Transaction Analysis: Paying for Papelbon

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Signed P-R Jonathan Papelbon to a four-year deal worth approximately $50 million and a vesting option that could bring the total value over $60 million. [11/11]

The closer and snark markets are now open for business.

Papelbon’s deal calls for around $12.5 million annually, with a vesting option worth an additional $10-plus million according to Jayson Stark. Suggesting that this deal will not sit well with the sabermetrics community would be an understatement. Skepticism runs rampant whenever a team gives a non-Rivera reliever this much cash over this many years, and for good reason. Relievers are the most volatile lot in a game known for its unpredictability; to commit so much with so little guarantee goes against prudent financial management.

Attackers of the deal, however, should aim their weapons towards the Phillies and Ruben Amaro Jr., not Papelbon. He is a good, now mega-rich reliever with four-straight 60-plus inning seasons and an earned run average better than the league average in each season since 2005. In 27 postseason innings with Boston, Papelbon allowed three runs, showing great aplomb in big spots and earning a reputation as a primetime pitcher.

The signing concludes a strange week for the Phillies. Just days ago, it looked like the Phillies were heading towards re-signing Ryan Madson. The rumored contract in that case—four-years worth $44 million with a club option attached—needed to be cleared by Philadelphia’s upper management. Depending on the source, either the clearance or the agreement never happened. Whatever the case, the Phillies have opted for Papelbon, yielding a first-round pick and an additional $6 million over the next four seasons. Should the Phillies offer Madson arbitration, then they would get a first- or second-round pick back.

One wonders how much injury history played into the Phillies’ preference for Papelbon. Madson has missed time with benign injuries in recent seasons—a broken big toe in 2010 and a hand injury after being struck with a batted ball in 2011—otherwise his most alarming issue is a strained shoulder that came back in 2007 and 2008. In theory, no one knows Madson’s medical records and conditioning habits better than the Phillies. Papelbon, alternatively, has never been to the disabled list in the majors, missing significant time back in 2006 and little since.

There will be talk about Papelbon’s compensation and about whether the market correctly values relievers. That is an argument for another time, but it does look like Papelbon is being paid market value. Just compare Papelbon’s 2009-2011 surface statistics with the 2008-2010 stats of relievers who received multiple years last offseason and their annual average value:

There is but one Rivera. Papelbon does compare favorably to Soriano statistically, although Papelbon has proven more durable and has the closer tag attached to his name, which explains the salary difference.  As Kevin Goldstein tweeted after rumors of the Madson deal hit Twitter: closer mentality does exist. Not in certain pitchers who live for the moment, but rather it exists in those who sign the checks and make the pitching changes. If it takes a myth for a manager to get through the ninth inning, so be it.

In trusting Madson with the ninth inning last season, the Phillies appeared ready to pay $5 million more than they had in order to previously retain him—all so Charlie Manuel would not deign himself by calling for an untested reliever in save situations next season. Instead, Manuel will get to bring in one of the best modern closers to finish games out.

Skeptics should appreciate the timing. Papelbon receives his payday weeks after Brad Lidge’s tenure in Philadelphia ended. Lidge, of course, signed a three-year, $37.5 million extension in July 2008. He finished that season just fine but tallied 41 innings per season and a 4.73 earned run average over the contract’s remainder. Nowadays, Lidge serves as a poster boy for what can go wrong with lengthy relief contracts.

As part of the aftershock, Papelbon’s contract adds to a forthcoming budget logjam in Philadelphia. Under Amaro, the Phillies have shown a penchant for making the big move, whether it comes via free agency, trade, re-signing, or even a non-move. Amaro let Pat Burrell walk after winning the World Series, traded for Cliff Lee just to trade him away, acquired Roy Halladay and Roy Oswalt, then declined options on Oswalt and Lidge, re-signed Ryan Howard, decided against re-signing Jayson Werth, and so far has done the same with Jimmy Rollins and now Madson.

Those moves have helped the Phillies reach the playoffs in each season under Amaro, with one World Series berth to show for it. The roster is older, but the Phillies should make trips to the playoffs at least once or twice more before the core is ineffective. With that in mind, can a general manager justify a questionable long-term contract to ensure short-term success? Maybe not. Still, unless signing Papelbon impedes their ability to acquire a shortstop, the Phillies should be okay for the 2012 season.

After next season, Cole Hamels and Shane Victorino will become free agents, with Chase Utley, Carlos Ruiz, and Hunter Pence following suit in winter 2013. Amaro has now committed more than $80 million in 2014 salaries to four players (Roy Halladay, Lee, Howard, and Papelbon), leaving the Phillies in a tough spot. Even with great revenues, the Phillies’ payrolls have not stretched beyond $150 million in two of the past three seasons. The next 24 months will present some difficult decisions, even if only the Phillies know their true payroll ceiling.

Meanwhile, Heath Bell’s agent should be taking notes and compiling comparisons. Anything to present a case that nets Bell an annual average value between the rumored four-year $44 million offer to Madson and Papelbon’s contract. Bell seems willing to remain with San Diego, so he could aim for comfort over money, but his surface statistics are better than the others; however, his advanced statistics suggest the opposite:

If the Papelbon deal proves anything, it is that teams are still willing to spend big money on closers. On a related note, Madson and Bell should sleep like children on Christmas Eve until their signing days. The rest of us will wait to play Scrooge.