Kyle Lohse Needs to Wait, But Not for O's

Spring Training has been going on for a while now and Kyle Lohse finds himself still without a team.  Recently, he claimed that he had seen no offers, but that is likely a product of him demanding a certain salary level that teams find prohibitive.  What likely makes the salary prohibitive is that it is tied to the forfeiture of a draft pick.  The Cardinals offered Lohse arbitration salary just over 13 million, which Lohse declined due to him (and his agent) incorrectly assessing his worth.

So what is the situation?

Lohse is worth about 15 MM in 2013 if he falls in line with his projections (mid to upper 3s for ERA).  The value of a draft pick (starting with the Mets at 11 and ending with the Indians 3rd rounder) ranges from around 12 MM to 3 MM (value comes from the probability of a player becoming a starter as well as how much a team saves while having a player under the renewal and arbitration control rules).  For most teams (meaning the most likely teams to acquire him), their picks are in the late teens and twenties, which roughly translates to 9 MM.  I shared some of this approach back in December.

The following contracts are based on his worth with expected 0.5 WAR decreases due to aging and an increase in cost per win of 5%:

1 yr 15 MM
2 yr 28.1 MM
3 yr 39.2 MM

With the draft pick value attached we get the following deals:

1 yr 6 MM
2 yr 19.1 MM
3 yr 30.2 MM

However, I think there really is another option.  What if Lohse simply waits?  If he signs after the draft in early June, then he can sign without a draft pick associated with him.  That would be a cost savings to a team of 9 MM.  Of course, with him signing in June and needing a couple weeks to get back into MLB playing shape...he will be able to give whatever club signs him only 18 games to start.  That value would be about 8.4 MM or a loss of 6.6 MM.

This would be a net gain of 2.4 MM for Lohse.  Turning the contracts into:

1 yr 8.4 MM
2 yr 21.5 MM
3 yr 32.6 MM

I think this is actually a conservative perspective on how much Lohse could earn.  By waiting it out, you may wind up with teams becoming more needy in terms of arms and more willing to sign Lohse to a backloaded deal.  Of course, it would be prudent for him and his agency to put in for insurance in case he somehow injures himself before he is able to sign a deal, but, at this point, I think Lohse can wait.

So what about the Orioles?

Well, a common refrain is that Lohse is a flyball pitcher who would be crushed at Camden Yards.  Busch Stadium is actually rather kind to flyball pitchers by depressing homerun rates by 9% while Camden increased them by 31%.  That sounds to many as a recipe for disaster, but I question that perspective.  Lohse is indeed a flyball pitcher, but not by much.  The average pitcher induces groundballs 44% of the time while Lohse does so at 42%.  Lohse's 19 home runs given up would go up to 27 if he played only at Camden Yards.  Wei-Yin Chen gave up 29.  Lohse does not strikeout as many batters as Chen, but he also does not walk as many.

To me, that is not the issue.  To me, the issue is really about what kind of team this is and I think the Orioles are a 4th or 5th place squad.  I think spending market rate for a 2 or 3 win improvement over whoever our 5th slot pitcher becomes is not incredibly useful when this team will be fighting hard to finish above .500.