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November 21, 2013

Fantasy Bargains and Busts

American League Pitchers

by Mike Gianella

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On Tuesday, I took a look back at American League hitters from a Rotisserie valuation standpoint. Today, I’ll tackle the pitchers in the Junior Circuit.

Before I get started, here is a brief explanation of the data you will see in the charts below.

The $ value column is based on my Rotisserie-style, 5x5 formulas. It doesn’t exactly match anything in Baseball Prospectus’ PFM, but is derived using a SGP valuation model (something the PFM does offer when it is up and running). The most important thing to know about the values is that for the 168 best perceived American League hitters and the 108 best perceived American pitchers on Opening Day 2013 the values add up to $3,120. This is important, as this is where the next two columns come into play.

Sal is the average salary of the players. This column is derived from the prices in CBS, LABR, and Tout Wars, the three expert leagues that convene before the regular season starts and (thank goodness for the purposes of my analysis) have three complete AL-only auctions with no frozen players from which to derive data. While I would love to use more leagues to derive each player’s average salary, most Rotisserie-style leagues are keeper oriented and average salary data isn’t useful for this exercise thanks to inflation.

The +/- column subtracts each player’s earnings from his salary and shows whether or not he gained or lost his fantasy owners money. Decimals aren’t displayed in the $ and Sal columns, which is how Robinson Cano can earn $31, get paid an average salary of $35 and lose five dollars.

MG is yours truly, your heroic pricer and proud prognosticator since 2013. Another good reason to look back is to see if the fantasy expert you are following is good at what he or she does. It is easy to make predictions in March and never revisit those predictions. But how good are we at what we do? The prices below are from my sixth and final installment of Rotisserie style bids from late March 2013. I have always taken others to task for their predictions; now it’s finally time for me to face the music.

2012 shows what the player earned in 2012. If you don’t like looking back, you might think that looking back an additional year is worthless, but as you’ll see an additional season’s worth of fantasy earnings data is sometimes very instructive.

Major League Baseball has plenty of lazy/false narratives, but fantasy baseball isn’t immune to this phenomenon. Lazy fantasy baseball narrative instructs us that pitchers are bad investments, that we shouldn’t spend big money on an ace, and that we do so at our own peril. But what does 2013’s tale of the tape say?

Table 1: Top 10 Salaries, AL Pitchers 2013

#

Player

$

Sal

+/-

CBS

LABR

Tout

MG

2012

1

Justin Verlander

$17

32

-15

34

31

31

33

$39

2

David Price

$19

28

-10

30

27

28

28

$36

3

Felix Hernandez

$24

25

-1

27

25

24

28

$31

4t

Yu Darvish

$30

25

5

25

25

24

23

$23

4t

Jered Weaver

$16

25

-9

26

24

24

24

$32

6

Max Scherzer

$35

23

12

23

25

21

23

$25

6

CC Sabathia

$8

22

-14

24

22

20

24

$28

8

Chris Sale

$26

21

5

21

20

21

19

$30

9

Matt Moore

$17

19

-2

18

21

19

18

$17

10

James Shields

$20

19

1

19

20

18

21

$29

Average

$21

24

-3

25

24

23

24

$29

These were the 10 most expensive pitchers in the CBS, LABR, and Tout Wars expert leagues (based on average salary). They failed to turn a profit, so the narrative presumably holds. Pitchers are bad investments, hitters are good investments, and don’t spend your money on pitching, right?

Well, maybe not so fast.

Table 2: Ten Most Expensive AL Hitters and Pitchers: 2009-2013

Year

$

Sal

+/-

ROI

2013 Hitter

$26

34

-8

76%

2012 Hitter

$24

35

-11

69%

2011 Hitter

$24

36

-12

67%

2010 Hitter

$25

35

-10

71%

2009 Hitter

$24

36

-12

67%

2013 Pitcher

$21

24

-3

88%

2012 Pitcher

$24

24

0

100%

2011 Pitcher

$26

24

+2

108%

2010 Pitcher

$19

25

-6

76%

2009 Pitcher

$24

26

-2

92%

This might be the most surprising data you will see from a fantasy baseball perspective this entire offseason. Not only do the best (perceived) pitchers bring their fantasy owners back a superior ROI (salary divided by earnings) they bring back the same amount of money per player more often than not, with the notable exception of 2010. The 2011 group of AL pitchers earned more money on average than any ten most expensive groups of hitters or pitchers in the last five years.

So why do owners chicken out on the top pitchers? Shouldn’t they be spending more on the best pitchers (or less on the best hitters)?

There are a few reasons this happens.

In standard 5x5 Rotisserie, hitters have four quantitative categories (home runs, runs, RBI, stolen bases) compared to three quantitative categories for pitchers (wins, saves, strikeouts). A hitter can only hurt you in batting average, while a pitcher can torpedo you in ERA and WHIP. As a result, while it’s fairly unlikely that a hitter will destroy your entire offense with a .200 batting average over 600 at-bats, it’s entirely possible that a pitcher’s 5.00 ERA and 1.400 WHIP over 200 innings will take a toll on your pitching.

And it is absolutely true: the worst pitchers sink far into negative earnings while the worst hitters (in only formats, at least) only lose $2-3 at the most. But the most expensive pitchers don’t lose big bucks like this. Since 2009, only five of the highest-paid pitchers have earned less than $10: Josh Beckett (-$2) and Javier Vazquez ($3) in 2010; Jon Lester ($9) and Mariano Rivera ($3) in 2012, and CC Sabathia ($8) last year. This is worse than it is for the hitters, who have only had one high priced hitter in that same time span fail to earn $10 (Jacoby Ellsbury, $2, 2010). But on the whole, this speaks to more predictability and less variability among top-tier pitchers than we might expect.

But even though the best pitchers aren’t unpredictable, the overall unpredictability of pitchers pushes their prices down as a group. In most leagues, fantasy owners spend 30-35% of their money on pitching versus 65-70% on hitting. In a league with $260 team/$3,120 league budgets, this means that each team spends $78-91 on pitching, with the lower number becoming the norm over the last few seasons. Rather than push all of that money toward the top, fantasy teams distribute the wealth evenly. The result is that even though fantasy aces are relatively predictable and should get higher salaries, the market robs them and gives them a pay cut.

Because of this 30-35% allocation, though, the top pitchers do earn less than their offensive counterparts, particularly in seasons like 2013 when the pitching is good.

Table 3: Top 10 Earners, AL Pitchers 2013

#

Player

$

Sal

+/-

CBS

LABR

Tout

MG

2012

1

Max Scherzer

$35

23

12

23

25

21

23

$25

2

Yu Darvish

$30

25

5

25

25

24

23

$23

3

Hisashi Iwakuma

$30

9

21

13

5

8

8

$15

4

Greg Holland

$27

16

12

13

16

18

15

$15

5

Joe Nathan

$26

17

9

13

18

19

17

$21

6

Koji Uehara

$26

1

25

1

1

1

$9

7

Chris Sale

$26

21

5

21

20

21

19

$30

8

Anibal Sanchez

$25

13

12

12

13

14

11

$13

9

Felix Hernandez

$24

25

-1

27

25

24

28

$31

10

Bartolo Colon

$23

1

22

1

1

2

1

$15

Average

$27

15

12

15

15

15

15

$20

2013 was the first time since 2010 that the 10 best pitchers in the American League failed to earn $30 or more on average. A superficial analysis would indicate that this is because earned run averages and WHIPs have improved, thus pushing earnings on the top pitchers down. But a deeper look reveals that while there have been some minor fluctuations league ERA hasn’t changed much since 2010. Instead, two things have happened. Strikeout rates league wide continue to climb and – last year at least – the top pitchers were more predictable.

The earning formulas in these charts are derived from the auction populations of CBS, LABR, and Tout Wars and last year a better crop of pitchers were purchased. The average American League pitcher had a 3.87 ERA last year… but the average pitcher purchased in an AL-only auction had a 3.78 ERA. This sounds like a trivial difference, but in terms of valuation it is not.

The same logic applies to prior years as well. 2011’s average American League pitcher had a 3.94 ERA… but so did the average pitcher purchased in an AL-only fantasy auction. The result is that the 2013 version of Scherzer was worth less in the context of 2013 than he would have been in 2011. Looking at this another way, the 2011 version of Justin Verlander still would have been a stud in 2013, just not quite the $46 earner he was in 2011.

For the record, Scherzer’s 2013 would have been worth $38 in 2011’s AL context, while Verlander’s 2011 would have been worth $44 in 2013.

Getting back to what happened last year, pitchers like Colon and Uehara are why owners philosophically don’t like paying $30+ for any pitcher. It is extremely unlikely you are going to purchase a $1-3 hitter and land one of the best hitters in baseball. It is still a long shot you will be able to do this with a pitcher, but it is entirely possible and it happens nearly every year. And while the bargains aren’t always that great, there are some pretty nice bargains in the next table.

Table 4: Top 10 Profits, AL Pitchers 2013

#

Player

$

Sal

+/-

CBS

LABR

Tout

MG

2012

1

Koji Uehara

$26

1

25

1

1

1

$9

2

Bartolo Colon

$23

1

22

1

1

2

1

$15

3

Hisashi Iwakuma

$30

9

21

13

5

8

8

$15

4

Justin Masterson

$20

3

17

3

2

3

4

$7

5

John Lackey

$17

1

16

1

1

1

1

6

Ervin Santana

$19

4

15

4

3

4

3

$9

7

Ubaldo Jimenez

$16

2

15

3

1

1

1

$0

8

Joaquin Benoit

$18

3

15

1

5

3

9

$11

9

Chris Tillman

$18

4

14

4

4

5

6

$15

10

Clay Buchholz

$20

7

14

6

6

8

7

$11

Average

$21

4

17

4

3

4

4

$9

No one expected these guys to come forward and have big years in 2013: not the experts in CBS, LABR, or Tout Wars, and certainly not me. Despite the volatility in pitching from season to season, we all generally had the same idea on what we wanted to bet on these guys last year. Iwakuma was the only pitcher with any kind of significant price difference; everyone else was close to the same bid price on every other one of these pitchers.

Just like with the hitters, the best predictor of what would happen in 2013 was 2012. If you simply walked into an auction with 2012 as your barometer, you would have outbid the expert market and me on all of these pitchers except for Lackey and Jimenez.

The “last year” approach is a mixed bag, though. It sounds great when you’re looking at the success stories; it doesn’t work so well when you’re sifting through the detritus of last year’s failures and saying “why God, why” to yourself as you stare morosely at the ruins of your ancestral home.

Table 5: Top 10 Losses, AL Pitchers 2013

#

Player

$

Sal

+/-

CBS

LABR

Tout

MG

2012

1

Brandon Morrow

-$2

19

-20

18

19

19

21

$19

2

Josh Johnson

-$5

14

-19

16

13

12

16

$11

3

Brett Anderson

-$2

17

-18

19

17

14

13

$7

4

Justin Verlander

$17

32

-15

34

31

31

33

$39

5

CC Sabathia

$8

22

-14

24

22

20

24

$28

6

Joel Hanrahan

-$1

13

-14

12

13

15

13

$17

7

Vance Worley

-$8

4

-12

6

3

3

5

$2

8

Lucas Harrell

-$10

2

-12

3

1

2

2

$9

9

Matt Harrison

-$2

9

-11

8

8

11

9

$23

10

Joe Blanton

-$8

2

-10

1

3

1

4

$8

Average

-$1

13

-15

14

13

13

14

$16

2012 had a more robust outlook than the expert market and my bid prices on Verlander, Sabathia, Hanrahan, Harrell, Blanton, and Harrison.

Pitchers across the board aren’t going to get paid what they were paid the previous year because the worst pitchers are typically weeded out. They retire, they don’t make it back to the majors for another lap, or they get buried in the minors or in a big league bullpen. Whatever the reason or reasons, the worst pitchers aren’t usually invited back for another season.

But this is why we slam the brakes on pitching spending overall. Eight of the 10 pitchers in this chart not only turn a loss against their average salary, they lose money for their owners in any context. Verlander’s season was disappointing, but even Verlander earned $17 in 2013.

Verlander’s $15 loss would seem to indicate that my theory is wrong and that you should shy away from expensive pitchers, but I believe it reinforces my theory. We don’t spend enough on our aces. If $17 is your worst-case scenario for Verlander, then you’re still buying the 26th-best pitcher in the American League. A $15 loss on Verlander stinks, but it’s no worse than some of the losses on the 10 most expensive American League hitters, as I showed on Tuesday. I’m not suggesting spending a fortune on the best AL pitchers. But it might be time to consider shedding the incredible pessimism we have toward pitchers on the whole and start opening our wallets just a little bit more for the guys at the top of the heap.

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

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