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Nolan Arenado's projected arbitration value is quite high

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Can Nolan Arenado really make over $6.5 million as a super-two? Let's consider the context by using player comparisons.

Charles LeClaire-USA TODAY Sports

When you think of winter, what comes to mind? Do you think of the Winter Meetings, the seemingly out of nowhere big trades, or how the University of Kansas basketball team will look this year? Are you happy that it is the only time of year when we let young children sit on the lap of a long, grey, and scraggly-bearded man who is dressed in all red and famous for breaking and entering (lest we forget the heinous milk and cookie theft)? No, I know you. Your mind goes immediately to how thrilling the Major League Baseball arbitration process is.

Speaking of said process, MLB Trade Rumors’ arbitration gurus Tim Dierkes and Matt Swartz released their 2015-16 projections earlier this month. I thought it might have been too early to write on it, but now that we are less than a week away from the offseason I think the timing is better. There are a lot of players in their projections that stick out as high or low, and I hope to write about more individual cases in the future (and invite my colleagues to do the same). For today, however, let’s focus on the projection MLBTR had for Nolan Arenado.

Arenado, who posted another solid season for the Colorado Rockies in 2015, was pegged to receive $6.7 million by the MLBTR model. Here’s the thing, though: that number is fairly unprecedented. As a super-two, this is an amount that will set Arenado up for continually big arbitration paydays for years to come.

Since the arbitration process is your favorite part of the winter, I am sure you already know how it works—as well as some of the factors that are taken into account. But since it has been almost a year, you might have gotten a little rusty. So if that is the case, here are some things to remember:

  • Once a player accrues more than three years on Major League service time, he is eligible for salary arbitration for the first time. Eligibility remains intact until he owns more than six years of service time, in which a player is then eligible for free agency.
  • There is a special case where players without three years of service time can gain salary arbitration eligibility, and this is what is known as a Super-Two. This occurs when—in terms of service time—a player ranks within the top 22% of anyone with at least two years of MLB service time but no more than three.
  • The overwhelming majority of arbitration eligible players remain just that—eligible. Eligibility and the threat of a hearing actually play a much bigger role in the arbitration process than the actual hearings themselves. Typically only a handful of cases go to a hearing, meaning players will sign extensions or one-year deals to avoid arbitration more often than not.
  • An arbitration hearing occurs when the team and player cannot agree on what the player's salary should be for the upcoming season. In these hearings, both the player and team submit their own individual salary amounts which represent what they feel is fair monetary compensation for the player's service.
  • The player and team then meet in front of a panel of three independent arbitrators for a short amount of time in order to state their cases why the player deserves the amount their individual side offered. As FanGraphs and MLBTR describe, these panels are known for being old-school—using traditional/counting stats or, as MLBTR calls them, ‘back of the baseball card’ stats. In addition to statistics, player comparisons are able to be used by both sides in order to give context to where the player stands in relation to past precedent. Lest we forget, awards the player has won are also a factor.
  • These panels then make a decision as to which side, the team or player, made the stronger case. They are not allowed to create a number they feel would be fair compensation; instead, they are allowed to choose only one of the two numbers submitted to them.

So now that we got that reminder out of the way, back to our main character—Nolan Arenado.

When I saw his projection initially, I was a bit surprised at how high it was. I mentioned it before, but comparisons are helpful when looking to get context as to what a certain player might get. Looking back into the past to see what players with similar numbers and service time received either through an extension, one-year deal, or a hearing itself helps us get a sense of the neighborhood a player is in.

The last arbitration season presented us with three great comparisons, as there were multiple top-tier third basemen who were eligible for arbitration for the first time—Josh Donaldson, Todd Frazier, and Kyle Seager.

With the same MLBTR model, Donaldson—who was the only super-two of the bunch—was projected to make $4.5 million, Frazier was projected at $4.6 million, and Seager was projected at an even five million dollars. After everything was said and done, Frazier and Seager signed extensions with their respective teams—receiving $4.5 million each for their first arbitration eligible seasons. Donaldson, however, went to trial in a losing effort, receiving $4.3 million for the 2015 season.

As for players who had similar numbers to Arenado but played the other corner, Freddie Freeman and Anthony Rizzo both signed extensions to buy out all of their arbitration eligible seasons. However, the pair still received a sum of money comparable to what they might have received should they have gone to trial. Freeman got $5.1 million while Rizzo took home a cool five million dollars. Also, for the sake of a high ceiling, let’s toss in a crowd favorite—Mike Trout. Trout, who also signed an extension before his first arbitration eligible season, received $5.2 million from the Los Angeles Angels.

So now that the gang's all here, what do they look like when stacked up against each other?

Comparisons galore
Player Team Year Service Time PA HR RBI SB AVG OBP SLG OPS First arb eligible salary
Mike Trout LAA 2014 3.070 2195 98 307 102 .305 .395 .549 .945 $5,200,000
Freddie Freeman ATL 2013 3.033 1908 68 280 7 .285 .358 .466 .825 $5,100,000
Nolan Arenado COL 2015 2.155 1646 70 243 6 .281 .318 .500 .818 TBD
Josh Donaldson OAK 2014 2.158 1691 63 228 17 .268 .347 .458 .805 $4,300,000
Anthony Rizzo CHC 2014 2.168 1827 71 215 16 .254 .345 .450 .794 $5,000,000
Todd Frazier CIN 2014 3.071 1846 73 235 30 .258 .325 .451 .775 $4,500,000
Kyle Seager SEA 2014 3.085 2201 70 264 32 .262 .328 .429 .757 $4,500,000

Since Arenado and Donaldson were three whole days of service time apart from each other when they first reached super-two status, it is difficult not to use Donaldson as the most accurate comparison. Why wouldn’t we? After all, they are only seven homers, 15 RBIs, and .013 OPS points apart from each other, all of which are in favor of the Rockies' raking third baseman.

Last offseason, I wrote about why Josh Donaldson lost his arbitration case over at Baseball Essential—resulting in him making less than Todd Frazier and Kyle Seager. Not to knock either player, but Donaldson simply deserved more yet lost because of the amount for which ($5.75 million) his side asked.

No player that put up the same type of numbers Donaldson did leading up to his first crack at arbitration made much over $5.1 million. Even non-super-two first year arbitration eligible players, who typically get more money due to more PA and just generally for being in the major leagues longer, didn’t receive that kind of money.

Arenado is faced with a similar predicament. None of the players on that list made over $5.2 million, not to mention that Arenado doesn’t have the best numbers those players used as comparisons. Obviously that means he could be a good distance away from the $6.7 million total he is projected to get.

Like most things in life, however, it isn’t that simple. What Arenado has going for him is that he had one hell of a platform year. A platform year, for those of you that might have forgotten, is the season leading up to a player's first shot at arbitration. In this case, that would be the 2015 season in which Arenado posted 42 HR, 130 RBI, and owned a .287/.323/.575 slash over 665 PA. Although most of us realize that in order for a player to get RBIs there have to be runners on base, and that Coors field is friendly to that home run total, the panel of judges does not care. Because the panel of judges does not care, the model created to mimic their decisions does not either.

How did his platform year stack up against the players we previously used as comparisons, you ask? Check it out:

Platform Season
Player Team Year PA HR RBI SB AVG OBP SLG OPS
Mike Trout LAA 2014 705 36 111 16 .287 .377 .561 .938
Anthony Rizzo CHC 2014 616 32 78 5 .286 .386 .527 .913
Nolan Arenado COL 2015 665 42 130 2 .287 .323 .575 .898
Freddie Freeman ATL 2013 629 23 109 1 .319 .396 .501 .897
Josh Donaldson OAK 2014 711 29 93 8 .255 .342 .456 .798
Todd Frazier CIN 2014 660 29 80 20 .273 .336 .459 .795
Kyle Seager SEA 2014 654 25 96 7 .268 .334 .454 .788

He has had one of the best platform seasons in recent memory according to the stats that the arbitration panels deem most useful. In fact, the Rox righty is in the top portion of nearly every category—alluding to how good he was this season. This is not even considering his extensive defensive capabilities, though keep in mind that Donaldson is also a very capable defensive third baseman.

Yes, he was good. But that still doesn’t explain how Arenado is worth over than a million dollars more than anyone on that list. Well, quite simply put, the explanation to that is that baseball is getting richer and expanding. As a result, growth has led to inflation within the sport. According to stevetheump.com, from 2013 to 2014 the average MLB salary increased by an astounding 12.8 percent. If we use four million dollars as an estimated average MLB salary for 2015, then from last season to this season average salary has increased by 4.7 percent.

Let’s see what that means for the salaries of the players we used as comparisons:

What they're worth now
Player Present Value
Anthony Rizzo $5,905,000
Mike Trout $5,865,600
Freddie Freeman $5,752,800
Todd Frazier $4,711,500
Kyle Seager $4,711,500
Josh Donaldson $4,502,100

At the top, the change is over $600 thousand for each player—pushing each closer to the six million dollar mark. For Seager, Donaldson, and Frazier the difference is around $200 thousand and serves more as a floor for Arenado’s projections.

So, does Arenado reach his projection of $6.7 million?

Second guessing MLBTR’s projections isn’t the best idea, as the model they built is more than likely in the neighborhood of the correct amount. But, like I said before, this total just stuck out to me as odd.

Arenado's projection is well above what players like him have received in the past, so it would be downright risky for Arenado’s side to ask for that much should he actually go to trial. Asking for too much is what burned Donaldson last season, and he isn’t the first player to lose to the team—most actually do. If the Rockies were to submit a final offer somewhere between $5.2 million and $5.6 million, Arenado might be in the same boat should his side submit the MLBTR projected figure. My guess, however, is that this high salary projection makes Nolan Arenado one of the more appealing extension candidates out there.

. . .

Shawn Brody is a contributor for Beyond the Box Score as well as a sophomore pitcher at Howard Payne University majoring in Business Management. He has the current misfortune of being a Red Sox fan. If you would like to get a hold of him, please feel free to email him at Shawnbrody9@gmail.com or follow him on Twitter @ShawnBrody.