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February 9, 2010

Prospectus Hit and Run

NL East Competitive Ecology

by Jay Jaffe

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The response to last week's piece on the competitive ecology of the six major-league divisions, which integrated recent work by colleagues Shawn Hoffman and Matt Swartz with older work by Keith Woolner, Doug Pappas, and Nate Silver, was enthusiastic enough that I figured it would be worthwhile to delve into some of the nuances of each team's situation in the service of division-by-division rundowns. We'll start with the NL East.

As noted in the previous piece, I've chosen to break with Shawn's Payroll Efficiency Ratings in a couple of ways, first by using the end-of-year payrolls instead of the more easily available Opening Day ones. The latter include salaries, signing bonuses, earned incentive bonuses, buyouts of unexercised options, deferred cash, and more (see here), which can add over 30 percent to a team's overall payroll expenditures or, in the case of a mid-season fire sale, subtract as much as 10 percent, thus painting a fuller picture. I've also chosen to base the calculations on actual wins instead of third-order wins, because let's face it, nobody gets to raise a flag or sell tickets on winning the third-order division championship. I'm indebted to Shawn for his help in providing the data that has allowed me to take a separate route from his own. I'm also indebted to the work of Jeff Euston, my new colleague, over at Cot's Baseball Contracts, particularly with the 2010–14 payroll obligations spreadsheets.

Over the past three years, the NL East has been a relative mediocrity, with their collective winning percentage and Hit List Factor both under .500 (.493 and .498, respectively), ranking fourth among the six divisions. Despite getting an above-average amount of production from players in the Non-Market salary class (players in their pre-arbitration or arbitration years), the division has also been the game's least-efficient division economically, harboring the league's two least-efficient teams, a pair from opposite ends of the economic spectrum.

Atlanta Braves


Year  Win%   HLF  Attendance     Payroll        MP/MW     PER'   NM    AM   Tot    NM%
2007  .519  .536   2,745,210   $92,634,468   $2,316,228   1.02  27.4  24.2  51.6  53.1%
2008  .444  .478   2,532,834   $92,494,314   $3,486,082   0.83  22.9  15.7  38.6  59.3%
2009  .531  .545   2,373,631  $100,078,591   $2,376,433   1.02  38.4  17.6  56.0  68.6%
Avg.  .498  .520   2,550,558   $95,069,124   $2,624,193   0.96  29.6  19.2  48.7  60.7%

Post-season appearances: The Braves haven’t had played a meaningful October game since 2005, breaking a 14-year string of post-season appearances that was interrupted only by the 1994 strike.

The three-year window of the data above coincides with Liberty Media Group's ownership of the Braves following a controversial and convoluted purchase from Time Warner, as well as the team's sagging fortunes on the field and in the box office. Recall that during the latter years of the Braves' 1991-2005 dynastic run, it often seemed as though their fans were taking the team's success for granted given their mediocre attendance figures and less-than-packed playoff games. While their attendance during their four-year postseason drought has actually risen 3.5 percent over the previous four years, that's against a backdrop of an industry-wide 8.5-percent attendance growth, so the Braves are losing ground at the gate.

At least this partially explains why the disconcertingly faceless new owners have cut costs, taking a team that ranked among the game's top 10 in payroll in each of the final three years of the old guard's ownership into the mid-pack, 13-to-15 range in 2007-09. Even so, they haven't been terribly efficient thanks to the bummer of 2008, in which the Braves finished more than seven games below their third-order projection thanks to a staggeringly awful 11-30 record in one-run games. After laying out $83 million for commitments to Derek Lowe and Kenshin Kawakami last winter, they've gone cheaper this winter, trading Javier Vazquez to the Yankees, extending Tim Hudson at a discount relative to his previous deal, and catching Billy Wagner on the rebound while letting the injury-prone Rafael Soriano and Mike Gonzalez move on. That said, they already committed $42 million last March to extend Chipper Jones through his age-38-40 seasons, a move that should make Braves fans nervous given that Jones' 4.1 WARP and .292 EqA were his lowest since 2004.

The good news is that the Braves are suddenly bursting with Non-Market talent, putting up the third-highest WARP total in the league in that department in 2009, with the work of Yunel Escobar (7.3 WARP), Jair Jurrjens (6.4), Brian McCann (4.0), Tommy Hanson (3.7), and Martin Prado (3.0) accounting for the bulk of that production. Hanson hasn't even spent a full year in the majors, Escobar, Jurrnens, and Prado aren't even arbitration-eligible until 2011, and McCann is locked up through 2012 with an option for 2013, his age-29 season. Oh, and they've got the game's top hitting prospect, 20-year-old Jason Heyward, who is expected to join the lineup at some point this season, perhaps as early as this spring. So while there's reason to be concerned with Liberty's bloodless ways, there's also reason to be hopeful regarding the new blood.

Florida Marlins


Year  Win%   HLF  Attendance     Payroll        MP/MW     PER'   NM    AM   Tot    NM%
2007  .438  .452   1,370,511   $33,072,472   $1,001,450   0.86  39.8  -0.4  39.4  101.0%
2008  .522  .509   1,335,075   $27,003,450     $447,736   1.15  40.1   0.0  40.1  100.0%
2009  .537  .516   1,464,109   $37,532,482     $685,742   1.16  39.6   0.1  39.7   99.7%
Avg.  .499  .492   1,389,898   $32,536,135     $670,464   1.06  39.8  -0.1  39.7  100.3%

Post-season appearances: They haven’t had one since 2003, when they won the World Series.

Say this for the Marlins: they're doing it differently. Owners of the game's lowest average payroll—35 percent lower than the next-lowest team, the Pirates—and its lowest average attendance, they're also the only ones to average less than $1 million per marginal win during this time period. Yet for all of the harsh words written about them both here and elsewhere (with Joe Sheehan's once calling them "a blight on the face of the American sports landscape" a particular highlight), they've been quite competitive, finishing second in the division last year and third the year before.

The Marlins have managed to adapt amid a long-running drama which has seen them win two World Series championships under two different owners (Wayne Huizenga and Jeffrey Loria) during their short lifespan, only to tear apart their rosters the following year. Combined with their residence in a relatively inhospitable football stadium (not to mention the bag job of a three-way sale involving the Marlins, Red Sox, and Expos), the mistrust those teardowns engendered placed the team either last in the league or second-to-last in attendance 10 times in the past 11 years and led to a 12-year battle to approve plans for a new taxpayer-funded stadium.

That the Marlins have adapted is testament to the fine work of GMs Larry Beinfest and Mike Hill (the latter promoted from within in late 2007 as the former ascended to president of baseball operations) in acquiring talent, as the team has traded away higher-salaried players of varying effectiveness (e.g., Miguel Cabrera and Dontrelle Willis, or Mike Jacobs and Kevin Gregg). Note that they've gotten virtually no value from Auction Market salaries in recent years. They haven't signed an Elias-ranked free agent since Luis Gonzalez in 2007, and he produced just 0.2 WARP in his lone year in teal. Meanwhile, only the Rockies have gotten more out of their Non-Market salaries over the past three years, with the Marlins actually holding a slight edge over the Dodgers and Rockies in the bargain-basement, pre-arbitration category, 24.3-24.1-23.6.

With their new park set to open in 2012, things are changing for the Marlins, and rather rapidly. The Players Association recently intervened to extract a promise that the Marlins would spend more on payroll, thus enforcing a key clause in the collective bargaining agreement involving the wheelbarrows full of revenue-sharing money with which the team has padded its bottom line. The immediate payoff was a four-year, $39-million extension for ace Josh Johnson and the avoidance of arbitration with Dan Uggla, both of whom otherwise might have been traded. Those are important signings for a team whose farm system is thinning out beyond the top-tier talents, and they're far more likely to help the Marlins get on the good foot with their fans than all of the new park's Joan Miró references.

New York Mets


Year  Win&   HLF  Attendance     Payroll        MP/MW     PER'   NM    AM   Tot    NM%
2007  .543  .551   3,853,949  $120,927,727   $2,799,181   0.88  28.6  26.5  55.1  51.9%
2008  .549  .550   4,042,047  $144,693,962   $3,311,237   0.87  23.1  25.1  48.2  47.9%
2009  .432  .453   3,154,262  $142,229,759   $6,122,886   0.54  18.4  16.9  35.3  52.1%
Avg.  .508  .518   3,683,419  $135,950,483   $3,706,437   0.77  23.4  22.8  46.2  50.6%

Post-season appearances: The Mets came within one win of a trip to the 2006 World Series, though that's their only playoff appearance since 2000.

Following final-day eliminations from contention in 2007 and 2008, complete with nightmarish campaigns in which they seemed to invent new ways to lose games, players, and credibility on a weekly basis, the Mets have become the game's biggest punch line. As doubts about their finances, medical staff, and decision-making processes have sprung up, the team with the NL's highest average payroll over the past three years hasn't been able to reap the benefits of a single playoff appearance. Indeed, their 0.54 PER' in 2009 is the league's lowest single-year mark of the time span, and their three-year mark is the league's second-lowest.

Of course, that's hardly a surprising outcome given the fact that the Mets lost 1,451 days and $52.2 million of salary to the disabled list in 2009 (both MLB highs), as a variety of disasters befell seven of the team's 10 highest-paid players. All salaries in millions of dollars:


                       2009   Future
Rk  Player           Salary   Salary   DL Days
 1  Carlos Beltran    $20.1    $40.1      78
 2  Johan Santana     $20.0    $93.0      42*
 3  Carlos Delgado    $12.0       -      144*
 4  Oliver Perez      $12.0    $24.0     104
 5  Billy Wagner      $10.5       -      137
 9  Jose Reyes         $6.1     $9.9     134*
10  J.J. Putz          $6.0       -      119*
*: Ended season on DL

Those top five players qualify as Auction Market salaries, which helps explain why the Mets declined so sharply from their 2007-08 WARP levels in that category, falling from fourth to sixth to ninth in the majors from 2007 to 2009. They've got the equivalent of more than a year's worth of payroll tied up in four of those players (for nine player-seasons) going forward, and their 2011 payroll commitments are already over $108 million, so they'll have to pray for strong rebounds. They'll also have to hope that marquee free-agent signing Jason Bay, whose four-year, $66-million deal ranks as the winter's third-largest, holds up as well, given the concerns about his knee that apparently cooled the Red Sox' interest in retaining him.

Even more unsettling is the fact that the Mets fell from 14th to 18th to 28th in terms of WARP from Non-Market salaries over the three-year period. Again, injuries were part of the story, as players like Angel Pagan (3.7 WARP), John Maine (0.4 WARP), and Fernando Martinez (-0.7 WARP) all spent at least 80 days on the DL, too. On the other hand, the regular lineup presence of sophomore Daniel Murphy (0.6 WARP while splitting his time between the two positions where the offensive bar is the highest, first base and left field) didn't help matters.

Of course, last year marked the Mets' debut in Citi Field, an attractive, intimate replacement for their Shea Stadium dive, but one with 27 percent less seating capacity, which will likely produce a drag on revenues, even given higher ticket prices. If there's any good news to be found, it's that the farm system is on the rise thanks to the team's international scouting efforts, and that the 2010 season couldn't possibly bring more bad news for the franchise than the past year did. At least until Omar Minaya's impending firing opens up a whole new can of tabloid whoop-ass.

Philadelphia Phillies


Year  Win%   HLF  Attendance     Payroll        MP/MW     PER'   NM    AM   Tot    NM%
2007  .549  .544   3,108,325  $101,823,122   $2,257,008   1.24  39.7  14.3  54.0  73.5%
2008  .568  .555   3,422,583  $112,654,711   $2,344,118   1.40  36.6  16.0  52.6  69.6%
2009  .574  .551   3,600,693  $138,286,499   $2,862,309   1.25  40.2   9.5  49.7  80.9%
Avg.  .564  .550   3,377,200  $117,588,111   $2,496,134   1.30  38.8  13.3  52.1  74.5%

Post-season appearances: The Phils have won the NL East and made the playoffs in each of the past three years, winning the World Series in 2008 and the NL pennant in 2009.

The Mets' recent misfortune has been the Phillies' gain, as they've taken command of the NL East in convincing fashion, reaching the playoffs in three straight years for the first time since 1976-78 and winning their first World Series since 1980. They've done so largely thanks to their Non-Market talent; no team got more WARP via that route in 2009, and only the Rockies and Marlins bested their average over the three-year span. Thanks to that, the Phillies rank fourth in the majors in PER' over the time span, behind only the Angels, Rockies, and Rays.

Still, that Non-Market talent hasn't come cheap. Ryan Howard's 2008 salary of $10 million marked the highest figure ever awarded to a first-year arbitration winner, and the three-year, $54-million extension he signed last February doesn't even buy out any of his free agent years. His extension, along with that of Cole Hamels (three years, $20.5 million, setting a record for a first-time arbitration-eligible pitcher in terms of average annual value), was part of a post-championship spending spree embarked upon by incoming GM Ruben Amaro Jr. Meanwhile, Chase Utley reached the eight-figure salary tier last year—which otherwise would have been his final arbitration-eligible year—via a seven-year, $85-million extension that takes him through 2013.

Amaro also spent a fair chunk of change in the graybeard section of the Auction Market aisle, signing Raul Ibañez to a three-year, $31.5-million deal covering his age 37-39 seasons, and extending Jamie Moyer through his age-47 season to the tune of $13 million. Furthermore, predecessor Pat Gillick granted erratic closer Brad Lidge a three-year, $37.5-million extension during the summer of 2008. All of these deals made the team's $25.6-million jump in payroll from 2008 to 2009 the majors' largest, though on a percentage basis, the two tight-fisted Florida clubs' payrolls rose more sharply.

Amaro has continued to spend money this winter, most notably trading prospects for Blue Jays ace Roy Halladay and signing him to a three-year, $60-million extension (the Jays are paying $6 million of this year's $15.75-million salary). He signed Shane Victorino to a three-year, $22-million extension, which buys out his arbitration years, spent $24 million for three years of Joe Blanton, buying out his first two years of free agency but also triggering the dealing of the reasonably priced mid-season acquisition Cliff Lee ($9 million during his final year prior to free agency). And if that's not enough, Amaro inked Placido Polanco to a three-year, $18-million deal and Danys Baez to a two-year, $5.25 million contract. Such moves have pushed the Phillies' 2010 commitments to $138.1 million. Their 2011 commitments have been bumped to $132.7 million. While on-field success has boosted their attendance from seventh in the league in 2006 to second last year, the Phillies' combination of age, big-dollar contracts, and the trading of prospects—seven of their top 10 from last year's list, including the top six, all departed in the Lee and Halladay deals—will almost certainly make them a less-efficient team in the coming years.

Washington Nationals


Year  Win%   HLF  Attendance     Payroll        MP/MW     PER'   NM    AM   Tot    NM%
2007  .451  .436   1,961,606   $43,254,278   $1,336,651   0.91  28.1   5.5  33.6  83.6%
2008  .366  .384   2,320,400   $59,699,668   $4,530,706   0.68  13.8   7.5  21.3  64.8%
2009  .364  .408   1,817,280   $69,321,137   $5,588,571   0.56  17.8   7.3  25.1  70.9%
Avg.  .394  .409   2,033,095   $57,425,028   $3,061,793   0.71  19.9   6.8  26.7  74.6%

Post-season appearances: Not only has the franchise not made the playoffs since moving to Washington, but even in their Expos incarnation, they made the postseason just once in 41 seasons, that coming in 1981.

This is not a pretty picture. The Nationals have posted the majors' lowest winning percentage over the past three years, and even with the fourth-lowest payroll, they've been its second least-efficient team, barely edging the Orioles. Only seven teams paid more per marginal win during that time span.

The lowly state of the Nationals has plenty to do with their spending nearly half a decade (2002-06) ago as wards of the other major-league 29 clubs, the outcome of the unseemly three-way sale referenced in the Marlins section above. That period saw the franchise relocated from Montreal to Washington, and while the Nationals posted an 81-81 record in their inaugural year in the nation's capital, it has been all downhill since, as years of skimping on the farm system while signing mid-priced mediocrities as free agents have taken their toll. The past two years have marked the first time in the team's history that they've posted back-to-back 100-loss seasons.

The tenure of GM Jim Bowden, which ended in scandal last spring amid bonus-skimming allegations, was marked by Ol' Leatherpants' penchant for dumpster diving. That occasionally brought some inspiring moves, including the acquisitions of troubled, high-upside outfielders Lastings Milledge and Elijah Dukes, not to mention bopper Josh Willingham. More often, it resulted in rosters full of misfit toys like Dmitri Young, Ronnie Belliard, Felipe Lopez, Cristian Guzman, Paul LoDuca, Willie Harris, Austin Kearns, and Wily Mo Pena, some of whom had their moments on the Nats' watch, others of whom have just taken up space.

With relatively little of immediate value coming out of the farm system—John Lannan (6.1 WARP over the past two years) being the major exception—the team has been in the bottom three in Non-Market WARP in each of the past two years while ranking in the bottom third in Auction Market WARP all three years. Only the Pirates have a lower average total WARP in that span.

New GM Mike Rizzo has at least started righting the ship with his signing of last year's first overall draft pick, Stephen Strasburg, marking the most important step. Even so, the cavalry's arrival is hardly imminent, and in the meantime, current contracts like those of Adam Dunn, Jason Marquis, and Guzman—three players taking up half of the $55.1 million they've committed for 2010—aren't likely to yield any great rewards. Furthermore, the momentum of the team's new ballpark, which opened in 2008, has been squandered, as they've finished 13th in the league in attendance in each of the past two years, with last year's total 6.5-percent lower than their final year in the outmoded RFK Stadium. Yes, Virginia, Maryland, and DC denizens, it's just that bad.

---

Next up is the AL East. In the meantime, I'll be chatting today at 1 p.m. Eastern.

Jay Jaffe is an author of Baseball Prospectus. 
Click here to see Jay's other articles. You can contact Jay by clicking here

Related Content:  A's,  Team Age,  Payroll,  Doug Million,  Rosters,  Year Of The Injury

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