Most baseball fans with an interest in baseball arbitration are familiar with the 40-60-80 rule. The argument is that on average, a player with between 3 and 4 years’ service time will receive 40% of his value, between 4 and 5 years will receive 60% and between 5 and 6 years will receive roughly 80% of his value. The problem is that this rule was actually created in 2007 and therefore is nearly a decade old. Does it still have any validity?
Cot’s Baseball Contracts has developed a spreadsheet with the service time of all players from 2007-2015. By combining that spreadsheet with salary information from the Lehman Database, free agent win costs via Lewie Pollis and RA9_WAR values from Fangraphs, it is possible to determine the cost per win for …show more content…
This could possibly be because teams are worried about signing veteran arms due to attrition. It’s almost certainly due in part to the fact that the arbitration process overvalues relievers. In any event, teams pay only a fraction of the cost for a team-controlled position player whether or not they sign an extension or go through arbitration. It isn’t the case for pitchers though. Once pitchers go through arbitration for their third season, they’re roughly earning market …show more content…
For example, Bud Norris isn’t a particularly good starter but earned $8.8M in his last year of arbitration. The value of tendering a starting pitcher in that third year isn’t due to the cost savings but the fact that he only needs to be signed for one year. The difference between Jimenez and Norris is that Jimenez was signed as a free agent and therefore the Orioles needed to offer him four years (and still have him on their payroll) while the Orioles could offer Norris a one year term and cut him when he failed to