Arbitration Showdown: Mock Hearing: Sergio Romo

It's salary arbitration season in Major League Baseball, and here at Baseball Prospectus we're holding mock hearings, arguing for or against the actual team/player filing figures before a three-person panel of certified arbitrators. We've selected 10 of this winter's most intriguing, highest-dollar cases to cover in depth over the first two weeks of February (regardless of whether the players' real-life cases remain unsettled). After each side's opening argument and rebuttal/summation below, we'll give you a chance to vote on what you think the result should be before seeing the panel's decision. For more on the arbitration process, read the series intro by Atlanta Braves Assistant GM John Coppolella, listen to his appearance on Episode 35 of Up and In, or check out the BP Basics introduction to arbitration.

In Part 10 of this 10-part series, we'll tackle San Francisco Giants reliever Sergio Romo, who sought $4.5 million and was offered $2.675 million. Unbeknownst to our arbitrators, Romo and the Giants reached an agreement on a two-year, $9 million contract, avoiding arbitration.

The Criteria

The criteria will be the quality of the Player’s contribution to his Club during the past season (including but not limited to his overall performance, special qualities of leadership and public appeal), the length and consistency of his career contribution, the record of the Player’s past compensation, comparative baseball salaries, the existence of any physical or mental defects on the part of the Player, and the recent performance record of the Club including but not limited to its League standing and attendance as an indication of public acceptance.

The complete procedure for salary arbitration is available in the Basic Agreement.

The Case

	vs
Sergio Romo Player Request: $4.5 million Represented By: Nick J. Faleris	Midpoint: $3.587 million	San Francisco Giants Club Offer: $2.675 million Represented By: Bradford Doolittle
Position: RHP DOB: 03/04/1983 Bats/Throws: R/R Service Time: 4 years, 97 days

Player's Presentation

Sergio Romo’s submission of $4,500,000 represents a request to be adequately compensated for his contributions to the 2012 World Champion San Francisco Giants. Through the two seasons leading up to his platform season, Romo performed as an elite set-up man for the organization. Early last year, after the Giants’ bullpen was deprived of its incumbent closer by injury, even more was asked of Romo, and he delivered a performance that catapulted him from a piece of the pen to a face of the franchise—all while leading the Giants to a World Championship.

The Giants entered 2012 with Brian Wilson at closer. Wilson had served as the team’s closer in each of the previous four seasons, notching three All-Star appearances between 2008 and 2011 and finishing second, third, first, and eighth in the National League in saves over that span. Additionally, he was a key component in the Giants’ 2010 World Series run.

Brian Wilson as Giants Closer
(2008-2011)

Wilson logged just two innings in April before being lost for the season due to an elbow injury, leaving a gaping hole at the back of the bullpen. Santiago Casilla served as closer beginning in April and through ups and downs helped to keep the Giants in contention, with Romo serving as a dominant set-up man.

2012 Sergio Romo
(April through August)

As impressive as those numbers are, in order to fully understand the depth of Romo’s dominance over those five months we need to see slightly adjusted numbers. In back-to-back appearances at the end of July, Romo logged his two worst outings of the year, totaling 1.1 innings pitched and allowing six runs, six hits, and one walk with just one strikeout. Thereafter, Romo immediately returned to form, allowing just three runs over the remainder of the season (after allowing just two runs prior to those back-to-back outings in July). If we remove that 1 1/3 innings pitched, his numbers from April through August are simply mind boggling.

2012 Sergio Romo
(Adjusted April through August)

As the Giants pushed towards the playoffs, Romo’s incredible performance, including in save situations (innings pitched in which a player was maintaining or completing a potential save opportunity), ultimately led to his winning the closer job outright at the end of August.

Romo vs. Casilla
(Save Situations)

Though Casilla was given more time than Romo in the closer role in 2012, when the calendar changed to September and the Giants geared up for the most important stretch of the season, it was Romo that they wanted finishing their games. Romo responded by going a perfect six-for-six in save opportunities to close out the season, allowing just two runs over 14 2/3 innings pitched (1.23 ERA). The Giants entered the playoffs with Romo entrenched as closer and through the playoffs Romo put up a stat line comparable to that of Brian Wilson’s 2010 postseason. Like Wilson, Romo led San Francisco to a World Series title, pitching in 10 of the Giants’ 11 wins while allowing just a single run.

Sergio Romo vs. Brian Wilson in Postseason

The loss of Wilson at the beginning of the season created doubt as to whether the Giants would have the stopper they needed, and in the most critical stretch, from September through their World Series win in October, Romo provided more stability and production than the organization could have hoped for.

2012 Sergio Romo
(September and Post Season)

The Giants have already declared Romo the closer for 2013, and in a recent Associated Press article, both Romo’s manager Bruce Bochy and his bullpen mate Jeremy Affeldt chimed in with quotes extolling Romo’s fantastic finish to the season:

I think he’s earned the right to be [our closer] as we start the season. —Bochy

I think if anything he proved something to himself [last year]. He didn’t have to prove anything to us. I always knew he had the stuff to do those things. —Affeldt

The stats back up Affeldt’s claim, as Romo’s last three years as a set-up man, and the end of last year as a closer, show consistent dominance.

2010-2012 Sergio Romo

Looking as far back as six years, there have been no true comps to Romo among players with similar service time, due to his dual role as set-up man and closer in his platform season and his extended dominance in the role of set-up man over the three-season period including his platform season. In attempting to find the closest appropriate comparable players, the closest matches to Romo in terms of set-up men demonstrating both platform season dominance and some extended success over a three-year span are Scot Shields (2006 platform season) and Santiago Casilla (2011 platform season).

Romo vs. Shields vs. Casillo
(Platform Season)

Romo’s platform season stands out compared to those of Shields and Casillo due to the combination of his save totals (as closer for his club), elite strikeout rates, and low walk rates, ranking first in all such categories. In fact, the players’ rankings in WHIP, SO/9, BB/9, and SO/BB coincide perfectly with their respective platform season adjusted salaries.

Romo vs. Shields vs. Casillo

(Three-Year Period Including Platform Season)

Again we see Romo stand out in WHIP, SO/9, BB/9, and SO/BB, showing significantly better rates than those of Shields and Casilla. Further, with performance normalized over three seasons we see Romo essentially maintaining his platform season performance over the full three year span, while both Shields and Casilla see regression in ERA, WHIP, BB/9, and SO/BB. In addition to posting the most impressive platform season, Romo has proven to be the more reliable reliever, producing at a higher and more consistent level than either of his two closest comps.

Romo’s multi-season performance as a set-up man, platform season performance as a set-up man and closer, and impactful contributions as closer through the end of the 2012 season and throughout the Giants’ World Series run places him in rarified air among relievers with similar service time over the past several seasons. The club has tabbed him as its closer for the upcoming season due to his near-flawless performance through the 2012 season (excluding his two-appearance hiccup in July) and throughout the postseason. Further, he played a pivotal role in bringing San Francisco its second World Series in three years.

At a time when the Giants were without their dependable closer of four years, the club turned to Romo to provide stability in the pen throughout 2012 and ultimately entrusted him with the most important role in the bullpen when the games mattered the most. Romo excelled in that role and should be compensated accordingly. The player’s submission of $4,500,000 provides an appropriate increase from the adjusted salary of his closest comparable players, Scot Shields and Santiago Casilla, due to his added contributions as a closer during his platform season and his greater consistency over multiple seasons. —Nick J. Faleris

Club's Presentation

Sergio Romo had a fine 2012 season and was a key component of the Giants’ championship run. The image of Romo striking out Detroit’s Miguel Cabrera to clinch the World Series title will forever be a cherished piece of Giants baseball history, and deserves to be. He’s been a top-notch middle reliever during his career and is deserving of a salary increase commensurate with a player of his ability. However, the $4.5 million figure filed by Romo’s representatives is out line with the typical earnings of a relief pitcher at his level of service time.

The player’s figure is more appropriate for a closer with an established track record of finishing games than it is for a set-up reliever. While Romo finished the season as the Giants’ closer and held the role through the playoffs, he had never served in that capacity on a full-time basis during his first 3 ½ seasons in the major leagues. He had just three saves during his first three years of service time, and even after switching roles late in the 2012 season, he has just 17 career saves.

Other than Heath Bell, every comparable pitcher had accumulated at least 19 saves prior to his platform season, and all of them held the closer role for the entirety of their fourth season. Nevertheless, five pitchers earned less in their post-platform season than Romo is requesting for 2013. Those five pitchers had on the average 31.6 career saves prior to their platform season, and 71.4 through it. Again, Romo had three saves prior to 2012 and has just 17 career saves to date. Simply put, this group of closers does not constitute Romo’s peer group, though the $4.5 million salary figure filed by his representatives suggests that it does.

A more appropriate group of comparable pitchers would be those who, like Romo, had established themselves as dependable middle relievers before transitioning to the closer’s role during their fourth year of service time. Such pitchers are not easy to isolate, because pitchers tend to fall into roles quickly upon arriving in the major leagues.

By placing Romo in a more appropriate peer group, it becomes apparent that the figure filed by his representatives is excessive. Romo has fewer saves than relievers in or near his service class who have saved between six and 18 games, end points which serve to cut out those who were either full-time closers or full-time middle relievers. Romo’s request is well beyond the average salary for this group and is without precedent. He also had fewer pre-platform year saves than the other pitchers in this group.

The midpoint between the club’s request of $2.675 million and Romo’s $4.5 million is $3.58 million, which is well above the established level for his appropriate peer group. The club’s offer is almost exactly in line with the salaries of previous relievers that had track records comparable to Romo’s. The Giants are hopeful that Romo will develop into an established closer, but in light of the fact that he lacks even a single full season in the role, the figure filed by his representatives is excessive. — Bradford Doolittle

Player's Rebuttal/Summation

While Romo has only recently been given the opportunity to serve as the Giants’ closer, he has excelled in his time with the team. Additionally, his extended track record indisputably evidences his status as an elite set-up man, and the conclusion of his platform season (as well as the club’s decision to entrust Romo with the closer job for 2013, parting ways with former All-Star closer Brian Wilson in the process via non-tender in November) provides ample evidence that the Giants view him as an elite closer moving forward. Prior to Romo’s 2012, no set-up man in recent history had compiled comparable dominance for three consecutive years outside of Scot Shields, and as discussed above, even Shields falls short of Romo in terms of dependability and consistent production. Romo’s compensation should surpass that of Shields’ adjusted salary, and admittedly should not be on par with the likes of closers who have shown multiple years of dominance in the role.

Using Shields as the floor, the following table compares Romo against the group he joined in 2012—relievers with comparable service time and less than two full years of experience as closer.

Relievers with Comparable Service Time and <2 Years as Closer
(Platform Season)

Utilizing the player’s submission, Romo fits perfectly into this group of relievers with less than two years’ experience as closer. In fact, we see an almost perfect correlation between production and compensation when we focus specifically on the player directly ahead and directly behind Romo in terms of compensation.

Romo vs. Putz vs. Hanrahan
(Platform Season)

Across the board, save percentage, ERA, WHIP, SO/9, BB/9 and SO/BB line up perfectly with the compensation columns, with Putz, Romo, and Hanrahan ranking first, second, and third, respectively. While there is a discrepancy in save totals, Romo should not be penalized for the club’s decision not to give him ninth-inning opportunities until late in the season. Further, Romo’s consistency over the past three years, when compared to his peers here, more than makes up for the few extra months Putz and Hanrahan served as closer.

Romo vs. Putz vs. Hanrahan
(Three-Year Period Including Platform Season)

The only area in which Romo does not clearly outperform Putz and Hanrahan is the total tally of saves, which at its heart is an issue of opportunity, and not performance. Taking into account the previous tables, as well as the above table, the club’s submission of $2,675,000 is a significant underpay—about 60 percent and 65 percent of Putz’s and Hanrahan’s respective compensation—despite Romo’s equivalent or superior performance in ERA, WHIP, SO/9, BB/9, and SO/BB over the past three seasons, and comparable performance in each of those categories, as well as save percentage, in the players’ respective platform seasons.

While Romo is in the early stages of his tenure as a top-tier closer, we have shown that there is no question as to the extended nature of his dominance over National League hitters. Just as important, Romo served as an important presence in the Giants’ playoff push and postseason, ultimately leading the organization to a World Series victory. Romo stepped in for Brian Wilson, the team’s closer of four years and a multiple-time All-Star, and the club did not miss a beat. Indeed, Romo’s performance was so impressive that the club decided to non-tender Wilson at the end of November, severing ties with their former All-Star closer and anointing Romo the closer for the upcoming season.

The player’s submission of $4,500,000 is in line with the compensation given to relievers with comparable service time and less than two years of closer experience. The team’s own actions in giving Romo the closer position for the playoff push, the postseason, and now the 2013 season, as well as the club’s decision to part ways with Wilson, speaks volumes about the importance of Romo to the organization. While all of these actions indicate that the club views Romo as an elite closer, the club’s submission of $2,675,000 seeks to pay Romo as a set-up man. Even more shocking, the club’s submission seeks to compensate Romo less than a comparable set-up man, Scot Shields, was paid despite superior production and consistency to Shields’ at the same point in their respective careers. The panel should not acquiesce to the club’s request to obtain closer production from Romo while compensating him as a middle reliever. —Nick J. Faleris

Club's Rebuttal/Summation

The Giants don't dispute that Romo has been an excellent and consistent set-up reliever over the course of his career. However, the fact of the matter is that the most highly-compensated relievers are paid on the basis of saves. Middle relievers with four years of service time do not earn $4.5 million, and with just 17 saves over his career, Romo has to be classified as a set-up reliever, at least until he's spent a full season in the closer role. Of the 36 active relievers who appeared in least 200 games over their first five seasons without reaching 20 career saves, not of them approached the level of salary requested by Romo, in either their fourth, fifth, or sixth years in the big leagues.

The case of former Giants closer Brian Wilson is telling:

By the time Wilson reached his first season of arbitration eligibility in 2010, he had already notched two seasons as the Giants’ closer, and only then did he approach Romo's requested figure. After another successful season in the role, which helped the Giants win the first of their two recent World Series titles, he signed a two-year contract that placed him solidly in his peer group. Romo can become a member of the closer peer group and achieve the type of contract that goes with that distinction. But he is not a member based on 17 career saves. —Bradford Doolittle

The Reader Poll

Before scrolling down to read the three-person panel’s decision, record your own decision here:

The Panel

Burt Fendelman is an attorney with more than 45 years of experience, initially in corporate finance and securities laws working as inside counsel for several major securities brokerage firms. He has performed as an arbitrator for FINRA (Financial Industry Regulatory Authority), the American Arbitration Association, and currently as an arbitrator and mediator for the New York County Lawyers Association in fee dispute-related matters. He is presently a self-described “work in progress”, working with clients in areas related to art and antiques. He attended Washington University in St. Louis and NYU Graduate School of Tax Law, and he now lives in Manhattan.

Doris Lindbergh is a retired lawyer who is an arbitrator with FINRA (Financial Industry Regulatory Authority) and its predecessor forums, the National Association of Securities Dealers (NASD) and the New York Stock Exchange. She also arbitrates for the National Futures Association (NFA). She attended Washington University School of Law and has a Master of Arts from Fordham University. Her employment history includes stints at Wall Street investment banks and, most recently, the MTA New York City Transit Authority, but her most challenging assignment was raising a future Editor-in-Chief of Baseball Prospectus.

David Marcus is a retired lawyer and serves as an arbitrator with the Financial Advisory Regulatory Authority (FINRA). He lives in Metuchen, New Jersey. He attended Columbia College and Yale Law School, after which he served as an enforcement attorney with the SEC. His subsequent career includes working for the New York Stock Exchange heading its regulatory division, and working for several broker-dealers as a regulatory attorney or General Counsel.

The Panel’s Decision

2-1 in favor of the Club

Arbitrators Fendelman and Marcus voted in favor of the club, finding that Romo's record as a closer, while excellent, is too brief to warrant a raise of the magnitude that he requested. Therefore, they believe that the club's offer is fair for the coming year. Arbitrator Lindbergh believes that the record Romo compiled as a closer, coupled with his earlier pitching performance, is sufficient basis to be confident of his future performance at a level justifying his salary request. The team's decision to name him closer for the coming year demonstrates a similar confidence in his future performance.

The Sabermetric Perspective/Additional Commentary

There’s so much to say about Sergio Romo. You can recite the stats: no reliever with at least 200 innings pitched over the past five seasons had a FIP as low as Romo’s 2.41; Only Mariano Rivera had a better strikeout-to-walk ratio than Romo’s 5.8 or a lower WHIP than Romo’s 0.88 over the same span. You can marvel at the stuff: the slider, which he threw as a higher percentage of his 2012 pitches (58 percent) than anyone but Luke Gregerson; more slowly than all but three of the 78 other pitchers who threw 200 sliders last season (78.3 mph); and with more horizontal movement (10.1 inches) than any other pitcher. You can unravel the mysteries: a merely league-average multi-season platoon split, despite all the sliders and the low arm angle, which generally lead to large splits. (The solution(s), most likely: limited use against left-handed hitters; a .220 BABIP against them; and a changeup he throws exclusively to southpaws.)

But I don’t want to (continue to) talk about those things. Instead, I want to talk about two semi-conflicting sentences from opposite sides of today’s case. First, the second sentence of a paragraph by Bradford on the Club side of the case:

A more appropriate group of comparable pitchers would be those who, like Romo, had established themselves as dependable middle relievers before transitioning to the closer’s role during their fourth year of service time. Such pitchers are not easy to isolate, because pitchers tend to fall into roles quickly upon arriving in the major leagues.

And second, the beginning of this sentence from Nick’s pro-Romo argument:

While Romo is in the early stages of his tenure as a top-tier closer, we have shown that there is no question as to the extended nature of his dominance over National League hitters.

Those two contentions—that pitchers tend to adopt their long-term roles quickly upon arriving in the majors, and that Romo is only at the start of his closing career (which would suggest that there’s much more closing to come)—are somewhat at odds.

Romo has long been a more effective pitcher than most closers, even though he was a set-up man until last season. But he doesn’t pitch like the typical closer—he throws slower than any other closer, and also slower than nearly all non-closer relievers—and he doesn’t look like one, either. Romo is listed at 5’10”, 185, lighter than every other pitcher who recorded 10 saves last season and shorter than all but one (Greg Holland, who’s also listed at 5’10” but throws 96.5 mph anyway). Given his profile, it’s not that surprising that it’s taken time (and injuries to other pitchers) for him to get a shot—it’s telling that Santiago Casilla, another reliever with no closing experience, was tapped to replace Wilson before Romo. But now that he’s excelled in the closer role, even in the highest of high-pressure situations, is it safe to include him among the closer elite? Or is he still in some danger of being busted back to set-up duty?

To get some sense of what might lie ahead, let's look at what happened to other other late-blooming closers like Romo. By “like Romo,” I mean pitchers who never started a game in the majors—by the time they got to the big leagues, there was no uncertainty about whether they were ultimately bound for the bullpen or the rotation. That rules out, say, Ryan Madson or Joe Nathan, closers who didn’t have their first 10-save season until around Romo’s age but spent some time starting before they settled into their eventual roles.

I also mean pitchers who, like Romo, pitched at least four seasons of at least 30 innings each before their first with 10 saves. That rules out anyone who started closing quickly, as well as oft-injured arms such as Rafael Soriano, who (in addition to doing some starting) had a few early seasons in which he barely made it to the mound. We’re trying to isolate pitchers whom teams viewed as relievers from the start, but didn’t view as closers even after seeing them pitch out of the bullpen over a pretty long period.

Here’s a list of pitchers who’ve satisfied those criteria, along with their ages in the seasons that they first recorded 10 saves and the number of saves they recorded in all subsequent seasons combined. It’s not a very long list. (Asterisks denote active players.)

Since we restricted our sample to pitchers with zero starts, the query returned only recent pitchers; before the accelerating bullpen specialization of the 1990s, every pitcher with a decent arm was presumably pushed to start at some point. Only 11 pitchers (counting Romo) qualify for the club, with three of them joining last season alone. Among the five non-active pitchers on the list, the average number of additional saves recorded is 38, or roughly one full season of successful closing; throw in Heath Bell and Chad Qualls, whose save-recording days are probably just about over, and the average rises to 44.

If we raise the minimum to five career games started, allowing for the occasional spot start, we get a slightly larger sample:

The average additional saves count among retired members of this group is 29 (33 with Qualls and Bell included). As a kind of control group, the average number of additional saves among all pitchers who’ve ever had a 10-save season (including the ones above) is 56. Their average age in those first 10-save seasons was 28, a year younger than Romo's.

If closing is in the cards, pitchers who aren’t considered potential starters generally get a chance to close quickly. Those who take a long time to get their first shot at saves generally don’t last long in the role; the circumstances that belatedly led to their getting saves change, or they pitch poorly, or whatever bias discouraged teams from giving them opportunities earlier causes teams to take their opportunities away.

Granted, most of these pitchers weren’t as effective as Romo before they became closers, and some were considerably older. This is mostly for fun. But it would be unusual—though hardly the most unusual thing about Sergio Romo—if 2012 turned out to be not a temporary departure from lower-leverage relieving, but the start of a lucrative second career. —Ben Lindbergh
 

Thanks to Rob McQuown, Colin Wyers, Hudson Belinsky, Jonah Birenbaum, and Andrew Koo for research assistance.