This article was written by Hudson Belinsky

The value of a player like Masahiro Tanaka is higher now than it has ever been before. With the immediate potential impact that a middle-of-the-rotation arm can have on a team, and the difficulty of developing such an arm, teams are willing to spend exorbitant amounts of money on starting pitching. Since the latest collective bargaining agreement, elite pitching often comes with an even bigger price tag; aside from the financial investment in the player, teams may have to sacrifice a draft pick and the ability to spend money in the draft, meaning that the benefits of acquiring a free agent starter at a certain price must outweigh the benefits of not only a high draft pick, but the bonus allotment associated with that pick.

The new CBA makes signing free agents who have spurned qualifying offers from their previous teams much more risky. Teams now need to decide between immediate investment and long-term investments. The draft pick compensation issue makes baseball free agency significantly much more complex than simply determining whether the added value from a player is worth a certain dollar figure to an organization.

International free agents don’t receive qualifying offers. They are not subject to any sort of draft pick compensation. Signing Jose Dariel Abreu will have no impact on how the White Sox operate in the amateur talent market, and will not inhibit their ability to develop stronger infrastructure. The same goes for the Phillies and their signing of Miguel Alfredo Gonzalez. Each team could lose out on its investment if the players ultimately fail to help cultivate a team that attracts fans and brings in appropriate revenues, but this is the risk with every contract in baseball.

The uncertainty of international free agents drives down the price tags of these players. The acquisition of Yu Darvish will cost the Rangers just under $18 million per season, considering the six-year pact, the posting fee of $52 million, and the contract of $56 million. This pales in comparison to the average annual salaries in the recent deals for Zack Greinke, Justin Verlander, and Felix Hernandez, whose salaries will average over $25, and there’s an argument that Darvish is better than all three of these pitchers.

So, let’s say that a scouting department has closely evaluated Masahiro Tanaka and judged him to be a No. 3 starter. Apparently, some teams think he’s even better than that, but based on the video I’ve seen of him and the supposedly elite pitchability, it seems reasonable to me that Tanaka will settle in as a solid No. 3. How do we go about pricing this kind of pitcher?

A couple weeks ago, I started polling some professional scouts that I know about aces, no. 2 starters, and players who have the potential to reach either one. I sent out a survey with 65 names on it and asked scouts to indicate whether the player fell into one of six groups: Ace, Former Ace, Potential Ace, No. 2, Potential No. 2, or Haven’t seen enough to determine. The list of players included those who had strong 2013 campaigns or had traditionally had high levels of success and had a down season in 2013. Obviously, this wasn’t a systematic way to do things, but I figured that asking scouts to place players in boxes would yield more results than giving them a box and determining which pitchers belonged in it. I reached out to 16 scouts, and had full survey responses from nine of them.

If I were a GM, I’d have everyone in my front office evaluate every pitcher on this criteria, then have many of those same evaluators go see Mr. Tanaka. Since I’m not a GM, I’m limited to secretive dialogues with evaluators whose opinions I trust to varying degrees. I haven’t had relationships with most of these evaluators for long enough to determine whose opinions are more often correct; this issue would be resolved if I were sitting in a GMs chair. I also don’t have a single source who was willing to discuss an in-person evaluation of Tanaka, which forced me to evaluate him based on video alone. There are also some issues with my research methods; each scout may have a slightly different understanding of what constitutes a certain classification of a pitcher.

I followed up with conversations of various length and detail, attempting to properly identify pitchers of each classification. There’s a lot more from this survey to be discussed in other contexts, but I identified a class of pitchers who were not quite no. 2 starters, and I labeled them as no. 3 starters. Only four of these pitchers had reached the open market over the past three years—Detroit’s Anibal Sanchez, CJ Wilson, Hiroki Kuroda, and Hyun-Jin Ryu. Ervin Santana, Ubaldo Jimenez, and Matt Garza, who are free agents this winter, were also labeled as no. 3 starters.

From this point, it’s difficult to draw a line to Tanaka. The closest examples are a slightly older player (Sanchez), a much older player who signed consecutive one-year pacts (Kuroda), a low-30s reliever-turned-starter who had finally put together his stuff with some command (Wilson), and a player that was clearly under-valued, either because teams had not done their homework or because the level of competition hadn’t convinced them of the player’s legitimacy (Ryu). Ryu was generally regarded as a back-end starter before his superb stateside debut and Kuroda presumably took a discount to play for the Yankees in 2012 before re-upping with them for 2013. It seems that Sanchez’s and Wilson’s contract (five years, $80 million and five years, $77.5 million) should be the starting point for what a team ought to pay for Tanaka.

Tanaka made roughly $4 million this season, and the posting system limits the market for each player to just one team. Tanaka’s representation is likely to argue that the 25-year-old is the next Yu Darvish, and that he deserves to be compensated similarly. If I’m sitting in a GM’s chair, I’m going to use Darvish’s contract as the ceiling for Tanaka; it wouldn’t make sense for me to concede that Tanaka and Darvish are on equal ground. So, with Darvish’s six-year, $56 million contract as the ceiling for my offer to Tanaka, and Sanchez’s five-year, $80 million pact serving as the starting off point for my overall financial commitment to Tanaka, we just need to connect the dots.

Darvish is better, and was more highly-regarded coming out of Japan, but he was also 25 years old when he played his first season in the majors. So it seems fair that the commitment to Tanaka should fall somewhere between the six-year, $108 million commitment to Darvish and the commitments to Wilson and Sanchez.

Independent of my team and my market (which would always be huge considerations in such a move), I’d feel comfortable committing $100 million to Tanaka over six years. Assuming that his contract wouldn’t cost more than $56 million, I’d bid $44 million for the rights to negotiate with him.

The methods are flawed, yes, but I think this is an appropriate route to take for determining what to pay Tanaka and how much to bid for the rights to negotiate with him.

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