seasonal/recreational employees, which would be akin to carnival workers.  Some arguments on the periphery have included that players in the minors are more or less involved in internships where (1) employee and employer understand what compensation will be delivered, (2) that the work benefits the employee more than the employer, and (3) that the employment is a needed aspect to a final occupation.  The internship argument tends to be more of a garnish than a main argument because internship arguments would often be undermined by exclusivity rules in the contracts the players sign.

Minor league players have argued that the current system exploits players.  I cannot find the current Minor League Baseball agreement, but the numbers communicated to me are these:
Monthly Salary
Dominican Summer League: $300
Rookie League: $950
Short Season A: $1150
Low A: $1300
Hi A: $1500
AA: $1700
AAA: $2400
Players are not paid by the club for spring training or instructional leagues.  Short season payment covers two to three months.  Full season payment covers five months.  This means the yearly expected salary for minor leaguers at various steps would be:
Yearly Salary on Level
DSL: $900
Rookie: $2850
Short A: $3450
Low A: $6500
Hi A: $7500
AA: $8500
AAA: $12000
If a player repeats a level, he is usually entitled to a raise of about $50 a month.  If you are in the minors and score a 40 man roster spot, your pay increases to $88,000.  If your first contract expires (six full seasons after you sign it) and you are a free agent, you can negotiate for a higher salary if a team is willing to hand you one.  As you can see, there is good reason why minor league teams send out pleas for people to host players.  With their salary, they cannot afford rent.  It is why it is not uncommon to hear about four or five players sharing space in two room apartments while in the minors.

Wait, what about signing bonuses?
Players signed outside of the top ten rounds see signing bonuses ranging from $1,000 to $100,000 dollars for signing a 6.5 year contract.  Senior college players typically sign for $10,000 in the first ten rounds.  At any time, an organization has about 10% of its minor leaguers as guys who had a signing bonus for more than $500,000 for that 6.5 year contract.  International players often sign for far less and often send much of their meager paycheck back home to their families.

As you may know, baseball is a nine billion dollar industry.  Revenue for each team ranges from the low 200 million mark for the Rays to over 500 million for the Yankees.  Assuming that each team has 250 minor leaguers in their system, it costs each club about 1.53 million dollars to pay salaries for every minor leaguer in the system (If clubs also paid for spring training, that would add 0.27 MM).  The public line by MLB is that it would be cost prohibitive to put minor league players under FLSA scope.  You often hear a few things, such as how thankful minor leaguers are of having this opportunity (which though the severity is different in scale, this was something you often heard about child labor or back breaking hours before FLSA went into effect).  You also hear organization lament about what if they had to tell their guy who wants more batting practice time that he has to go home because his hours are up (which is silly because you can do whatever you want off hours and MLB teams can pay for overtime).

So how much would it cost?
There are a few ways to look at potential solutions:
Per Hour
1. Straight Time
2. Time Plus 1.5
3. Living Wage in Season
4. Living Wage Salary (whole year)
5. Living Wage + child Salary (whole year)
6. Split Roster
Straight Time
For this exercise, we will use Sarasota as the baseline for minimum wage for US leagues and the Dominican minimum wage.  Under this scenario, we assume that each baseball player is paid in-season plus spring training for all their hours working for the club (estimated as 60 hours under employer oversight).  Florida minimum wage is $8.25.

Time Plus 1.5
This approach is the same as straight time except that any hour worked over 40 hours a week would result in being paid 1.5x the hourly rate ($12.38).  Florida is again the baseline here.

Living Wage in Season
In Sarasota, the Living Wage is considered $12.00.  This is a bit of a false statement because a living wage would assume 2,080 hours of work per year, while a full season plus spring training workload would be 1,548 paid hours.
Straight Time Plus Living
Complex 12771 14900 18576
DSL 1491 1491 1491
Rookie 6386 7450 9288
Short A 6386 7450 9288
Low A 12771 14900 18576
Hi A 12771 14900 18576
AA 12771 14900 18576
AAA 12771 14900 18576
Total 2.59 MM 3.02 MM 3.75 MM
Increase 1.06 MM 1.49 MM 2.22 MM
AAA players really do not benefit until you reach that third option, but, over the course of their professional careers, it would benefit them in the low minors to have earnings of $12,771 or $14,900 as opposed to the $3,450 a low A player makes up to the $8,500 a AA player makes.  Perhaps most interesting is that, of these, the highest increase in cost would be the living wage option at 2.22 MM a year for the entire minor league system.  The Tampa Bay Rays would be impacted most as their minor league salary base would take up 1.06% of their revenue as opposed to the current projected cost of about 0.86%.  For a team like the Yankees, they see an increase from 0.33% to 0.40% of their revenue.

While the above pay options improve the financial security of minor leaguers, we are still talking about poverty level employment.  For a single house dweller, poverty is considered less than $15,060 per year while a wife brings the poverty level to $20,290 and a wife and kid takes you to $25,520.  So, yes, almost all baseball players would remain in the poverty zone under the scenarios above.  This takes us to a salary approach.

Living Wage Salary
This approach would take into consideration that players would reason a full living wage, making up those 532 hours otherwise not covered with only in-season pay.

Living Wage + child Salary
While baseball is a family sport (or at least it is sold as one), the minor leagues are quite unconcerned about providing for a player with a family.  In this scenario, we consider living wage salaries and assume all players have a single child.  This scenario is the same as the Living Wage Salary scenario, but with that child component.
Living Living +1
Complex 24960 52000
DSL 3280 5964
Rookie 14477 30160
Short A 14477 30160
Low A 24960 52000
Hi A 24960 52000
AA 24960 52000
AAA 24960 52000
Total 5.17 MM 10.76 MM
Increase 3.64 MM 9.23 MM
These are certainly more, perhaps, socially responsible figures.  What these approaches do is respect these professionals as full year employees, which makes some sense as they are signed for 6.5 years exclusive to the team.  What the second option does is honor and respect the families of these employees who serve as the foundation of Major League Baseball.  From what I understand, this approach would be more similar to what Japanese players make in their minor leagues.

For the Tampa Bay Rays, this would increase the revenue share from 0.86% to 1.73% for the single and 4.40% for the family plan.  For the Yankees, they would see it increase from 0.33% to 0.66% for the single and 1.68% for the family plan.

Split Roster
This scenario is a bit more complicated.  This scenario considers the creation of a 60 man minor league roster.  Being on this roster would provide the team the same protection that the 6.5 year first contract provides, but also pays the players on this roster a living wage salary.  That 60 man number though does not consider the other 190 players needed to fill out the minors.  These players would play under existing rules, but be additionally compensated for Spring Training and be free to sign with any team after the season ends.
60 man Seasonal
Complex 24960 7800
DSL 3280 900
Rookie 14477 2850
Short A 14477 3450
Low A 24960 7800
Hi A 24960 9000
AA 24960 10200
AAA 24960 14400
Total 1.28 MM 1.28 MM
Increase 1.03 MM 
Under this scenario, we have a compromise.  You have a two-tiered system where players the team truely designates as future stars are provided with a living wage salary and the club enjoys the protections of the first contract.  Meanwhile, the other 90 players are handled much like the seasonal/recreational labor that MLB claims them to be.  These contracts would be pay for play and the players would be free to sign with any organization at the conclusion of each year.

The Tampa Bay Rays would be impacted most as their minor league salary base would take up 1.22% of their revenue as opposed to the current projected cost of about 0.86%.  For a team like the Yankees, they see an increase from 0.33% to 0.47% of their revenue.  To me, this seems fair.

When I spoke generally about this in December, former site contributor Nick Faleris piped in with the idea that maybe this sort of structure would alter things more significantly.  He suggested that perhaps many clubs would reduce the number of minor league affiliates.

This was referring to a true living salary, so that is what I will compare it to.  I figured the club would keep its complex at full strength, but that it would include more half year players who were in the draft.  The club would also keep its Low A, Hi A, and AA clubs.  Under this scenario, the full system cost of 5.17 MM would decrease to 2.58 MM and cost 125 jobs per club choosing to go this route.

That leads us to a lot of questions.
Is the minor system oversaturated with clubs, developmentally speaking?
Are certain levels not needed for development or as a holding pen for MLB level substitution?
Is the industry of minor league baseball more important than the earnings of its employees?
Are multi-year contracted employees of MLB as minor leaguers truly seasonal labor like carnival workers?
Is it moral as spectators to enjoy the game when you know the minor leagues is full of struggling families?
It can be hard to really get a good grip about what all of this means and to see it more personally. Based on unpublished research, the typical minor league baseball player comes from a white, upper middle class home and by the age of thirty has half the earning potential and assets as a similar person from the same background that did not go into baseball.  That difference in earning can have major impacts on a person's life.  That difference is worth about two years of life (my extrapolation from the data).  Based on a Stanford study, the value of a year of life is about $129,000.  So, from a purely financial perspective, the players are not only making next to nothing, they are paying about $256,000 for the privilege of playing the game.

Maybe that is a question we could answer for ourselves.  How much would we pay to be a professional baseball player in the minors?

21 March 2018

Can Mike Wright Put It All Together?

This is a guest post by Jakob Lucas. You can follow him on Twitter here. Note: This post was written before the O's signed Alex Cobb. There's good information in it, so we're still running it.

After traveling the Norfolk shuttle over the past three years, Mike Wright is out of minor league options. He is competing for the fifth starting spot with Nestor Cortes and Miguel Castro, but he could also start the season in the bullpen. With Chris Tillman's awful spring, it's possible that his spot is up for grabs, too.

The Orioles don't have a very talented rotation or depth to it. Wright told Brittany Ghiroli of MLB.com that while his goal is to make the team, he feels he can contribute more as a starter than as a reliever. Wright has consistently put up good numbers in AAA, but that performance hasn't translated to the majors yet.

Across 144.1 innings in the major leagues, Wright has pitched to a 5.86/5.46/5.16 ERA/FIP/xFIP line. In his career, he has struggled against lefties, allowing a .328/.384/.578 line to them. He has pitched much better against righties, only allowing a .247/.332/.447 line. The consensus opinion was that he may be able to survive as a reliever, but he needs a new pitch to be able to pitch against lefties and succeed as a starter.

When Wright was first called up to the majors, he was a 4-seam pitcher, throwing a fastball 54.8% of the time. In 2015, he had 12 appearances, 9 of which were starts, and got busted up to the tune of a 6.04/6.13/5.70 ERA/FIP/xFIP. He returned to the majors in 2016, making 18 appearances (12 starts), producing an improved but still poor line of 5.79/5.30/5.29. His pitch mix was still dominated by the fastball, throwing it 47.3% of the time.

In 2017, Wright pitched exclusively as a multi-inning reliever, pitching 25 innings in 13 games. He reduced his fastball usage to an even split with his 2-seamer and slider. His ERA wasn’t pretty (5.76), but for the first time in the majors, he had good peripherals. A 25.7% strikeout rate and a 6.4% walk rate were good for a 4.72 FIP and 3.83 xFIP.

Pitch Info (Velocity) - Fangraphs
SeasonFB% (4-seam)SI% (2-seam)CH%SL%CU%
201554.8 (94.8)14.5 (92.5)11.1 (81.3)16.9 (84.0)2.7 (77.1)
201647.3 (94.9)22.9 (93.2)8.0 (81.8)18.5 (83.7)3.5 (79.6)
201730.0 (94.1)31.2 (93.1)7.0 (85.5)31.9 (86.5)2.7 (78.9)

As Wright has moved away from the 4-seamer and towards the 2-seamer, his groundball rate has increased slightly, from 37.7% to 43.7%. The 2-seamer produces groundballs, which inversely means fewer flyballs. Groundballs are valued at a premium in Camden Yards, a hitter’s park. With his previous home run issues, groundballs are even more valuable.

Ghiroli also noted that Wright started throwing a new pitch in the minors in 2017, a cutter. He has continued throwing it this spring. In five games, he’s pitched 14.2 innings, struck out 9, walked 3, and given up 1 home run. A more diverse pitch mix is helpful, especially for a starter. There aren’t any starters who had a pitch usage similar to Wright’s in 2017. At this point, we do not know if his will be a successful pitch cocktail. That is not to say that he won’t succeed as a starter; there just isn’t a reliable starter comp at this point.

There are, however, some reliable reliever comps. If Wright continues with the cutter, he could be in the company of Pedro Strop, Roberto Osuna, Bud Norris, and Steven Okert. This group throws a fastball, cutter, sinker, and slider ~20-30% of the time. Okert has pitched 41 innings in the major leagues and has yet to separate himself from the pack. Strop has been a consistently good middle reliever throughout his career, but he only started to use a cutter last season. Osuna has established himself as the Blue Jays' closer in three major league seasons. Norris reestablished himself as a decent reliever after two lost seasons in 2015 and 2016.

Wright has similar velocity to the other pitchers, within ~1 mph. There haven’t been any reports of his velocity in spring training, but hopefully his cutter is a good 90+ mph pitch.

2017 Pitch Velocity - Fangraphs
Mike Wright94.1N/A93.186.5
Roberto Osuna95.090.794.786.1
Pedro Strop96.189.596.485.2
Bud Norris94.490.294.685.3
Steven Okert92.488.892.285.7

Wright pitches in the zone 45.6% of the time, which is in line with Osuna and Norris, at 43.7%. Osuna gets significantly more O-Sw% (38.2%) than Wright (29.5%) or Norris (29.9%). Wright falls behind Osuna and Norris in O-Con%, with 64.2% opposed to Osuna’s 49% and Norris’ 49.7%. Wright also has the lowest SwStr% of the trio. Wright and Norris look to be very similar, with the major difference being their O-Con%.

These are Wright’s numbers before adding a cutter. The rest of the pitchers in this group already throw one. Based on this data, rising up to Norris’ level doesn’t seem out of the question, and while becoming an elite closer like Osuna may not be probable, it is possible.

2017 Plate Discipline Data - Fangraphs
Mike Wright29.5%65.3%45.8%64.2%83.9%77%45.6%10.6%
Roberto Osuna38.2%69.9%52.1%49.0%81.6%68.1%43.7%16.8%
Pedro Strop32.7%62.1%45.2%40.6%82.5%65.1%65.1%15.5%
Bud Norris29.9%66.9%46.1%49.7%85.4%72.3%43.7%12.5%
Steven Okert28.2%65.6%48.6%66.1%83.5%78.9%54.5%9.8%

Starting pitching is still the biggest need for the 2018 Orioles. But with the impending loss of Zach Britton and Brad Brach after 2018, and Darren O’Day after 2019, the bullpen is also running thin.

The above data shows us that there is precedence for Wright’s potential success as a reliever. But he has work to do.

Data via Fangraphs

20 March 2018

The Orioles, Who Weren't Done, Sign Alex Cobb

During this offseason, there have been plenty of questions about the Orioles. What are they doing? is one, along with several others that have been asked repeatedly the last few weeks and months about the direction of the club. I touched on some of them in a post last week:
As with most things O's related, there are more questions than answers. Why isn't there more payroll room? Are the O's really doing all they can to win now? How can they rely on Mike Wright or a Rule 5 pick and say they're trying to win? How does adding Andrew Cashner, Tillman, and Colby Rasmus qualify as reloading?
Well, the O's indeed were not finished, and they've apparently swooped in and signed the most notable free agent starting pitcher remaining, Alex Cobb. According to Jon Heyman, the O's deal with Cobb is, surprisingly, for four years and close to $60 million. (Pending a physical, of course. Always pending a physical.) It was reported all offseason that the O's weren't comfortable going to four years again with a starting pitcher, and yet, here we are.

Before this move, the O's were about $30 million under last season's payroll. Now, depending on the structure of Cobb's deal and the deferred money, the O's will be somewhere around $15 million below. It's still a bit confusing that payroll would drop when an obvious cliff is upcoming -- the impending free agency of Manny Machado, Zach Britton, Adam Jones, and Brad Brach -- but clearly it's easier to put up with that when the rotation now includes Cobb to go along with Andrew Cashner and Chris Tillman.

Now, it's tough to square Cobb's contract with the one signed by Lance Lynn. Lynn, who's a similar talent to Cobb and has been linked to him all offseason, signed a one-year, $12 million deal with the Twins last week. That's a pretty significant discount for someone of Lynn's talent level, and for someone who also costs his new team a draft pick since they both rejected qualifying offers from their previous teams.

The O's are most likely overpaying for Cobb. He doesn't come without his risks, and as the O's just learned with Ubaldo Jimenez, four-year deals for starters can go south in a hurry. But how often have you heard that the O's need to spend more than the opposition to bring a starting pitcher to Baltimore? How much better does the rotation look when you have Cashner/Tillman in the 4/5 spots instead of Tillman and one of Nestor Cortes/Miguel Castro/Mike Wright? Those things matter.

The Cobb signing makes the Orioles better, even if his PECOTA projection is worrisome. All along, the hope was that if the O's weren't going to commit to a full rebuild, that they'd take this offseason seriously and add some talent to a roster that needed it. Maybe none of the previous moves thrilled you, but together, adding Cobb, Cashner, Tillman, and Rasmus et al. looks decent once we finally got to this point.

Is this all the O's could cobble together to win now? Even the most optimistic fan would have a hard time selling that. But it's easier to defend the position that the O's are trying to win in 2018. Sometimes the bar is just that low.

Can Danny Valencia Be Steve Pearce Lite?

When the Orioles signed Danny Valencia to a minor league deal on March 3, it was a random move. Not unlike the O's, of course, just random. No one should get upset about a minor league signing, but it was a little tough to see the fit. The Orioles already have first base/DH types like Chris Davis, Mark Trumbo, and Trey Mancini on the roster, and just a week before, the O's brought back Pedro Alvarez, another 1B/DH.

Still, while all of the O's players above have played different positions in their careers, all of them except for Mancini are primarily first basemen and/or designated hitters now. Trumbo could certainly play in the outfield some for the O's in 2018, but he shouldn't. And if first base were open for Mancini, he'd be playing there instead of left field.

All of this is to say: Valencia is a bit different than a typical depth addition at first base (like Alvarez). He's more like another Swiss Army knife the O's employed during the golden years of the Buck Showalter/Dan Duquette era. Of course, I'm talking about the great Steve Pearce.

In almost 1,000 plate appearances with the O's from 2012-2016, Pearce posted a wRC+ of 123. His masterpiece, far and away, is the 2014 season when he somehow put up a 161 wRC+ which fueled a bWAR of 5.9 and an fWAR of 4.9 in fewer than 400 plate appearances. Like many things during the Showalter/Duquette era, it was stunning and amazing.

Valencia is similar to Pearce: they're about the same age (Valencia is 33; Pearce is 34), he can hit left-handed pitching, and he can play multiple positions well enough.

Valencia: 136 wRC+ vs. LHP (career)
Pearce: 126 wRC+ vs. LHP (career)

Valencia isn't as good of a defensive first baseman as Pearce, and Valencia has rated poorly defensively at third base, but he's an OK enough corner outfielder and can fill in at second base. He also doesn't fare as well against same-handed throwers as Pearce (85 wRC+ vs. RHP vs. a 100 wRC+ for Pearce).

But having Valencia around can be useful. It's beneficial to have a player capable of handling multiple positions, and it's even better when that player mashes left-handed pitching. From 2015 to 2017, Valencia is tied for 19th best (with Edwin Encarnacion) in the majors with a 133 wRC+ against lefties (min. 400 plate appearances).

When the roster is clogged with all of Davis, Trumbo, and Mancini, it may be tough to find playing time for Valencia. But with Trumbo scheduled to start the year on the disabled list, there's room for someone with Valencia's skill-set. Now, instead of hoping for platoon at-bats in right field and some utility player work, he could receive at-bats at DH as well.

If the O's stay disciplined in using Valencia as a platoon bat and avoid giving him too much work at third base, he could be a nice depth addition. It wouldn't even be that surprising if he ended up with better overall offensive numbers than Trumbo, and it could be a bonus to have him around if Trumbo's injury lingers or Davis's elbow issues don't go away. The bar is low for a minor league signing, but Valencia's presence already seems helpful.

19 March 2018

The Rays' New Media Deal Won't Help Them Compete With The O's

According to the Sports Business Journal, the Rays are in discussions to sign a long-term extension with Fox Sports Sun. Fox is expected to offer roughly $50M in 2019, and offer an average of $82M per year. If this is accurate, and presuming a linear rate of increase, this would result in an increase of 6.5% per year.

Such a large annual increase would be odd. Normally, baseball media rights deals result in a yearly increase between 3% and 4%. It’s worth noting that a 3.5% linear yearly increase of a 15 year deal starting at $50M would result in the Rays receiving $82M in the last year. This makes me wonder if the deal doesn’t offer $82M per year, but rather $82M in its final year. If this is in fact the case, the Rays would receive $980 million for 15 years as opposed to the $1.2 billion over 15 years they’d receive if they did get an annual increase of 6.5%. Then again, the Rays received $15M in 2012 but the Sports Business Journal claims they received $35M in 2017.

In recent years, both the Diamondbacks and Cardinals have signed new media rights deals and details of these deals have made it into the media (the Reds also extended their media rights deals, but no one has been able to report the terms). Here’s how the Rays' deal (using both 3.5% annual increases and 6.5% annual increases) compare to the Cardinals' and Diamondbacks' deals.

Depending on which annual increase is used, the Rays' deal is either slightly better than the Cardinals' and Diamondbacks' deal or slightly worse, but either are in a similar category. In either case, the Rays would start out earning slightly less than the Diamondbacks or Cardinals, but could end up receiving slightly more depending on the final terms.

While it has been reported that the Rays aren’t allowed to broadcast their games in the Miami DMA, both MASN and the RSDC stated in the MASN case that the Rays media territory includes the Miami DMA. Presuming this is accurate, then the Rays' media territory has roughly 7.2 million cable and satellite subscribers, of which 1.7 million are in its core market of the St Petersburg DMA. Note that all of these subscribers may not have access to Fox Sports Sun. This is significantly larger than the Cardinals' media territory which has 5.1 million subscribers and a core market of 1.2 million as well as the Diamondbacks' territory which has 4.1 million subscribers and a core market of 1.6 million subscribers. However, the Cardinals always have high ratings and had an average of 94,000 viewers per game in their core media market in 2017. The Diamondbacks had above average ratings and on average 66,000 viewers per game. The Rays have below average ratings and only 52,000 viewers per game in their core market. Unlike the Cardinals and Diamondbacks, the Rays don’t have particularly good attendance, suggesting limited interest in the Rays. The Rays may have a stronger market than either the Diamondbacks or Cardinals, but both those teams have stronger fan interest.

The Orioles/Nationals shared media market is far larger than the Rays, Cardinals or Diamondbacks media market but includes two teams instead of just one. MASN's core DMAs of Washington and Baltimore are roughly the same size as Miami and Tampa Bay combined and has 9.5 million total cable and satellite subscribers as well as 3.2 million subscribers in its inner core. However, MASN has roughly 5.9 million subscribers compared to the Rays 5.6 million subscribers in part due to MASN's failure to gain carriage in North Carolina. Based on solely a market size analysis, it would be reasonable to expect the Nationals and Orioles combined to receive slightly higher media fees than the Rays and Marlins combined. That stated, the Nationals and Orioles have higher ratings than the Rays and Marlins and are in more valuable markets making them clearly more valuable properties.
It is hard to determine how much MASN will pay the Nationals and Orioles in media rights fees because the rates are set to change every five years based on network revenue. In addition, Allen and Co, MASN, the RSDC and the Nationals each have their own drastic ideas of how fair media rights should be determined.

Allen and Co, on behalf of Comcast, offered a deal in which Comcast would offer both teams starting in 2012 a media rights fee of $42.5M and increasing by 4% annually until 2032. This would result in both teams earning roughly $1 billion each over the fourteen years from 2019-2032, or roughly the same as what the other teams in this sample are receiving. Given that the Nationals and Orioles are in a stronger market than all of these teams, this offer would be disappointing. Unsurprisingly, MASN didn’t accept Allen and Co’s offer.

Instead, MASN proposed their own rights fee for 2012-2016, as did the Nationals. In addition, the RSDC made a decision about the appropriate rights fee for 2012-2016 that was ultimately overturned. Any attempt at guessing what any of these parties might request over 2019-2032 requires a lot of conjecture.

That stated, MASN offered $45.7M in 2016 with a 7.7% annual increase. That rate of increase projects to roughly $57M in 2019 -- or more than any other team in the sample received. This doesn’t take into account that MASN was likely to receive an increase in revenue as a result of renegotiating its contract deals with other cable providers.

The RSDC felt that $66.7M was fair value for 2016. This is significantly higher than what any other team in the sample received in 2019 -- and presumably the teams’ rights fees would go up from 2017-2019. It’s likely that such an amount would only be reasonable if the Nationals/Orioles shared media territory is significantly more valuable than any of the other teams in the sample.

Meanwhile, the Nationals requested $127.4 million in 2016. Such an amount would be larger than any of the teams in the sample received in 2032. It’s likely that the Nationals request for 2019 would be roughly the same as what the Cardinals, Rays and Diamondbacks receive all together. This seems to be an awfully optimistic request.

Based on my understanding of the economics, I project that MASN's offer was on pace to be worth $1.45 billion over the fourteen year period, the RSDC's offer was on pace to be worth $2.1 billion over the fourteen year period and the Nationals' offer to be worth $3.7 billion over the fourteen year period. If so, the deals look like this.

These graphs always look a bit weird when I include the Nationals' request. Here's how the chart looks without them.

It appears that the Rays' media deal appears to be fair value compared to what the Diamondbacks and Cardinals received. It is likely that the Rays will receive less in media rights fees than what the Nationals and Orioles will receive in rights fees from MASN, but that is because the Nationals'/Orioles' media territory is more valuable. This media deal isn’t going to change the Rays' financial situation and likely means they’re going to struggle to maintain a competitive payroll going forward.

17 March 2018

Easy Listening: Shepherd on Locked On Orioles Podcast

This past week, I (Jon Shepherd) appeared on Locked on Orioles, which is a new podcast that began this year.  We touched on the decrease in the Orioles payroll this year, Anthony Santander, and how innovative the club has been over the years.

1:50 Interview Begins
3:00 Rumination on Payroll
6:10 A Little Bit on MASN and the original deal the Orioles signed with the Senators in 1954
7:30 Why did the team not trade their assets if not going all in?
10:24 Rebuilding, what to expect in 2019?
12:45 Tanking requires discipline and organization
15:16 Orioles have actually been progressive
18:29 More on Santander
20:43 Orioles surplus of left fielders and designated hitters

Give it a listen.

16 March 2018

How Was Dylan Bundy's Second Half Different?

In his first full season as a major league starting pitcher only, Dylan Bundy started 28 games and threw nearly 170 innings. But his innings were curtailed in the second half, and he was given extra rest between some starts. The additional days off appear to have been beneficial:

1st half: 108 IP, 4.33 ERA, .326 wOBA, 7.0 K/9, 2.92 BB/9, 4.88 FIP, .271 BABIP,
2nd half: 61.2 IP, 4.09 ERA, .277 wOBA, 9.92 K/9, 2.34 BB/9, 3.51 FIP, .277 BABIP

In the second half, Bundy increased his strikeouts and cut down his walks. Oddly enough, batters hit the ball harder against him, though it didn't seem to matter much:

1st half batted ball: 19.6 Soft%, 45.5 Med%, 34.9 Hard%
2nd half batted ball:13.8 Soft%, 46.7 Med%, 39.5 Hard%

Bundy induced more ground balls in the second half, and there weren't as many line drives hit against him. There weren't as many home runs, either (1.50 HR/9 vs. 1.17).

Maybe it's not surprising to find out that Bundy threw a tiny bit harder in the second half. Bundy's velocity on his four-seamer went from 92.3 mph to 92.7 mph. He also threw the rest of his pitches --his changeup, slider, curveball -- slightly harder as well.

But what's more interesting is Bundy leaned more heavily on his slider in the second half. Here's a breakdown of his pitch usage in both halves:

1st half: 53% four-seamers, 11% curveballs, 20% sliders, 16% changeups
2nd half: 55% four-seamers, 9% curveballs, 27% sliders, 9% changeups

Last season, Bundy's slider was his most effective pitch. Here are the numbers against his four offerings, from Brooks Baseball:

Four-seamer: .288/.498 (batting average/slugging percentage)
Curveball: .167/.381
Slider: .174/.252
Changeup: .229/.419

Bundy's slider is a very good pitch, but he has considered not throwing it quite so much. Check out this January article from the Baltimore Sun's Jon Meoli on Kevin Gausman and Bundy, which includes this nugget (emphasis added):
... Bundy has spent the offseason preparing for a heavier workload and examining where he could improve. He started throwing about a week later than normal in an effort to save his arm, and pondered mixing in his curveball and changeup more often as he became too reliant on his slider as an out pitch in 2017.
Did Bundy become too reliant on his slider? Was he not throwing it enough? Or maybe throwing too many of them is not the best thing for a pitcher's arm. That last part is up for debate and is only a guess, and Bundy knows his arm better than anyone else.

The Orioles need Bundy to be just as good or better in 2018 while increasing his workload. He'll seemingly have no limitations, and if healthy, should approach 200 innings.

He's still learning what works best for him now that he's back to being a full-time starter. Bundy is closer to a middle-of-the-rotation option than a frontline starter, but the O's are in no position to complain. It would just be nice if Bundy had more help.

Stats via FanGraphs and Brooks Baseball. Photo via Keith Allison.

15 March 2018

Orioles Fifth Starter Competition Should Last All Season

To some extent the Orioles have a blessing and a curse. Their fifth starter position in their rotation looks to be rather undecided. On top of that, Chris Tillman looked very shaky on Tuesday. Plus, Andrew Cashner is no one's idea of a sure thing. This should give the Orioles an opportunity to test out their young arms by using a swingman. What I mean is that the Orioles could keep to four days off and one day on for their starting pitchers. With off days, this increases the frequency that the top of the rotation pitchers will enjoy.

Slot Strict 5 Priority 5
1 33 36
2 33 36
3 32 35
4 32 31
5 32 24

Standard practice these days tends to give starters as much rest as possible. What you typically see is that everyone takes their place in the rotation, which is why you wind up with about 32 starts per pitcher with the first two slots looking at 33. What a swingman role will do is give greater opportunity to your best pitchers. Gausman, Bundy, and Cashner will potentially get more opportunities. Tillman would get about the same and the fifth starter will get far fewer. Yes, rainouts, injuries, and performance will change the distribution, but this is the general idea.

So what would this mean?  Below I tabulated the expected number of total runs for each pitcher.  Data shows that ERA does not significantly differ between four days of rest and five days of rest, so we will assume that run rates will not change.  Gabriel Ynoa (boot and all) is standing in as our generic fifth starter.

Strict 5 Priority 5
Kevin Gausman 91 99
Dylan Bundy 100 109
Andrew Cashner 111 122
Chris Tillman 111 73
Gabriel Ynoa 103 77
516 480

What this suggests is that bringing back a true swingman and prioritizing starts for pitchers with at least four days rest would result in a decrease of 36 runs scored.  If such an approach could be taken and if these numbers hold out, it would mean a bump of four wins.

For fun, what if the club signed Alex Cobb.  We would slot him in Cashner's place and bump Cashner down to the fourth slot.  Tillman would then enter the fifth starter abyss.  The priority five run total would drop from 480 to 454 runs score, another 26 runs.

This means that changing from a straight five approach to a priority five approach plus Cobb would net the club 62 runs, which is about seven wins.

But, wait, there is more.  Going back to the swingman, the club can get creative here.  You could imagine Chris Tillman getting a few starts to open the seasons or be placed on the DL with some starts later on. Nestor Cortes could be given a shot.  Mike Wright could try to put it all back together again.  Miguel Castro might have a whirl or two.  In the minors, the likes of Alec Asher, Michael Kelly, Yefry Ramirez, Tanner Scott, Jayson Aquino, and Eddie Gamboa could be run through.

The swingman approach could rekindle what was beneficial with the 2012 team, which was the ability to give opportunities to pitchers in order to find out whether Chris Tillman or Miguel Gonzalez could put it all together.  The swingman approach also reduces the importance of finding those guys.  Time spans between fifth pitcher starts could be as long as 14 and 17 days between, which allows the club to beef up the pen to make up for the starter's tendencies to not go deep into games.

The opportunity to find useful starters or, at worst, provide more depth for the bullpen or bench could well be worth another win.  If Fangraphs is right that this is a 75 win team, then this approach plus Cobb would get them to a projected 83 wins.  That club would be playing meaningful baseball into August, at least.

14 March 2018

How the Orioles win the AL East in 2018

The Orioles could win the the AL East this year.  They could.  I am not kidding.  Such an outcome is one I would not expect.  It is an outcome that I would find shocking, but there is a path.  If you pay attention to projection models incorporated into season models (pick one, any one, they all are about as accurate as any other), then you may know the club is generally seen as a mid 70s win team.  Such a club matches or exceeds 90 wins almost 10% of the time.  In other words, it is not uncommon.

However, 90 wins is nice, but not a guaranty of much of anything with an AL East that looks to have two monsters in the Yankees and Red Sox.  What would be a safe number would be around 95 wins.  That leads us to this idea, what would a scenario look like where the Orioles win 95 games.  That may sound unrealistic, but projection models disagree.  There is a chance.  That chance would require an even push by several Orioles in a more positive direction or a couple big breakouts to shoulder the load.  In this post, I will take the slight push approach.  Chance shown for each player is the probability for a player doing at least that well, so they could actually do better.

Projection Change
C Chance Sisco 256 0.8 0.8 0
Caleb Joseph 320 0.8 1.6 0.8
The Rest 64 0.1 0.1 0

Chance: 50%
Fangraphs sees both Joseph and Sisco as competent catchers.  The Orioles off season long search to displace Sisco from the roster is not coming up as a good idea in the models.  Here, though, I decided not to push anyone's performance in the positive direction.  Everyone sticks to their 50th percentile projection.  The group does improve by 0.8 WAR.  Why?  Well, they do not consider pitch framing in their estimates and Joseph is routinely an excellent pitch framer, so the gain here is simply recognizing Joseph's total value.

First Base
Projection Change
1B Chris Davis 476 1.4 1.9 0.5
Trey Mancini 189 0.3 0.5 0.2
Mark Trumbo 35 0.1 0.2 0.1

Chance: 40% (Davis), 40% (Mancini), 50% (Trumbo)
I nudged each player here.  Davis' 0.5 WAR improvement comes from the idea that perhaps now that his core is healthy again that his first step comes back, improving his defensive play.  Mancini's bump of 0.2 is based on the assumption that last year's level of offensive performance is real.  Trumbo's bump comes from him bouncing back and performing slightly better at first base.  If you are counting, we are now at 78.5 wins.

Second base
Projection Change
2B Jonathan Schoop 644 3 5 2
Engelb Vielma 56 -0.1 -0.1 0
Chance: 10%
The model seems to think that Schoop is in for a regression to his career line.  We are going to say last year's performance was not only real, but also add another win for expected modest growth in talent.

Projection Change
SS Manny Machado 644 5.3 7.3 2
Engelb Vielma 56 -0.1 -0.1 0

Chance: 20%
For Machado, we are throwing in there a 7.3 WAR which would just barely be the highest WAR of his career.  This assumption is the assumption that Machado is actually one of the best players in baseball, which may not well be true.  In this scenario, he is.  And, we are up to 82.5 wins.

Third Base
Projection Change
3B Tim Beckham 644 1.9 3.4 1.5
Danny Valencia 35 0.1 0.1 0
Engelb Vielma 21 -0.1 -0.1 0

Chance: 20%
The projection for Beckham is that his offensive talent level will regress.  Instead, we decided that the average of his entire 2017 is his true talent level.  So, that bumps him up 1.5 wins.

Left Field
Projection Change
LF Trey Mancini 385 1 1.6 0.6
Joey Rickard 140 -0.1 0 0.1
Austin Hays 105 0.1 0.2 0.1
Anthony Santander 70 0.1 0.1 0.0

Chance: 40% (Mancini), 70% (Hays) 
In left field, the benefit comes from the aforementioned Trey Mancini replicating his 2017 season. In addition, the assumption here is that Rickard will reduce his playing time and Hays will see more with a plus arm.  The club is now at 84.8 wins.

Center Field
Projection Change
CF Adam Jones 630 2 2.6 0.6
Joey Rickard 35 0 0 0
Austin Hays 35 0.1 0.1 0

Chance: 30%
Jones' isn't dead, yet. He feels happy.  Assuming his play in centerfield remains adequate and his bat leans more toward his second half high without actually duplicating it, we could potentially see something like his 2015 season (without the defense).  That would add a little bit to the pot.

Right Field
Projection Change
RF Colby Rasmus 410 1.2 2.2 1
Danny Valencia 210 0.1 0.1 0
Joey Rickard 35 0 0 0
Austin Hays 21 0 1 1
Anthony Santander 14 0 0 0

Chance: 30% (Rasmus), 50% (Hays)
Projection models still like Rasmus' potential to reach back and deliver something similar to his 2015 season with the Astros.  His offensive demolition last year with the Rays is a bit more unlikely.  The rest of the pickup here is due to Hays spelling Valencia.  If Hays meets his mark and has a plus arm, he could deliver a win over 200 plus plate appearances.

Designated Hitter
Projection Change
DH Mark Trumbo 539 0.6 1.6 1
Chris Davis 112 0.2 0.2 0
Trey Mancini 28 0 0 0
Danny Valencia 21 0 0 0

Chance: 10% (Trumbo)
The model thinks there is about a 10% chance that Trumbo can perform a smidge below his 2016 career year.  This does not consider that he appears to not do well when playing as designated hitter.  Anyway, this gets us to 86.5 wins.

Starting Pitchers
Projection Change
SP Kevin Gausman 177 2.6 3.1 0.5
Dylan Bundy 177 2.1 3.1 1
Andrew Cashner 138 0.7 2.2 1.5
Chris Tillman 122 0.4 1.9 1.5
Gabriel Ynoa 111 0.4 2.4 2
The Rest 215 1 1 0

Chance: 15% (Gausman), 20% (Bundy), 10% (Cashner), 5% (Tillman)
A number of assumptions are being made here.  One, Gausman is assumed that he will match his career high performance.  Two, Bundy is assumed to meet last year's performance and add a half a win.  Three, Cashner is pushed to producing a normal year for himself.  Four, Tillman slides back to his 2012-2016 performances.  Five, well, the Orioles sign Alex Cobb.

Relief Pitchers
Projection Change
RP Brad Brach 65 1.2 1.7 0.5
Darren O'Day 65 1 1 0
Mychal Givens 65 0.9 1.4 0.5
Richard Bleier 45 0.2 0.2 0
Zach Britton 40 0.5 1.5 1
The Rest 240 0.1 0.1 0

Chance: 10% (Brach), 20% (Givens), 15% (Britton)
The bullpen hopes lie in the Orioles hitting their stride on their fearsome three: Brach, Givens, and Britton.  The likelihood of this seems about as good (or bad) as the starting pitching predicament.

And there you have it. If about 15-20 players hit their upper quartile projection, the Orioles will be expected to win about 95 of their games. That is the optimistic push of the finger. Of course, we have been talking about the chances of all of this happening. That would be less than a 0.000000001 chance of 95 games being won.

13 March 2018

Are The Orioles Done?

The top group of available starting pitchers is now down to just one: Alex Cobb. Jake Arrieta is heading to the Phillies on a three-year deal, and Lance Lynn signed a one-year, $12 million deal with the Twins. While Arrieta is still going to make a lot of money, he's getting significantly less than what was anticipated.

Lynn, meanwhile, joins some good, mid-tier players who recently decided to accept one-year contracts. Carlos Gonzalez signed for $8 million. Jonathan Lucroy, Mike Moustakas, and Logan Morrison signed for $6.5 million each (which is weird). And yesterday, Neil Walker signed for $5 million.

Lynn isn't the only notable starting pitcher to sign a one-year deal this offseason. Here are some others:
  • Jaime Garcia, $10 million
  • CC Sabathia, $10 million
  • Michael Fiers, $6 million
  • Doug Fister, $4 million
  • Miguel Gonzalez, $4.75 million
  • Francisco Liriano, $4 million
  • Chris Tillman, $3 million
  • Anibal Sanchez, $2.5 million (released after the Twins signed Lynn)
  • Yovani Gallardo, $2 million
There are more, and a lot of minor league signings, obviously, but this list will work. Out of everyone noted above, the O's signed one player: Tillman. This despite having interest in nearly all of them (except for maybe Lucroy, Morrison, and Gallardo). 

The Orioles needed (and still need) starting rotation help. They could use another left-handed bat -- like Walker's! And the O's are well-known bargain hunters. And yet, despite their needs, the O's didn't pounce on any of these pitchers except for Tillman. They also must not have tried hard enough for Walker, who signed with the Yankees.

As with most things O's related, there are more questions than answers. Why isn't there more payroll room? Are the O's really doing all they can to win now? How can they rely on Mike Wright or a Rule 5 pick and say they're trying to win? How does adding Andrew Cashner, Tillman, and Colby Rasmus qualify as reloading?

It's not surprising that some pitchers would choose another club's one-year deal over the Orioles'. The American League East can be daunting, and someone like Tillman had limited options to fall back on, unlike Lynn. Still, Garcia joined the AL East anyway. I wonder how the Blue Jays did that!

Here we are yet again. The Orioles limit themselves in free agency by focusing on pitchers on short-term deals, and then it's a huge surprise when their offers, which many times include lower amounts and more deferred money, are spurned. (Tillman's deal even includes deferred money for "some earned performance bonuses," per Cot's.)

The Orioles refuse to spend big on starters and won't spend much internationally to supplement their farm system, so they have to rely on short-term deals, trades, and the draft (and Rule 5 draft). The O's didn't make any trades, and no other draft pick can really help them at this moment unless Hunter Harvey flourishes if he's rushed to the majors or Nestor Cortes quickly puts it all together. That's why it was fortunate that many pitchers received affordable, short-term contracts this offseason. That meant more chances and less risk.

Cobb is out there and would make a lot of sense for the O's, but Cashner may still wind up as the team's big-ticket item this offseason. Maybe you're not sold on Garcia, Fiers, Fister, and Miguel Gonzalez. Maybe you don't like Walker or don't think he'd be a fit on the O's this year. But the O's had interest in all of them for the right price -- and then they all signed for less than many thought.

What is the right price for the Orioles? What is a significant enough discount? Why not spend more to improve the rotation or bench and improve this year's chances? Even if they added Cobb or Lynn, the 2018 payroll would still be well below that of 2017.

The O's might not be done this offseason, but it seems like it. Cobb is no savior, but he'd assist an underwhelming rotation. If the O's have been waiting to act, this is a good time to nab a useful player. If they don't, well, then they'll have even more explaining to do for a truly bizarre offseason.