The deadline for teams and players to exchange arbitration numbers is today, Tuesday January 19th, at noon. The Pittsburgh Pirates entered the off-season with three players eligible for arbitration. They signed Ronny Cedeno to a $1,125,000 deal, and non-tendered Matt Capps, which leaves Zach Duke as the only player who has yet to reach an agreement. If a deal is not reached by noon today, Duke and the Pirates must each submit their figure and start the process of an arbitration hearing.
So what happens next? If the two sides fail to strike a deal, they submit their figures, and a hearing is scheduled. At this hearing, each side will present their case for their figure in front of an arbiter. The arbiter will use this information to determine which salary seems fair: the one submitted by the team, or the one submitted by the player (it has to be one of these two). This process can be messy, as the team basically has to tear down the player to explain why they feel he’s not worth as much as he thinks he is. If the team wins, the player not only gets less money, but has the hard feelings from the case the team made. If the team loses, the hard feelings from the hearing still exist, even though the player was awarded the contract.
This is why teams try to avoid arbitration. Even if the two sides exchange figures tomorrow, they can still reach a deal, even up to the moment they’re scheduled for their hearing (sometimes deals are reached right outside the hearing room doors). The question is, what would be an appropriate salary for Zach Duke in 2010?
Duke is in his second year of arbitration, coming off a year in which he made $2.2 M. A lot of people point to recent performances when determining an arbitration value, although the value of a player is usually based on their whole body of work, and not just the recent season. So while Duke is coming off a strong season, it doesn’t guarantee that he will see a massive raise in arbitration. To get a feel for what he could see, let’s compare him to Paul Maholm.
I picked Maholm for a few reasons. First of all, they both came to the majors around the same time, in the middle of the 2005 season. They both had immediate success in 2005, struggled for a few years, and recently rebounded. They’re both left handed, although that doesn’t really factor in to the arbitration debate. They both would be in their second year of arbitration this year, had it not been for the fact that Maholm signed an extension last year which bought out his arbitration years. I also picked Maholm because his $4.5 M salary this year is a good guide for Duke.
In the 2010 40-man roster/payroll projection page I estimated Duke at the same $4.5 M that Maholm will make. Taking a look at the FanGraphs WAR values, Duke has been worth $42.9 M in his career, including $11.2 M in 2009. Maholm was worth more the last two years, including $14.4 M in 2009, but actually has been worth $41.9 M in his career, which is $1 M less than Duke. So while Maholm has been better in recent years, they’ve basically been on the same page in their career, with Duke holding the slight edge.
So how do the two players compare stat wise?
Starts - Maholm 127, Duke 130
Innings - Maholm 796.0, Duke 805.1
Won/Loss - Maholm 38-44, Duke 37-55
ERA - Maholm 4.33, Duke 4.30
WHIP - Maholm 1.42, Duke 1.45
FIP - Maholm 4.30, Duke 4.21
K/9 - Maholm 5.72, Duke 4.57
BB/9 - Maholm 3.05, Duke 2.37
HR/9 - Maholm 0.88, Duke 0.85
H/9 - Maholm 9.71, Duke 10.68
Overall the two players are very similar across the board. They both average a little over six innings per start. They both have an ERA of around 4.30, and a FIP (Fielder Independent Pitching) in the same range. They have similar WHIPs, with Duke allowing more hits and fewer walks. Duke has more losses, although I don’t place much value on a won/loss record. I just included it here for comparison purposes.
If Duke comes tomorrow with a $4.5 M arbitration figure, it would make total sense. It’s the same thing the Pirates agreed to pay Paul Maholm this year for his second year of arbitration, and to date, Duke and Maholm are the same player value-wise.
I also wouldn’t be surprised if the Pirates focus more on the recent success of the two players. For example, if you take what Maholm was worth last year ($14.4 M), and divide it by his $4.5 M salary this year, you see he’s receiving 31.25% of his total worth. Therefore, applying the same percentage to Duke’s $11.2 M worth in 2009, you would get a $3.5 M salary for Duke. That could potentially put the two sides about a million apart.
So what is fair? Do we consider Duke’s recent success in relation to Maholm, or do we blindly look at the whole body of work between the two players? The whole body of work gives a lot of credit to Duke’s 2006 season, in which he posted a 4.47 ERA in 215.1 innings. It also gives him credit for eight extra starts over Maholm in 2005, which allowed him to earn an extra $5 M in value. Are those numbers relevant to his 2010 value?
Personally I think it should be a hybrid of the two. I think that it should be considered the two are basically on the same career path. They started out strong, had a decent second year, struggled a bit, then started to come in to their own. Duke was the better pitcher starting out, but Maholm has been better lately. I think the recent trend is the one to go with. As far as a fair value for Duke, I think the $3.5 M is a bit too low, but the $4.5 M that Maholm is getting is too high. Something in the $4 to $4.25 M range would be acceptable in my opinion.
We’ll find out how close these numbers are today at noon, assuming the Pirates and Duke don’t reach an agreement before that deadline.