Andrew McCutchen and Super Two

Yesterday, Tim Williams of Pirates Prospects noted that this year’s cut-off for Super Two arbitration eligible players is about eight days earlier than it has ever been before. This could be a concern for the Pirates’ front office, as there is now a strong possibility of Andrew McCutchen reaching arbitration a year earlier than expected. Thus, the cost of the talented young player could increase considerably.

For anyone unfamiliar with the Super Two rule, it allows certain players to reach arbitration after their second year in the league, whereas most players must wait until they have reached three years of service time. The end result is that, at least for the upcoming offseason, any player with at least 2 years, 122 days of service time will be eligible for arbitration (One year of service time is equal to 172 days). This service time cut-off changes each year, and you can find details on how it is calculated in Tim’s article.

I want to determine the degree to which the potential Super Two status could raise McCutchen’s price tag in the upcoming years. Here is Tim’s estimate (emphasis mine):

The most important thing is that the Super Two status for McCutchen could easily cost the Pirates $10+ M extra in the long run, as they would be paying an extra arbitration year, with that extra year being the most expensive fourth year.

Upon reading this, I started thinking about how Super Two players are generally paid. Tim’s assumption is that a player is generally valued the same in his first year of arbitration, regardless of whether it is a Super Two situation (which would lead to four total seasons of arbitration) or a standard instance of arbitration in which a player has accumulated more than three years of service time (which would lead to three total seasons of arbitration). This was also discussed a bit on the Pirates message board Only Bucs.

To determine the answer, I will use Wins Above Replacement (WAR). In free agency, a player is generally worth about $4 million per win. In a player’s first year of arbitration, he will generally receive a salary around 40% of his free agent value. He will receive about 60% of his value in his second year, and 80% of his value in year three. Finally, a player reaches free agency and should be able to fetch around 100% of his free agent value. The question is, do Super Two players generally follow a 40%/60%/80%/100% schedule in their four arbitration years, or a 20%/40%/60%/80% schedule? I didn’t know the answer, so I decided to look into it.

The easiest source of information I could find on Super Two players was this article written by Maury Brown, which provides a list of Super Two players from the offseason before 2009. The list includes the amount that each player eventually received, whether it was through arbitration or simply an agreement between the player and his team. I took each player’s WAR (I used the WAR from FanGraphs, otherwise known as fWAR), multiplied it by $4 million to calculate the player’s free agent value, and finally determined the percentage of his free agent value that each player received. The full results are here.

I immediately ran into issues due to outliers. There were several players with a fWAR near zero in 2008, which skewed the numbers dramatically. For example, Houston’s Humberto Quintero had a 0.05 fWAR in 183 plate appearances in 2008, essentially replacement level. He received a 2009 salary of $610,000, which is just a touch above league minimum. However, because his free agent value was $4 million * 0.05 fWAR = $200,000 (well below league minimum), his percentage of free agent value received was 305%. Because of this problem, I decided I would only consider players with at least 0.5 fWAR in 2008. The results showed that Super Two players received an average of 21.8% of their free agent value.

This would seem to indicate that the extra cost of McCutchen becoming a Super Two player would be much less than Tim’s $10 million estimate. For the sake of simplicity, let’s assume that McCutchen will accumulate 4.0 fWAR per season for the next five years. (For what it’s worth, he has been at 3.3 fWAR in each of his first two seasons.) Here is what we would expect McCutchen to earn if he went year-to-year in arbitration.

As you can see the total difference between reaching Super Two and not reaching Super Two is about $3 million. Tim is probably right to guess that McCutchen would receive about $3 million if he reached Super Two status following the 2011 season. However, if he missed the Super Two cut-off, I think you would see him receiving significantly more than $3 million when he first reached arbitration following the 2012 season.

Note: This assumes that Super Two players continue on the 40%/60%/80% arbitration schedule after receiving about 20% in their first year of arbitration. This is something that would require additional research.

UPDATE (11/8/2010, 5:40 PM): Tim wrote an excellent follow-up to this post over on his site. Be sure to give it a read.

UPDATE (11/9/2010, 2:00 AM): Over at Only Bucs, epoc conducted some extensive follow-up research on the effect of Super Two status on arbitration rewards. Really good stuff.

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