An Introduction to Determining Arbitration Salaries: Relief Pitchers

Moving on from an analysis of starting pitchers, we move to relievers.

Relief pitchers happen to be the easiest group of players to project as their final salary is nearly entirely driven by saves although for non-closers, holds become very important to differentiate between setup men (who make slightly more) and middle relievers.

For a RP who is arbitration-eligible for the first time, here are the statistics that correlate most with eventual salary:

Career SV: 83.28%

Platform SV: 79.07%

Career WPA: 38.15%

Career SV%: 35.60%

Career fWAR: 35.18%

Platform SV%: 27.06%

Platform SO: 25.75%

When initially looking for player comps, these are statistics we are going to focus on. Keep in mind that although ERA is not listed, it is nonetheless important as ERA is still one of the default statistics used during a hearing and one of the first bases for comparison.

Note: WPA and Shutdowns (SD) have strong correlations, however those two stats are not widespread enough to be used during a hearing. My model includes WPA, but does not include SD as the inclusion of SD de-emphasized the importance of saves while it inflated the salaries of situational relievers. While ideally that should be the way salaries are determined, that does not happen in practice so it made sense to omit SD from the model.

Let’s use Indians closer, Cody Allen, as an example of a first-year-eligible reliever. Cody Allen is arbitration-eligible for the first time going into 2016 with 3 years and 76 days of service time (3.076). In his platform season (2015), Allen recorded 34 saves with a 89.47 SV%, 99 SO and a 2.99 ERA. Over his career, Allen has compiled 60 saves with a 84.51 SV%, 4.19 WPA, 5.0 fWAR and a 2.64 ERA. The objective here is to find the players who avoided arbitration by signing a 1-year contract with statistics that are most similar to Allen’s. The more recent, the better. The best way to do that is to set a floor and a ceiling and then work your way towards the middle.

First, let’s look at David Aardsma’s 2009 platform season (old, but still useful). Like Allen, Aardsma was an effective closer with high save totals and a strong ERA. Aardsma recorded 38 saves, 80 SO with a 2.52 ERA. Over his career, Aardsma had compiled 38 saves with a 80.85 SV%, 2.25 WPA, 1.5 fWAR and a 4.38 ERA. Although the platform stats are very similar, Allen’s career numbers are far superior. Therefore, we can definitively state that Allen should receive more than Aardsma did. As such, Aardsma’s 2010 salary of $2.75 million should be the floor.

Next, let’s look at Greg Holland’s 2013 platform season. Like Allen, Holland was an effective closer with high save totals and a very strong ERA. Holland recorded 47 saves with a 94.0 SV%, 111 SO and a 1.21 ERA. Over his career, Holland had compiled 67 saves with a 88.16 SV%, 7.87 WPA, 6.9 fWAR and a 2.41 ERA. Although their career numbers are relatively close, Holland had a dominant platform season that surpassed Allen in every way. Therefore, we can definitively state Allen should receive less than Holland did. As such, Holland’s 2014 salary of $4.675 million should be the ceiling.

Given the above, Cody Allen is likely to receive somewhere between $2.75 million and $4.675 million. Now that we have a range, let’s find someone towards the middle.

In 2013, Ernesto Frieri recorded 37 SV with a 90.2 SV%, 98 SO and a 3.80 ERA. Over his career he recorded 60 saves with an 89.55 SV%, 5.62 WPA, 2.3 fWAR and 2.76 ERA Those numbers are quite similar across the board with both players having an identical career save total and only 3 more platform saves. Frieri’s 2014 salary was $3.80 million so we can determine Allen will receive a similar amount. Andrew Bailey ($3.9 million in 2012) is a decent comp as well.

As for my model, Allen projects to receive $3,595,732 +/- $130,998 which is perfectly in line with the comps above. MLBTradeRumors projects him at $3.5 million so both of our models are very close here (and will be most of the time).

For a player who has already been through the arbitration process before, the valuation is completely different as career statistics are no longer used the 2nd, 3rd, 4th, etc. time around (except in a few rare cases).

For a RP who has previously been through the arbitration process, the stats that correlate most with eventual salary are:

(1) Platform SV: 70.40%

(2) Platform fWAR: 41.36%

(3) Platform RA9-WAR: 36.58%

(4) Platform SV%: 34.79%

(5) Platform WPA: 34.34%

(6) Platform SO: 30.04%

For example, let’s look at Reds closer Aroldis Chapman who is arbitration-eligible for the third time going into 2016. As an Arb-2 going into 2015, Chapman received a $8.05 million salary. That figure includes everything he had done in his career up to that point. Thus, when determining his 2016 salary, we don’t need to focus on previous seasons. We need only determine what his 2015 season was worth and give him a raise. In his platform season (2015), Chapman recorded 33 saves with a 91.67 SV%, 116 SO, 1.99 WPA, 2.4 fWAR, 2.7 RA9-WAR and a 1.63 ERA. We want to find the players whose stats are most similar to Chapman.

First, let’s discuss Juan Carlos Oviedo’s (formally known as Leo Nunez) 2011 platform season where he recorded 36 saves with an 85.70%, 55 SO, 1.07 WPA, 0.1 fWAR, 0.2 RA9-WAR and a 4.06 ERA. Although Oviedo was fortunate enough to record more saves, Chapman was the far better player overall; so much so that, despite having fewer saves, we can determine that Chapman will definitely receive a larger raise than the $2.35 million raise Oviedo received going into 2012. Therefore, we can consider a raise of $2.35 million to be his floor. Oviedo is the perfect example of how important saves are (for arbitration purposes) when it comes to relievers.

Next, let’s look at Heath Bell’s 2010 platform season (again old, but useful still) where he recorded 47 saves with a 94.0 SV%, 86 SO, 4.49 WPA, 2.3 fWAR, 2.6 RA9-WAR and a 1.93 ERA. Like Chapman, Bell was an All-Star closer with virtually identical numbers except for WPA and SV, where Bell clearly outproduced him. Moreover, Bell was named the NL reliever of the year. As such, Bell’s raise of $3.5 million going into 2011 should be the ceiling.

Given the above, Aroldis Chapman is likely to receive a raise somewhere between $2.35 million and $3.5 million for a final salary between $10.4 million and $11.55 million.

Chapman is a perfect example of why first determining a range is important as Chapman represents a type of player who just has not been through the arbitration process in this service group before. Since 2006, there has not been a closer who recorded less than 40 saves with dominant numbers. Looking at saves we have Chris Perez (39 saves – $2.8 million in 2013), Brandon League (37 saves – $2.75 million in 2012), Jonathan Papelbon (37 saves – $2.65 million in 2011) and Joel Hanrahan (36 saves -$2.94 million in 2013). Somewhere around those numbers and perhaps a bit higher is what we should expect.

My model projects that Chapman should receive a raise of $2,743,587+/- $152,366 for a total 2016 salary of $10,793,587+/- $152,366, although I think my projection underestimates the impact his dominant numbers will have despite the lowish save totals (due the lack of comps). I would expect a raise of around $3 million. MlbTradeRumors is projecting a raise of $4,850,000 for a total salary of $12,900,000, which not only surpasses Heath Bell’s raise, but shatters Jim Johnson’s record-setting raise for a non-first-year reliever of $3,875,000 when he recorded 51 of 54 saves in 2012. Given the importance of saves and the relative unimportance of the other stats, I don’t see how such a high number is possible. Nonetheless, Chapman is a very interesting case study as he has the potential to change the way relievers are viewed during the arbitration process.

Next up: position players.