If I ran the Padres – Part II
If I ran the Padres….
I would stop buying out arbitration years for my young players. I admit my position on this issue has evolved in the past 3 seasons or so. In the past i felt locking up players with guaranteed money was a great investment because the team can set its price rather than risk huge increases that are out of their control. Sounds great in theory. But, as so many things are, the theory and the practice are not always the same.
This may seem like I am piling on an already full bandwagon of fans bashing the contracts of Cory Luebke, Nick Hundley and Cameron Maybin. Rather than focus on those players and their contracts, let’s look at the risk/reward for handing out these guarantees.
During the 2013 arbitration year, the average MLB player saw a 119% raise in salary by filing for arbitration. It should be noted that none of those players went to the arbitrator, they all agreed to a contract prior to their February hearing.
You probably don’t need me to tell you, but I will anyway, that means the Padres ended up losing money on each of the contracts they guaranteed to Maybin, Hundley and Luebke. Obviously, this is not always the case and guaranteed contracts can save teams money in arbitration (Mike Trout’s deal will likely do that). I am not trying to nit-pick each and every move the Padres make. My problem is with the overall idea with guaranteeing arbitration years.
Buying out arbitration years basically amounts to a public relations decision. The players who are given these contracts are (usually) years away from earning free agency and, therefore, not requiring multi-year contacts. The reason the Padres, and other teams, hand out these deals and often publicize them (see Jedd Gyorko’s contract announcement carried live on TV) is to show the fans the team is committed to keeping its players. These contracts can cost the team precious dollars while offering little more than a few positive headlines in return.
The argument can be made that by offering pay increases early in a players career the team can parlay those dollars into a discount on future contracts. This is rarely the case. Whatever goodwill is established between player and organization does not translate into dollars in any contract I could find.
And, of course, the elephant in the room in this discussion is the high likelihood of regression. Players do not all develop with the same speed, success or health. And peak years often occur during the years a player is eligible for free agency. Keeping a player in the arbitration system makes it more likely that future earnings will be commensurate with production. Not to bash Nick Hundley, but I doubt he would have earned $4 million in arbitration this past off-season, yet that is what he will make in 2014. The variability of arbitration years may seem like it adds a degree of variability to a team’s payroll each offseason. However, arbitration is also a hedge against regression.
I’m not a fan of doing things for show, or to send a message. It seems to me that buying out arbitration years usually qualifies as one or the other. I would prefer the team focus its dollars on free agency years for either players in the system or from the outside.