Friday, January 29, 2010

Saving Buchholz saved money long-term

(A discussion broken out of the Josh Beckett contract post.)

As it turned out, the Red Sox didn't lose much by leaving Clay Buchholz in the minor leagues until late July. Even as well as he pitched down the stretch, it's almost inconceivable that he alone could have made up the eight-win difference between the Red Sox and the Yankees in the regular-season standings -- and thus have changed the outcome of the season in any meaningful way.

And by leaving Buchholz in the minor leagues until late July, the Red Sox probably saved themselves $3 million during the 2011 season and maybe even more beyond that.

Buchholz, of course, is subject to the same salary structure that limits the earning power of younger players in both leagues. Until a player has the equivalent of three full seasons of service time in the major leagues, his salary can be set by his team. That salary normally is close to the major-league minimum, which will be $400,000 during the 2010 season.

Once a player has three full seasons of service time, he can file for salary arbitration -- and with that enjoy increased leverage depending on what an arbitrator might be expected to award him based on his service time and his achievement to date. Arbitration salaries tend to increase over time even if players' production does not: Jeremy Hermida earned $2.25 million last season and will earn $3.345 million next season despite lackluster production, the main reason the Florida Marlins traded him to the Red Sox for next to nothing.

There's one exception to the rule: Super Twos are players who have close to -- but not quite -- three years of service time in the major leagues. To qualify, a player must have two seasons plus 86 days of service time and rank among the top 17 percent of players with between two and three seasons of service time.

One season is defined as 172 days of service time. The cutoff, according to Cot's Baseball Contracts, tends to fall somewhere around two years and 130 days, but it varies year to year.

Super Twos are eligible for arbitration as though they'd completed their third full season -- and, as you can imagine, can cost their respective teams some money. Tim Lincecum might be the best example: The Giants called him up in early May in 2007 and, of course, never sent him back. The righty finished last season with two seasons plus 148 days of service time and thus is eligible for arbitration as a Super Two.

Had the Giants waited another three weeks to call Lincecum up to the major leagues, they'd be paying him less than $1 million in 2011. Instead, though, the two-time Cy Young Award winner filed with an arbitrator for $13 million.

(This is why it's become so trendy for teams to call up their top prospects no earlier than Memorial Day -- and sometimes later. The Atlanta Braves and Baltimore Orioles did it last season with Tommy Hanson and Matt Wieters, respectively. The Washington Nationals likely will do the same this season with Stephen Strasburg.)

Here's where Buchholz becomes relevant: The 25-year-old righty finished last season with one year and 59 days of major-league service time. Even if he spends the entire 2010 season in the major leagues, it's impossible for him to finish with more than two years and 59 days of major-league service time -- well below the Super Two plateau.

Had he started last season in the major leagues, he would have lined himself up for Super Two status in the 2011 season. Another 70 days of major-league service time -- about 2 1/2 months -- would have been enough to get him within striking range of arbitration eligibility.

Instead, though, Buchholz will be paid a salary close to the major-league minimum both in 2010 and 2011 before his service-time clock starts to kick in.

Lincecum, of course, is a special case. Barring a quantum leap forward in performance, Buchholz isn't going to see that type of money. But here's a look at several more similar pitchers eligible for arbitration for the first time and what they'll earn next season -- or, at least, what they and their team will take to the arbitration table should they fail to reach a settlement:

Brian Bannister: $2.3 million
Chad Billingsley: $3.85 million
John Danks: $3.45 million
Matt Garza: $3.35 million*
Jeremy Guthrie: $2.3-3.625 million
Joe Saunders: $3.6-3.85 million
Jered Weaver: $4.265 million
*Super Two

Beckett, for the sake of comparison, agreed to a deal worth $2.4 million in his first arbitration-eligible season and $4.325 million in his second arbitration-eligible season. Before he could get to arbitration again, he signed an extension that paid him $6 million in what would have been his third arbitration-eligible season.

Had the Red Sox missed the playoffs by a game or two, games in which Buchholz could have made a difference in April and May, that $3 million or so wouldn't look like much.

Just ask the Yankees, though, what a difference $3 million can make.

1 comment:

Ross said...

I had never heard of this Super Two rule. Cool stuff.