Found January 19, 2013 on Pirates Prospects:
The Pittsburgh Pirates exchanged arbitration figures with two players today, giving us a look at what each side is asking for in each individual case. The players who exchanged figures were James McDonald and Neil Walker. The Pirates will now receive arbitration hearings with each of these players. The sides can agree to a deal anytime before that hearing. If the Pirates go to a hearing with any one of those players, an arbitration panel would choose one of the two salary figures, based on the arguments from each side. Here are the exchanged figures. James McDonald Pirates: $2.65 M McDonald: $3.4 M Midpoint: $3.025 M Neil Walker Pirates: $3 M Walker: $3.6 M Midpoint: $3.3 M The typical question you see when it comes to arbitration hearings is “they’re so close, why don’t the Pirates just sign these guys and avoid arbitration”? McDonald and Walker are both separated from the Pirates by less than $1 M. Fans don’t have to worry about money, so it’s easy to give up a combined $1.35 M and make sure the two players are under contract with no hurt feelings through the arbitration process. But these arbitration prices have long term impacts that are more expensive than the small differences this year. As an example, let’s look at Neil Walker. Walker is a Super Two player, making this the first of four arbitration years. The rule of thumb for arbitration values is 40/60/80 for normal players, or 20/40/60/80 for Super Two players. Those numbers represent the percentage of what a player would receive if he were on the open market. Let’s use the exchanged salary figures to represent 20% of Walker’s value. Once that value is established, we can figure out his projected future salaries using the 40/60/80 scale for his remaining three years. That will show the long-term estimated cost of his decision. If the Pirates Win Percentage Salary FA Value 20 $3.0 $15.0 40 $6.0 $15.0 60 $9.0 $15.0 80 $12.0 $15.0 If Walker Wins Percentage Salary FA Value 20 $3.6 $18.0 40 $7.2 $18.0 60 $10.8 $18.0 80 $14.4 $18.0 In year one there’s only a difference of $600 K. However, if we assume Walker maintains the same value and goes year to year in arbitration, the overall difference would be $6 M. MLBTR projected Walker for $2.9 M in arbitration, so I’d say the Pirates have a strong chance of winning here if the two sides went to arbitration. If there’s the potential to save $6 M in the process, then it would make sense to stick to their $3 M figure. If we’re going by WAR, Walker has averaged a 3.2 WAR in each of the last two seasons. That would put his free agent value at $16 M, and his 20% value at $3.2 M. That means he would be closer to the Pirates’ value if the two sides went to arbitration. Based on this, it would benefit Walker more to try and reach a mid-point. I think the offer from the Pirates is a better representation of his value, and they’d probably win if the two sides went to arbitration. The long-term cost is going to be higher for Walker. He has an extra year of arbitration, so he is set to get a raise three more times over his 2012 salary, while McDonald would only see arbitration two more times. Here is the summary for McDonald. If the Pirates Win Percentage Salary FA Value 40 $2.65 $6.625 60 $3.975 $6.625 80 $5.3 $6.625 If McDonald Wins Percentage Salary FA Value 40 $3.4 $8.5 60 $5.1 $8.5 80 $6.8 $8.5 The difference between McDonald and the Pirates is $750 K this year. If he maintains the same value and goes year to year, the estimated difference would be $3.375 M over the three year period. If we reverse the salary information using the 40% figure, we get a 1.325 WAR from the Pirates and a 1.7 WAR from McDonald. McDonald had a 1.7 WAR in 2012, although it’s not about the most recent year, but the overall results. In the last three years McDonald has averaged a 1.17 WAR, which is lowered by his 0.2 fWAR in 2011. I would say this could go either way, which seems to be fitting for McDonald. He looked like an ace for half the season in 2012, and looked like a 4A pitcher for the other half. He’s had two seasons that were close to that 1.7 WAR, which would translate to a $3.4 M salary in 2013. But when you factor that third season, he’s closer to the Pirates’ figure. Since this one could go either way, the two sides would be better off meeting in the middle. The Pirates would be spending a potential estimate of about $1.7 M more, and McDonald would be losing the same potential amount. But that’s better than either side losing out on the full amount in a toss-up situation where you could make an argument for either side to win. Why the Pirates Shouldn’t Hand Away Money The Pirates aren’t going to just hand Walker and McDonald the amount they’re asking for, so it might be pointless to explain why that would be a bad approach. But I’ve seen so many “just give them the money” comments that I figured it wasn’t obvious to everyone why this would be a bad approach for any team. First, you’re setting a bad precedent by just giving the player what he wants. You’re not going to have much luck negotiating with players if you set a precedent for caving over “small amounts”. Second, those small amounts add up. As I pointed out above, there are long-term impacts for each player. If you’re not worried about $1.35 M in 2013, you’re probably not worried about $10 M spread over the next four years. But it’s not like this is an isolated incident. The fans who are saying “just give them the money” say that about every negotiation. If the Pirates actually did that, they’d be paying that extra money every year to every player. That adds up. Finally, the main idea behind giving in and paying the players what they want is to avoid hurting their feelings. This sort of stems back to the Jack Wilson arbitration hearings. Wilson and the Pirates went to arbitration, and Wilson won. After the hearings, Wilson complained about how the arbitration process resulted in him being demeaned by his own organization. That led to people worrying that Wilson would be alienated and would jump ship the first chance he got. People don’t seem to remember that Wilson signed a three year extension just two years after that hearing, buying out free agent years. Last year the Pirates went to a hearing with Garrett Jones over $250,000. We heard the same cries over the process. Some fans were saying the Pirates should just give him what he wanted, and avoid the alienating arbitration process. The Pirates won, yet one year later the two sides have apparently agreed to a pre-arbitration deal. We also can’t get a Garrett Jones trade rumor without hearing about how the Pirates have a high value on him and are asking for too much. So I don’t think the relationship has been damaged. The truth is that this is a business. Fans look at the situation with emotion. They don’t care about spending money that isn’t theirs. They just care about getting the player signed at whatever cost, and keeping him happy so that his play won’t be affected. Players aren’t that fragile. Jones responded to losing an arbitration case by having a career year, then signing a pre-arbitration deal. Despite his complaints about hurt feelings, Jack Wilson followed up his arbitration victory with the best year of his career. That’s not to say that there’s a link between arbitration hearings and player performance. Ross Ohlendorf had a horrible season in 2011 after winning his hearing. What we can take from this is that the players aren’t going to be impacted by the arbitration process. It’s a business. The players are trying to get the most money they can. The teams are trying to get players for the lowest amount they can get them. That’s true for pretty much every player and it’s true for every team. They all understand that it’s a business. All of this makes total sense until you add in the fan factor. Fans don’t care about how much money a team has to spend. Fans assume that players approach this part of the game with emotion like they do, rather than compartmentalizing things and looking at this aspect like a business. If you’re wondering why teams don’t just give the players what they want, it’s simple. That would be horrible business. You’d lose leverage in future negotiations, you’d pay much more than you normally would pay, and all to avoid hurting the feelings of the players — which isn’t a real issue since the players don’t look at this with the same emotion as the fans. There’s just no benefit to a team to negotiate with players in this process, and there’s not much downside. Links and Notes **The 2013 Prospect Guide is now available. The 2013 Annual is also available for pre-sales. Go to the products page of the site and order your 2013 books today! **The eBook version of The 2013 Prospect Guide is also available through our publisher. They also have a discount code during the month of January that allows you to save 20%. Use the code JANBOOKS13 to get the discount. This code is only valid on the eBook on the publisher’s web site, and not the books on the products page of the site. **Pirates Agree to Terms With Garrett Jones. **Pirates Agree to One Year Deal With Gaby Sanchez. **Pirates Exchange Figures With Neil Walker, James McDonald. **Pittsburgh Pirates 2013 Top Prospects: #11 – Clay Holmes. **Winter Leagues Recap: Playoff and WBC Notes.
THE BACKYARD
BEST OF MAXIM
RELATED ARTICLES

Pittsburgh Pirates 2013 Spring Training Tracker

Today I uploaded the Pittsburgh Pirates 2013 Spring Training Tracker to the site. This is the third year in a row that we’ve had the tracker on the site. Prior to Spring Training it will show all of the non-roster invitees who are invited to camp, along with the chances of each player making the Opening Day roster. Once Spring Training begins, the tracker will be updated any time...

Pirates in the World Baseball Classic

The World Baseball Classic rosters were announced on Thursday, and as we expected there are a couple of Pirates planning to participate. Team Canada will be of the most interest to Pirate fans. Russell Martin will be the starting catcher, and the Bucs’ #2 prospect Jameson Taillon will probably be in the rotation. Chris Leroux is also on the Canadian pitching staff–he could start...

Pirates, Gaby Sanchez Avoid Arbitration; Agree to Terms

#Pirates and @gabysanchez15 agree on 1-year deal worth $1.75M plus bonuses to avoid salary arbitration. #MLB — BHSC (@BHSCouncil) January 18, 2013   Gaby Sanchez hit .241/.323/.397 with four home runs in 130 plate appearances after being acquired at last season’s trade deadline from Miami.

Winter Leagues Recap: Marte Drives In Two Runs

In playoff action out of the Dominican yesterday, Starling Marte went 1-for-4, with a double, sacrifice fly and two RBI’s. He also recorded an outfield assist in the fourth inning that kept the game close, as his team trailed by two runs at the time. In the top of the next inning, Marte drove in his second run of the game to put his team up by two runs. Marte’s Escogido team...

Pittsburgh Pirates 2013 Top Prospects: #11 – Clay Holmes

The Pirates Prospects 2013 Prospect Guide is now on sale. The book features over 250 prospect reports, the 2013 top 50 prospects, and the most comprehensive coverage of the Pirates’ farm system that you can find.  While the top 50 prospects are exclusive to the book, we will be releasing the top 20 prospects over the next few weeks.  Be sure to purchase your copy of the book on...

Pirates Make Karstens Signing Official, DFA Zach Stewart

The Pittsburgh Pirates have made the signing of Jeff Karstens official, via a team press release. To make room on the 40-man roster, the team designated right-hander Zach Stewart for assignment. Stewart was acquired earlier this off-season for Kyle Kaminska. The 2013 payroll page has been updated with Karstens’ estimated salary. UPDATE 3:15 PM: Will Graves reports the deal is for...

Pittsburgh Pirates Playing in the World Baseball Classic

The 2013 World Baseball Classic rosters were announced today on MLB.com. Below are the players in the Pittsburgh Pirates system who are playing in the event. Australia Stefan Welch - Welch was signed by the Pirates last year and hit for a .266/.339/.416 line in 440 at-bats between high-A and Double-A. He played mostly third base for the Pirates last year, but is listed as a shortstop...

Pirates Agree to One Year Deal With Gaby Sanchez

The Pittsburgh Pirates have agreed to a one year, $1.75 M deal with Gaby Sanchez, according to the Beverly Hills Sports Council on Twitter. The two sides will avoid arbitration. #Pirates and @gabysanchez15 agree on 1-year deal worth $1.75M plus bonuses to avoid salary arbitration. #MLB — BHSC (@BHSCouncil) January 18, 2013 Sanchez was projected to make $1.8 M by MLBTR, so this...

Winter Leagues Recap: Three Hits For Marte

In playoff action out of the Dominican from last night, Starling Marte went 3-for-4, with two runs scored, a double and a stolen base. Marte’s Escogido team took a 2-0 advantage in the best-of-nine championship series with a 8-5 win. He is now hitting .387 in the playoffs after batting .304 during the DWL regular season. Marte has four playoff homers In action out of Venezuela...

Winter Leagues Recap: Playoff and WBC Notes

In Australian Baseball League action from today, Stefan Welch went 1-for-4, with two RBI’s, as Adelaide was handed an 8-2 loss. Hours before the game started, Welch was named to the provisional roster of the Australian team that will represent the country in the 2013 World Baseball Classic. He now has 24 RBI’s on the ABL season, tops among all Adelaide players. Welch was named...

Jeff Karstens, Pirates finalize $2.5M contract

Jeff Karstens is staying with the Pittsburgh Pirates, finalizing a $2.5 million, one-year contract on Thursday. Karstens can earn an additional $1 million in performance bonuses based on innings. The 30-year-old right-hander was 5-4 with a 3.97 ERA in 15 starts and four relief appearances last year, when he missed time because of separate injuries to a hip, groin and shoulder....

Jameson Taillon is the Guardian, Russell Martin is Puck (the Pirates in the WBC post)

When the news came out a couple of days ago that Andrew McCutchen wouldn't be taking part in the World Baseball Classic because he wanted to dedicate himself to getting ready for his 2013 season with the Pirates, I had two thoughts:  1.) Well, at least he won't get hurt or burn himself out early this year. 2.) I still kind of wish Andrew McCutchen had a chance to...

First Pitch: Aggressively Ranking Prospects

Today I posted the profile for the number 12 prospect in the system, Dilson Herrera. In the write-up I mentioned that Herrera was the favorite to be the 2013 version of Alen Hanson or Gregory Polanco. In somewhat of a coincidence, Charlie at Bucs Dugout posted a review of the 2013 Prospect Guide today, and noted a few of the aggressive rankings in the book (with Herrera being one...

World Baseball Classic, Gaby Sanchez, Brian Strait Updates

Just going to throw a few stories out there quick. World Baseball Classic rosters have been announced and eight Pirates players have made rosters. Ivan De Jesus, Jr. , INF – Puerto Rico Jason Grilli, P – Italy Chris Leroux, P – Canada Russell Martin, C – Canada Wandy Rodriguez, P – Dominican Republic Ali [...]
MLB News
Delivered to your inbox
You'll also receive Yardbarker's daily Top 10, featuring the best sports stories from around the web. Customize your newsletter to get articles on your favorite sports and teams. And the best part? It's free!

Today's Best Stuff
For Bloggers

Join the Yardbarker Network for more promotion, traffic, and money.

Company Info
Help
What is Yardbarker?

Yardbarker is the largest network of sports blogs and pro athlete blogs on the web. This site is the hub of the Yardbarker Network, where our editors and algorithms curate the best sports content from our network and beyond.