Hidden Vigorish

Detailed Analysis of The Pittsburgh Pirates

Month – January 2014

The A.J. Burnett Fiasco

After months of contemplating retirement it appears A.J. Burnett has decided he isn’t quite ready to give up being a major league pitcher. Yesterday Travis Sawchik of the Pittsburgh Tribune-Review broke the news that Burnett plans on returning to the mound in 2014. This would be great news for the Pirates if it meant he intended on coming back to Pittsburgh. It now seems A.J. has reversed course and is making himself available to other teams.

 
This is bad news, but not at all unexpected. I said it was a mistake months ago when the Pirates decided not to extend Burnett a qualifying offer. I believed that Burnett was not going to retire, and I believed he would eventually choose to listen to offers from teams near his home such as the Orioles, Nationals, and Phillies. Now it appears likely the Pirates will lose a very good pitcher. And because they did not extend a qualifying offer they won’t gain a compensatory draft pick either.
 
This A.J. Burnett situation has been entirely mishandled by the Pirates’ Front Office. It feels like they never really wanted him and were daring him to listen to other teams. I believe Burnett was being truthful when he said he would only pitch for the Pirates or he would retire. But I don’t blame AJ one bit for souring on the team after the Pirates’ brass showed a complete lack of appreciation by saying they could not afford to give him market value and attempted to negotiate through the media with implied low ball offers. And there was absolutely no reason not to offer Burnett the $14.1 million qualifying offer. Even if the Pirates felt the offer was a little too rich for what they were willing to pay, there was no risk Burnett would sign it. A qualifying offer does not come with a no trade clause. Burnett would never agree to a deal that would risk him being moved in a trade to a team outside the Mid-Atlantic Region. Just making a qualifying offer does not mean the Pirates would be boxed into that $14.1 salary figure. They could have used an iron clad no trade clause to negotiate a salary lower than the qualifying offer.
 
Futhermore, not having Burnett weakens the team. Edinson Volquez appears to be Burnett’s likely replacement. Burnett is projected to be worth around two more wins than Volquez. Where the Pirates sit on the win curve indicates that two wins can make a very big difference. Frankly, given the value in increased revenue for additional wins in the upper 80′s the difference in salary between Volquez and Burnett would nearly pay for itself. This is a major SNAFU by the Pirates. They need to make it right by extending a fair offer to AJ that will convince him that they really do want him and that he should continue his career in Pittsburgh. Otherwise, we Pirate fans will be left crossing our fingers that Wandy Rodriguez returns to health and Jim Benedict can work his magic on Volquez like he did with Francisco Liriano.
 

Win Curve Not Motivating The Pirates

Had the Pirates won 3 more games in 2011 they would finished with 75 wins. Had The Pirates won 3 more games in 2012 they would have broken the longest consecutive losing season streak in North American professional sports one year earlier. Had the Pirates won three more games in 2013 they would have tied the Cardinals for first place in the NL Central. As you can see not all wins are equal. The further up the standings a team goes the more meaningful each extra win becomes. The wins that make the difference between missing the playoffs or making the playoffs are not just the most meaningful, they are also the most valuable. A team’s 90th win generates significantly more revenue than their 81st win. This concept is known as the win curve.
 
Where a team sits on the win curve has a big impact on how much they are willing to spend for additional wins. ZiPS is projecting the Pirates as an 84 win team in 2014. Marginal upgrades can bring big returns for teams that sit where the Pirates do on the win curve. Including the Pirates, eleven teams are projected by ZiPS to have between 83-85 wins next season. Here is a look at the spending done by these eleven teams this off season:
 

      1) Yankees – 83 Projected Wins – $471 million committed to Free Agents
      Key Acquisitions: Brain McCann, Jacoby Ellsbury, Carlos Beltran, Masahiro Tanaka

      2) Rangers – 85 Projected Wins – $137 million committed to Free Agents
      Key Acquisitions: Shin-Soo Choo

      3) Royals – 84 Projected Wins – $62 million committed to Free Agents
      Key Acquisitions: Jason Vargas, Omar Infante

      4) Giants – 85 Projected Wins – $47 million committed to Free Agents
      Key Acquisitions: Tim Hudson, Michael Morse

      5) Rays- 84 Projected Wins – $39 million committed to Free Agents
      Key Acquisitions: James Loney, Grant Balfour

      6) Athletics- 84 Projected Wins – $32 million committed to Free Agents
      Key Acquisitions: Scott Kazmir, Eric O’Flaherty

      7) Angels- 84 Projected Wins – $18.5 million committed to Free Agents
      Key Acquisitions: Joe Smith, Raul Ibanez

      8) Indians- 84 Projected Wins – $16.5 million committed to Free Agents
      Key Acquisitions: David Murphy, John Axford

      9) Nationals- 83 Projected Wins – $11 million committed to Free Agents
      Key Acquisitions: Nate McLouth

      10) Pirates- 84 Projected Wins – $7 million committed to Free Agents
      Key Acquisitions: Edinson Volquez

      11) Braves- 84 Projected Wins – $4 million committed to Free Agents
      Key Acquisitions: Gavin Floyd

 
Obviously, the Yankees are a completely different animal. Win curves vary from team to team. Some have flat win curves while other have very steep win curves. The Yankees have a very steep win curve. The fan expectations of the franchise are enormous and revenues for the Yankees fall considerably if they don’t contend. To some degree that explains the heavy spending the Yankees do every year. Teams like the Royals, Rays, and A’s have win curves that are much more comparable to the Pirates. Those teams have decided that given their positioning on the win curve the opportunity warranted extending their payroll commitments a little further than they other wise would have. Rays executive vice president Andrew Friedman recently echoed that position.

“I think it’s an unaffordable figure for our franchise,” Friedman said. “But I think it’s something that Stu has been very steadfast and doing everything he can and putting our best foot forward to win as many games as we possibly can as we continue to build a foundation and fan base in this area.
“But it’s certainly not a sustainable number in terms of where we are revenue-wise, but we felt like we had a really good chance to be great next year, that’s why we’re doing what we’re doing.”

Meanwhile, The Pirates’ actions this offseason give the appearance that they are motivated very little by the win curve. They have chosen not to strike while the iron is hot. The Bucs are coming off a 94 win season and reached the playoffs for the first time in 21 years. They are positioned solidly to contend for the playoffs again in 2014. The Pirates have targeted free agents such as James Loney, Josh Johnson, and Eric Chavez, but for one reason or another have not been able to seal the deal with any of those players. Perhaps if the Pirates were treating the win curve as seriously as the Rays and A’s they would have pushed harder and landed one of them.
 

Farm Strong – Pirates’ Farm System Continues to Draw Accolades

While the news has been relatively sparse this winter for the Pirates in regards to acquisitions for the major league roster, the Pirates’ minor league system has generated a lot of buzz for its strength and depth. Baseball America ranked the Pirates’ farm system as the best in baseball in their recently released 2014 Prospect Handbook. There are two things that should be noted that makes this ranking even more impressive. First, Gerrit Cole has already graduated to the majors and no longer has prospect status. Secondly, the Pirates have been trade deadline buyers the past three seasons. Talented prospects Robbie Grossman and Dilson Herrera have exited the system in trades.
 
The Pirates collected more accolades earlier this week when MLB.com released their updated top 100 prospect list. The following six Pirates made the list:

  • Gregory Polanco -13th
  • Jameson Taillon – 16th
  • Tyler Glasnow – 27th
  • Austin Meadows – 45th
  • Alen Hanson – 67th
  • Josh Bell – 74th
  •  
    Nick Kingham apparently just missed the cut.

    I’m extremely high on Kingham. Some have suggested Kingham could be dealt to the Mets to acquire 1B Ike Davis. No way would I do that deal. Personally I feel Nick Kingham is going to be better than Jameson Taillon. I see Taillon being a much higher injury risk than Kingham.
     

    The Pirates’ farm system has created a strong foundation that should serve them well moving forward. Travis Sawchik wrote on the Trib Bucco Blog about how having a top ranked farm system correlates with qualifying for the playoffs. It will be interesting to see how the Pirates leverage their bounty of prospects. Having a strong major league a team and a strong minor league system at the same time has the Bucs positioned to be contenders for the NL Central along with the Cardinals for the foreseeable future. But the competition for the supremacy of the division is about to get a little more crowded. The Cubs are an organization on the come. They placed seven prospects in the MLB.com top 100 prospect list. The Cubbies also have the financial resources to outspend the other NL Central Division teams. So keep an eye on Chicago. They may be down now, but they won’t be there for long.
     

    Hidden Vigorish Prophecies For 2014: Neil Walker

    The switch hitting Neil Walker has been one of the more consistent performers the Pirates have had in recent years. Over the past three seasons he has posted fWARs of 2.6 in 2011, 2.6 in 2012, and 2.7 in 2013. Not surprisingly the 2014 projection models for Walker vary little. ZiPS estimates Walker with a 2.9 WAR in 2014, while Steamer and Oliver have him pegged for 3.0 and 3.1.
     
    With Neil Walker what you see is what you get. He is a solid player that does nothing exceptionally well, but has few holes in his game. His BB% and K% rates are better than league average and have been very stable from year to year. He has more power than a typical 2B, but not enough to fit in the heart of the order. His base running is average. His defense is average. Being average at so many things is what actually makes him an above average 2B. There just aren’t many second basemen with a well rounded set of skills, especially offensive skills. Matt Carpenter and Chase Utley were the only NL second basemen in 2013 that had a higher Weight Runs Created (wRC+) than Neil Walker. One of the few legitimate knocks on Walker is his increasing struggles to hit from the right side. His OPS against left handed pitchers has fallen in each of his four major league seasons. Last year he posted just a .518 OPS vs. southpaws. In 2013 those struggles finally began to cost him starts. Jordy Mercer and Josh Harrison both excel against left handed pitching and are legitimate platoon options at second base.
     
    Because Walker has a track record of steady performance he is one of the easiest players to project. I believe he will play slightly better than last season. His BABIP took a significant tumble in 2013. Last year he posted a .274 BABIP which is quite a bit lower than his .312 career BABIP. I expect that to rebound in 2014. However, I do suspect his power numbers will dip. Last year he posted a career best .167 ISO. Most hitters begin seeing big declines in ISO after age 28. The toughest thing to predict with Walker just might be how much he ends up playing. Will manager Clint Hurdle platoon him more in 2014? And can Walker stay healthy? He has a history of back troubles.
     
    Without further ado, here are the final estimations I’m using as inputs for Wahoo’s on First WAR Calculator to estimate the 2014 WAR for Neil Walker:
     

    AVG – .276
    OBP – .343
    SLG – .425
    Plate Appearances – 585
    Games – 140
    Position – 2B
    Defense – 4 (average)
    Base Running – 3 (average)
     

    And the verdict for Neil Walker 2014 WAR is… 3.2
     

    Pirates Reach Agreements With All Arbitration Eligible Players

    In a flurry of signings just prior to the January 17th deadline to exchange arbitration salary figures, the Pirates have come to terms on one year contracts with all of their remaining arbitration eligible players . Here is the list of signings:

  • Mark Melancon – $2.595 million
  • Gaby Sanchez – $2.3 million
  • Travis Snider – $1.2 million
  • Pedro Alvarez – $4.25 million
  • Neil Walker – $5.75 million
  • Vin Mazzaro – $950 K
  •  
    These signings, along with the Charlie Morton three year contract extension agreed to last month, puts a wrap on all the Pirates arbitration eligible players for 2014. The last time the Pirates went to an arbitration hearing with a player was with Ross Ohlendorf in 2011. The Pirates are one of several teams that have taken a hard line stance on arbitration. Known as a “File-And-Trial” team, they refuse to negotiate after the the deadline to exchange arbitration figures. Teams that employ this strategy believe it helps to avoid a messy arbitration hearings by encourageing agents to bargain in good faith earlier in the negotiating process. The “File-And-Trial” strategy appears to be working well for the Bucs.
     

    Why I Care About The Pirates Payroll….And You Should Too

    The Pirates have started taking some criticism from their fans and the media for a lack of spending on the payroll of the MLB roster this winter. This has also led to a number of defenders of the front office to voice their opinion in support of the Pirates’ spending. Some have not just defended the front office, but they’ve also taken an apathetic stance. Tim Williams of PiratesProspects.com says he doesn’t care about the payroll. I find that odd considering he often discusses the payroll advantages that high revenue teams have and how that aids them in building championship contenders. I agree with Tim that high revenue teams create an imbalanced economic structure that puts low revenue teams like the Pirates at a clear disadvantage. But I also believe if you care about the overall economics of the sport you should also care about how the team is operating within the economic climate of the industry. That means caring that the Pirates are using their available resources as best they can comparatively to the rest of the sport. That means also caring about payroll.
     
    For years owner Bob Nutting and the rest of the front office has told the fans that the Pirates would make a greater financial commitment to the team payroll when it made sense to do so. We were told when the team was a contender payroll would rise significantly if the fans were supporting the team. The fans have held up their end of the bargain. Last year was the second highest attendance in Pirates history. The team has already stated that they expect a new attendance record will be set in 2014. Ownership on the other hand has not held up their end of the bargain.
     
    It is true that the team payroll has risen in recent years, but that is very misleading. The Pirates’ financial documents from the 2007 and 2008 seasons that were leaked by Deaspin showed that as a percentage of revenue, the payroll of the Pirates’ major league roster was 36.7% in 2007 and 34.9% in 2008. As a point of comparison MLB Chief Operating Officer Rob Manfred stated that players received about 52% of league wide revenue during the 2008 season. The Pirates were spending much less of their piece of the revenue pie on payroll than other teams. If Nutting was true to his word the percentage of team revenues used on payroll should be rising. It is not.
     

    According to estimates by Bloomberg the Pirates had revenues of $185 million in 2013. Most insiders consider the Bloomberg estimates to be quite accurate. Many MLB teams have confirmed the estimates to Bloomberg. The $185 million estimate for the Pirates does not include the playoff windfall from 2013, as those had not yet been tallied. We have a pretty good idea that the Pirates generated an extra $5 million to $10 million in revenue from their playoff run. That lines up with other documents Deadspin leaked of the Rays and Angels during years they qualified for the playoffs. We also know the Pirates are getting an extra $20 million this year due to new National TV contracts that are going into effect this season. It is a fair estimation that the Pirates are working with revenues of around $215 million. The Pirates opening day payroll as it stands right now is estimated at $73 million. That works out to just 33.9% of the estimated revenues. That isn’t higher than 2007 and 2008. I’m not seeing any great financial commitment, are you? People often say they want the Pirates to be like the Rays. In 2010 The Rays stretched payroll to more than 47% of revenues. Do you think the Pirates would ever do that?
     
    Why should I care about this? Well, because I love the Pittsburgh Pirates. I know their resources are much more limited compared to other teams, but I want them to use the resources they have the best they can. In my opinion sitting on $10 million dollars is just as bad as wasting $10 million on a bad signing. There is no indication money saved from the budget today will go towards the roster down the road. This is a good team. They are a contender now. Even marginal improvements could make a big difference. 1 or 2 extra wins could be the difference between just barely missing the playoffs or making the playoffs. It would be a big mistake for the Pirates to fail to upgrade a position over a difference of just a few million dollars when the money appears to be there.
     

    You Make The Call – Which Team Got The Better Deal?

    Let’s take a look at two comparable signings by different teams this offseason.
     
    Player A
    Age: 30
    Contract: 3 years + 4th year team option, $21 million guaranteed
    fWAR 2013: 1.3
    fWAR last 3 season: 3.2
    fWAR career: 4.1
    Steamer WAR Projections 2014: 1.4
    Oliver WAR Projections 2014: 0.7
     
    Player B
    Age: 29
    Contract: 3 years, $21 million guaranteed
    fWAR 2013: 2.7
    fWAR last 3 season: 4.3
    fWAR career: 8.9
    Steamer WAR Projections 2014: 1.3
    Oliver WAR Projections 2014: 1.8
     

    So which team do you think got the better deal?
     
    The team that signed Player A was overwhelmingly praised for the signing. The team that signed Player B was also praised, albeit less so. Many felt three years was too long and risky for Player B.
     
    Player A is Charlie Morton. Like most people I did endorse the Morton extension. However, it has to be noted that Morton is a middle of the rotation pitcher with an injury history. The Morton contract is significantly riskier than the contract of Player B, which is first basemen James Loney. I felt Loney was a nice fit for the Pirates. I was concerned about committing three years to him, but ultimately if it was my decision I would have gone further than the Rays offer in order to sign him with the Pirates. I think I’m in the minority with that. There was no clear consensus from Pirate fans that Loney should have been the man for the Pirates’ 1B job on a healthy two year deal, let alone a three year deal. Yet the cold hard numbers seem to indicate Loney has more value and less risk than Morton.
     
     

    Trader Neal: Jason Bay Trade Retrospective

    Now that it appears that Jason Bay is hanging up his spikes for good let’s take a look back at the trade that ended his career with the Pirates.
     

    2008 was Neal Huntington’s first year on the job as General Manager of the Pittsburgh Pirates. The Pirates had flirted with the .500 mark for the first few months of the season, but by mid-July they were fading fast. After falling 10 games below .500 on July 20th it was clear the Pirates were going to be deadline sellers. It also seemed likely that the rookie GM was going to use the opportunity to start a full organizational rebuild. Jason Bay was the Pirates best player and Huntington’s top trade chip. For better or worse, trading Jason Bay would shape the opinion of Huntington held by Pirate fans, the media, and other GMs for years to come.
     

    The Pirates nearly swung a deal the prior offseason involving Bay for Cliff Lee and Franklin Guttierez. Bay and Lee were both coming off bad seasons in 2007. The Pirates Front Office decided to hold onto Bay in hopes he would rebound and rebuild his value. Bay did rebound in 2008. He was enjoying a fine season leading up to the trade deadline. Of course Cliff Lee did too, eventually winning the AL Cy Young Award in 2008, but that is another story for another time. Just minutes before the July 31st trade deadline Bay was sent to Boston in a three team trade with the Pirates acquiring Andy Laroche, Brandon Moss, Craig Hansen, and Bryan Morris. The trade was ultimately proved to be a failure for the Pirates. Jason Bay would give the Red Sox 7.2 bWAR over 200 games before leaving as a free agent. In 2009 he finished 7th in the AL MVP vote. The Pirates essentially got replacement level production from Laroche while Moss completely bombed in Pittsburgh. Moss would later have a resurgence with the A’s. Craig Hansen’s career was ruined by Parsonage–Turner syndrome which caused numbness in his throwing arm. Reliever Bryan Morris is the lone holdover from the trade.
     
    At the time of the trade, the deal actually looked pretty good on paper. Laroche, Moss, and Hansen all had previously been ranked as top 100 prospects by Baseball America. Morris was a 2006 first round pick of the Dodgers. He missed all of 2007 with Tommy John Surgery, but was back in action during the 2008 and showed some promise as a starting pitcher. The problem with all of these prospects though was they were losing their shine at the time the Pirates acquired them. They weren’t slam dunk can’t miss prospects. They had fallen out of favor for various reasons with their former clubs. We found out why when they came to Pittsburgh. I think the take away from all of this is that once a top prospect does not mean always a top prospect. Also it should be noted how difficult these types of deals are, especially for rookie GMs. Neal Huntington hadn’t had the chance to build up years of trust with his scouting and development people. Very likely he was acting on stale and/or inaccurate information. Over the years it seems that the Pirates have actually gotten better returns from prospects they acquired that weren’t top 100 prospects. Just a thought, but perhaps it takes a more experienced GM to rely on the scouts that unearth the hidden gems. Regardless, the Jason Bay trade goes down as one of the more infamous deals in recent Pirates history.
     

    The Curious Case of Edinson Volquez.

    The Pirates have had great success in recent seasons identifying talented yet underperforming starting pitchers, spending little to acquire them, then reaping the rewards of their rebound seasons. This was the formula with A.J. Burnett in 2012 and Francisco Liriano in 2013. The hope is that Edinson Volquez will provide the same returns in 2014.
     
    Volquez certainly fits the profile. He has strike out stuff and he generates a lot of ground balls, but he struggles to keep an ERA below 5.00. He posted a 5.71 ERA last season. It was the second time in the last three years he posted an ERA over 5.00. He posted a K/9 rate of 7.5 and a GB% of 47.6% in 2013. Solid rates for sure, but well below his career averages. The main problem with Volquez has always been his command struggles, but he actually posted the best BB/9 rate of his career last season. So why was he so terrible in 2013? How much was luck a factor? His FIP was a much more respectable 4.24. Volquez’s advanced metrics do not take a huge tumble with men on base like Ricky Nolasco or Tim Lincecum, two pitchers proven to be FIP under performers. A high BABIP of .325 and a low strand rate of 64.5% do point to some poor luck dragging down Volquez’s ERA, but he doesn’t do the little things to help himself either. He led the league with 16 wild pitches. Base stealers swiped 24 bags against him, 5th highest total in the league. Volquez does not field his position very well. His 9.3% rate of allowing infield hits on ground balls is well above league average. The 24 infield hits surrendered by Volquez was the seventh highest total in baseball last year. He was credited with a -7 in Defensive Runs Saved in 2013, which was second lowest total behind only Tim Lincecum.
     
    Given his struggles with wild pitches and holding runners, having Russell Martin and Chris Stewart behind the dish could have a big impact on Edinson Volquez. Having better battery mates will also help with fielding duties around the mound too. However, if Volquez is to have a big turnaround the biggest key may be how coachable he is. Pirate pitching coach Ray Searage and special instructor Jim Benedict have done wonders fixing pitchers like Charlie Morton and Francisco Liriano. Those are guys that wanted to be fixed and bought in to what the Pirates wanted them to do. I question whether a guy that so struggles with the little things like Edinson Volquez will be so easily molded.
     

    Hidden Vigorish Prophecies for 2014: Gaby Sanchez

    Gaby Sanchez will enter the 2014 season firmly entrenched as the right handed hitter in the Pirates first base platoon. This is the same role he has occupied since the Pirates acquired him in July of 2012 from the Miami Marlins. Sanchez is well suited for this rule. In his career he has mashed left handed pitchers to the tune of an .895 OPS. Last year Sanchez beat up on southpaws even more, posting an .987 OPS. But there is a reason Sanchez is a platoon player and not a full time 1B. As good as Gaby is against left handers, he is almost equally as bad against right handed pitching. His career OPS against righties is just .700. For a 1B that is downright terrible.
     
    Unfortunately, Gaby Sanchez’s ability to hit left handed pitching is providing diminishing returns for the Pirates because they face so few left handed starting pitchers. Last year the Bucs faced a left handed starter just 31 times. That was by far the lowest total in the league. 79.1% of all the Pirates’ plate appearances in 2013 were against right handed pitching. The league wide average was 71.2%. Gaby is terrific in the short side of a platoon, but the Pirates have the shortest short side of a platoon of any team in the league. It is not about to get any better in 2014 either. Tony Cingrani, Travis Wood, and perhaps Jaime Garcia are the only left handed starters of note the Pirates will face in the division. This wouldn’t be so concerning if manager Clint Hurdle did a better job of shielding Sanchez from right handed pitchers, but Hurdle allowed Sanchez way too many ABs last year against righties. Without a proven hitter opposite of Sanchez in the 1B platoon, I expect he’ll face even more righties this season. Unless the Pirates can work out a deal for Ike Davis or Justin Smoak, it appears Andrew Lambo will get the opportunity to occupy the left handed 1B platoon role. If Lambo struggles, Plan B will probably consist of Gaby Sanchez playing every day. I do believe Gaby Sanchez is going to get a few more ABs against right handers in 2014. I also believe he won’t rake against southpaws quite as well as he did in 2013. I expect his platoon splits against lefties to line up more with his career averages. For these reasons I feel Sanchez will be less productive offensively in 2014.
     
    Defensively Gaby Sanchez is normally quite good. However, last year his advanced metrics dipped considerably. For the first time in his career he had a negative Ultimate Zone Rating (UZR). I’m not ready to call that a trend. I believe in 2014 he’ll return to being a slightly above average defender. Sanchez doesn’t offer much on the base paths. He has little speed but he does avoid TOOTBLANS. I rate him as a slightly below average base runner.
     

    Without further ado, here are the final estimations I’m using as inputs for Wahoo’s on First WAR Calculator to estimate the 2014 WAR for Gaby Sanchez:
     

    AVG – .251
    OBP – .345
    SLG – .409
    Plate Appearances – 350
    Games – 135
    Position – 1B
    Defense – 3 (slightly above average)
    Base Running – 4 (slightly blow average)
     

    And the verdict for Gaby Sanchez 2014 WAR is… 0.6
     

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