Friday, January 23, 2009

Ryan Howard's Arbitration Case

I have been frequenting recently, which is a great site for lots of cool baseball data and analysis. I recommend it for all the baseball stat nerds out there.

Recently Ryan Howard, the Phillies first base slugger, is in the news for having the biggest difference between arbitration figures submitted. Howard is asking for 18 million, while the Phillies submitted a figure of 14 million. Last year, in his first arbitration year, Howard took home a record 10 million for actually taking his case to arbitration judges and winning.

So in terms of arbitration, major league players have three arbitration years. Howard is in his 2nd year. According to Fangraphs, estimates on what players get are 40% of their free market value their 1st year, 60% their 2nd year, and 80% their 3rd year. So Howard should be getting about 60 percent of his free market value.

The Phillies with their 14 million dollar offer, think Howard is worth 19.6 million/year.
Howard with his 18 million dollar suggestion, thinks he's worth 25.2 million/year.

So basically Howard thinks he deserves the 2nd highest contract in league after ARod, who makes 27.5 million/year.

Looking at Fangraphs data, here are what the top Phillies were "worth" based on last year's production:

1. Chase Utley: 35.7 million
2. Jimmy Rollins: 23.1 million
3. Jayson Werth: 21.3 million
4. Cole Hamels: 20.6 million
5. Shane Victarino: 17.0 million
6. Ryan Howard: 14.1 million

The stats take into account his defense, replacement level (1b) performance, OPS (which went down .100 this year), and many other measures.

Howard has regressed the past three years, but considering his great 2nd half he will hopefully preform better next year. The Phils take that into account giving him a "19.6 million/year" deal (5.5 million more than he "made" last year).

Yes - Howard wants the 2nd "highest" salary in the major leagues, when he was potentially the 6th most valuable Philly last year.

It will be interesting to see what happens if this goes to arbitration. Do these arbitration judges think like MVP voters (Howard finished 2nd in NL MVP voting) or do they take into account statistics other than HR and RBI? I think either way Howard will lose his case.

A good point (by a fangraphs contributor) was made that needs to be considered.

He basically believes that Howard cannot be considered like a typical arbitration case, which would normally fall under the 40/60/80 rule. The problem with Howard is that the Phillies took awhile (age 26?) in calling him up (since they had Thome). Assuming the arbitration judges aren't ignorant like MVP voters, they probably rewarded Howard 10 million last year because he really should be in his 3rd year of arbitration (not his 2nd). I can understand that logic a bit more. If you make that assumption, Howard only thinks he's worth 21.6 million, which is a bit high but more understandable. In the above article, the fangraphs author used 2009 projections to calculate that Howard would be worth approximately 15 million (assuming he's in his "third" year of arb.)

So it could go either way I guess, but I still don't think he's worth the money.


Demers said...

And beyond the stats, this is how valuable Utley is.

Demers said...

Darnit why didn't that get made into a link.