Monday, July 27, 2015

Which League Increases Pitchers Salaries?

It was announced yesterday that the Royals have acquired Johnny Cueto; a necessary move if they hope to win the World Series this year (that's how the organization felt, and I'm of like opinion). And as an NL pitcher (Cueto played for the Reds) sheds the responsibility of batting in his new AL home, I question which league most impacts the salaries of pitchers.

I used to believe the NL made pitchers marginally cheaper for AL teams. The American League doesn't care if a pitcher can hit. But in the National League, a guy with 92 mph heat who carries a .350 OBP could be more valuable than a slightly harder slinger who strikes out the majority of his at-bats. Obviously the arm is the most important function of a pitcher's value, but batting is a consideration that NL personnel offices must pay attention to. That makes pitchers who can manufacture hits worth more, and those that can't worth less. AL teams then have the opportunity to swoop in and acquire those pitchers that can't hit, because they ascribe a different value to hitting (essentially, zero).

However, the pendulum swings the other way too: AL teams have an opportunity cost NL teams don't concern themselves with in the designated hitter. Using Kansas City as an example, the Royals acquired Kendrys Morales this year to be their designated hitter. Morales should never be playing first base for the Royals - while he's technically the backup to Eric Hosmer, expect a quick call-up from Omaha for Balbino Fuenmayor to play the position.

So what do the Royals pay for the privilege of having Morales on the roster, despite the fact he should never field the ball? His current deal is worth $17 million* over two years, and that's not at the high end of the spectrum. Alex Rodriguez obviously pulls in the most dough (due $21 million cash money in 2015), while David Ortiz will make $16 million, and Nelson Cruz and Nick Swisher will pull down $15 million this year. Only two teams (Houston and AnaheimLA) aren't paying at least $3 million for the position. Morales makes the median salary for DHs in the MLB at $8.5 million.

What does an NL team gain in avoiding the opportunity cost of carrying a designated hitter on the roster? The average NL payroll this year is $124 million (inflated by the insane spending of the Dodger), and the median payroll is $105 million (Milwaukee Brewers). That means if the Brewers were the Royals of the AL, 8.1% of their payroll would be going to Kendrys Morales. In this scenario, Ryan Braun is probably gone from Milwaukee. Unless they can develop one for cheap (doesn't happen), the Brewers would have to make a major decision in whether to be competitive by overpaying for a DH (I consider DH the most overpaid position in the league), or having a guy hitting .210 in the line up.

Or maybe not. If all NL teams are subject to the DH rule, the cost of pitchers would likely decrease. Cruz could command more money because 30 teams want him rather than 15, but all other positions would take a salary hit because NL teams would have less money to spend on non-DH positions. And that includes pitchers. Finite resources and all that jazz. I guess the takeaway is, blame the DH rule for inflated payrolls. And go Johnny Cueto.

*For consistency, all numbers should be in 2015 cash, not payroll hit.

No comments:

Post a Comment