Fantasy Freestyle: The Rising Cost of Pitching

Last week, CBS Sports held their NL-only and AL-only expert league auctions (I participated in the NL auction while Paul Sporer represented Baseball Prospectus in the AL auction). While the League of Alternate Baseball Reality (LABR) and Tout Wars are better-known expert leagues, CBS has been running their expert leagues in an auction format since 2008. Questions of stature or importance aside, these auctions happen before the LABR and Tout Wars auctions do so they give us the opportunity to look at some early spending trends. Many home leagues are influenced to at least some degree by how owners spend in the expert leagues.

The first thing I noticed is that pitching prices are up this year.

Table 1: Hitting/Pitching Dollar Allocation 2013 vs. 2014

For the first few years of its existence, CBS was a poor barometer of how the other expert leagues would play out. The CBS experts typically paid significantly more for the best players, which led to a high number of bargains and cheap players at the end of the auction. This changed in 2012, when CBS started behaving almost exactly like LABR and Tout Wars and in some cases perhaps even slightly more conservatively. Some of this was a product of newer owners shifting into the CBS universe, but most of it was owners adjusting to the idea that only leagues aren’t mixed leagues. Spend too much of your money on superstars early and you’re going to get pinched in the endgame by the one or two enterprising experts who are patient enough to buy one or two par players early and then wait for the bargains and clean up in the middle and at the end.

As you can see in Table 1 above, all three of the expert leagues spent a significant portion of their budgets on hitting in 2013. This was particularly true in the American League. For years, experts were reluctant to cross the 70 percent barrier ($182 per team) on their hitting budgets, but all three of the AL expert leagues did so in 2013. The NL experts in LABR and Tout came close, but weren’t quite able to stomach spending $78 or less per team on their pitching staffs.

If CBS has become a mostly reliable barometer for the expert leagues – as well as your home leagues – then pitching prices are likely to climb once again this year. Sporer noticed a similar phenomenon in early drafts and—not surprisingly—it has carried over to auctions as well.

A little bit of this is Clayton Kershaw. He went for $37 in CBS’s NL auction. Neither of the CBS leagues has paid $35 or more for a pitcher since Felix Hernandez went for $35 in 2011 (for those of you who are metaphysically confident that Kershaw will be automatic in 2014, Felix earned $23 that year). But a lot of the price shift has less to do with Kershaw and his American League counterpart Yu Darvish, and more to do with a shift further down the chain.

Table 2: CBS AL Spending by Tiers: 2013 versus 2014

*Thirty-eight dollars were not spent in CBS in 2013.

Table 2 lists in groups of 12 the hitters and pitchers purchased in CBS in 2013 and 2014, sorted in descending order by price.

Based on what is happening in drafts, you might expect to see higher prices this year for the top pitchers. But on the aggregate their prices didn’t move at all. Darvish ($32) actually cost two dollars less than last year’s most expensive pitcher, Justin Verlander at $34. It isn’t until you get to the 16^th-most-expensive pitcher that the prices start to jump. From slots 16 through 54, $77 more was spent in this year’s auction than in last year’s auction.

This sweet spot falls in the $8-18 range and covers a wide variety of pitchers, but at a glance there are two types of hurlers that caused the price increase this year:

• Closers. After 2012’s near-historic stopper immolation, the experts were extremely unwilling to spend on closers. In 2013, Fernando Rodney ($18) and Mariano Rivera ($16) were the only closers who went for more than $15. This year, 11 American League closers cost between $16-19; the only exceptions being John Axford ($14), Nathan Jones ($14), and Jesse Crain ($5; the market liked Josh Fields at $8 better). Nineteen isn’t a lot to pay a closer in 5×5, so this seems more like an appropriate market correction than an over shift.
• Young arms. The $8-18 price range features a bevy of young and up-and-coming arms that excited the CBS market to no end. Danny Salazar ($18), Corey Kluber ($16), Sonny Gray ($15), A.J. Griffin ($15), Taijuan Walker ($15), Jose Quintana ($12), and Drew Smyly ($11) were among the many younger pitchers for whom the experts really opened up their wallets. You have to squint to find these types of pitchers in the 2013 pool. Matt Moore went for $18…and then it dropped off very quickly to A.J. Griffin, Alex Cobb, and Alexi Ogando at $11 apiece. The market is placing a pretty significant bet on the fact that this new class of pitchers will defy history and rise up as one to take over and alter the paradigm in short order.

As always, the money has to come from somewhere. Often, the money will come from lesser pitchers, and a greater number of $1-3 buys will appear at the bottom. That isn’t how it played out in CBS. Instead, the money was taken from the hitters at the middle and toward the bottom of the player pool.

There were bargains to be had everywhere, but the back end of the outfield is where you could have cleaned up if you were in the CBS AL auction. Michael Brantley ($12), Dexter Fowler ($11), and Josh Willingham ($9) were the “high end” bargains, but behind them was a larger group of players in the endgame who could return their value in April alone. This group included: Matt Joyce ($6), Jackie Bradley ($5), David Murphy ($5), Michael Saunders ($4), Daniel Nava ($3), Robbie Grossman ($2), Craig Gentry ($2), Raul Ibanez ($2), David DeJesus ($1), Andy Dirks ($1), Alex Presley ($1), and L.J. Hoes ($1). Deep league players know that bargains like this win you your league. I’d rather let another owner roll the dice on guys like Salazar and Walker at those prices and buy boring reliable starters on offense with my money instead.

That was how it played out in the American League. What was the story in the NL?

Table 3: CBS NL Spending by Tiers: 2013 versus 2014

It wasn’t quite as radical in the National League as it was in the American League, but once again the money shifted away from the hitters and toward the pitchers.

Unlike in the AL, there was not a similar sweet spot in the NL for hitters where the bargains came in one specific cost increment. For the most part, the drop in costs came across the board. I participated in this auction and don’t remember a specific set of price points where I thought “a ha! I have to jump in here!” While I wasn’t planning it this way, I did not spend over $25 on a player. Matt Holliday was my most expensive purchase of the day at $24, and Aaron Hill and Will Venable were my next most expensive hitters at $19 apiece. While the prices at the top were similar this year to what they were last year, I felt that the talent wasn’t nearly as good. As a result, I refused to pay market value for hitters that I felt cost more than what they were truly worth.

Where the AL didn’t see a jump in the prices for elite pitchers, the NL did see a bump up in cost. The NL experts actually purchased more $20+ arms in 2013 than they did in 2014, but the spending at the very top was significantly higher this year. Kershaw ($37), Adam Wainwright ($31), Stephen Strasburg ($29), and Cliff Lee ($28) led an aggressive push by the experts to get an ace. Where the NL and AL did converge was on closer prices. Where 2013 saw aggressive pricing for Craig Kimbrel and Aroldis Chapman, 2014 pushed Kimbrel ($26), Kenley Jansen ($24), Chapman ($23), and Trevor Rosenthal past $20. CBS hasn’t seen spending like that for closers in the NL since 2010, when the $20+ guys were Jonathan Broxton, Francisco Rodriguez, Heath Bell, Brian Wilson, and Ryan Franklin.

The secondary pitching bump in the NL wasn’t nearly as dramatic as the AL’s, as it “only” came in the $8-14 price range. There weren’t nearly as many pitchers in this bracket (17 in total) so it is harder to identify a type of pitcher or trend in this group. In reality, what happened is that while prices in this bracket increased, the pitchers who got the big raises were once again the young guns.

Table 4: CBS NL Starting Pitchers in 2014 and Their 2013 Counterparts

The pay increase isn’t quite as dramatic as it was in the American League. But Wacha, Cingrani, and Cole are all getting raises on promise, not performance. Meanwhile, veteran stalwarts like Gonzalez, Zimmerman, Fister, and Latos are all relative bargains.

I’ll be writing next week about the LABR AL- and NL-only auctions. I am curious to see if this trend holds in LABR or if the CBS leagues’ push on young pitching is the trend going forward in leagues in 2014. I suspect the latter. If this is the case, I see a competitive advantage for teams willing to buck the trend and avoid spending $15-plus on relatively unproven pitching. The 2013 versions of Jose Fernandez and Matt Harvey are enticing many to spend big on the next crop of young arms this year, but there is a good chance that last year was an anomaly, and not the beginning of a brand new trend.