Analyzing the Matt Garza Arbitration Case: Does Matt Even Have a Chance?

When I conceived of this post, making the arbitration case for each of the Chicago Cubs and arbitration-eligible pitcher Matt Garza, the Cubs had just offered Garza $7.95 million for 2012, his third year of arbitration (out of four, as a Super Two). Garza had asked for $10.225 million.

Or so the initial reports said.

Under such a belief, I thought making the case for the Cubs’ number, and for Garza’s number, and then choosing a winner (recall, should the case proceed to an actual arbitration hearing, there is no compromise – one side wins, the other side loses), would prove challenging. And then, Garza’s requested number was corrected: $12.5 million.

Making the Cubs’ case just got a lot easier, and making Garza’s case became nearly impossible.

Garza’s ask is about 57% higher than the Cubs’ offer. Know how many other asks/offers had that large of a spread over the past five years among cases that went to arbitration? Just two out of 29 cases – and, in those two (pitcher John Patterson in 2007 and back-up catcher Jeff Mathis in 2010), the money at issue was well under $2 million total.

In other words, the extreme difference between the two sides would be an anomaly for cases that go to arbitration. Either the Cubs are far too low, or Garza is far too high.

Before getting into the case for each side, it’s important first lay out the criteria used by the three-person arbitration panel in rendering a decision. Per Article VI(F)(12) of the expiring Collective Bargaining Agreement, the criteria governing an arbitration award:

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 …. Any evidence may be submitted which is relevant to the above criteria, and the arbitration panel shall assign such weight to the evidence as shall appear appropriate under the circumstances. The arbitration panel shall, except for a Player with five or more years of Major League service, give particular attention, for comparative salary purposes, to the contracts of Players with Major League service not exceeding one annual service group above the Player’s annual service group. This shall not limit the ability of a Player or his representative, because of special accomplishment, to argue the equal relevance of salaries of Players without regard to service, and the arbitration panel shall give whatever weight to such argument as is deemed appropriate.

The Case for Paying Matt Garza $7.95 Million in 2012

The Cubs’ offer of $7.95 million is, by almost anyone’s standard, a touch lower than Garza deserves in 2012. But, such is the nature of the arbitration (and negotiation) process – if you offer what a guy is worth, you’ll end up either settling for more than the guy is worth, or dragging the player through the mud in an arbitration hearing just for the right to pay him what he’s worth anyway.

So, in that way, the Cubs’ offer is fair. And, based on Garza’s stats, on comparable pitcher salaries, and on other allowable considerations, the Cubs’ offer would probably win out in an arbitration hearing. To that end, the Cubs’ argument is less about contending that their offer is an accurate representation of Garza’s worth, and more about contending that Garza’s request is simply too high. Only one offer can win, after all.

Keep in mind as you read what follows: I’m not crapping on Matt Garza. I think he’s an excellent pitcher who could be among the best in the NL for the next few years.

But this process is ugly.

Garza’s Stats

Garza’s request for $12.5 million – a raise of about 110% – is predicated almost entirely on his breakout 2011 season. It must be. After all, before 2011, we’re talking about a 42-44 pitcher with a 3.97 ERA and a 1.315 WHIP. Fine numbers for a middle-of-the-rotation pitcher (I note the win/loss record not because I approve of that ridiculous and meaningless statistic, but because it does come up in arbitration proceedings), but they have the look of a guy who’s just a little above average. His 107 ERA+ through 2010 would seem to confirm that evaluation.

About that 2011 season – it was very good. A 3.32 ERA and a 1.258 WHIP are solid, and a 9.0 K/9 is great. His 118 ERA+ suggests he was 18% better than average. Still, he won only 10 games. He missed a couple starts with a fluke injury on a comebacker, and didn’t quite top 200 innings (198). His ERA was good for just 26th in baseball among starting pitchers, and his WHIP just 47th.

And, not to be lame, but there was the matter of his seven errors, a pathetic .788 fielding percentage, and an absolutely worthless time at the plate .(A pitcher’s hitting ability is not of paramount importance, but it strikes me as consistently undervalued. Garza had a .215 OPS and a -40 OPS+ in 2011, numbers so ridiculously awful that they cannot not be mentioned.)

Matt Garza had a very good 2011 season, but a $12.5 million salary in the third of four arbitration years is the kind of figure you’d expect to see next to the name of a clear-cut ace. Garza’s numbers before 2011 look more like a number three or four than an ace, and his breakout 2011 season was only borderline “ace.”

Comparable Salaries

When it comes to comparables, ideally, you’d find another pitcher in his third year of arbitration, one who has similar numbers to Garza, and who was a Super Two. But, of course, finding that perfect comparable player is a near impossible task, and, pursuant to the criteria laid out in the CBA, it is not absolutely necessary. Instead, we’re left to look at comparable pitchers’ salaries, when those pitchers had a similar amount of service time as Garza – some of which salaries came by way of arbitration, others by way of extensions.

Dan Haren would have been the perfect comparison for Garza, had he not been signing extensions through his arbitration years. Haren was set to be a Super Two in 2007, but signed a multi-year extension before the 2006 season – and then another one before the 2009 season. That 2009 season would have been Haren’s third arbitration year (out of four, like Garza), and, leading up to it, he had put together back-to-back dominant seasons (138 ERA+ in 2007 and 139 in 2008, far better than Garza in 2011), and had a career ERA+ of 118 (Garza is at 109). In 2009, Haren made just $7.5 million. Obviously, the vagaries of the extension process necessarily obscures what Haren would have made that year in arbitration, but his salary is relevant – particularly given how much better he’d been to that point in his career than Garza. If you’re not comfortable using the salary in the first year of an extension as a comparable, let me offer you this: even if you consider the entire four-year contract Haren signed before 2009 (which contract bought out his final two years of arbitration and two free agent years), his average salary during that period was just $11.2 million. And, once again: Haren’s numbers at that point in his career blew Garza’s out of the water. In short, Haren’s salary story makes Garza’s $12.5 million request look downright outrageous.

Garza’s request looks similar to the figure another powerful righty netted in his third year of arbitration some years ago. In 2007, Carlos Zambrano avoided arbitration with the Cubs for $12.4 million. Good for Garza, right? Well, to that point in his career, Zambrano had an incredible 134 ERA+, had won at least 14 games in each of the previous three seasons, had finished 5th in Cy Young voting in two of the previous three years, and was inarguably one of the best pitchers in the NL at that time. It’s easy to forget just how good Zambrano was. The numbers that earned him $12.4 million, quite simply, are incomparable to the numbers Garza has put up.

Another possible comparables in recent years is CJ Wilson, who, in his third year of arbitration, received $7 million last year. Wilson is an interesting comparison because, before 2010, he was a dominant reliever. And then, in 2010 – his second year of arbitration – he was a dominant starter, to the tune of a 3.35 ERA in 204 innings over 33 starts, with a 1.245 WHIP and a 134 ERA+. On the one hand, his prior relief experience makes Wilson an odd comparions. On the other hand, he was, like, Garza coming off his best season as a starting pitcher in the year prior to that third arbitration year, and predicated his arbitration ask largely on the merits of that one strong season. It again bears noting: Wilson’s 2010 season was far better than Garza’s 2011, and Wilson received a meager $7 million the next year.

The best comparable that actually went through the arbitration process in recent years is probably Wandy Rodriguez after the 2009 season. His is an imperfect comparison because Rodriguez was in his second arbitration year, not his third, like Garza. His service time was similar at that point in his career, though, having completed just about five full seasons at that point, like Garza. Rodriguez, who was coming off the best season of his career (3.02 ERA in 205.2 innings over 33 starts, with a 134 ERA+ and 1.240 WHIP; but note that Rodriguez’s career numbers to that point were slightly worse than Garza’s right now), sought $7 million, and the Astros offered $5 million. The Astros won.

Even if you were to consider Garza a free agent – understanding that players do *not* make as much in arbitration as they would make as a free agent – it’s fair to wonder what kind of contract he’d get. Multiple years, to be sure, but $12.5 million annually? Probably. But here’s a question: how much do you think Edwin Jackson – a pitcher whose career numbers bear a striking similarity to Garza’s – is going to sign for? There is speculation that he’ll have to settle for a one-year deal, and it would be surprising at this point if he can pull in $12.5 million annually. Again, Jackson is a free agent. (In case you’re wondering, in his third year of arbitration, Jackson ended up getting $8.75 million as part of a two-year extension.)

Cubs’ Performance and Attendance

One final criterion cuts in favor of the Cubs’ offer: “the recent performance record of the Club including but not limited to its League standing and attendance as an indication of public acceptance.” During Garza’s one year with the Cubs, the team finished 71-91, tied for the fifth worst record in baseball. Attendance was decent – 9th in baseball – but dropped in 2011 from 2010.

The Case for Paying Matt Garza $12.5 Million in 2012

As I said, the argument was tough enough when the ask was believed to be $10.225 million. Garza and his agent aren’t fools, of course, and, while their lofty request is undoubtedly designed to create negotiating leverage, they wouldn’t have gone as high as they did unless they at least felt there was an argument there.

The best argument is a heavily sabermetric one, and thus doesn’t necessitate a breakdown into multiple subarguments. There simply aren’t that many good arguments.

Here goes nothing.

Matt Garza had a 5.0 WAR according to FanGraphs last year (13th best in MLB among starting pitchers), which made him one of the best pitchers in baseball. In the preceding three and a half years of his career, Garza put up a WAR around 1.6 to 3.0. He clearly took a step forward in 2011, but some regression would be understandable. Thus, a 4.0 WAR in 2012 is a pretty fair prediction.

If you subscribe to the belief that one unit of WAR is worth about $5 million, then you can argue that Garza is expected to be worth about $20 million in 2012. Players don’t get their full value in arbitration, but, by their third arbitration year, they are typically getting something close to 80% of their value. So, a little multiplication, and you get a $16 million arbitration award – far more than Garza has even requested.

Keep in mind, this methodology is heavily speculative, and subject to wild fluctuations (for example, if you project a 3.0 WAR for Garza in 2012, his value becomes $15 million, and his expected arbitration award drops to $12 million). But I’d hazard a guess that there’s something here that forms the basis for what otherwise looks to be an impossibly high ask by Garza.

Other sabermetrically-inclined stats indicate Garza was among the elite pitchers of the game last year – his FIP was 8th best among starters, his xFIP was 11th. That would provide some additional support on his side of the aisle. But it’s thin, and it’s only 2011.

Conclusion

Taken together, when considering the criteria used by arbitrators when handling these cases, the Cubs’ position is quite strong. Almost overwhelmingly so. Garza probably deserves more than $7.95 million in 2012, but when that number is set up against the only other option – $12.5 million – the choice appears to be easy, and unfavorable to Garza.

A settlement near, or slightly below, the midpoint still seems the most likely outcome. Garza’s arbitration hearing has not yet been scheduled, but would occur at some point in the first three weeks of February.

Brett Taylor is the editor and lead writer at Bleacher Nation, and can also be found as Bleacher Nation on Twitter and on Facebook.

50 responses to “Analyzing the Matt Garza Arbitration Case: Does Matt Even Have a Chance?”

  1. Toosh

    Since the arbitrator must choose one side’s figure or the other, no compromise allowed, it wouldn’t surprise me if the higher figure is chosen if Garza’s case goes that far.

    1. Drew

      Toosh – just curious, but what makes you inclined to believe the higher figure will be chosen? From this article and previous arguments, it would seem to me the Cubs offer is much more likely.

      1. Toosh

        I didn’t write that I believed the higher figure would be chosen if it came to that, I wrote that it wouldn’t surprise me.

        1. EQ76

          I wonder if any of this has to do with efforts to trade him? If the Cubs intend to trade Garza then the lower the number the better.. it’s worth going to ARB if he’s going to be dealt by the deadline anyways.

  2. Fishin Phil

    Nothing good can come of that huge spread. I’d like to see Garza extended before it gets to arbitration.

    1. Cubbie Blues

      Agreed, Garza has never given me the impression of being thick skinned and the process can get nasty. It could leave him with hard feelings and we all know how emotional he is on the mound. It could throw most of his year away until he gets over it.

  3. WGNstatic

    Interesting analysis, thanks!

    One thought I have had regarding the possibility of trading Garza… Most have said that his request “complicates” any potential trade. To me, it might actually make it easier for the Cubs. If the Cubs do go to arbitration with Garza, they will likely win, setting his salary at an almost ridiculously low $8M. Yes, there were be bruised feelings, but he wouldn’t hold that against his new team (presumably). What’s more, he might be even more likely at that point to sign an extension (if the team was willing to have it go into effect for 2012).

  4. Cheryl

    The only way he can get in the $10 milllion range is through an extension that is signed prior to arbitration or is traded prior to arbitration given the past history of these cases, correct? If it does go to arbitration, I doubt he can win,

  5. Hrubes20

    Either try to hammer out an extension, or go to arb. Garza’s side knows it’s a business by that high request amount. As Brett said, the evidence is overwhelmingly in the Cubs favor.

  6. Eric

    Brett do you go to google images and just search for context relative pictures? Like for example search for “gavel” for this one. Or “enthusiasm” for the baby eating the big watermelon? I like the pictures and sometimes they are funny the way they relate. I’m just trying to get an insight into the way you operate.

    1. Edwin

      Eric, are you trying to Mr. Ripley Brett?

  7. rbreeze

    When is the deadline for the arbitration?

  8. JR 1908

    I say take him to aribitration. Brett showed how much in favor for the Cubs this arguement is. Garza and his side know that Theo has never taken anyone to arbitration. It would set up a precedant for future players not asking for the moon like Garza.

    1. Dave

      There is a reason many teams do not like to take players to arbritration.
      It tends to create bad feelings on the players side when they have to sit in a room and listen to the team argue why he doesn’t deserve what he and the agent are asking.
      It’s in the best interest of both Garza and the Cubs to settle before it goes to arbritration.

  9. Ron

    So much for short and informative….I hate lawyers and Scott Boras!

  10. Dick

    Just an aside, but Garza gave up 17 unearned runs last year, mainly due to his own errors. Dempster gave up 3, Zambrano 2, Wells 1. As a result, Garza looks great on ERA, but that goes away on Runs/9 Innings…Garza was 4.09 R/G, vs. league average of 4.17.

    1. CubFanBob

      17 unearned runs by his own errors ? That seems crazy 1!!

  11. Steve

    As a Bankruptcy Attorney, I find that comment very offensive Ron. However, I get that a great deal, and since you are a fellow Cub fan, I will let it pass.

    1. Ron

      I was completely kidding, one of my brothers is a lawyer.

      1. Steve

        As was I. There seem to be many,many scumbag attorneys out there. I’m just scum, as the bag has not atteched itself as of yet.
        Go Cubs!!!!

  12. Kansas Cubs Fan

    @JesseSanchezMLB Let the games begin. Yoenis Cespedes is officially a free agent. mlb.mlblogs.com 4 minutes ago via web

  13. mb21 (David Mick)

    I take the other side, Brett. I’ll be honest and say I have no idea who wins, but I think Garza has the stronger case. First, he must be compared to players of similar service time and ones who went through the arbitration process. Consider a position player who isn’t as good as Evan Longoria. Thanks to Longoria’s ridiculously team friendly contract he’d be making very little money. The reason Longoria makes so little money is because the Rays took a huge risk and signed him to an extension early on. The pool of players that will be used as comparables are guys who are super 2s and are in their 3rd trip through arbitration.

    The past season weighs the heaviest. Garza got about $6 million after a league average season in 2010. He was league average that year. Not a whole lot better in 2009 either. He was one of the best pitchers last year. His batting average allowed, OBP allowed were relatively similar to the previous years, but his slugging was WAY down. His strikeouts went up. His home runs went down. These peripherals give lead us to believe there’s a better chance he maintains being that good. There’s of course a chance he isn’t, but coming off the best season of his career and one in which he was one of the best pitchers in baseball is going to lead to a huge raise.

    That’s the thing here. There really aren’t any comparables to Garza considering his super 2 status and that he’s coming off not just the best season of his career, but a season in which he was significantly better than previous years. We already know Garza received $6 million in his second trip through arbitration after a league average season. He received a raise of $2.6 million last year even though his 2010 was worse than his 2009. For the Cubs to win the arbitrator would have to say it’s then acceptable to only give him a raise of $2 million after one of the best pitching seasons last year.

    I think if it goes to arbitration Garza wins, but the Cubs won’t let it go that far. If they want to trade him at any point in the next two years they need to keep his salary as low as possible. Taking a risk that Garza wins just isn’t something I expect this team to do. Plus, Theo has been to fewer arbitration cases than Hendry has. I’m guess they settle at $10.5 million. That’s close to halfway in between, but closer to Garza’s value.

    When I started thinking this over I wanted to look at comparables, but I actually don’t think there are any. There aren’t that many Super 2′s to begin with. Most of them aren’t having their best season by far entering their 3rd trip through arbitration. Most of them didn’t have one of the better seasons at their respective position either. I think Garza’s reps did their homework well on this one and I’d put the odds of him winning at about 80%.

    I just don’t see much of an argument for the Cubs value when you factor in the type of raise Garza saw in his second year of arbitration while coming off a league average season. I think he’s due for a big raise.

  14. Cliffy

    QT @BenBadler: MLB has informed clubs that Yoenis Cespedes is now a free agent.

  15. MoneyBoy

    In the vast wilderness that is my mind – I noodled possible arb numbers for Garza and others.  I came up with 9 on the low side and 10-ish on the high.  Hand on the Bible -  $9mm  is sitting on my spreadsheet.

    Brett, I was shocked when the Cubs offer was announced and floored when the $12.5 came out.  Granted – the Cubs offer is a raise of over 33%; you already listed the percentage on the other.

    You had commented earlier, I believe, that Garza’s people may have decided to test Theo’s rep for never going to arbitration.  Dangerous play that!!   You also commented that the Cubs offer may have had in mind the “hidden cost” of being too generous with another arb year after this one, then FA.

    I can’t believe this doesn’t get resolved before the case gets heard.  It’s a god-awful system but it’s what it is.

    <smirk> 2,200 words huh?  Getting paid by the word lawyer boy?   Steve: chill, only teasing Brett.   Really well done Brett, and the comments have been remarkably good as well.

  16. OHBearCub

    he gets an extension $10M this year, $11M next year and $12M in year three. If he pitches the way he did last year we are getting a deal with today’s market being such a high stakes game. After next year I would re-work the above deal to tie him up long term if he keeps improving. You can’t be cheap and ya have to be smart and stay ahead of the money in this game. The Brewers and Cardinals learned hard lesson this winter.

    1. Pat

      I don’t think there’s much chance he would accept that deal. I don’t even think 3/38 gets it done.

  17. Chad C

    One thing tat struck me was this statement “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)…” what I wonder and hope to find out is how much weight the intangibles Garza possesses would be factored in to his favor? For instance, he is constantly talking to his teammates, being a cheerleader and appearing (to this viewer anyway) to be one of the few players genuinely interested in the outcome of every pitch. I mean on every off-day he was there, top step, going nuts for play on the field, welcoming players as they come back to the dugout and overall being the most enthusiastic player on the bench. If these factors are given any weight he could have a strong case for the $12 mil he wants as the leader of an apathetic club who seemed to go through the motions rather than giving it their all every day. He could point to his overall enthusiasm as being a strong leader and not only that but could make the argument that some of his encouragement or attention to details during the game led to more wins for his team that did not show up in the statistics. An example of this could be that he sees an opposing pitcher tipping a certain pitch, relays that information to the batter and the batter drives the ball to push some runs across. I agree it’s a stretch but might not be that far off if indeed those “special qualities of leadership” are weighted heavily by the arbitrator. Does anyone have any insight into this? I’d be curious as to how he could win if special leadership qualities or public appeal have very little to do with the overall case.

  18. aCubsfan

    The Cubs $7.95 offer is a very fair 25% increase. Garza is out of his mind with a request that would be a 210% increase. And for anyone to think the midway point between the two numbers is fair is crazy as well because that is a 172% increase. No player is worth a 172% – 210% increase in pay year over year.

    It’s these ridiculous wages that is making every sport only available for corporations or the rich and famous. The average Joe can’t afford to go the game especially in these economic conditions.

    I just don’t get it. Most of America was outraged by the crap that happened in the financial crisis. A sizable portion of the population are cheering on Occupy Wall Street protestors because of ‘Corporate Greed.’ But, at the same time sports fans put up with the nonsensical wages players get paid.

    We have a fat slob in Prince Fielder getting $214 million over 9 years guaranteed and based on all analysis I’ve read he’ll barely make it to 30 before his knees and back start breaking down and by most opinions the final years of his contract are going to be a brutal mess.

    Who in Detroit is going to be able to afford going to the games? Illitch could have done a hell of a lot more to bring pride and a long lasting impact on the city of Detroit by taking half of Fielder’s contract and investing it in the neighborhoods of the city.

    I for one am glad the Cubs didn’t waste their time on Fielder and will be quite happy when they get rid of the likes of Garza, Dempster, Wood and Soriano.

  19. BetterNews

    Is the Garza arb case of 12 mil really ridiculous? I must say yes, and I am a big Garza fan as many know.

    1. KCubsfan

      Here is the problem with him getting 12.5 this year is the 16 to 19 he will get thru arb next year.

      1. BetterNews

        KCubs-Ouch! I understand and I am now veering from my previous stance on Garza.

  20. Whytee

    Hopefully Garza wins his case and Epstien is forced to keep him because the Cubs Need an ACE that is a Fact………..The Cubs don’t need to wish and hope maybe someday Epstien finds a Top Notch Pitcher that wants to play in Chicago……..Call me crazy but I like to go off of Facts and Real Players……….Not a wish………..Epstien has not made one move for a Pitcher to be the Cubs ace………He is alienating Stars and this is his way to a championship…Ya right in what universe is this going to work??????

  21. Whytee

    Even rebuilding Teams need an ACE………..Instead of lowballing Garza he should be signing him to a 5yr Extension……..Here’s an Idea…..Quit buying McDonalds’es that you want Us Taxpayers of Chicago to tear down for you so you can build a training and entertainment venue that you own and rebuild your stadium you own and you can keep all the profits.lol ya right……..Spend that money on getting Major League Ready Talent and Pitching…….Not Players that hit 144 or 150 and are praying they turn it around…….I prefer not to hope a hitter can hit..Ya,what am I thinking??? Ricketts and company are on the right track……Ya it’s a win-win situation……

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  24. Bob Warja

    You are an outstanding writer. Good grasp of sabermetric concepts, and well articulated. I am impressed.