The Yankee dollar has been pushed aside by Dodger dough. For the first time since 2001, the Bronx Bombers did not end the year with Major League Baseball’s highest payroll. Instead, it was the Dodgers who were baseball’s biggest spender. And, it wasn’t even close. With a final payroll just over $257 million, Los Angeles not only out spent New York by nearly $40 million in 2014, but also easily topped the Yankees’ previous record-high payroll of $237 million, which was set last year.

Top-20 Final Team Payrolls, All Time

Top 20 Final Payrolls

Note: Final payrolls represent actual amounts spent (salaries, benefits, earned bonuses and pro-rated shares of signing bonuses), but not AAV valuations used for luxury tax purposes.
Source: bizofbaseball.com and MLB releases published by AP

For their efforts, the Dodgers were also hit with this year’s largest tax bill, breaking the Yankees’ stranglehold on that distinction as well. Don’t expect Los Angeles to be popping corks, however. The team now has until January 21 to send a $26 million check to the commissioner’s office (30% tax levied against the team’s $277 million AAV payroll; click here for 2014 luxury tax payrolls). That tidy sum represents the fourth largest remittance since the first luxury tax was instituted in 1997, and one-third of the total paid by teams other than the Yankees.

Year-by-Year Luxury Tax Payments by Team
lux tax bar
Note: Baseball’s first luxury tax was in force from 1997-1999. The current system was instituted in 2003.
Source: bizofbaseball.com and MLB releases published by AP

Percentage of Luxury Taxes Paid Since Inception
lux tax pie
Note: Baseball’s first luxury tax was in force from 1997-1999. The current system was instituted in 2003.
Source: bizofbaseball.com and MLB releases published by AP

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As expected, the Yankees’ bullpen swap of Andrew Miller for David Robertson was more about economics than an assessment of each pitcher’s potential performance over the next four years. By suggesting that Robertson priced himself out of the Yankees’ plans, GM Brian Cashman admitted as much. Considering the meaningful savings and relative competence of each pitcher, the penny wise choice doesn’t necessarily mean it will turn out to be pound foolish. However, more concerning to Yankee fans should be other statements made by Cashman that suggest both a level of dishonesty and disconnect with the team’s rank and file fan base.

The most eyebrow raising comment from Cashman was his admission that, despite statements to the contrary, the Yankees had no intention of signing both Miller and Robertson, and, in fact, never made their incumbent closer an offer. According to the GM, he did this to prop up Robertson’s market, which is not only a little condescending to the reliever, but also a big fat lie. Undoubtedly, Cashman isn’t the first MLB executive to manipulate the media during a contract negotiation, but his bold-faced admission and use of deception for the perceived benefit of a third party is more unique. What’s more, it’s also contrary to a code of conduct to which Cashman himself has professed to adhere.

In September 2008, Joe Girardi was wrapping up his first turbulent year as Yankee manager, and one of the most common complaints about his stewardship was a tendency toward deception when it came to addressing the media. These allegations came to a head when the media accused Girardi of misleading them about Mariano Rivera’s “cranky shoulder”. According to reports, the GM privately apologized for his manager’s conduct and forced Girardi to make a public apology. The end didn’t justify the means then, so why should it now?

Does Cashman owe the media an apology for his lie? Let them sort that out. Yankee fans should be more concerned about how the team’s GM regards their engagement with the team. After all, Cashman also led them astray, giving false hope to fans who might actually have an emotional attachment to one of the team’s longest tenured players.

Cashman’s dishonesty is only a small part of the story. The bigger issue is the franchise’s increasing disregard for tradition and gradual dissolution of the idea that there is a “Yankee Family”. Robertson is the latest in a growing line of popular Yankee free agents who have been dismissed without a competitive offer. Last year, a half-hearted attempt was made to keep Robinson Cano, and the year before Nick Swisher and Russell Martin were shown the door without an offer. Even before that, the Yankees played hardball with Derek Jeter, of all people. Although being a Yankee doesn’t come with a lifetime guarantee, the team has rarely shown such disregard for factoring tradition into its decision making.

At the heart of the team’s new ambivalence toward retaining their own players is the notion that clothes do in fact make the man. “I would think the fan base is connected to the pinstripes”, Cashman stated in defense of the team’s new penchant for letting its own free agents depart, but what are the pinstripes without tradition, and where does that leave the fans?

Do the Yankees still believe they owe it to the fans to build the best possible team each and every season? Is cultivating the franchise’s tradition still worth spending a few extra dollars? Or, is a healthy profit margin just as important as a lofty winning percentage and proud tradition? To this point, the team’s brass has had all the right answers, but their actions have spoken louder than the hollow words. Yankee fans deserve the truth, and it’s time for the team to start telling it.

The Yankees haven’t had an active winter, but the one question they’ve reportedly been weighing is who will pitch the ninth inning next season. The choice has seemingly been narrowed down to incumbent David Robertson and lefty set-up man Andrew Miller, but what’s not as clear is the criteria the Yankees are using to make the decision. So, before venturing a guess as to whom the Bronx Bombers will tap as their next closer, let’s consider the options.

The Case for David Robertson

Since 2009, David Robertson has consistently ranked among the most effective relievers in the game. Over that span, his ERA+ of 162 ranks 12th best among all relievers with at least 250 innings, and his fWAR of 8.9 ranks fourth. Robertson is also one of only six relievers to throw at least 60 innings in each of the last five seasons. What’s more, with 39 saves last year, Robertson completed his transitioned from Mariano Rivera understudy to an effective closer in his own right. Both effective and reliable, Robertson’s level of consistency means the Yankees would be signing a known commodity, both in terms of his ability to close games and handle the pressure of New York. That’s no small consideration in a market known for rough free agent transitions. Also, though insignificant from an evaluation standpoint, Robertson’s time in the Bronx should carry some weight in terms of leadership and fan connection. Along with Brett Gardner, Robertson is the most tenured Yankee, so his presence in the clubhouse could have value to the team, while his familiarity and likeability among Yankee fans is also an added bonus. Besides, if you’re going to “overpay” a reliever, you might as well do so with one of your own.

Top-10 Relief Pitcher WAR, 2009-2014

Source: fangraphs.com

The Case for Andrew Miller

Although it’s possible the Yankees’ talent evaluators view Andrew Miller as a better pitcher than Robertson, the strongest case in favor of the lefty is based on relative cost. According to the rumor mill, Miller is seeking a four year deal worth $40 million, or approximately $10 million less than the Papelbon-esque contract being sought by Robertson. Is a $10 million savings over four years really a difference maker? Considering the Yankees’ recent efforts to lower relative payroll expense, $2.5 million per year isn’t insignificant. However, for the Yankees, the impact is much greater. Because the team is likely to continue paying a 50% luxury tax over the next four seasons, the difference in contract values is actually $16 million. Then, if you consider modest investment of the annual difference, another $1-$2 million can be tacked onto the savings. In total, the Yankees are looking at an approximately $16 million savings if they sign Miller instead of Robertson. When added to the interval value the Yankees place on the draft pick they’d net from Robertson signing elsewhere, the difference in contract costs looks more substantial.

Financial Comparison of Potential Deals for David Robertson and Andrew Miller

Rob vs. MillerNote: Contract values based on “published rumors”. Investment is a 5% return on the salary difference plus luxury tax savings compounded once at the end of the year (i.e., investment begins at end of 2015 and first compounds at end of 2016).
Source: www.investor.gov (compound interest calculator)
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Joe DiMaggio played the game at least at a couple of levels higher than the rest of baseball. A lot of guys, all you had to see to know they were great was a stat sheet. DiMaggio, you had to see. It wasn’t only numbers on a page—although they were there too—it was a question of command, style, grace.”Jim Murray, Los Angeles Times, March 9, 1999

The New York Daily News is celebrating Joe DiMaggio’s 100th birthday by setting the record straight. After decades of unbridled adulation for the Hall of Fame centerfielder, it turns out the Yankee Clipper’s greatness was not only built on legend, but also myth.

The newspaper’s clarification of DiMaggio’s legacy is based on the testimony of baseball historian John Thorn, who “chips away” at the myth with two claims. The first is an assessment of how well the centerfielder’s swing would hold up in the modern game. According to Thorn, DiMaggio fails the “teleportation” test because the “wide arc” of his swing would have left him exposed to the modern fire baller. Maybe so, but it’s always possible that DiMaggio would have adjusted to a different era. Unfortunately, no allowance is made for that possibility, and it’s just as well. It’s hard enough to make comparisons between different eras based on relative performance, much less subjective opinions of how players would perform if capable of time travel.

Thorn’s second attempt to knock DiMaggio down a peg is more defensive, literally. Every baseball fan has heard stories about DiMaggio’s gracefulness in the vast Yankee Stadium centerfield, but despite the countless recitations by teammates, opponents and members of the media who saw him play, Thorn suggests this praise is more exaggeration. As proof of his claim, the historian states that DiMaggio’s “contemporaries recorded more putouts”. Ironically, this statement is offered in support of the notion that modern sabermetrics are what’s eroding DiMaggio’s legend, while ignoring that modern defensive metrics rely heavily on context, namely the number of opportunities and the difficulty of each chance.

So, here’s some context to consider. From 1936 to 1951, excluding the war years DiMaggio missed, Yankee pitchers struck out about 0.5 more batters per nine innings than the AL average. That’s approximately 75 fewer putouts available for Yankee fielders to make. If the Yankees’ staff was more prone to groundballs, that would also lessen DiMaggio’s putout opportunities. Similarly, having to defend a much larger centerfielder than most might also mitigate his total. What’s more, DiMaggio was injury prone, and rarely played a full season, further limiting his opportunity to record putouts. Without the advanced data we enjoy today (and even with this data, defensive metrics can be sketchy), it’s impossible to sift through these variables and arrive at a truly meaningful comparison. That’s why arguments like “DiMaggio only led the league in putouts one time” ring hollow, which, incidentally, also applies to Willie Mays.

Top 20 Outfielders by TotalZone Per Game: 1936-1942

TZ chartNote: Minimum 300 outfield games. See here for explanation of totalzone.
Source: fangraphs.com and baseball-reference.com

Is Joe DiMaggio overrated? If that simply means not as good as rival Ted Williams and fellow centerfielder Mays, the answer is probably yes. Although a case could be made for DiMaggio being the equal to Mays and Williams at his peak (i.e., better defender than Williams and better hitter than Mays), the fact remains that both players had longer and more productive careers than the Yankee Clipper. However, that doesn’t tarnish DiMaggio’s accomplishments. After all, building up Williams and Mays doesn’t tear DiMaggio down. Arcing swings and putouts aside, DiMaggio is one of the true legends of the game with a career worth celebrating every day, not just on the anniversary of his birth.

Yesterday, I considered several reasons why Giancarlo Stanton’s new contract wasn’t folly on the part of the Marlins, but that was before the details of the mega-deal were announced. As it turns out, Stanton’s extension is heavily back loaded, making the new contract even more team friendly than first anticipated.

Annual Breakdown of Giancarlo Stanton Contract
Stanton Contract Breakdown
Note: Excludes potential for $1 million in award-based bonuses each season.
Source: Cots contracts

Stanton’s new deal was first reported as 13-years and $325 million, but that includes a $10 million buyout of a $25 million option in 2028. So, if the Marlins pick up the option, the average annual value (AAV) would end up being $24.3 million. However, that’s only a small consideration. What significantly lessens the Marlins’ financial burden is the payment structure, which concentrates payment in the second half of the contract. This is important for a few reasons, including the impact it has on Stanton’s opt out after year-six. If the right fielder decides to test free agency at that time, the Marlins would likely have enjoyed his prime years for a paltry $107 million dollars, or less than one-third of the total contract value. If this transpired, the Marlins could end up with an incredible bargain, but what if they want the slugger to stay? Because of the back-loading, the incentive for Stanton to flee would be lessened considerably. Instead of aiming to surpass an AAV of $25 million in order to breakeven, Stanton’s hypothetical foray back into free agency would need to net at least a seven-year deal worth approximately $31 million per season. Considering salary inflation in major league baseball, that’s not beyond the realm of possibility, but it certainly raises the bar.

The impact of back-loading on Stanton’s opt out is only half the story. By structuring the deal in such a manner, the Marlins will also enjoy more tangible financial benefits. Although pundits like to refer to large contract values as one lump sum payment, the transfers of cash are periodic. This is important because money has time value (i.e., a dollar is worth more today than in the future in the absence of deflation). As a result, the present value of any long-term series of payments is less than the stated amount. So, by pushing the largest payments to a later date, the Marlins have increased the level of benefit they’ll accrue (see here for a PV analysis using a straight-line approach). The chart below illustrates this savings by adjusting each year’s payments by an average CPI and MLB salary inflation rate, in each case using assumptions that are less favorable to the team to avoid overstating the impact.

Inflation Adjusted Present Value of Giancarlo Stanton Contract
Stanton Contract Breakdown Adjusted
Note: Adjustments based on average CPI rate of 2.4% from 1994 to 2013 and average player salary growth rate of 4.3% between 2003 and 2013. Assumes full payment made on January 1 of each year, with the inflation rate compounded once. Present Value is as of the January 1, 2015.
Source: timevalue.com, espn.com, Cots contracts, inflationdata.com Continue Reading »

The Miami Marlins must be crazy. That seems to be the conventional wisdom in the wake of the franchise’s decision to commit $325 million dollars over 13 years to Giancarlo Stanton. But, is this reaction to an admittedly mind-boggling contract based upon sound analysis, or simply a visceral response to the exorbitant salaries of professional athletes and an aversion to the notion they might actually be worth them?

In the rush to judge a contract that won’t expire until 2027, several exaggerated claims have been made by those who believe Stanton’s contract is destined to consign the Marlins to years of payroll inflexibility and diminishing returns. Below are several misconceptions being promulgated along with rebuttals that suggest the Marlins may not be so crazy after all

1) Almost every long-term deal has ended badly. By ignoring history, the Marlins are repeating an industry-wide mistake.

As the chart below demonstrates, long-term contracts are not inherently disastrous. Among deals of at least $90 million and seven years signed since 2001, and for which at least four years have been completed, about half have worked out for the team. Using fangraphs’ estimates of value, three of the 12 long-term contracts ended up in the black, while three others were within a reasonable range of the player’s estimated monetary contribution. A similar breakdown exists for current deals.

Lucrative, Long-Term MLB Contracts
LT Contracts

^Based on Fangraphs’ calculations of player value. *Years included are to-date 2014. #Total value excludes portion of Arod’s contract forfeited by suspension.

Note: Includes seven year deals of at least $90 million signed between 2001 and 2011. 2001 valuations are based on that year’s fWAR multiplied by 2002 dollar value of one win over replacement. Option years are not considered, nor is deferred money factored into the calculations. In some cases, such as CC Sabathia and Arod, contracts are considered independent of opt outs.

Source: Cots Contracts and fangraphs.com Continue Reading »

“You can’t sit on a lead and run a few plays into the line and just kill the clock. You’ve got to throw the ball over the goddamn plate and give the other man his chance. That’s why baseball is the greatest game of them all.” - Earl Weaver

Young prospects aren’t the only ones being put to the test in the Arizona Fall League this year. Major League Baseball is also using the league to experiment with a series of measures designed to speed up the game. MLB has used Arizona as a laboratory for innovation in the past, but this time around, the proposed changes are intended to turn the clock back to a time when the “pace of the game” was deemed more fan friendly.

Average Length of Baseball Game, 1947-2014
Length of Game
Note: Includes shortened, nine inning and extra-inning games.
Source: Baseball-reference.com

The length of the average major league baseball game has increased over the last 70 years. In 1947 (the first year for which baseball-reference.com has nearly every game time), the typical game lasted two hours and 11 minutes, a far cry from the three hours and eight minutes needed to complete a contest this season. What’s the reason for this increase, and, is baseball’s desire to reverse this trend a case of trying to fix something that isn’t broken?

What probably concerns baseball suits the most are the last three years depicted in the chart above. Since 2011, the average length of a baseball game has increased by over 10 minutes, representing the first sustained breach of the three-hour mark in the period covered. What explains this sudden spike after years of gradual increases?

Replay Review Snapshot
Replay snapshot
Note: Official replay time is from retrosheet. Actual replay time is based on the time from when a manager enters the field until the next batter steps into the batter box.
Source: retrosheet.com and MLB.com video Continue Reading »

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