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March 26, 2013

Transaction Analysis

Kyle Lohse’s Long, Strange Trip Leads to Milwaukee

by Ben Lindbergh

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MILWAUKEE BREWERS
Team Audit | Player Cards | Depth Chart

Signed RHP Kyle Lohse to a three-year, $33 million contract. [3/25]

Except for the few months before he agreed to a three-year, $33 million contract with the Brewers, Kyle Lohse has never been more interesting than he is right now. All offseason, we’ve wondered and written about when, where, and for how much he would sign. Now that we know, we can dissect the signing, estimating its on-field impact and assessing the terms. The story still has your attention—to get here, you had to click—but it’s just not the same. In the same way that a new car loses half its resale value as soon as you drive it off the lot, Lohse lost half his value to baseball writers as soon as he signed his new contract.

Over the last seven seasons, Lohse was traded twice; learned to throw a two-seam fastball; signed a four-year, $41 extension with St. Louis; had forearm surgery; fathered two children; won a World Series, and totally transformed his goatee:*

Yet at no point leading up to or immediately after those major events in the life of Kyle Lohse was he on even half as many minds as he has been this winter.

Expressed another way, MLBTradeRumors posts tagged “Kyle Lohse” between the end of last season and now fill nine internet pages. MLBTradeRumors posts tagged “Kyle Lohse” between December 2005 and the end of last season fill eight internet pages. If the newest Brewer goes back to being the league-average arm he has been, on the whole, through almost 2000 big-league innings, we’ll all have a hard time remembering why the heck we spent all winter treating Lohse like Truman Burbank.

Of course, the Kyle Lohse offseason saga was never really about Kyle Lohse, which is why we cared so much. Lohse’s free agency was a referendum on both the current CBA’s draft-pick compensation system and the industry’s understanding of the aspects of player performance that contribute to team wins. Even before Lohse received and declined a qualifying offer from the Cardinals, saddling his suitors with the potential price of a future first-round pick in the 2013 amateur draft, we were talking about whether Lohse’s league-leading winning percentage and sub-3.00 ERA would blind teams to his lackluster track record and pedestrian strikeout rate. The consensus was that some clueless club would fall in love with the superficial stats and buy high, committing way too much money over too many years for a 34-year-old whose best days were (immediately) behind him.

After the qualifying offer, though, the draft pick was mentioned more than Lohse’s shortcomings—which was, of course, exactly what Scott Boras wanted. Now it's almost universally accepted that Lohse's late signing can be traced directly to the pick. Just to cite the first Google result I got, the Sporting News story on the signing says: “Because of the new draft-pick compensation rules, Lohse did not find employment until a week before opening day.” It’s not quite as simple as that, though. In fact, in Lohse’s case, the draft-pick compensation, while relevant, was more of a distraction from the real story than the story itself.

The second-to-last remaining free agent to receive (and deny) a qualifying offer, Michael Bourn, signed almost six weeks ago. Josh Hamilton signed, for much more money than Lohse, 10 days before Christmas; B.J. Upton inked even earlier. Granted, of the nine members of the first qualifying offer class, three re-signed with their old teams (who didn’t have to surrender picks) and two signed with the Indians, whose first-round pick was protected. Returning to his old team wasn’t an option for Lohse, thanks to the Cardinals’ surplus of young, cost-controlled starters. But there were plenty of places he could have gone, had the price been right (including Cleveland, whose new fifth starter had a nice spring but hasn’t pitched well since 2008). The draft-pick compensation system didn’t help any of the qualifying offer free agents find work, but Lohse was the only one who remained unsigned when pitchers and catchers reported to camp, let alone in late March.

What the “Kyle Lohse, free agent victim” narrative neglects to mention is that Boras and Lohse were looking for a lot more money than Lohse is worth, and that the market supported. Boras reportedly pegged the price for the pitcher at $60 million over four years. Imagine a world in which free agent compensation weren’t tied to the draft. In that world (which we might see as soon as the next CBA), would you give Lohse $60 million? For that matter, would you give Lohse $60 million in a world where you got a free first-round pick for signing him?

You would if you could count on him to repeat 2012 for the next four years, but we know that’s not likely: the 33-year-old Lohse’s innings total and PWARP last season were career highs, and his ERA and walk rate were career lows. Before Lohse, only 19 starters whose careers began in 1950 or later had posted career-high PWARPs at age 33. Those starters, ranging from Whitey Ford to Ryan Vogelsong, averaged 3.3 PWARP in their age-33 seasons (Lohse posted a 2.5). In their age-34 seasons, those same starters averaged 1.5 PWARP—and, given the way the aging curve works, got worse as a group from there. Even without bringing up BABIP (Lohse’s was low), a peak as late as Lohse’s is more often a last gasp than the start of a new, productive plateau.

Under Cardinals pitching coach Dave Duncan and his successor Derek Lilliquist, Lohse made real strides as a pitcher, expanding and improving his arsenal (particularly the aforementioned two-seamer and a slider) and perfecting his control. He gets ahead in the count and stays there about as often as anyone. Normally, I’d caution that a Molina might have had something to do with that—Yadier was the best framing catcher besides his older brother last season, and you’d think that having that help behind the plate might disproportionately benefit a guy like Lohse, who relies on command, control, and favorable calls more so than swinging strikes. But if you have to leave a Molina, Milwaukee is where you want to go: Brewers backstops Jonathan Lucroy and Martin Maldonado ranked fifth and seventh, respectively, in framing runs saved last season, so Lohse’s batterymates will continue to be well suited to someone without strikeout stuff. The rest of his defense can’t say the same: the Brewers ranked last among non-Rockies teams in defensive efficiency in 2012, which makes them an especially bad fit for a pitcher who allows a lot of balls in play. Fortunately for Lohse, a fly-ball pitcher, most of the ugly is in the infield: thanks mostly to Carlos Gomez in center, the Brewers’ outfield alignment projects to be nine runs above average in the field, edging out Jason Heyward and the Uptons for the distinction of best in the NL.

On the other hand, we have the 2012 home run factors for Lohse’s former and future ballparks:

Stadium

RHB HR Factor

LHB HR Factor

Busch Stadium

90

105

Miller Park

125

142

So expect more of Lohse’s fly balls to leave the ballpark. Still, Lohse isn’t necessarily destined to go the way of former Duncan protégé Joel Pineiro, whose gains lasted for only a year after leaving St. Louis (not to mention another former Cardinal who went to Milwaukee with disastrous results, Jeff Suppan). But he’s been here before: Lohse got a bigger contract than this one from the Cardinals after 2008, a season in which he posted a shiny winning percentage and a then-career-low ERA and walk rate. (Sound familiar?) Since then, he’s had as many lousy seasons as he has good ones; his ERA+ from 2009-12 was 98, almost indistinguishable from his career mark (97). And he signed that pact as a much younger man. League-average innings eaters have value, but not as much as Boras’ asking price would indicate. Plus, Lohse isn’t exactly Mark Buehrle in the durability department, and even in light of his recent refinements, expecting a starter who was just below league average from ages 22-33 to top that from 34-36 (or 37) is going to be a bad bet most times you make it.

So yes, if not for the cost of the draft pick, Lohse almost certainly would have signed sooner, and for more money. But how much sooner, and for how much more? Not as much as Boras would have you believe. In 2009, Sky Andrecheck—who now works for the same Indians organization that keeps surrendering its picks—calculated the average on-field value produced by each draft slot. He found that picks in the late-first-round range went on to produce roughly 4-5 wins above replacement. But that’s lifetime production, not production during years of team control, and it doesn’t start to pay out for at least a few years. That’s not a star; that’s Jay Gibbons, or Marcus Thames, or Kazuo Matsui. The potential for a cost-controlled bench bat like one of those three is certainly worth something, but not the nearly $30 million between what Lohse and Boras wanted and what they received.

If you’re still inclined to buy into Boras’ sob story about stolen youth and kidnapped children, remember that this free agent class handed us a tailor-made test case for the viability of Lohse’s initial ask, in the form of a former Boras client. Edwin Jackson, from a career performance standpoint, is a pretty good proxy for Lohse. (Lohse’s career ERA/FIP/FRA are 4.45/4.36/4.94, compared to Jackson’s 4.40/4.29/4.76.) But Jackson is five years younger, has more perceived upside from a “stuff” perspective, and didn’t cost a draft pick. And even he didn’t get four years and $60 million.

Lohse is coming off a season that would have made him a richer man if the dollar values of the present had been coupled with the ignorance of analytics and aging curves of the past. But they weren’t. Teams were too smart to pay the amount Boras demanded earlier in the winter—and reportedly continued to demand, right up until the Brewers broke through the bluster. The Lohse story reminded us that draft-pick compensation matters, yes, but it also taught us that the winner’s curse doesn’t always bail out Boras. Sometimes the free market sets a reasonable price.

And it is a pretty reasonable price. The protracted negotiations couldn’t have been good for Lohse’s blood pressure or his pre-season preparations—he’s been throwing bullpen sessions and simulated games against college hitters, and should be ready to start soon after Opening Day—but the money and years ended up in a range that even most skeptical sabermetricians can agree is about the going rate for a pitcher of Lohse’s pedigree. (You’d think Lohse might have kept himself fresh by pitching in the World Baseball Classic, but if the last impression you left on teams was a 16-3 record and a 2.86 ERA, it’s probably best not to run the risk of suffering a few shaky starts when you’re still unsigned.) Boras can’t add the right-hander’s contract to his long list of triumphs, but it’s not an embarrassment, either.

“We’re a better ball club today than we were yesterday,” Brewers GM Doug Melvin said after making the move. That’s true, although that’s also sort of the minimum standard for a win-now contract to meet; for three years and $33 million, you’d better be better, especially in a small market like Milwaukee where money is tight. Melvin and owner Mark Attanasio have been insisting all offseason that they’d keep their payroll at $80 million or below; this move might push it above, but only barely, since the Brewers will pay Lohse only $4 million this season, with $7 million deferred to 2016-18. Brewers beat writer Tom Haudricourt wrote that Attanasio was likely “a driving force in the decision to sign Lohse.” We’ve seen Boras play the “appeal to ownership” card to great effect in the past, and it looks like he's employed the tactic successfully again.

A few days before Lohse signed, Boras said that the demand for his client would be “created by attrition when teams learn that their younger pitching can’t meet their need.” Yovani Gallardo and Marco Estrada have been fairly effective for the Brewers this spring, but after that, it’s been ugly. Mike Fiers has allowed 17 runs in 19 1/3 innings, Mark Rogers has allowed 12 runs in nine innings, and Chris Narveson has a 5.50 ERA in his five starts. Wily Peralta, whom this move appears to push out of the rotation, has a 5.74 ERA with eight strikeouts, four walks, and an air out for every ground out—out of character for a guy who usually gets groundballs—in 15 2/3 innings. Sure, spring stats are meaningless, and hitters start out ahead, but it has to be unsettling to see the majority of your young rotation struggle to that extent. Lohse supplies a comforting veteran presence whose results are a little less variable.

So the Lohse signing isn’t really an overpay, and it does make the Brewers a bit better in the short term, giving them time to sort out the mess in the rest of their rotation. However, it’s hard to see much upside in the move. The Brewers finished last season on a 36-23 run, but they don’t look like anything better than a borderline contender in 2013. The win or two that Lohse might be worth over their other available options probably won’t help them catch the Reds or the Cardinals, and they’ll lose their 17th pick (plus the bonus pool money that goes with it). Worse still, the compensation pick goes to the Cardinals, who already have a player-development powerhouse in place. Milwaukee has a subpar farm system, and losing this pick will make it a little more difficult to build back up again. Signing Lohse is a win-now move by a team without a great chance to do that, but considering where the organization stands, even the low-double-digit chance the Playoff Odds allow the Brewers this season could be the best they’ll have for a while.

*Bonus quiz question: Which is Kyle Lohse, and which is Mona Lisa?

 

 

Thanks to Tim Collins and Ryan Lind for research assistance.

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

Related Content:  Milwaukee Brewers,  Kyle Lohse,  Scott Boras

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