Dodgers Re-Up Ted Lilly

Ted Lilly made a nice impression in his 12 starts for the Dodgers: Seventy-six innings, a 3.98 FIP, and a 3.52 earned run average, which are nice enough numbers that the Dodgers have re-signed the southpaw to a three-year deal worth $33 million. The deal serves as a nice follow-up to Lilly’s last free agent contract, which held a worth of $10 million annually. A value deal this is not.

Over the last three seasons, Lilly has posted Wins Above Replacement totals of 2.8, 3.8, and 2.3. Taking an average is not the best method for projection purposes. But if Lilly is a three-win pitcher then that gives him a market value of something around$12 million. Given Lilly’s age and decreased velocity – he averaged nearly 90 miles per hour on his fastball the last time he inked a contract, he’s down to 87 miles per hour now – it’s not unreasonable to say he could be in for some decline.

Let’s say he starts at three wins (and keep in mind, this does not account for any regression towards the mean) and declines at a straight-line rate of 0.3 wins per season. That’s not too aggressive, mind you, and gives us the picture of a best-case scenario. That gives us totals of 3, 2.7, and 2.4. Optimistically let’s say the market begins to perk up over these seasons, with win totals costing $4 million for next year, then increasing by 10% annually, which paints the following picture:

The margin for error is thin. What this analysis has yet to account for is the Dodgers’ placement on the win curve and the opportunity cost incurred by re-signing Lilly. The Dodgers finished fourth in the division, but the National League West seems perpetually open, meaning contention is not out of the question. Lilly is one of the better starting pitchers on the open market and the Dodgers needed to secure either Hiroki Kuroda or him, lest they head into the free agency period needing two starters with a budget saddled by divorce papers.

This deal is completely reasonable in the minds of those who think Lilly can continue to replicate his results year in and year out, but the inherent injury and attrition rate held by starting pitchers makes it a risky proposition. Once the ownership issues vanish, the salary becomes irrelevant – $11 instead of $9 is not going to get anyone fired. The length, though, is the most questionable aspect and will continue to be so.

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13 Responses to “Dodgers Re-Up Ted Lilly”

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  1. B N says:

    All told, it seems like a reasonable signing. Pitchers always seem to get signed for too long and/or too much. He’s been pretty steady as a pitcher and his performance has been solid. Especially considering that he’s kind of a fly ball pitcher and the Dodgers play in a big park, I’d have to think this was a good move for them. He’s worth more to them than to some other clubs, probably.

    On the other hand, breakdown is always a risk. Just ask Pavano and Clement, the two staff fillers for the Yankees and Red Sox a few years back…

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  2. chuckb says:

    As a Cards fan, the size of this contract has me worried about what the Cards will end up paying to resign Jake Westbrook. They’re similar pitchers in terms of skill level, though Lilly’s a flyball pitcher and Westbrook’s a ground ball pitcher, but Westbrook’s profound injury history has to make him a greater risk than Lilly going forward. Frankly, I don’t trust John Mozeliak’s ability to be prudent when it comes to signing free agent pitchers, based on the ridiculous contract to which he signed Kyle Lohse 2 years ago, and I could see him using Lilly’s contract here to go something like 3 years and $30 million with Westbrook when going anywhere beyond 2 years is a tremendously risky proposition.

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    • B N says:

      I’d have to think Westbrook should be getting something considerably under what Lilly is getting. Lilly strikes out more guys, walks less guys, and still has only shown he’s healthy for one season. To me, that sounds like a 1 year deal with a vesting option, personally.

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  3. Vladman1327 says:

    I’m curious as to why your sample market increases by $0.4 million/win every year. Shouldn’t the market correlate with inflation? That’s not to say that the value of a win does not increases each year, but 10% seems like a huge jump now, doesn’t it? Besides, the jump from $4.4 m to $4.8 m is only 9.1%.

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    • Xeifrank says:

      The 10% increase is Tom Tango’s model (I believe) and the 10% is the modern day historic average increase in salaries. When the global financial meltdown occurred a few years ago, it through this model out of whack and it is pretty difficult to guess at what the proper $/WAR should be. The author is probably sticking with the 10% out of simplicity. The real number is likely between 5 and 10 percent. For our exercise here 10% should be fine, but feel free to plug in 5% or some other number and run the numbers.
      vr, Xeifrank

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  4. max says:

    Lilly was deemed “must be moved” at the deadline by the Cubs. No one seemed to think that the best scenario may have been to offer him a one-year arb deal which he would decline in order to get a multi-year deal elsewhere. With him being a type “A” free agent, Cubs could have gotten a couple of high draft picks which may have been better for the long-term than a Maddux-to-Dodgers redux trade (A stop gap middle IF and a couple of marginal prospects). Then again, maybe I’m wrong and he accepts a one-year deal and the Cubs have to pay him and try to move him again.

    Anyone have any thoughts on this?

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    • ofMontreal says:

      I think the Cubs just wanted to save some(just a little) $ and move on. To be honest, I don’t think they would have done it if not for the Theriot-DeWitt exchange. I think the Cubs value DeWitt highly. We’ll see if they try to replace him this off season. And of course Theriot had to go, so that counts a little too.

      I also am not a big believer in type A surety. Had the same argument with Jaffe at BP about Randy Wolf. I don’t think he would have gotten the big contract from Milw if they had to give picks and LA would have had to eat him. And I also think the trade was a bit of a reward for Lilly, because he did well and never caused a problem. Although I thought the Cubs could have got McDonald for him and had another starter.

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    • Boomer says:

      What if Lilly didn’t pitch well after the trade? Would he still have gotten a 3 year deal? Maybe not. Cubs didn’t want to risk him accepting a raise.

      And even though he’s a Type A, the draft picks are an unknown. What if he signs with the same team that signs a higher rated Type A like Carl Crawford? Then the Cubs would’ve gotten their 2nd rounder, so you’re looking at picks in the 30’s (supplemental) and somewhere in the 40s/50s.

      Can’t remember how much money the Cubs saved, but they’re penny pinching and that probably helps more than the draft picks 6 years away and without the risk of giving Lilly a raise to $13 or $14 million for 2011.

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      • max says:

        Yeah, it seems the trade was motivated by cash and I probably didnt give enough credit for swapping Theriot for the same type of player who is 5 years younger, cheap and left handed. Both of you make valid points about him getting the “Juan Cruz” treatment if a team had to give up a pick.

        I would just have liked to have given Tim Wilken some more picks to play with. After Castro, the young talent level sees a drop depending on how one feels about Cashner, Colvin, Archer, etc….and since it seems this team is going to have to wander the baseball desert for a couple of years, I would like to see some more young talent ready to make in impact when the team may be ready to compete rather than see guys produce when the team around them is a waste like Byrd and pre-AS break Silva.

        Or maybe Hendry has a plan and really can make them competitive next year. He will need to do that to sell tickets like they have been since 2004, but thats another issue entirely.

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  5. John says:

    A simple Marcel regressed 5% projects Lilly to be worth 2.5 WAR next season. Using your parameters (decline .3 per season plus 10% inflation), Lilly’s value over the next three years is expected to be $29 million.

    Is that typically how you’re supposed to regress to the mean? Or should I have regressed year 2 by 5% and so on…

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  6. OTerry says:

    You’re forgetting to mention his intangible leadership skills, which will help the rest of the team’s starters. Also, he is scrappy and/or has lots of heart.

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  7. Jacob Jackson says:

    R.J., any thoughts on what impact this signing has on two other Type A guys – Carl Pavano and Jorge De La Rosa?

    I’m curious if the community foresees Pavano and De La Rosa earning deals that are identical to this, slightly more, or slightly less.

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  8. Xeifrank says:

    Dodgers needed three starters (Kershaw, Billingsley, 3, 4, 5) with the contracts of Kuroda, Lilly and Padilla expiring. Chances are they break back either Kuroda or Padilla to be their 4th starter. Kuroda would likely take two years and Padilla one year, Then hope an NRI or minor leaguer can stick for the 5th spot – or 5th spot by committee. Dodgers also need to fill a few holes on offense, so Dodgers fans are hoping the payroll creeps up over $100M otherwise they will likely be a .500 team again next year.
    vr, Xeifrank

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