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May 27, 2010

Contractual Matters

The Strasburg Clock

by Jeff Euston

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The Stephen Strasburg Watch has lasted almost a year now. When the Washington Nationals selected him with the first pick in the 2009 First Year Player Draft, he was hailed as the best college pitching prospect ever. He signed a record contract in August, then impressed in the Arizona Fall League. This spring, he turned heads in major-league spring training and now he has dominated at the top two levels of the minor leagues.

In just a handful of starts as a pro, Strasburg has become baseball’s version of the Dos Equis pitchman, The Most Interesting Man in the World: His reputation is expanding faster than the universe. After witnessing two of the phenom’s starts for his Triple-A Syracuse club, manager Trent Jewett concluded that Strasburg is so good that the hype surrounding him is actually understated.

So what is he doing throwing against Scranton/Wilkes Barre on Saturday night in Syracuse? Well, the Nationals have an answer. They have a few, actually. And they’ll list them with a straight face:

  1. Strasburg needs to adjust to starting every fifth day, not once a week, as he did at San Diego State.
  2. He needs work pitching with men on base, though his 0.706 WHIP is not allowing him much experience in that area.
  3. More generally, Strasburg simply needs development time as a professional. Or, like the Dos Equis guy, maybe he will experience an awkward moment, just to see how it feels.

The unspoken answer, of course, is that the timing of Strasburg’s major-league debut has significant financial and competitive implications for the Nationals. Keeping him in the minors to start the season allows Washington to control his rights for nearly seven major-league seasons, rather than six. Keeping Strasburg down until June is likely to prevent him from reaching the service time necessary for salary arbitration until after the 2013 season, saving the club millions.

But despite the buzz surrounding Strasburg’s pending arrival in the Beltway, his situation is not unique. Giants fans are awaiting the promotion of catcher Buster Posey, who is hitting at a .346/.441/.525 clip while working on his defense and game-calling skills at Triple-A Fresno. Indians fans are clamoring to see catcher Carlos Santana, who has compiled a .313/.447/.573 slash line at Triple-A Columbus. And Marlins fans wonder when they’ll see 20-year-old outfielder Mike Stanton, who is hitting .318/.451/.734 with 17 home runs for Double-A Jacksonville.

Developing a prospect into a major leaguer is not a hard science. The promotion of a player can hinge on countless factors, ranging from hard numbers like age, league or production to the more subjective, such as maturity, makeup, or need at the next level. But the rules regarding service time, salaries, arbitration, and free agency are there in black and white, often subjecting front office roster decisions to review from the Major League Baseball Players Association, agents, players themselves, or any fan with his favorite team’s pocket schedule.

As many fans already know, a player earns major-league service time for each day he spends on the active 25-man roster or on the major-league 15-day or 60-day disabled lists. A player also continues to earn service time while serving any disciplinary suspension. Baseball’s labor agreement defines one year of service as 172 days, though a full season generally lasts 183 calendar days. If a player is sent to the minor leagues on optional assignment for a total of less than 20 days during a season, he receives service time for the entire season. A player needs six full seasons of service to become a free agent, and players generally need three years of service to qualify for arbitration. But the top 17 percent with at least two but less than three years of service qualify under the Super Two provision, with the cutoff point usually falling between two years, 128 days and two years, 140 days.

Regardless of the reasons a club chooses to promote a player, the timing often has long-reaching consequences on the franchise’s bottom line. If Strasburg had made the Opening Day rotation, he’d be eligible for arbitration after the 2012 season and free agency after the 2015 season. Washington avoided that scenario by starting him in the minors in 2010, ensuring he’s off the free-agent market until after the 2016 season.

If, as expected, Strasburg is promoted to the majors sometime between June 8-10 for a three-game series with the Pirates at Nationals Park, he will be able to earn a maximum of 118 days of service in 2010, which almost certainly prevents him from qualifying for arbitration as a Super Two after the 2012 season. If Strasburg proves to be a smashing success in the majors, the timing of the promotion could save the Nationals as much as $18 million through 2016, according to Dave Sheinin of the Washington Post, who did the math.

For the Nationals, who began the season as long shots, it’s an easy call. But for clubs trying to win now, the decision is not always so clear-cut.

Atlanta kept young ace Tommy Hanson in the minors until June 3 last season, promoting him only after Jo-Jo Reyes and Kris Medlen faltered in the starting rotation. In the last four months of the season, Hanson pitched 127 2/3 innings and struck out 116 in 21 starts for the Braves, who made a late run at the National League wild-card spot before falling six games short. Had Hanson’s 11 starts in April and May come in Atlanta rather than Triple-A Gwinnett, the Braves conceivably could have closed the gap.

The Brewers met a similar fate in 2007 when they held off on promoting Ryan Braun until late May. Braun hit 10 home runs and slugged .701 in 34 games for Triple-A Nashville before coming to Milwaukee, where he hit .324/.370/.634 in 113 games. The Brewers battled the Cubs for the NL Central title until the last weekend of the season, but ultimately finished two games out.

Obviously, the timing of a promotion is also something of a reflection on a front office’s outlook: Does the team need to win now? Or is the franchise taking a longer view and building to win two or four years from now? That issue colors roster usage and construction for every club, from how the Yankees use Joba Chamberlain to whether Cardinals manager Tony La Russa resorts to using starting pitchers in a 20-inning game with the Mets in April. It’s rare that any team has the 25 most-talented players in the organization on the active major-league roster at once. And, despite the cries from some fans, that fact hardly compromises the integrity of the game.

Money often is not the overriding consideration, anyway. The Braves put 2007 first-round pick Jason Heyward on their Opening Day roster this spring. Rookie Mike Leake made the Reds’ rotation out of spring training. Premium prospects Justin Smoak, Starlin Castro, and Ike Davis were promoted to the majors in late April or early May, putting them in position to be Super Twos after the 2012 season.

Yes, the size of the Super Two pool could be changed in an effort to encourage teams to bring premium young players to the majors before June. But any change would need to be negotiated in the next round of labor talks. The owners certainly would resist expanding the pool, and the players would resist reducing it. And in any event, as long as any service-time milestones are in place, the cost of promoting a player will be an important consideration. In a $6-billion industry, it’s both necessary and inevitable. And if Strasburg is truly worth the wait, Nationals fans will gladly trade two months of 20-year-old Strasburg in 2010 for a full season of 27-year-old Strasburg in 2016.

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

19 comments have been left for this article. (Click to hide comments)

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Str1fe5

Is there any consideration for the value of managing Strasburg's pitch counts and PAP? In AAA, if Strasburg throws more than 30 pitches in an inning, they can go ahead and pull him mid PA. They can justify pulling him after 4 innings if he's thrown 100 pitches already, even if he hasn't given up a run yet. They can be equally more rigid or less rigid in how they manage his innings and pitches. A lot of these super phenom top pitching specs don't work out largely because they are rushed to the majors extremely quickly and get hurt. It is rarely the case that the talent evaluation is simply wrong - most guys are really good when they are healthy. I'd just think the Nationals might want to monitor innings and pitches in the minors all year long or close to all year long rather than call him just because you know he can get MLB hitters out.

May 27, 2010 06:42 AM
rating: 1
 
Travis Leleu

While this may be somewhat true, the fact remains that managing his workload is something they could do in MLB just as easily. I don't think the Nationals would have a problem "pulling him after 4 innings if he's thrown 100 pitches", even if it is a shutout.

Plus, with the other service clock hold-downs happening (Posey, Santana, et al.), you know this is a common occurrence in the game. Seems much clearer to me that it's a money thing. Guess we'll find out in a few weeks -- if they bring him up in June, you know it was a money issue.

May 27, 2010 08:36 AM
rating: 0
 
mark

For the reasons you mention Braun absolutely should've been on the Opening Day roster in 2007. However, with the benefit of hindsight, the Brewers did play .600 ball before he got there so his absence probably didn't cost them huge in the standings. Who knows? Maybe he could've turned a very good start into a great one but maybe not.

May 27, 2010 07:43 AM
rating: 3
 
leites

Does time spent in the majors in September (when active rosters expand from 25 to 40) count for service time?

May 27, 2010 08:15 AM
rating: 0
 
69wildcat

Yes, any time spent on the active roster counts as service time.

May 27, 2010 09:39 AM
rating: 0
 
BP staff member Jeff Euston
BP staff

Yes, a player promoted in September earns service time. Posey's 2009 September call-up got him 33 days, for example.

But September service does not affect a player's status as a rookie the following season. A player is no longer a rookie if he has 1) more than 130 ABs or 50 IP in the majors or 2) more than 45 days on an active roster in April through August. Posey had 17 ABs with the Giants in '09, so he'll still be a rookie when he gets to San Francisco.

May 27, 2010 09:41 AM
 
Todd Boss

Despite the Nationals being at .500 a quarter of the way into the season, most indicators (pythagorean w/l, amazingly lucky babip for Livan Hernandez, and the performance of rookie starting pitchers thus far) seem to show that we'll be coming back to the pack and will not seriously be contending for a division title or wild card come july-august.

Thus, the arguments to bring him up to get a few extra (possible) wins aren't really valid. The nats lost 100+ games 2 years running and were not expected to compete this year, so that extra year of control in 2016 will come in handy. We'll be happy we took the long view instead of the short view.

May 27, 2010 08:21 AM
rating: 0
 
rajzen

Jeff, as more teams hold players in the minors in an attempt to avoid super-two status, presumably this has pushed the super-two cutoff point later into the season. Do you know if this has actually happened and is there any concern that the deadline will move increasingly later in the season thereby increasing the on-the-field cost to teams?

May 27, 2010 08:24 AM
rating: 0
 
BP staff member Jeff Euston
BP staff

The low point for the cutoff was 2 years, 128 days in 1991. The cutoff was 2 years, 139 days last off-season and has been 2 years, 140 days in four of the last seven years. So the cutoff seems to have settled into a fairly predictable range.

My sense is that it's not so much that clubs are changing their behavior as the process has become more public. Also, for every club that might decide to hold a player down, there's a club forced to make an early decision because of injury or need. The best laid plans ...

May 27, 2010 10:03 AM
 
R.A.Wagman

Thanks very much - I have been wondering much on the same issue myself recently. Jeff - do you think that some teams might now start pushing lesser rookies up earlier as their Super Two dollars wouldn't be as high as those of the more exciting prospects down the road?
For example - the Nationals would not be paying as much to Drew Storen if he is deemed a Super Two as they would to Stephen Strasburg under the same circumstances?

May 28, 2010 04:27 AM
rating: 1
 
N8

What would be the downside of just setting an age after which you're eligible for free agency? Whether it be 28, 26 or 31 it would end all of these decisions to manipulate a player's service time. As soon as a player enters your organization, you know how much time you control him for. There would be no excuse for not having your 25 best players on your roster.

May 27, 2010 11:28 AM
rating: 0
 
DAra

That would be too random a statistic and doesn't take into consideration the wide range of players drafted out of high school, after college, internationally, etc.

May 27, 2010 12:28 PM
rating: 0
 
N8

I think this is the most opposite example of random there is. The age is determined to be 30? Age is 30, no randomness.

As to the high school/college question, does one group tend to reach the majors and therefore qualify for free agency at a younger age? Or would it be fair to say that the three or four years of player control you would get for drafting a high school player would be spent developing him in the minors anyway?

May 27, 2010 12:37 PM
rating: 0
 
69wildcat

For one thing you would never get the Player's Association and the teams to agree on where to set the age; too low and the teams would claim that they would not get sufficient return on their investment, too high and the players would claim that many players would never get to cash in as free agents. Teams can already control players for up to 12 years, if they so desire, that means most players are at least 30 before they can become free agents. It is only the top players, the ones who make the majors without spending a long apprenticeship in the minor leagues that end up signing multiple FA deals. For every Starlin Castro that reaches the big leagues when he is 20, there are dozens of Garrett Jones; players who spend years in the minors and who will be lucky if their career lasts long enough to achieve free agency.

May 27, 2010 12:28 PM
rating: 2
 
N8

"For one thing you would never get the Player's Association and the teams to agree on where to set the age; too low and the teams would claim that they would not get sufficient return on their investment, too high and the players would claim that many players would never get to cash in as free agents."

- I disagree. There's an average age at which players become free agents right now. If I suggested one year younger, the players association would be in favor of it. If I suggested one year older, the owners would be in favor of it. If I suggest the same age, maybe they could agree. And I'm sure there are other factors, but let's not get into it because we're not answering the question.

I'll rephrase. Why is it better to base free agency based on service time rather than age? There may be legit reasons, I'm just not thinking of them right now.

May 27, 2010 12:46 PM
rating: -1
 
Zaxell

For one, service time is indisputable. Players are often not the age they claim to be, and having millions of dollars contractually tied to the number could get pretty ugly when the 19-year-old you signed turns out to be 22.

May 27, 2010 13:02 PM
rating: 2
 
BP staff member Jeff Euston
BP staff

Like most every other union, the players' association is committed to the concept of seniority. Players earn additional rights and benefits (pensions being the most prominent example) based on years and days in the majors, regardless of age. Setting a new age-based milepost would upset that framework, even if all sides could agree on a specific age.

Unless someone finds a magical way to legislate away the chance a team manipulates the rules, each front office will have the right to promote players when it sees fit.

May 27, 2010 13:44 PM
 
PWHjort

Jeff, I'm surprised you referenced the Washington Post Sheinin article's $18 million figure. I discuss my issues with his methodology here ( http://www.insidethebook.com/ee/index.php/site/comments/delaying_strasburg_worth_18mm_to_nationals/#7 ):

I’ve got the difference at ~$11 million (the author of the article makes several over simplifications) using the author’s salary numbers.

One thing he didn’t do is account for the extra half a win the Natspos would’ve gotten from Strasburg over 8 or so starts. The money isn’t adjusted for inflation, either.

The biggest problem I have is the assumption that he’ll make the same amount of money during his first, second, and third arbitration years regardless of whether he’s a super two or not. This almost certainly doesn’t mirror reality.

If Strasburg enters his first arb year after the 2013 season, he’ll have had another year to accomplish things that arbitration panels consider, and the end result is likely a higher salary.

If you use, say 10-15-20 as his three arb years if he isn’t a super two and 8-13-18-23 as his four arb years if he is a super two, the difference is only ~$7.5 million.

The author’s point is much the same and I think the Nationals were correct in leaving Strasburg on the farm for two months for financial and baseball reasons, but I think the case has been over stated, here.

May 28, 2010 00:01 AM
rating: 0
 
BP staff member Jeff Euston
BP staff

Fair points all, Peter. I'd peg the Nationals' likely savings at $12 mil. But, at least in theory, the difference could be more if Strasburg qualified as a Super Two, filed for 8 figures and won, then proceeded to go year-to-year. In that sense, Lincecum was conservative in settling after filing for $13 last February.

But, as you suggest, a decision with 8-figure implications is not insignificant, whether it turns out to be $10 million something much more.

May 28, 2010 20:42 PM
 
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