Cost Efficiency of Pitchers and Hitters in the Free Market

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Yesterday I posted an analysis on organizational rankings using John Sickels' grades (AL, NL) and the Wang methodology to determine worth. In that column, I wrote my suspicion that Wang underestimated the value of pitching prospects about half of what they are truly worth. The basis of that thought was how free agent pitchers are typically a rather poor buy in comparison to free agent hitters (which was rather anecdotal) and that ranking systems and trades seem to view positional and pitching prospects somewhat similarly. Why would this matter? Buying free agent pitching may be so inefficient that having a stable of young pitching prospects may be twice as valuable even though they have a low success rate.

Upon that idea, I decided to engage in a quick study analyzing the cost efficiency of free agent pitchers and position players. It is all after the jump.


Method:
Players included in this study were all individuals that received more than 5MM in total salary signed in the 2007 off season (pitchers, n=26; positional players, n=34; t-test, alpha=0.05). Players with contracts longer than three years only had salary earnings to this point included meaning that the only seasons addressed in this study are the 2007, 2008, and 2009 seasons. Five pitchers and seven positional players are still under contract with more total money devoted to the positional players. This means the numbers presented here are still dynamic. Metrics used were MM/WAR and WAR/MM (to avoid issues with 0 WAR players. Cost efficiency based on previous WAR production was derived from information at fangraphs.

Results and discussion:
Cost efficiency was significantly higher (p=0.03) in the positional players (0.20 WAR/MM; 0.04 SE) in comparison to pitchers (0.092 WAR/MM; 0.026 SE). Both of these means are less than the rates by which they were paid (0.24 WAR/MM). This is to be expected as players are typically paid with respect to what they have accomplished as opposed to what they will accomplish. Some risk management is utilized, but the team with the most optimistic projection or the team who is positioned competitively to more greatly value wins will likely succeed in signing the player. Another way to look at this information is by MM/WAR, which is the typical way this information is expressed. For instance, pitchers from 2006 have wound up getting paid 10.66MM per WAR. Positional players, on the other hand, have earned 5.46MM per WAR.

After taking into consideration that several contracts have yet to end, it appears unlikely that the findings presented here would change greatly. We would expect though that the cost efficiency for both populations would decrease more. Based on projections of a 0.5 WAR decrease for every remaining season under contract, we see a reduction for pitching cost efficiency from 0.092 WAR/MM to 0.089 WAR/MM and for positional players a decrease from 0.20 WAR/MM to 0.19 WAR/MM.

Conclusion:
In no way is this a conclusive piece of research. It is just a simple study used a somewhat small data set. The preliminary indications are that the system has already taken into account the free market cost to acquiring a pitcher versus growing your own. Pitchers are 53% less cost efficient than batters. In Wang's valuing of prospects, he has batter worth 49% more based on a weighted average of the top 100 prospects as ranked by Baseball America. If this is true, it casts doubt on how many try to use the Wang methodology to determine organizational worth. Wang's work appears to be best suited in comparing absolute worth of two different players outside of the pressures of the free market talent available to teams . . . more or less a closed system only considering MLB projection of MiL talent.

UPDATE: How would this change the prospect rankings?
Well, one way to do it would be to multiply the prospect worth as designated by the Wang approach by the factor difference between the the cost efficiency of pitchers and positional players. There are probably better ways, but this is a quick way to do it. Using this approach, pitching prospect values would be multiplied by 1.93 (using the WAR/MM numbers). The following would be organizational worth of the top 20 pitchers in each organization.

1. Rays
2. Rangers
3. Indians
4. Braves
5. Giants
6. Angels
7. Royals
8. Athletics
9. Dodgers
10. Brewers
11. Orioles
12. BoSox
13. Cubs
14. Rockies
15. Mets
16. Tigers
17. Reds
18. Padres
19. Pirates
20. Blue Jays
21. Astros
22. Nationals
23. Yankees
24. Marlins
25. Twins
26. Mariners
27. Cardinals
28. Phillies
29. ChiSox
30. Dbacks

Of the three lists I have shown in the past two days . . . this one actually looks the best to me.

Minor League Rankings (thoughts on the Wang Methodology)

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I was emailed at the Sun Board about this post by dougdirt over at Minor League Ball (John Sickels' blog - rankings: AL, NL). The numbers seems a bit screwy to me even when taking into consideration how Wang's methodology views pitching prospects. To clarify, I think Wang's methodology undervalues pitchers because of their injury incidence. You see Wang's values are a product of how well a positional or pitching prospect, ranked at a certain level, does after that point in time. There is more variation in pitchers than hitters in large part as a result of a higher incidence of performance affecting injury. That could lead to the erroneous (in my opinion) conclusion that hitters are worth more than pitchers. I disagree with that because it forgets the other end of the equation.

You see, pitching performance is a volatile commodity. It means that a pitching prospect is quite a risky venture. It also means that a free agent pitcher is also a risky venture. By focusing on pitching prospects, your cost efficiency (cost per run given/earned) will be less than if you ignored pitching prospects and focused on drafting or acquiring hitting prospects. In that regard, I think Wang undervalues the cost savings of pitching prospects. If the system was closed and free agency had no relationship to payroll, then I would say these numbers would be valuable.

Regardless, I decided to take Wang's numbers and run them my own way using the spreadsheet dougdirt came up with (click here to see post with table). All of that after the jump.


I figured the best way to compare different teams was to only look on their top 20 prospects. Dougdirt did not do this. He focused instead on C+ prospects and above. This means that some teams did not receive credit for having C level prospects. I think this unfairly devalues the system and ruins the spectrum for comparison. C level prospects do have value as Wang himself noted. I did not feel like going back through my database, so I assumed that summed prospect totals less than 20 prospects would be filled with C level guys worth 1MM, which is roughly the middle point between hitting and pitching prospects at the C grade.

Here are the rankings I came up with using the modified Wang method:
1. Cleveland Indians 127.1MM
2. Oakland Athletics 124.1MM
3. Tampa Bay Rays 122.7MM
4. Atlanta Braves 117.6MM
5. Texas Rangers 111.3MM
6. San Francisco Giants 111.1MM
7. Los Angeles Angels of Anaheim 107MM
8. Chicago Cubs 106.8MM
9. Milwaukee Brewers 103.6MM
10. New York Mets 100.6MM
11. Boston Red Sox 99.7MM
12. Cincinatti Reds 96.4MM
13. San Diego Padres 95.4MM
14. Kansas City Royals 93.7MM
15. Los Angeles Dodgers 92.3MM
16. Detroit Tigers 91.1MM
17. Pittsburgh Pirates 90.7MM
18. Baltimore Orioles 86.2MM
19. Florida Marlins 83.5MM
20. Toronto Blue Jays 81.6MM
21. New York Yankees 81MM
22. Washington Nationals 80.3MM
23. Colorado Rockies 78.5MM
24. Houston Astros 77.3MM
25. Seattle Mariners 72.6MM
26. Minnesota Twins 69.8MM
27. Chicago White Sox 54.5MM
28. Philadelphia Phillies 54.3MM
--. St. Louis Cardinals 54.3MM
30. Arizona Diamondbacks 48.5MM

The rankings somewhat pass the smell test, but I do think Wang's method undervalues the true worth of developing your own pitching. Taking that into consideration, I decided that we should make hitting and pitching prospects worth the same. This assumption is defined as saying that the loss of production in terms of performance volatility is canceled out by the benefit in not having to rely on the free market cost of pitching. Under these guidelines the list would be:

1. Texas Rangers 146.5MM
2. Tampa Bay Rays 144.2MM
3. Cleveland Indians 125.8MM
4. Atlanta Braves 121.9MM
5. San Francisco Giants 117.5MM
6. Oakland Athletics 116.4MM
7. Baltimore Orioles 111.8MM
8. Chicago Cubs 108.7MM
9. Cincinnati Reds 107MM
10. New York Mets 106.8MM
11. Boston Red Sox 106.4MM
12. Washington Nationals 106MM
13. San Diego Padres 104.8MM
--. Detroit Tigers 104.8MM
15. Kansas City Royals 104.4MM
16. Los Angeles Angels of Anaheim 104.1MM
17. Los Angeles Dodgers 102.5MM
18. Milwaukee Brewers 100.2MM
19. Colorado Rockies 94.4MM
20. Toronto Blue Jays 92.8MM
21. Florida Marlins 91MM
22. Pittsburgh Pirates 93.4MM
23. Houston Astros 78.4MM
24. New York Yankees 77.2MM
25. Seattle Mariners 72MM
26. Minnesota Twins 64MM
27. Chicago White Sox 62.4MM
28. St. Louis Cardinals 53.5MM
29. Philadelphia Phillies 50MM
30. Arizona Diamondbacks 47.3MM

These rankings actually look more accurate to me. It would be nice to see something a little more quantitative than just assuming that the market has figured itself out, but I have no time for that right now. An interesting note here, if Brian Matusz did not qualify for prospect status, the Orioles would have sunk to the 24th ranked system in baseball. This is pretty similar to the argument last year with Matt Wieters.

The Orioles have been pretty lucky to basically make up for the underlying talent. Next year will be another big test on the organizational pipeline. Potential A talent could come in the form of Josh Bell, Zach Britton . . . maybe Snyder, but I doubt it. I imagine the team will have several B and B+ players next year, but no As.

Garrett Atkins Power

A few weeks back, Daniel Moroz over at Camden Crazies posted the observation that Garrett Atkins home runs have been whittled down to pull shots. He mentions that Atkins use to have more of an "all fields" power, which I do not think is very debatable. I think Moroz' point was not to say that Atkins utilizes all fields, but that there were home runs to right. As in, it was not a true talent assessment. It was a descriptive observation.

Atkins has always been a pull power hitter. It was just that sometimes he managed to hit a couple in right center. In my opinion a true power to all fields type of hitter would have more of a spread distribution. Such a hitter is also typically more of a level plane hitter as an uppercut swing is more difficult to alter timing on for outside pitches. It seems this sort of hitter more often comes early (grounders) or late (infield and short outfield popups) than getting meaningful contact.

After the jump, I'll go into my analysis of Atkins.


Here are two charts of Atkins hit performance. First is his 2008 season and second is his 2009 season. What you will notice is a general power depression. His hit dispersal is still roughly the same rate. It is just the average flight distance has dropped about 10 feet. This follows suit with the numbers. He still delivers a flyball rate just past 40% and his HR/Fly rate decreased from 9.9% to 7.3%. If you look at Moroz' graphs, you will get a similar conclusion just by looking at the proportion of balls leaving the park and traveling 400 ft. Atkins just does not have the power anymore.





I think it is fairly safe to assume two things:

1. Atkins will not reach back to his mid-aughts power days.
2. He perform slightly better than he did last year now that he has moved to a smaller park.

AL East Best Under-26 Team: Part 3 - Second Base

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Series Links
Intro / C / 1B / 2B / 3B / SS / OF / RHP / LHP / CL

I'll be finalizing the rankings for Parts 3 - 5, with MJ coming back for the RHP. Second base isn't particularly deep in the AL East Under-26 grouping, with our top-rated player still profiling best as a utility guy at this point.

The full list with brief write-ups after the jump...

1. Sean Rodriguez / Tampa Bay Rays (AAA/Durham)
Height/Weight - 6-1/215 / Born - 4/26/1985 / Bats/Throws - R/R
Stats - Fangraphs / Baseball-Reference / MinorLeagueSplits

Rodriguez is a bat first utility man that fits best as a second baseman in a full-time role. Similar to Brandon Wood, Rodriguez boasts an above-average raw power tool with limited in-game value at the Major League level until he shows an ability to improve his contact rate (in 216 plate appearances he has picked-up 62 strikeouts -- or 28.7%). Also like Wood, there is little left for Rodriguez to accomplish at the AAA level, posting consecutive seasons of over 1.000 OPS in '08 and '09, while hitting a total of 51 homeruns in that same period.

Defensively, Rodriguez is the definition of average. He has limited range and just enough athleticism to turn adequate pivots. His arm strength plays best at the four-spot. With Zobrist in place at second, Rodriguez could compete for a utility spot, along with fellow middle-infielder Reid Brignac. His shortcomings in the strikeout department are tied more to an inability to control the strikezone than any issues with bat speed or holes. At this point, he'll just need to get the reps and either sink or swim. The potential is there for an average-fielding, 6-hole bat with some pop.


2. David Adams / New York Yankees (A-Adv./Tampa)
Height/Weight - 6-2/190 / Born - 5/15/1987 / Bats/Throws - R/R
Stats - Fangraphs / Baseball-Reference / MinorLeagueSplits


Adams was one of our favorite middle-infield targets in the 2008 draft, potentially providing Top 50 value out of the late third round. The former UVA Cavalier has taken his professional approach at the plate at the college ranks and transitioned well to the low-minors. Thus far, he's walked in a little over 10% of his professional plate appearances, posting just 1.5 strikeouts per base-on-balls. Adams has a lot of moving parts in his swing, and it remains to be seen whether or not it will continue to play at the upper-levels. A reasonable projection has Adams carving-out a career as a solid average regular, with no spectacular tools but enough defensive value to make a .750-775 OPS playable out of the bottom-third of the order. There is top-of-the-order upside if Adams shows enough gap-to-gap pop to force upper-level pitching to respect him (if not, his plate discipline will be negated by pitchers coming right at him looking for weak contact).


3. Brad Emaus / Toronto Blue Jays (AA/New Hampshire)
Height/Weight - 5-11/200 / Born: 3/28/1986 / Bats/Throws - R/R
Stats - Fangraphs / Baseball-Reference / MinorLeagueSplits

Despite an unimpressive slash line of .253/.336/.376, Emaus turned in an encouraging performance at AA/New Hampshire in 2009. The first positive sign was his ability to maintain the near 1:1 SO:BB ratio he'd posted the prior year at A-Adv./Dunedin, while again walking in over 10% of his plate appearances. The second positive sign was that his linedrive, fly ball and ground ball percentages were each almost identical to previous year, while he saw a heavy dip in his BABIP of almost 50 points (.050). This could indicate that his 2009 slash line was negatively impacted by a disproportionate amount of poor luck on batted balls. This is somewhat backed-up by his solid showing in the Arizona Fall League (.317/.391/.417), albeit in just under 70 plate appearances. Defensively, Emaus will struggle to maintain average production, due to his limited range and athleticism. He'll be one to watch in 2010, as we look to see if his offensive production bounces back along with his BABIP. He could get a shot at Toronto as an end-of-the-season call-up if all goes well.



HM. Justin Turner / Baltimore Orioles (AAA/Norfolk)
Height/Weight - 5-11/180 / Born - 11/23/1984 / Bats/Throws - R/R
Stats - Fangraphs / Baseball-Reference / MinorLeagueSplits

Turner (pictured) projected as a utility man at the start of 2009 and a solid, if unspectacular, season did little to change that. Turner continues to show an excellent understanding of the strikezone (34 BB/37 SO over 441 PA), while employing a semi-aggressive approach at the plate. He shows little in the way of usable power and will rely almost exclusively on OBP to provide offensive value at the ML-level. As mentioned above with regards to Adams, Turner will need to show enough gap-to-gap pop to make pitchers respect him, and if he does his solid footwork and range in the field should be enough to complete the picture. At best, Turner could be a serviceable regular at second base for a non-tier-one club. At worst, he tops out as a AAAA bat just shy of enough strength for his offensive approach to translate.

Derrik Gibson (Boston Red Sox) was also considered for this spot. A solid showing at Short-season Lowell was enough to put him on our watch list, but he's too far away to rank ahead of the four others mentioned above.