Financial Situation Part II: Service Time Mistakes

About a month ago, I posted an analysis of the Royals' financial commitments and arbitration timetables for the young players. This post will build upon the previous one, so here's a link to the former post, titled "Royals' Future Payrolls" or read the brief summary below.

Royals' Future Payrolls

In summary, the Royals are in good shape next year, with $25-30 million to spend if Glass allows Baird to have a payroll of $50 million. In 2007, the Royals get hit harder by arbitration, with Affeldt in his third year, Brown and Hernandez in their second year, and MacDougal, Gobble, Snyder, and Carrasco in their first years of arbitration. So, the Royals will have to spend some money on players' arbitration in 2007, with these 7 players in arbitration. But, that's not all unfortunately. Meet the 2007 class of Super Twos (unless these players are sent to the minors):

Leading off: David DeJesus with 2 years and 146 days of service time


On the Mound: Zack Greinke with 2 years and 135 days of service time


Relieving Greinke: Mike Wood with 2 years and 140 days of service time

Photos: kcroyals.com

Super Twos are players who rank in the top 17% of players with between 2 and 3 years of service time. Super Twos qualify for arbitration a year early and get 4 arbitration years instead of 3. It's difficult to predict where the cutoff will land, but it's usually between 130 and 140 days and the lowest it has fallen to is 128 days. So, based on the historical cutoff, it appears that David DeJesus and Mike Wood will be Super Twos and Greinke has a pretty good chance (60-70%) of being a Super Two as well. After the 2006 season, the Royals will have 9 or 10 arbitration-eligible players. The Royals' realistic timetable for becoming a contender again is the 2007 season. With all of these players headed to arbitration, it may be tough for the Royals to sign key players to improve the team in the 2006-2007 offseason.

After the 2007 season, the Royals core of youth hits arbitration, with Sisco, Gotay, Bautista, Teahan, and Buck entering arbitration as well. If Burgos and Nunez remain on the big league club for the rest of the season, they will likely qualify for Super Two status after the 2007 season. However, Sweeney's contract will no longer be a burden, so that should help pay for young players' pay raises.

The Royals' payroll flexibility next year will likely last just one year. With 9 or 10 players entering arbitration in 2007, the Royals will be somewhat restricted in how much money they can spend in free agency this year. Ideally, the best contracts would be either one-year deals or two-year deals with an option for the third year. The one-year deals would improve the team next year with the extra money available, perhaps giving the Royals some trade bait near the trade deadline as well as some much needed help. The two-year deals with an option would be good for a solid starter who could help stabilize the rotation. The Royals will probably need to split the $25-30 million in half between both types of contracts, figuring an increase of $10-15 million in payroll in 2007 due to arbitration increases.

How do you avoid the Super Two mistake? Well, keeping a player like Greinke in the minors for one more week would have significantly reduced the risk of him reaching arbitration a year early. An extra week or two in the minors can make a difference in a lot of cases. It might be worth sending Burgos and Nunez down to the minors for a while. It's paying attention to small details like Super Two status that can be the difference between keeping a player for the entire arbitration period or just a couple years of it. It becomes more difficult to negotiate a long-term deal with a player who will be a Super Two because they know that they'll have four arbitration years instead of three. I read a lot of complaints about how expensive Affeldt and MacDougal will be next year after arbitration. Just wait until 2007 and 2008! Arbitration is still much cheaper than free agency. Beltran earned a total of $18.5 million over 3 years of arbitration, especially compared to the contract he signed with the Mets at $17 million per year.

The key to building a cost-effective, successful franchise that gets the most out of their payroll and limited service time of their players is to keep young players in the minors until they are ready to contribute on the big league team. By developing players in the majors, the Royals are only getting these players closer to arbitration and using up service time. Hopefully, the Royals will have a strong core of young players that don't become free agents until the end of the decade and can be a contender from 2007-2010. But, that will only happen if the Royals manage their payroll effective and avoid starting players' arbitration clocks any sooner than necessary. It also couldn't hurt if the Royals can develop some starting pitching too!

Sisco's Future: In the Rotation or the Bullpen?

This will be one of the big questions in the offseason. The Royals' bullpen appears to be one of the strengths of the team next year. The Royals have 5 hard throwers in the bullpen. But, with 4 pitchers (Sisco, Burgos, Affeldt, MacDougal) with closer stuff, the Royals have a logjam here. The Royals have other options for relievers as well with Wood, Nunez, Cedeno, Bayliss, and Gobble. The Royals should also add a veteran reliever to stabilize the young bullpen as well. So, with all of these options in the bullpen, moving Sisco to the rotation seems very feasible.

Pros:

Need-based Reasons: The Royals need more quality starting pitching. The Royals' rotation has been one of the worst in baseball now for some time. The starting pitching depth isn't very good and the Royals are relying on guys who have had injury problems (Hernandez, Snyder, Bautista) and young starters who have had limited success so far. Sisco's upside as a starter is very high. Sisco's stuff could help him become a #1 or #2 starter. If the Royals want to get an edge in the AL Central, having 3 aces would be a good start. If Greinke, Bautista, and Sisco develop as projected, the Royals would have 3 aces.

Statistical Reasons:

1. Sisco has dominated both lefties and righties this year. Lefties have a .508 OPS against Sisco and righties have a .658 OPS against him.

2. Sisco gets better as he pitchers deeper into a game. Here are batter's splits against Sisco based on how many pitches he's thrown, notice the improvement as his pitch totals increase:

1-15 pitches: .289/.402/.422 .824 OPS
16-30 pitches: .138/.239/.138 .377 OPS
31+ pitches: .071/.133/.071 .205 OPS

3. Sisco's strikeout rate has been very impressive. He's struck out 50 in 45 innings. The Royals could use a good strikeout pitcher in the rotation.

4. Sisco has three good pitches that could make him effective as a starter. He has a good fastball that gets a lot of strikeouts. He throws a solid changeup and slider/curve (can't decide which it truly is) as well.

Cons:

1. Sisco has had some problems as a starter in the minor leagues. Sisco has had trouble with his conditioning and lost effectiveness in the second half of last season as a starter.

2. Sisco has been very good in relief for the Royals this year. He has the lowest ERA in the bullpen. Sisco has shown that he can be an effective reliever, but don't have a very good idea if he can be a good starter. The Royals run the risk of hindering his development like Affeldt's if they constantly switch his roles.

3. Sisco's control hasn't been very good this year. Sisco is averaging 5.4 walks per 9 innings. He also throws a lot of pitches and might not be able to go deep into games.

Overall, I think the pros outweigh the cons. Sisco could become a dominant starter, which the Royals could really use. The Royals have a surplus of good arms in the bullpen and don't have a very good rotation. So, moving Sisco into the rotation would make sense to me. I'm not sold on Bautista as a starter and he may end up in the bullpen. But, if we try both Sisco and Bautista in the rotation, then the chance that one or both will become top starters will increase. Otherwise, Bautista may end up in the bullpen and the Royals might have Bautista, Burgos, Sisco, Nunez, Affeldt and MacDougal in the bullpen. That'd be a great bullpen. But, if the starters aren't putting the Royals in a position to win a lot of games, the great bullpen won't be terribly useful.

High Desert Home/Road Splits

Minor League stats can be very deceptive. The different leagues are hitter-friendly or pitcher-friendly. Prospects may be working on specific things that could hurt their stats. Individual ballparks may help a player's stats. So, analyzing minor league stats is a tough chore. High Desert is essentially the "Coors Field" of the minor and the California League is very hitter-friendly. The inflated stats make it very difficult to analyze how well the Royals' prospects at High Desert are doing, especially after being accustomed to the stats from the pitcher-friendly Carolina League.

I decided to analyze the home/road splits of Billy Butler and Chris Lubanski, the Royals' top prospects at High Desert. Both Butler and Lubanski are putting up very impressive numbers. Butler and Lubanski are on pace to hit about 35 HRs, something we haven't seen from a Royals' prospect in a while. Butler is 3rd in the league in HRs and Lubanski is 5th. Butler is among league leaders in most offensive categories. Butler and Lubanski are both very young for the league and are doing really well relative to the rest of the league. But, does playing at High Desert give them an advantage over the other players in the California League? The home/road splits should help answer this question.

Here are the cumulative home/road splits for Butler and Lubanski:

Oddly enough, the home/road splits are the exact opposite for the two players. Butler has done considerably better away from High Desert and Lubanski has done very well at High Desert. There is a huge home/road difference in Lubanski's slugging percentage. His slugging percentage is .639 at High Desert and .399 away from High Desert. This would tend to suggest that Lubanski's power is helped a lot by a hitter-friendly park. Butler's case is just the opposite. Butler's numbers actually improved on the road. Also worth noting, Lubanski's road numbers were consistently worse each month than his numbers at home. Butler's home/road splits tended to vary each month, with no particular trend. For the most part, Billy Butler has been consistently outstanding regardless of where he's playing. Chris Lubanski, on the other hand, seems to go on a tear everytime a homestand starts.

Billy Butler's home/road splits give additional creedance to his status as one of the top prospects in baseball. The ballpark factor doesn't appear to be a factor in his success. Butler may very well be hitting 500-foot blasts that would leave any park. Butler is very young for the league and is one of the best hitters in the league. Chris Lubanski is still young for the California League and his road numbers aren't awful. But, because of his home/road split, his stats are going to be inflated.

Month-by-Month Breakdown

Butler has been pretty consistent throughout the season. He's been in a slump over the past week, hurting his July numbers. His June numbers are a small sample size because of an injury. Overall, he's been great and there's not much more room for Butler to improve as a hitter at High A.

Lubanski has steadily improved throughout the year. He got off to a terrible start, but has put up Butler-like numbers in June and July. Lubanski's home/road differential has decreased over the past couple months and his home/road splits are almost even in July. Hopefully, that's another sign that he's improving.

Note: Lubanski's HR total on minorleaguebaseball.com is 20. But, looking through the boxscores, I only counted 18.

Organizational Needs: Bullpen

The Royals' bullpen has become the most promising part of the organization. The Royals' collection of young "power arms" has made the bullpen into an organizational strength. The Royals have 4 pitchers who can hit 97 mph and a young lefty who can hit 95 mph. With those arms, the Royals have the makings of one of the best bullpens in baseball.

The 2006 bullpen looks like this without any additions:

1. Mike MacDougal/Closer: MacDougal looks like he is finally settling into the closer's role. He's saved 12 out of 14 games this year and has been able to work out of jams. He may not be the long-term closer, but MacDougal should be a good closer until Burgos is ready.

2. Jeremy Affeldt/Jimmy Gobble: Jeremy Affeldt will be the setup man unless he's traded. Affeldt still has to stay healthy, but has looked pretty good this year otherwise. If Affeldt is traded, Gobble give the Royals another lefty option in the bullpen.

3. Ambiorix Burgos: Burgos is probably the future closer for the Royals. Burgos throws a fastball that touches 99 mph and has a very good splitter. Burgos has the mentality to be a good closer. Until then, he'll give the Royals another good late-inning option.

4. Andrew Sisco/Jimmy Gobble: Sisco could also be the future closer if he stays in the bullpen. given the lack of starting pitching depth and lack of quality, I hope his future is in the rotation. This could be another spot for Gobble or a free agent.

5. Leo Nunez: Nunez has pitched 9 innings and allowed just 1 run so far in July. He's looked very good during this month after struggling throughout June. Nunez has a mid-90s fastball with a lot of life on it. Nunez also has good control, issuing just 9 walks in 32 IP.

6. Mike Wood: Wood will be the Royals' long reliever. He's been solid, but unspectacular in the long relief role.

Other candidates: Jonah Bayliss, Juan Cedeno, Dennis Tankersley

In-Season Trades: The Royals have depleted their minor league pitching by promoting a lot of young pitchers. The Royals will need to add some more pitching depth in the minors.

Offseason Moves: The bullpen looks pretty good next year. The only problem is that the bullpen is still very young and unproven. The Royals also have a potentially very good, but inconsistent closer. So, it would do the Royals a lot of good to add a quality veteran set-up man who has experience closing games. The Royals might even consider getting a closer if MacDougal struggles or the starting pitching FA crop prevents them from getting a good starter.

FAs: Mike Timlin, BJ Ryan, Bob Wickman, Tom Gordon, Octavio Dotel, Ryan Dempster, Jim Mecir, Julian Taverez

Royals Trade Graffanino and Shutout Indians

The Royals dealt Tony Graffanino for 25-year-old outfielder Chip Ambres and 21-year-old LHP Juan Cedeno. The Royals will also send Boston a player to be named later, although the Royals news release didn't note this but most other articles did. Cedeno's numbers aren't very impressive. He has a 5.49 ERA and has allowed 11 HRs, 37 walks, and 85 hits in 80 1/3 innings. Cedeno has a fastball that can reach 96 mph and may add some velocity. But, he still needs to refine his command and develop his curveball. Cedeno has a lot of upside, but has struggled this year. The Royals are sending him to Wichita, I guess to avoid High Desert, even though Cedeno was struggling at High A ball. The Royals haven't ruled out making him a starter, but his command and secondary pitches will need improvement.

Ambres has spent 7 years in the minors and is having his best season as a professional. He has the tools to succeed as a 4th outfielder and should add some speed and good plate discipline to a ballclub that doesn't have much of either of those things. Ambres is hitting .294/.401/.495 with 10 HRs and 19 stolen bases in 24 attempts.

Overall, it seems like a fairly good deal for the Royals. Cedeno has a lot of upside, as there aren't many lefties with mid-90s fastballs and a potential plus curve. Ambres could be a good 4th outfielder for the Royals and add some speed off the bench. It'll be interesting to see who the player to be named later is though. That could alter my opinion of the trade. At first glance, I'd give the trade a B. It's about as much as you could hope to get in return for a utility player who becomes a free agent at the end of the year. Graffanino was a good veteran for the Royals to have around. But, he'll get a chance to play on a playoff contender. Best wishes to him.

The Royals shutout the Indians, their second shutout in 3 games. Zack Greinke pitched 7 scoreless innings and struck out 4. Greinke did a good job of mixing his pitches and had command of all of his pitches. He also threw his good, 93-95 mph fastball and struck out some hitters with it. Greinke is most effective when he mixes his pitches and has pinpoint control. Greinke also needs to stay away from overusing his changeup and two-seam fastball. Hitters seem to sit on those two pitches and the movement on those two pitches seems to cause the ball to end up in the middle of the plate too often. Greinke has also ran up his pitch counts and seems to lack the endurance to finish games. I think a good offseason conditioning program would help him. Overall, most of the hits against Greinke tonight were infield hits and bobbled balls by the middle infielders. It's looking like Zack Greinke is returning to form. Burgos and MacDougal kept the shutout going. Burgos is back to his pre-injury form, with a 98 mph fastball and a very good splitter.

Organizational Needs: Starting Pitching

I'm going to break down the Royals' organizational needs. I'll include what the Royals need to do to improve the team through trades and offseason deals. I'll start with starting pitching and work through the bullpen, infielders and outfielders.

Right now, the 2006 starting rotation looks something like this without any additions:

1. Runelvys Hernandez (best overall season of any Royals' starter this year)
-staff ace by default; he's ideally a innings eating No. 3 starter when healthy, but not the potential ace the Royals' brass think he'll be
2. Zack Greinke
-best shot at being the staff ace, but has a lot to learn and could have some maturity issues
3. DJ Carrasco
-Carrasco has been our best starter through 12 starts; still has to prove that his endurance can hold up and he can survive with a poor K/BB rate
4. JP Howell
-Howell has struggled, but after some polish in the minors, he should be ready to go in 2006
5. Denny Bautista
-As long as Bautista gets healthy, he will be in the rotation
Other possibilities: Kyle Snyder, Andrew Sisco

That has the makings of being every bit as good as the rotation this year, which is a dreadful. The Royals need to acquire 1 or 2 solid starters to add to the rotation. It's easy to pencil in these 7 guys and think that we have all of the pieces for a rotation. But, if the Royals want to improve their team, they need to get a No. 2 starter and a solid, innings-eating No. 4/5 starter. That will add a lot of stability to the rotation and add insurance for injuries, which will occur. Snyder and Sisco can start at AAA. Sisco will need to develop as a starter if the Royals choose to go that route.

In-Season Trades: The Royals need to acquire as much starting pitching prospects as possible. The depth in the system is dangerously low for a team that has a starting rotation as dreadful as the Royals. The Royals' best pitching prospect is in low A ball (Luis Cota) and the Royals have a solid college pitching prospect in high A (Billy Buckner). But, outside of that, the Royals don't have a lot of good pitching prospects.

Offseason Deals: The Royals need to acquire one No. 2/3 starter. This will cost $$$$. But, it is a necessity. The Royals haven't been able to develop quality starting pitching. So, the Royals need a No. 2 starter who can be the ace until they develop one. The Royals should look for a solid veteran pitcher who is willing to sign a $6-8 million/year deal for two years with an option for a 3rd year. But, the likelihood of the Royals actually spending the money to bring a quality starter to Kansas City isn't very good. The Royals could also use a solid veteran No. 4/5 starter who can be a true "innings" eater, not the Lima or Anderson variety. But, I'd settle for just a staff ace.

Notable FA Starters: Kevin Millwood, Paul Byrd, Glendon Rusch, Matt Morris, Esteban Loaiza

This is the Royals' greatest need. If they don't fix the rotation, the Royals' future is bleak. The Royals may have a great bullpen over the next few years, but that is meaningless if the rotation isn't putting the bullpen in a position to close out games. The offense doesn't look like it could carry a team with bad starting pitching. Most of the Royals' current players are replacement-level players at best. The Royals have a few impact bats in the minors, but they may or may not pan out. The best plan for the Royals is to load up on starting pitching.

Wild Game Against the Tigers

Runelvys Hernandez was working on a two-hit shutout in the sixth inning. For the most part, Hernandez pitched very well through 5 innings. He did hit 2 batters before the sixth inning, but his command was pretty good otherwise. Maroth had also hit DeJesus and the umpires issued warnings to both benches. In the sixth inning, Hernandez almost hits Guillen in the foot. On the next pitch, Hernandez hits Guillen in the helmet. I'm pretty sure Hernandez was trying to hit Guillen, just not in the helmet.

This led to an exchange of words between Guillen and Hernandez and the two were quickly restrained by other players. The brawl should have ended there. But, the Tigers' bullpen came out to incite more trouble. Farnsworth and Bonderman led the charge. Kyle Farnsworth tackled Affeldt out of the blue and everyone jumped in. Altogether, Hernandez, Bell, Castillo, and Brown were ejected on the Royals' side and Farnsworth, Bonderman, and Guillen were ejected from the Tigers' side. I still have no idea why Brown was ejected. He looked to be one of the people restraining the instigators.

Hernandez will likely get a suspension and miss at least one start. So, that means Kyle Snyder will probably be called up to take his place and Howell will have to stay in the rotation. This isn't good news for the Royals, who are already short on starters. Farnsworth and Bonderman should receive a suspension as well because they started a fight they had no business being in.

Nunez came in and pitched 2 very good innings of relief. Affeldt and MacDougal gave up some hits, but didn't allow any runs. Sweeney homered for the Royals, his 4th in 7 games. Teahan also homered, to the opposite field (as usual). Teahan has some power and it will show once he starts to pull the ball. He just better hope that happens before Gordon is ready.

Minor League Notes:

Luis Cota pitched another good game for the Bees today. He went 7 innings and allowed 2 earned runs, struck out 5 and walked 2. Cota has pitched much better in his last 2 starts after really struggling in June. Good to see that the 19-year-old righty has been able to make some adjustments.

Wichita infielder Donnie Murphy is pushing for a promotion soon. He's raised his average up to .308 after going 2-2 with a double so far in today's game. Murphy has 8 HRs in 209 ABs. Murphy is probably as good a hitter as Gotay is, and a better fielder. Murphy would be a downgrade defensively at shortstop over Berroa, but he could challenge Berroa next year. The Royals may break him in as a utility infielder, especially if the Royals trade Graffanino.