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Exploiting Inefficiencies In The Pitching Market

We haven't seen any numbers come out of the Mets' front office, but the consensus seems to be that they'll probably have a 2010 payroll comparable to that of the 2009 team, which is to say something in the $140-150 million range. I don't know why the consensus says that. I guess somebody inferred that since the Mets aren't in terrible shape financially (thanks to being one of the few investors to actually make money with Bernie Madoff), coupled with no apparent inclination to rival the Yankees' expenditures, they will probably just look to maintain the status quo. With a few contracts coming off the books, including those of Carlos Delgado, Billy Wagner, J.J. Putz, and Brian Schneider, rough estimates give the Mets around $30 million or so to spend this offseason. Those departing players are leaving holes, though, so that money has to be spread around to patch the roof, fix the shutters, put in a new garage door, and if there's money left over perhaps spring for those fancy pavers for the driveway.

The Mets finished 12th in the National League in both runs scored and runs allowed, so a cursory glance doesn't make clear whether the Mets should allocate more money to pitching or to hitting. Injuries tell part of the story, but pitchers and hitters alike lost significant playing time to the disabled list in 2009. The big ticket item is Matt Holliday, who should command $18 million or so all by himself. If the Mets dipped their feet in that pool they wouldn't have a lot of money left over for everything else. There's no obvious stud on the starting pitching market (a la CC Sabathia last year) but there are at least a fair number of interesting names to choose from. Here's a quick snapshot of the top eight available starters. I've included each pitcher's 2010 seasonal age, his 2007-2009 WAR, his mean WAR for those years using a 5-3-1 weighting, plus an approximate value for that mean using $4.5 million per win.

Num Player 2010 Age 2009 WAR 2008 WAR 2007 WAR 5-3-1 WAR Avg. Est. $ Value
1 Andy Pettitte 38 3.3 4.4 4.5 3.8 17.1
2 John Lackey 31 3.9 2 5.6 3.5 15.6
3 Joel Pineiro 31 4.8 0.9 0.6 3.0 13.7
4 Jason Marquis 31 3.8 1.8 1.7 2.9 13.1
5 Randy Wolf 33 3 2 1.7 2.5 11.4
6 Rich Harden 28 1.8 4.4 0.4 2.5 11.3
7 Jon Garland 30 2.4 1.9 3.6 2.4 10.7
8 Doug Davis 34 1.7 2.4 2.4 2.0 9.1

What's surprising to me is how decent some of these guys are. Really, they're all decent or better. It's easy to get hung up on the sexy names out there, but Jon Garland has been worth two-plus wins consistently throughout his career, and for a guy who isn't likely to get much in terms of money or years you could do a whole lot worse than him in the back of your rotation. I don't love the guy, but a two-year deal worth $5-6 million annually looks like a pretty good investment.

I like Rich Harden a lot. We all love his strikeouts and his age, right? But at some point you have to wonder whether he's the sort of pitcher worth gambling on, given his injury history and high walk rates. He probably has the highest upside of the group here, but it's not clear that he's a smarter investment than, say, Jason Marquis, who isn't really appealing to me at all but has still managed to be reasonably productive. High upside can be very enticing, but it's quite possible that three average seasons might be preferable to one poor season, one decent season, and one great season. In other words, there might be something to be said about consistency.

Let's not get carried away with the "C" word just yet. Consistency has no gravitas without some context to which it can be applied. A player who middles along at replacement level every year can be said to be consistent, but that doesn't make him in any way desirable. A player who alternates terrific and average years is fairly inconsistent, but cumulatively he's still well above average and therefore has plenty of value. A guy like Garland, who does little to distinguish himself -- but also little to embarrass himself -- is a valuable commodity, and his value is probably going to exceed his cost.

Garland and Marquis aren't great pitchers, but they're not bad pitchers, either. Livan Hernandez is a bad pitcher. Oliver Perez appears to be a bad pitcher. John Maine isn't a great pitcher, and he might never be especially good or healthy again. It's not always necessary to get the best players available, and part of what makes the smart teams so smart is that they maximize the investments they make, regularly seeing significant returns on those investments.

The Mets could go out and spend $16 million a year on John Lackey, and if he stays healthy they might actually get $16 million worth of pitcher once or twice over the life of the contract. That's not a bad investment: you got what you paid for. But if there are market inefficiencies that disproportionately value something -- say strikeouts or Cy Young votes -- the teams that exploit those inefficiencies in the other direction by identifying traits that are undervalued -- say a string of merely above-average seasons or good health -- can make up a lot of ground by taking on value in excess of their costs. That's one thing the Mets fail to do almost without exception*, and it's clearly an area of their roster and payroll management that could use some attention sooner rather than later.

* Buying out the arbitration and early free agent years for David Wright and Jose Reyes were shrewd moves