Swartz: The value of closing and Dellin Betances’ arbitration case

From SABR member Matt Swartz at MLB Trade Rumors on February 20, 2017:

The baseball world is abuzz about the controversial recent comments of Yankees president Randy Levine, who criticized Dellin Betances’ $5MM filing in his losing arbitration case this past week. After emerging victorious in arbitration, Levine described the filing as a “half-baked attempt” to “change a well-established market” for setup men, further noting that Betances was not a closer — the reliever type that typically commands big arbitration salaries — any more than Levine himself was an astronaut.

Levine’s decision to call out Betances after defeating him in a case was questionable, but he was right that arbitration pays relievers based on their role rather than their value. Indeed, my arbitration model forecasted Betances would land at $3.4MM, only a few ticks higher than the Yankees’ $3MM filing, and probably very close to where Betances could have bargained had he and the Yankees opted to negotiate a one-year deal to avoid arbitration.

Setting aside the decorum or business wisdom of the quote, the least accurate part of Levine’s comment was his description of Betances’ filing as an attempt to “change a well-established market.” Arbitration is not a market, or at least it is not a market in the way that people generally mean when they talk about markets. There are no multitudes of buyers and sellers trying to exchange the services of relievers in arbitration. Free agency is a market. Arbitration is a manufactured system of loosely defined rules that players and owners have agreed upon as part of the Collective Bargaining Agreement.

Read the full article here: https://www.mlbtraderumors.com/2017/02/dellin-betances-arbitration-case-and-the-value-of-closing.html

Originally published: February 22, 2017. Last Updated: February 22, 2017.