February 8, 2013
Mock Hearing: Jim Johnson
It's salary arbitration season in Major League Baseball, and here at Baseball Prospectus we're holding mock hearings, arguing for or against the actual team/player filing figures before a three-person panel of certified arbitrators. We've selected 10 of this winter's most intriguing, highest-dollar cases to cover in depth over the first two weeks of February (regardless of whether the players' real-life cases remain unsettled). After each side's opening argument and rebuttal/summation below, we'll give you a chance to vote on what you think the result should be before seeing the panel's decision. For more on the arbitration process, read the series intro by Atlanta Braves Assistant GM John Coppolella, listen to his appearance on Episode 35 of Up and In, or check out the BP Basics introduction to arbitration.
In Part Five of this 10-part series, we'll tackle Baltimore Orioles pitcher Jim Johnson, who is seeking $7.1 million and has been offered $5.7 million. Johnson and the Orioles have yet to reach an agreement. (*Update* Johnson and the Orioles avoided arbitration and settled for $6.5 million after this piece was published.)
The complete procedure for salary arbitration is available in the Basic Agreement.
Last season, the Baltimore Orioles made the postseason for the first time since 1997, and did so largely on the strength of their extraordinary record in close games. As the team's closer—the relief pitcher responsible for getting the crucial outs to finish off narrow victories—Jim Johnson was a key factor in that record, and he played a large part in Baltimore finally snapping its playoff drought.
Johnson's request of a $7.1 million salary is more than reasonable when considered in the context of his importance to Baltimore's playoff berth. The Orioles won 29 of their 38 games that were decided by one run last season. That's the best winning percentage a team has recorded in one-run games since the American League was founded in 1901.
Even good teams can generally be expected to finish around break even in such games, which means Baltimore gained around 10 extra wins from its performance in close contests.
If the Orioles had recorded a more typical record in one-run games, they would have finished well out of the playoff race. Instead, with Baltimore engaged in its first playoff race in this century, the Orioles' attendance increased by nearly 20 percent and surpassed two million for the first time in five years. Thirteen of those one-run wins came at Oriole Park at Camden Yards.
Baltimore went 74-0 when it held a lead after the seventh inning. According to the Elias Sports Bureau, only two teams have had a better record in that category, the most recent being the 2011 Detroit Tigers.
Since the Orioles were so reliant upon preserving narrow advantages, no closer in baseball was more important to his team's success then Johnson. It's obvious but worth stating: Modern baseball managers use a closer to save games. It's the closer's one and only job. Last season, no one did it as well as Johnson, who was rewarded with the American League's Rolaids Relief Man Award, the honor given annually to the league's best relief pitcher, and pitched in the 2012 All-Star game.
How well did Johnson perform his job? He became just the 11th relief pitcher in big-league history to record 51 or more saves.
Johnson saved three more games than any other pitcher in baseball and six more than any Orioles pitcher before him. Johnson recorded as many or more saves by himself than 27 of the other 29 teams did as a whole across baseball. He failed to convert a save just three times in his 54 regular-season chances, and in one of those he earned the win after the Orioles went on to defeat their opponent.
Johnson’s conversion percentage of 94 percent ranked better than all but one of the save leaders in 2012. If Johnson had matched the MLB-average conversion rate of 70 percent, he would have saved just 38 of his 54 opportunities, and even if Baltimore had rallied to win some of the failed conversions, it almost certainly would not have made the playoffs.
A closer can sometimes earn an "easy" save by entering a game which meets the minimum requirements of the rule, which is to pitch one inning while preserving a three-run lead. Johnson had just six such games, and he recorded more "tough" saves than any other pitcher in baseball.
Johnson saved seven games that went into extra innings, contributing to the Orioles' remarkable 16-2 record in those contests. He also entered six games that were tied when he came on to pitch and thus didn't have a save opportunity. He didn't allow a run in any of them.
By any definition it was an impeccable performance, and Johnson is easily worthy of his request for $7.1 million for the 2013 season. Because the job of a closer is so clearly defined, it's relatively easy to compare them amongst a peer group.
There have been nine recent examples in which a player near Johnson's level of service time recorded 41 or more saves in a platform season within a year of Johnson's level of service time. All of the comparable players were awarded substantial pay increases for the following season, and were so rewarded based on lower save totals than Johnson’s.
Note that the average post-platform year compensation ($6.8 million) is higher than the midpoint in this case ($6.4 million), much closer to Johnson's requested salary of $7.1 million than the club's offer.
Soria and Lidge are outliers on the chart. Soria signed a below-market deal with Kansas City in exchange for a longer contract term. Lidge had logged more years as a closer than Johnson. Overall, the average of the two post-platform salaries of these players brings them in line with the context of this table. Also, note that Bell and Valverde posted consecutive qualifying seasons, which speaks to the likelihood of Johnson sustaining his performance.
Johnson's request for $7.1 million is appropriate in the context of peers coming off platform seasons with a high number of saves, given the $6.8 million average and especially given Johnson's higher number of saves. The club's proposed figure represents a considerably smaller pay increase ($3.1 million) than that of Bell, the most recent example. Such an increase would also leave Johnson $1.1 million below the established level of average post-platform compensation received by those in his peer group.
Johnson had four more saves than any other pitcher in his peer group. His saves "meant" a great deal in the context of the playoff race, as Johnson's preservation of numerous narrow leads helped boost Baltimore into the postseason. It's highly unlikely that the Orioles would have played into October without Johnson's consistent performance in clutch situations, and he should be compensated accordingly. —Bradford Doolittle
The club’s submission of $5,700,000 (which would be the largest annual salary ever for a reliever with less than two years of experience as his team’s closer) appropriately compensates Johnson for both his platform-season performance and his previous, though limited, experience as a closer. But it does not—and the panel should not—overcompensate Johnson based on one impressive season’s worth of performance in the absence of the demonstrated sustained success in the role of closer that has historically been fundamental in awarding a reliever an annual salary greater than $6,000,000 (adjusted for the increase in average player salary to 2012 levels).
Quite simply, Jim Johnson’s submission of $7,100,000 seeks to place him in elite company among relievers with comparable service time, and does so in opposition to the manner in which top-tier salaries historically have been determined for closers. Since 2007, only six relievers with comparable service time have received a salary over $6,000,000 (adjusted). In each case, the player’s platform year performance has not been a driving factor in determining his salary, as can be determined by comparing baseline statistics for each.
Baseline Platform Year Statistics for Closers
While these platform year statistics vary widely, having no discernable unifying characteristic, further examination of this grouping of players shows there is a performance nexus we can look to in determining whether, historically, a player has been rewarded with a salary greater than $6,000,000 (adjusted). The commonality among these six arms is a uniform demonstration of sustained success in the role of closer, evidenced by multiple years of service in the role and an accumulation of at least 100 saves over the course of their respective careers as of the completion of their platform year.
Career Save Totals and Years as Closer Through Platform Year
Since 2007, no reliever with service time comparable to Johnson’s has been awarded a salary north of $6,000,000 (adjusted) without meeting this criteria, and no reliever that has met this criteria has received a salary less than Brad Lidge’s 2007 adjusted salary of $6,250,000 (aside from Joakim Soria, who was under a multi-year contract at the time and, we assume, chose to sacrifice annual realization for greater long-term security). Indisputably, this level of annual salary has historically been reserved for established closers with sustained success over multiple seasons. While Johnson by all accounts enjoyed a highly productive 2012, his 72 career saves (60 over his seven months as closer for Baltimore from September/October 2011 through September/October 2012) leave him well short of such a distinction.
Of the qualifying names examined, only Francisco Rodriguez and Brad Lidge were able to achieve enough success in the closer role to amass over 100 saves in less than three years. An examination of each full season completed by Rodriguez and Lidge, leading up to and including their platform season, reveals multiple years on par with Johnson’s 2012.
Francisco Rodriguez and Brad Lidge
To award Johnson a 2013 salary of $7,100,000 would essentially split the difference between Rodriguez’s and Lidge’s compensation for their 2006 seasons, while ignoring the fact that each player had already provided a full year of production as a closer in 2005, in each case on par with Johnson’s 2012. Further, the club’s submitted salary trumps each of the salaries earned by Rodriguez and Lidge following their first season as their team’s respective closer—seasons which are statistically similar to Johnson’s 2012.
While Johnson’s limited track record should disqualify him from having his salary grouped with those of the six pitchers discussed above, he compares quite favorably when set next to other closers with comparable service time and less than two full seasons serving as the closer for their respective team.
Most Single-Season Saves With <2 Years as Closer
Breakdown by Months Serving as Closer
*Note: For purposes of this table we examine only saves accumulated while the pitcher was considered the closer, and not “situational saves” accrued while the pitcher was primarily serving in another capacity as part of his bullpen; Johnson’s listed salary is the club’s submitted salary.
Again, we see added weight assigned to track record, with each of Jose Valverde and J.J. Putz leading the way in salary, career saves, and duration serving as his team’s closer. Johnson fits behind Putz in terms of career saves (72) and is most similar to Joel Hanrahan in terms of time spent as the closer for his club (seven months). A comparison of Valverde’s, Putz’s, Hanrahan’s, and Johnson’s respective platform years follows.
Jim Johnson vs. Jose Valverde
Jim Johnson vs. J.J. Putz
Jim Johnson vs. Joel Hanrahan
On a platform season basis, Johnson compares favorably with each of Valverde, Putz, and Hanrahan, and the club acknowledges that Johnson deserves recognition for a particularly successful 2012—his first full season serving as closer. His 51 saves, 94 percent success rate, 2.49 ERA, and 1.019 WHIP are all impressive accomplishments and, while his All-Star selection and American League Rolaids Relief Award do not distinguish him from his contemporaries in this grouping (players listed in the tables above have had varying degrees of All-Star selections and Rolaids Relief Awards with no discernible effect as to their compensation the following season), we too note our satisfaction with these honors being bestowed upon him.
Each of these listed achievements should be appropriately recognized in setting Johnson’s salary compensation for 2013. The club’s submission of $5,700,000 does this and appropriately compensates Johnson to the tune of the largest annual salary ever for a reliever with less than two years of experience as his team’s closer. A finding in favor of the club’s submission would reward Johnson for a very strong 2012 while correctly reserving the top tier of annual closer salaries for those pitchers that have not only performed admirably for a season, but have shown themselves through repeated successes over multiple seasons to be upper-echelon relievers. It is the club’s hope that Johnson reaches such status in the coming years, but he has not earned such a distinction through his 2012 performance alone. —Nick J. Faleris
We reiterate that a closer’s one and only job is to accumulate saves. In Jim Johnson’s case, there are really two considerations: How are closers who save games with the frequency he did in 2012 compensated? And how likely is he to sustain his current level of performance?
Our opening brief dealt with the typical changes in compensation for closers who save an inordinately high level of games, none of whom saved as many games as Johnson did in 2012. The club’s presentation notes that the salary Johnson is seeking is generally reached by closers only after multiple years of serving in the role. However, the pitcher can control only his performance, not the role in which he is used.
In terms of the most crucial statistics for pitchers, Johnson performed at largely the same level of effectiveness during the four years prior to 2012 that he did last season. The primary difference is saves. Johnson was not used as Baltimore’s primary closer during the earlier timeframe, even though his performance suggested that he would be able to effectively hold down the role. He proved that by saving seven straight games during the last month of the 2011 season and converting 51 of 54 chances during a historically remarkable performance in 2012. Again, that 94-percent conversion rate was well over the MLB average of 70 percent.
Johnson’s platform season didn’t represent an unusual leap in performance, only a change in role. That he pitched slightly better in the more crucial role suggests that he will be a reliable closer going forward. While last season was his first full season as the Orioles’ closer, Johnson was not a rookie. He is a veteran with more than four years of service time and an established record of performance.
Among the pitchers on our list of comparable players from the opening brief, four recorded 41 or more saves in their fourth year of service time. Three of those four posted 40 or more saves the following season as well. The exception, Joakim Soria, injured his elbow in September of 2011 and hasn’t pitched since. The evidence suggests that once a player reaches the level of established closer, he tends to stay there for the near term.
Again, the post-platform average salary level for that group—$6.8 million—is well above the $6.4 million midpoint between the club’s submitted figure and that requested by our client, and is much closer to the requested figure of $7.1 million as opposed to the club’s offer of $5.7. In recognizing Johnson’s historic level of achievement as being one of nine players in the history of baseball to reach 51 saves, the panel will be bringing Johnson’s salary in line with those of similar service time who have performed in the role he fills at the level at which he fills it. —Bradford Doolittle
Johnson’s submission and accompanying argument rests on a narrative that 1) closer value is measured by save totals, 2) the Baltimore Orioles made the playoffs last year because of their record in close games, and 3) Johnson was a significant factor in the club’s record in close games. The club fully agrees that Johnson performed admirably in his role, but it is the performance of his teammates that put him in a position to realize such a lofty save tally.
As noted in Johnson’s opening argument, the club did not lose a game in which it held a lead after the seventh inning. While Johnson certainly did his part in recording the final out in 51 save situations, the remainder of the bullpen was additionally impressive in its performance in “save situations” (innings pitched in which a player was maintaining or completing a potential save opportunity). The following tables illustrate how each individual member of the bullpen performed in save situations and compare the performance of the bullpen as a unit (without Johnson) to Johnson’s performance alone.
2012 Baltimore Orioles Bullpen vs. Jim Johnson in Save Situations
2012 Baltimore Orioles Bullpen vs Jim Johnson In Save Situations
Johnson was indeed an important piece of a bullpen that preserved wins in all 74 games in which the team held a lead after the seventh inning. But he was simply a piece of the engine, and not the driving force. Without the 83 sterling innings provided by the other eight Orioles bullpen members to log time in save situations, Baltimore certainly would not have enjoyed such success in those 74 games. Further, Johnson would not have been afforded the luxury of 54 save opportunities leading to his impressive save total. Finally, because Johnson’s strikeout rate (SO/9 and SO/BB) lagged behind those of the rest of the pen, Johnson was additionally more dependent on his defense for recording outs, further evidence that Baltimore’s success in the late innings was attributable to far more than simply the man throwing the final pitch.
Johnson’s argument for an unprecedented 2013 salary of $7,100,000 further attempts to find footing by limiting the discussion to the increase in salary, as opposed to the ultimate yearly salary historically awarded to comparable performers. Even then, in order to explore this as potential justification for such an outlandish annual salary, Johnson’s argument must resort to looping in players with additional service time (five-plus years as opposed to Johnson’s four-plus years). The result is unsurprising—those four players account for the top four total salaries and the top five total salary increases in the table provided in Johnson’s opening argument.
Limiting the comparison to players with comparable service time tells quite a different story—one in which the club’s submission represents a generous compensation offer in light of historical averages. (Note: We have additionally removed Joakim Soria from the below modified table so as to avoid artificially lowering the averages due to the particulars of his multi-season deal).
The club’s submission would reward Johnson with a salary increase of $3,100,000—about 7 percent more than the average salary increase for true comparable players coming off of a 41-plus save season, per Johnson’s own numbers. Shockingly, Johnson’s submission would reward Johnson with a salary increase of $4,500,000—about 55 percent more than the average salary increase for the above-discussed comparable players. Not only would such an increase be unprecedented, but it would also have potentially significant effects on future rewards for arbitration-eligible closers who have enjoyed short-term success without demonstrating an ability to sustain that success.
Since saves were first recorded as a statistic, 73 different players have compiled 40 or more saves in a single season. Of those 73 players, less than half (35) were able to repeat the feat, and just 30 percent (22) were able to record back-to-back seasons with 40 or more saves. As noted in Johnson’s opening argument, Heath Bell and Jose Valverde are two such pitchers that were able to log back-to-back seasons with 40-plus saves. While Johnson’s argument goes on to use this as evidence that Johnson is likely to repeat his performance, history has clearly provided a different story. Indeed, the rarity of such an occurrence is precisely what makes track record and sustained success such an important component in determining whether a closer will receive an elite annual salary of $6,000,000 (adjusted) or above. Based on all the evidence before us, it should come as no surprise that Bell and Valverde achieved their elite-tier closer salaries—$7,500,000 and $8,000,000, respectively—only upon establishing themselves as successful full-time closers over multiple years. Johnson may join this elite class as early as a year from now, but present inclusion is simply not yet warranted.
As noted in the club’s opening argument, Johnson performed exceptionally well in his first year as closer for the Baltimore Orioles, and must be rewarded appropriately. The club’s submission achieves this in the form of the highest-ever single-season salary for any closer with comparable service time and comparable closing experience, as well as the highest salary increase for any closer with comparable service time and 41-plus saves in a single season. Johnson’s submission would be a massive overpay and would serve to shrug aside the most important historical component in determining closer salary—demonstrated sustained success in the role of closer. That is a precedent this panel should not set. —Nick Faleris
Before scrolling down to read the three-person panel’s decision, record your own decision here:
Burt Fendelman is an attorney with more than 45 years of experience, initially in corporate finance and securities laws working as inside counsel for several major securities brokerage firms. He has performed as an arbitrator for FINRA (Financial Industry Regulatory Authority), the American Arbitration Association, and currently as an arbitrator and mediator for the New York County Lawyers Association in fee dispute-related matters. He is presently a self-described “work in progress”, working with clients in areas related to art and antiques. He attended Washington University in St. Louis and NYU Graduate School of Tax Law, and he now lives in Manhattan.
Doris Lindbergh is a retired lawyer who is an arbitrator with FINRA (Financial Industry Regulatory Authority) and its predecessor forums, the National Association of Securities Dealers (NASD) and the New York Stock Exchange. She also arbitrates for the National Futures Association (NFA). She attended Washington University School of Law and has a Master of Arts from Fordham University. Her employment history includes stints at Wall Street investment banks and, most recently, the MTA New York City Transit Authority, but her most challenging assignment was raising a future Editor-in-Chief of Baseball Prospectus.
David Marcus is a retired lawyer and serves as an arbitrator with the Financial Advisory Regulatory Authority (FINRA). He lives in Metuchen, New Jersey. He attended Columbia College and Yale Law School, after which he served as an enforcement attorney with the SEC. His subsequent career includes working for the New York Stock Exchange heading its regulatory division, and working for several broker-dealers as a regulatory attorney or General Counsel.
3-0 in favor of the Club
On Thursday, we analyzed the arbitration case of Max Scherzer, whose ability to miss bats dominated the discussion. Between the two advocates, the word “strikeout” was used 16 times. Today we turned our attention to Jim Johnson, and “strikeout” didn’t surface until the Club’s rebuttal/summation (and even then only once). Only the strikeout pitcher's case persuaded the panel.
It’s tough to think of two other pitchers who performed at such a high level last season with such disparate styles. Scherzer led all qualified starters in strikeout rate. Johnson not only trailed all closers in strikeout rate—as a group, the other 17 pitchers with at least 20 saves recorded Ks more than twice as frequently—he trailed nearly all relievers in strikeout rate. Among relievers with at least 60 innings pitched, Johnson’s 5.4 strikeouts per nine innings ranked ahead of only one: Alex Burnett. Alex Burnett has a lifetime 4.61 ERA, with three career save opportunities. He blew all three.
Both Johnson and Scherzer do something a perfect pitcher wouldn’t: Johnson allows a lot of balls to be put in play, and Scherzer doesn’t get any grounders. Each one has the coveted trait the other lacks; put all of their attributes together, and they’d be the best of all possible pitchers, a flamethrowing control artist who racks up strikeouts and gets ground balls (also known as “Felix Hernandez”). But if Johnson’s success tells us anything, it’s that since so few pitchers come close to perfection, we shouldn’t dismiss or mislabel the ones with warts—even warts as unsightly as an almost laughably low strikeout rate. The Orioles bucked convention when they entrusted Johnson with save opportunities, and while pitch-to-contact types don’t normally set the sabermetric pulse to pounding, Johnson’s 2012 success is another data point in favor of the (perhaps overly simplistic) numbers nerd credo that “anyone can close.”
The outcome of the case hinged on whether Johnson can repeat his success; arguing on behalf of the Orioles, Nick contended that closers get paid for consistency, a rarer commodity than a single season of piling up saves. So is Johnson’s success sustainable?
Normally, we’d look at the low BABIP, K rate, and HR/FB rate and make dire predictions about the correction to come. But there is some research to suggest that groundball pitchers allow weaker contact on grounders than the typical pitcher, and the fact that Johnson has kept up the act for two seasons makes it seem slightly more compelling (even though the two seasons together total only 150-plus innings, which we’d have no problem labeling luck if it came in a single season of starting).
On the other hand, there’s his BABIP in 170 innings from 2006-2010: .300 on the nose, with a 3.65 ERA. Johnson has been a better pitcher since then, walking fewer batters and getting more grounders, but PECOTA still expects more of the same: a 3.66 ERA. That wouldn’t be good enough for another 94 percent save success rate, or to live up to the standard set by some of the other pitchers in the 50-saves club. But it’s not quite Kevin Gregg. —Ben Lindbergh
Bradford Doolittle is an author of Baseball Prospectus. Follow @bbdoolittle