Garza: When is a bargain valuable? | Disciples of Uecker

Disciples of Uecker

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After the Brewers signed Matt Garza, I had one consistent thought in my mind: the deal is an absolute bargain, but the Brewers might not be the best possible club to extract value from that bargain. Ryan, Vineet and James, and Adam have covered many angles on the implications of the contract for the Brewers’ organization. For this post, I am most interested in two angles:

(1) What does Garza’s contract mean in the context of the RHP market?
(2) How do injuries impact contractual value?

The RHP Depression?
There’s a narrative about the Garza signing that is rather fun to consider. Namely, I have this vision of GM Doug Melvin inquiring on pitching prices, hearing a general answer from Garza’s agent, Nez Balelo, and being so floored that he couldn’t pass on the deal. Consider recent deals for everyone from Anibal Sanchez and Zack Greinke to Ricky Nolasco and Jason Vargas. As Melvin shops through the supermarket of starting pitchers, learning of Garza’s availability for approximately four years and $50 million (at base) is quite a stunning price. (I think this narrative works even if you are a Mark Attanasio conspiracy theorist, and believe that Attanasio pulled the strings on the Kyle Lohse and Garza deals).

One interesting question about the Garza deal, in the context of the recent right-handed pitching market, is whether this bargain signals a market correction on the value of RHP. Stated simply, the types of deals handed to Matt Cain, Justin Verlander, Felix Hernandez, Greinke, and even Sanchez cannot necessarily be sustained by each MLB club (not even in an era of expanding TV revenue on local and MLB levels). Even if a club like Milwaukee has more TV revenue to play with (thanks to the larger league TV contract), Melvin and Attanasio cannot necessarily sign Yovani Gallardo, Lohse, or Garza to $80 million deals (even if they’re worth that level). In the span of less than two years, the explosion of RHP contracts appears to be complete. By my count, Kevin Brown, Carlos Zambrano, and Pedro Martinez were the only righty starters to earn more than $90 million on a single contract between 1997 and 2012. Between April 2012 and January 2014, Masahiro Tanaka, Cain, Greinke, Hernandez, Verlander, and Adam Wainwright each signed contracts greater than $90 million. While the Sanchez deal seemed to follow the explosion and hint at its expansion into the middle rotation, the Edwin Jackson contract squarely stabilized RHP prices for 2013-2014 offseason. Here are how ten notable RHP contracts compare, including each pitcher’s basic performance five years leading up to the deal:

Pitcher (Years) IP ERA+ K / BB / HR Contract (Millions)
C. Zambrano (’03-’07) 1077.3 136 945 / 477 / 87 5/$91.5
J. Verlander (’08-’12) 1154.7 131 1140 / 338 / 95 7/$180
A. Wainwright (’09-’13) 903.7 130 828 / 209 / 62 5/$97.5
Z. Greinke (’08-’12) 1035.7 124 1007 / 261 / 87 6/$147
A.J. Burnett (’04-’08) 851.7 113 836 / 308 / 77 5/$82.5
E. Jackson (’08-’12) 996 110 766 / 345 / 110 4/$52
M. Garza (’09-’13) 864.7 108 768 / 279 / 102 4/$50
A. Sanchez (’08-’12) 724.7 107 647 / 255 / 67 5/$80
J. Vargas (’09-’13) 852.7 95 551 / 238 / 108 4/$32
R. Nolasco (’09-’13) 939 90 780 / 214 / 102 4/$49

While some professionals, analysts, and fans alike are focusing on Garza’s injury history, it’s easy to forget that Garza is quite a good arm. Given that the Brewers are paying Garza at basically the same rate as Nolasco and Jackson, it’s difficult to feel bad about Garza’s potential at what amounts to a “veteran minimum contract” for a serviceable arm.

Injuries and Rotational Position
One of the specific concerns with Garza is his health. Given Garza’s recent injury history, one might be inclined to question the value that the Brewers will receive from their bargain. However, in this area, there is quite a track record of injury-prone pitchers, or pitchers with recent injury histories, signing notable contracts. This alone does not justify the Garza deal, but it can put the deal in perspective.

Specifically, Anibal Sanchez, Adam Wainwright, A.J. Burnett, and even Zack Greinke (to an extent) are pitchers on the notable RHP contract list with injury histories prior to their deal. Greinke’s 2011 injury is obviously quite different than Wainwright’s elbow injury, and Burnett’s and Sanchez’s injury histories with the Marlins seem like ages ago. In Sanchez’s and Wainwright’s cases, both pitchers missed significant amounts of time within the five years preceding their big contract. In fact, Wainwright is only two years removed from his injury, and that period of time included one moderately below average season. Here, one might suggest that a pitcher’s track record, mechanics, and actual bill of health from a physical are more important than basic performance levels; if the Cardinals or Tigers feel that Wainwright and Sanchez can overcome their injury histories for mechanical reasons, then their respective contracts might correlate more to that judgment than basic performance.

One of the issues with injured pitchers is that teams must replace those pitchers when they are on the disabled list. If a pitcher needs to be replaced and cannot work 100+ IP, not only does the club need to pay that pitcher’s salary, but they also need to find other pitchers. In this case, the Brewers’ replacement situation is not the same as other clubs; given solid swingman and replacement performances by Marco Estrada and Tyler Thornburg within the last few years, as well as an entire handful of AAA-to-MLB starters, the Brewers have a relatively competent and plentiful replacement situation should any of their arms falter in 2014.

Furthermore, it is not always the case that a pitcher cannot return to form after injuries. Over the last six seasons, I have ranked National League pitchers by their runs prevented (against league and park). While I judged dependable starters recently, there are also eight pitchers that worked 100+ IP in 2008 and remained under contract through 2013 (within the NL). Since the number of 100+ IP starters typically were between 65 and 75 starters during those seasons, in the years that those eight starters need to be replaced, I’ve ranked them #80 (i.e., “replacement level”). Here’s how those eight pitchers fared over six seasons:

Pitcher 2008-2013 Ranking Individual Rankings Salary ($millions)
A. Wainwright #26.0 17-3-2-80-49-5 $35.3
T. Hudson #28.3 13-80-5-14-19-39 $67.0
K. Lohse #34.0 21-49-80-34-7-13 $55.9
J. Santana #41.7 2-18-6-80-64-80 $126.9
C. Carpenter #47.0 80-1-17-24-80-80 $74.8
J. de la Rosa #48.7 47-36-40-80-80-9 $40.0
B. Zito #57.8 69-26-38-80-67-67 $109.0
E. Volquez #60.5 12-80-80-66-57-68 $10.9

In the case of Edinson Volquez his injury and suspension issues kept him from matching his 2008 Top Rotation performance (although one might argue whether he was going to match that performance anyway). On the other hand, Wainwright, Kyle Lohse, and Barry Zito returned to their previous level (in Zito’s case, that means something completely different than it does for Wainwright and Lohse). Tim Hudson and Jorge de la Rosa surpassed their previous level after their injuries, while Chris Carpenter and Johan Santana could not overcome their injuries.

Overall, these eight starters missed approximately (or, at least) 25% of their potential workload from 2008-2013, since they needed to be replaced in 12 of 48 total seasons. Their average contract during this period was $10.8 million per year, which means that their “replacement cost” in their injury seasons was quite high to their respective clubs. Their respective teams spent this money for an aggregate ranking of #43, or a solid three starter; Wainwright and Hudson were much better than that, Zito and Volquez much worse. Carpenter’s case is particularly interesting, since the Cardinals offered him a modest extension despite his injury history; his case shows the type of judgment clubs will make when they can potentially acquire (or keep) a pitching asset in their organization (regardless of injury history). Carpenter also shows the type of money clubs will spend for the potential of a solid pitcher, even with injury risk; while his case is extreme, it’s also instructive: the Cardinals had to replace Carpenter three times in six seasons, and still paid him nearly $75 million.

With this in mind, Garza’s potential for delivering value in Milwaukee could be promising. One cannot say that an injury will absolutely diminish his potential to produce; some pitching cases show that injuries deplete performance, while other pitchers are able to reclaim their previous value. Even if the Brewers need to replace Garza at some point, his basic level of production when he’s on the mound is strong enough to justify his salary. On the other hand, his salary level is not so high that replacing him places a burden on the Brewers (especially given that the Brewers basically have five or more arms ready in their bullpen or AAA at a minimal cost). Furthermore, the Brewers enter the 2014 season with more depth at a position that previously had a lot of question marks. Frankly, while I’m disappointed that we might not be able to see Thornburg or Will Smith placed into the rotation to start the season, I also know that most NL clubs have recently needed more than five starters to complete their seasons. So, Smith, Thornburg and the AAA/swingman gang will get their shot. The difference is now we can ask: where does a healthy Lohse/Gallardo/Garza lead Milwaukee?

Rotation Placement Looking Back
2013: Garza’s 71 IP / 7 runs prevented performance in the NL would have been the Brewers’ second-best replacement performance (a 4-to-8 run improvement over Tom Gorzelanny and Donovan Hand). Overall, Garza’s 155.3 IP / 106 ERA+ performance would have made him the Brewers’ second best pitcfher in 2013.
2012: Garza’s 103.7 IP / 1 run prevented performance would have been sixth best on a particularly strong Brewers rotation. The club could have improved approximately 25 runs if they had Garza’s performance over that of Randy Wolf.
2011: On another strong Brewers rotation, Garza’s 198 IP / 4 runs prevented performance would have ranked fourth behind Wolf, Gallardo, and Shaun Marcum. This would help the club improve 5-10 runs over Greinke and/or Chris Narveson.

Resources
Baseball-Reference. Sports Reference, LLC., 2000-2013.
Cot’s Baseball Contracts. BasballProspectus. Prospectus Entertainment Ventures, LLC., 1996-2014.
2011-2013 NL Rotations with Runs Prevented

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Comments

Tell us what do you think.

  1. Jacoby says: January 28, 2014

    MLB Trade Rumors posted an excellent breakdown of how the 5th year option works. Should Garza be injured throughout the first 4 years, the Brewers can pay as little as 1 million for 2018.

    • Nicholas Zettel says: January 28, 2014

      Isn’t that option something else? I can’t believe it.

      • Jake W says: January 29, 2014

        Just awesome to see as a Brewers fan. The only question I have is whether the option is voided if he is traded. If it can’t be Garza becomes serious trade chip down the road.

        • Nicholas Zettel says: January 30, 2014

          That’s a good question — I do not believe Cot’s has reported anything on this issue.

          However, I do think Garza’s price will make him a solid trade piece down the line. He is the type of arm that a contending club needs each year. Hopefully he will eventually be a centerpiece of a Brewers’ contending rotation, though.

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