Arbitration situations could be tiebreaker in deciding White Sox closer

Addison Reed, shown looking at his salary curve. - Mike DiNovo-USA TODAY Sports

Overemphasis of saves in salary determinations spurred trade of Addison Reed, and it might alter plans for Nate Jones

Generally speaking, sabermetric orthodoxy says teams shouldn't chase saves or the pitchers who own them.

That's why it's odd that some of the league's most analytics-based operations spent a healthy amount of money on closers with experience this offseason, even though they had big and talented arms in the bullpen begging for a shot at ninth-inning glory.

On top of that, the Mariners signed Fernando Rodney (two years, $14 million), and the Colorado Rockies signed LaTroy Hawkins ($2.5 million), even though both of those teams had younger, better in-house options as well.

Why did these teams do that? Maybe because, as Matthew Murphy at The Hardball Times explains, teams end up saving money on the younger, more talented relievers if they keep them from closing for as long as possible, and at least until after they hit their first arbitration year.

The outdated arbitration process rewards relievers for saves more than more useful stats, and this results in exploding salaries for young closers, especially if they close from Day One. Murphy gets an idea of how much these teams may save by averaging the salary escalations of recent closers against those of recent setup men, and he applies them to Oakland's situation.

If all goes according to plan, the A's will use Johnson as their closer for one year before giving the job to Ryan Cook, who hits arbitration in 2015. Murphy uses the average salary escalation between setup men and closers and tries to estimate how much money this will save Billy Beane (and cost Cook):

RYAN COOK, POTENTIAL VS. PROBABLE EARNINGS
Player Arb 1 Arb 2 Arb 3 Arb Total
Ryan Cook w/ Johnson $1.6M $4.2M $7.2M $13.0M
Ryan Cook, closer $3.8M $6.8M $9.8M $20.4M

Murphy's conclusion:

There you have it. By keeping Cook out of the ninth inning for just one year, the A’s appear to be saving around $7.4 million in arbitration costs. This makes the net cost of having Jim Johnson close for the A’s in 2014 around $3M. You could argue that these numbers are a bit generous, but assuming that Cook continues to be an effective reliever, the A’s appear to be saving at least $5 million with this move. A $10 million Jim Johnson doesn’t look too great, but at $3-5 million he has to be considered a steal.

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Arbitration years and White Sox closers

The White Sox aren't included in this study, but they're on the same course this offseason so far, minus the proven closer import.

Addison Reed saved 69 games over his first two seasons with the Sox. Let's take his first two-plus seasons, throw in his 2014 ZiPS projections and split the difference in saves (35), and Reed finishes his pre-arbitration period with this career line:

W-L ERA G SV IP H HR BB K
Addison Reed 12-10 3.84 199 104 204 198 19 61 213

That's if Reed meets projections. A great year would put Reed in the neighborhood of a former White Sox closer who held down the job for all three pre-arb years:

W-L ERA G SV IP H HR BB K
Bobby Jenks
10-11 3.09 222 117 236 196 13 76 224

And here's what the Sox paid Jenks as he entered arbitration:

  • Last pre-arb: $550,000
  • First arb year: $5.6M
  • Second arb year: $7.5M

Looking at the 2009 payroll with no further context, a team should be happy to pay Jenks $5.6 million for that track record. Alas, that big boost in his first arbitration year put him on a salary trajectory he failed to outpace. A so-so 2009 made him even more expensive in 2010, and a disappointing 2010 forced the Sox to non-tender him afterward. The returns rapidly diminished once the big-boy closer made big-boy money.

Reed doesn't have Jenks' baggage, but he is a relief pitcher subject to the same volatility. If healthy, he'd be worth $5 million in first arbitration year. But the second year boost ($8 million?) takes a big bite out of his surplus value, and the final jump erases it.

The Sox chose to trade Reed while he had plenty of surplus value intact, and they received a possible starting third baseman of the future in return. If the Sox play the Grand Prize Game with Davidson's service time, they won't get to the fourth Bozo Bucket until 2018. Under the current arbitration system, respectable third basemen don't make as much as good closers. If Davidson can ball, the Sox gained quite a bit of financial flexibility and timeshifting out of this deal.

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Closing in 2014

If the Sox are paying attention to saves and arbitration years beyond Reed, then that's good news for Matt Lindstrom, and bad news for Nate Jones.

It's not a stretch to consider Lindstrom like the Rockies regard Hawkins. The Sox didn't acquire him for 2014, but they did pick up his option, and he's the only guy in the bullpen with closing experience. If pitchers and catchers reported on Saturday and Robin Ventura said that Lindstrom's going to get the first shot at saving games, that would be as reasonable as any other option. Like we've discussed before, the late innings are a whole new world.

Like Hawkins, Axford, Johnson, etc., Lindstrom is a short-term solution. Jones, on the other hand, still figures prominently in future plans.

Going back to the THT post, Jones would need a great year to reach the neighborhood of elite three-year setup men like David Robertson, Jonny Venters and Sergio Romo. All of them earned $1.6 million in their first arbitration year.

On different teams, they could have been closers in their final pre-arb year like Steve Cishek or Ernesto Frieri. There's no measurable difference between Cishek and Frieri in quality, but there's a big difference in saves -- and that resulted in a big difference in salary. Both second-year closers will earn $3.8 million in their first arbitration year.

If the Sox can wait until 2015 for Jones to close, they stand to save $2 million.

There's a pretty obvious lesson here for Rick Hahn: If they can wait until 2015 for Jones to close, the Sox stand to save $2 million. And if Jones succeeded in the role from there, then he would adhere pretty closely to the Cook chart above, and the Sox could save $7 million through 2017.

You might be able to extend this example to guys like Daniel Webb. Looking only at stuff, Webb could get a look in the ninth inning this year. However, if the Sox want to pencil in Webb as a big part of bullpens down the line, they might be better served making him wait in the queue behind Jones.

There are a couple reasons to not look that far ahead. The Sox didn't harm themselves by letting Reed rack up saves over his first two pre-arb years. In fact, it might have made Reed more desirable to the Diamondbacks. Assets are assets, and the Sox shouldn't restrict a guy like Webb from any role if it's his best chance to get good. The Sox have a big enough payroll to potentially accept a $2 million "penalty" for developing a high-leverage reliever who can close games on a timetable that made sense to them.

Moreover, the arbitration system is so backwards and game-able that it seems due for a significant restructuring in the next round of CBA negotiations. If Webb breaks camp with the club and sticks on the roster, he'll hit arbitration in 2017, which would be the first year of the new CBA. It'd be unfortunate if the Sox hamstrung themselves in the short term, only to find out that all good relievers are equal under the new arbitration process.

The loophole remains very real for Jones, though, and so I wouldn't be surprised if Ventura named Lindstrom the closer on Opening Day, with one of the other veteran righties as Plan B.

The Sox wouldn't have to keep Jones away from the ninth inning all year, mind you. Bobby Parnell, one of those $1.6 million men, stands out among the setup crowd for saving 13 games over two years. As it turns out, though, collecting saves over the final two months of 2012 didn't make him a closer in the eyes of the arbitration process in 2013. Jones could take over the ninth after a midseason/trade deadline restructuring, and it doesn't look like the Sox would be worse off.

(The partial-season outcome works the other way, too. The Sox may decide Jones is the best ninth-inning option at the beginning of the season, but that doesn't mean he'd pitch well enough to stick there past April.)

Either way, it'll be fun to see how the plot of Mystery Closer II: Electric Boogaloo takes shape with the financial factors in mind, because its ramifications will be a season-long storyline. Maybe they'll truly believe Jones is the best option to close out winnable games for a team that's learning how to win, but if it's a total toss-up between numerous righties, I imagine they'd want to err on the side that stands to save a couple million bucks without trying.

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