The arbitration clock and how teams use it to screw themselves

So Mike Lamb is back for 2009. Bill Hall will also be back, and Casey McGehee is also in the mix. All are considered primarily third basemen (although Hall is more versatile than Lamb or McGehee), and all will likely compete for a spot in a third base platoon in spring training, where the winners will likely hold the spot warm for Mat Gamel.

Gamel is one of three Brewer position player prospects (including Alcides Escobar and Angel Salome) who are considered pretty close to major league ready. Whether they are or they aren't actually ready is debatable. In that debate a variety of factors will come up, though, and one of them will usually be the player's service time. It shouldn't, and here's why:

Step 1: The arbitration process

For the first three seasons of a major leaguer's career, his salary is determined entirely by his team, and his contract can be renewed by the team if the two sides cannot reach an agreement on his salary (this happened to Prince Fielder in 2008). After the third season, the player becomes eligible for salary arbitration, which usually creates a large increase in salary. After three seasons of arbitration, the player is eligible for free agency.

The exception to the three-year rule listed above is a "Super 2" player. A player who has only played two full major league seasons and part of a third can qualify for arbitration if he:
  • Played in the majors for at least 86 days in the previous season
  • Is among the top 17 percent for cumulative playing time in the majors amongst others with at least 2 years, but less than 3 years experience
(via Wikipedia)

So a player called up in April of his first season could qualify for arbitration after his third season, despite not having played three full seasons. The rule protects a player from having a team hold him off the major league roster for one day to delay him from reaching arbitration.

So, a team can prevent a player from being arbitration eligible for one year by keeping them in the minors on Opening Day and not calling them up until after 17% of that season's in-season callup rookies have been added to their respective rosters. Feel free to skip this if you've already got it, but if you don't, here's an example:

Player A is on an MLB roster on Opening Day 2009, as a rookie.
Player B is called up on April 15, 2009.
Player C is called up on June 1, 2009.

Assuming all three players are not sent back down:

Player A will have three years of ML service time following the 2011 season, and will qualify for arbitration for 2012 and free agency for 2015.
Player B will likely qualify for abritration as a Super 2 following the 2011 season, and will qualify for free agency for the 2015 season.
Player C will not qualify for arbitration until completing his third full season in 2012, and will not be a free agent until the end of the 2015 season.

Step 2: Why it's not a good idea

The simplest answer is this one: If you have a player who is big league ready and a spot on your roster where they can consistently play and improve your chances of winning, you're hurting your chances of winning by keeping them in the minors.

Furthermore, a spot on the Opening Day roster in 2009 is no guarantee of a big payday in arbitration in 2012. Beware of counting your chickens before they've hatched, because any of the following could still happen:
  • The player could underperform and be sent back to the minors.
  • The player could have a career-altering injury that ends their big league time or dramatically alters their effectiveness.
  • The player could be traded and their arbitration clock could become someone else's problem.
  • The player could just turn out to be a disappointment, meaning their value when they hit arbitration won't be that high anyway.
  • If free agency is what you're afraid of, the player could sign a long-term deal that eliminates the cost uncertainty of arbitration or the possibility of free agency.
Here's the simplest economics lesson I've ever delivered: Presented with the possibility of improvement now or an unknown amount of possible financial gain six years from now, you should almost always choose the current option.

Step 3: The cautionary tale

In 2007, Ryan Braun was knocking on the door of the big leagues, but was left off the Opening Day roster. In his place, Craig Counsell and Tony Graffanino split time at third base, and posted the following lines:

Counsell: .231/.360/.308
Graffanino: .187/.261/.234
Combined: .207/.311/.268

On May 25, Braun was finally called up, and posted the following line over 113 games: .324/.370/.634. If you don't want to do the math for yourself, he outperformed Counsell and Graffanino by 431 OPS points.

Of course, we'd be missing something if we didn't factor in Braun's defense at third, which was abysmal at best. Braun cost the Brewers an estimated 37 runs in the field during his 113 games. Taking the average, let's assume he would have cost the Brewers an additional 15 runs in the field if he had played third base all season.

Using the Baseball Musings Lineup Analysis Tool, we can project that a Brewer lineup featuring Braun for the entire season would have scored a little over 5.2 runs per game. With Counsellino in his place, they projected for a little over 4.7. If we call the difference .5, then leaving Braun in AAA cost the Brewers 23.5 runs at the plate. Taking the difference, missing two months of Braun cost the Brewers 8.5 runs, or roughly .85 wins. The Brewers only missed the playoffs by two games, so the difference is significant.

Conclusion

None of the trio of Gamel, Escobar and Salome will likely have the 2009 impact that Ryan Braun could have had in 2007, even given a full season of playing time. And, for that matter, the trio of Hall, Lamb and McGehee would be hard pressed to be worse than Counsell and Graffanino were offensively. But with that said, if the Brewers have prospects that are ready and the team would be better off by having them on the roster, then they should be here and the team can cross 2012's arbitration bridge when they come to it.
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