Pettitte and Lowe

Earlier today, we took a look at the potential super-rotation the New York Yankees may feature next year. They already signed CC Sabathia to a monster deal and are considered the front-runners for both A.J. Burnett and Derek Lowe. With Mike Mussina retiring, and Andy Pettitte‘s uncertainty, the aforementioned three would join forces with Chien-Ming Wang and Joba Chamberlain to improve the rotation by approximately six full wins above replacement.

Brian Cashman left the Winter Meetings today to fly to Texas, in order to make a final offer to Andy Pettitte. The one-year offer is believed to be worth $10 mil, a paycut from Pettitte’s $16 mil salary in 2008. While Andy has not discussed wanting more than his fee last season, he has made it clear that he does not want to take a paycut. Cashman said that the offer for Pettitte would be to claim the final spot in the starting rotation. Assuming that the decision here is between Lowe and Pettitte, let’s weigh the pros and cons.

First off, what are their true talent level projections for 2009? Marcel forecasts Lowe to produce a 3.67 FIP in 185 IP. I would bump that up to around 3.80 given that he is going from the NL to the AL, so we can call him a 3.80 FIP pitcher in 185 IP. Compared to the replacement level, with a slight reward for pitching all those innings himself, and not allowing a poor reliever to enter, those numbers translate to +35 runs, +3.5 WAR.

Pettitte is projected to log 182 innings, with a 3.98 FIP. To make the comparison a bit easier, let’s bump him up to 185 IP, the same figure as Lowe, with a 4.00 FIP. Factoring in the same replacement level and slight reward, Pettitte in 2009 comes out to +31 runs, +3.1 WAR.

Therefore, Lowe is worth a bit under a half-win better than Pettitte based on their true talent levels. The fair market value for each, assuming $4.8 mil/win, would be $16.8 mil for Lowe and $14.9 mil for Pettitte. Replacing Lowe with Pettitte in the super-rotation will cost them 0.4 wins, meaning they would be worth +19.4 wins as opposed to +13.8 in 2008. This is still a substantial improvement, meaning the differences between Pettitte and Lowe are not that significant.

In terms of salary, however, it isn’t likely that either will earn their fair market value. As I mentioned earlier, Pettitte is being offered a take-it-or-leave-it, 1-yr/$10 mil deal. With a 10% discount rate factored in for the security of a long-term deal, Lowe would sign for 3-yrs/45 mil, or 4-yrs/60 mil. Therefore, that extra half-win of Lowe’s value would cost around $5 mil.

As commenter Steve Sanders pointed out, though, signing Pettitte instead of Lowe would give Cashman greater flexibility in the future. Pettitte would sign for a 1-yr deal, be an above average pitcher less than a half of a win worse than Lowe, and after this season, come off the books, freeing up more money to be spent elsewhere. In the past, Cashman would sign a plethora of players to multi-year deals, hamstringing himself in the process.

With Lowe, if we assume a dropoff of 0.35 wins per year, over the course of a 3-yr deal, he would go from 3.50 to 3.15 in 2010, to 2.80 in 2011. Perhaps the contention of those fans in favor of bringing back Pettitte for the 1-yr deal as opposed to signing Lowe is that they will get similar value in 2009, and be able to avoid paying $15 mil to a 2.80 win player in 2011, when some of their prospects may be ready for full-time rotation duty.

What say you, Yanks fans? Do you want Pettitte back for one year, or Lowe for a few years?




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Eric is an accountant and statistical analyst from Philadelphia. He also covers the Phillies at Phillies Nation and can be found here on Twitter.


12 Responses to “Pettitte and Lowe”

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  1. dan says:

    Pettitte for one year, Sheets for two. The vast majority of Yankee fans seem to dislike Burnett.

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  2. Greg says:

    Gotta go with Pettitte for 1/10 or even 1/12. A 1 year deal for him is way better than signing lowe to a 4 year deal through his age 39 season. I don’t even see how it’s close.

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  3. Jake says:

    As a Yankee fan, it sure doesn’t feel like Andy’s only a half a win less than Lowe. I don’t know what his numbers were by the end of the year, but it felt like half his starts were brilliant 8-inning 2-run affairs and the other half saw him knocked out after a mere 4 inning, with little ground in between.

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  4. scappy says:

    Don’t forget that lowe is a GB pitcher and would have a sub-par infield behind him

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  5. K-Farn says:

    Signing Pettitte for one year makes so much more sense than giving Lowe a 4 year contract.

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  6. K-Farn says:

    Also, don’t forget that signing Lowe costs a draft pick, whereas signing Pettitte doesn’t cost a draft pick.

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  7. BaiMianBao says:

    Do the picks still matter? 1st rounder is already gone for CC and the other 1st round pick is protected. Wouldn’t the Dodgers just get a supplemental and the Yankees’ second round pick? That’s not as harsh.

    Also my understanding is that it would be one of (Burnett or Lowe) and one of (Pettitte or Sheets). So isn’t the better comparison there Sheets vs Pettitte? Signing both Lowe and Burnett would lock up the rotation for years to come and freeze out young talent like Hughes and Brackman. I think Cashman wants the flexibility of having an open rotation spot in a year or two for young talent to fill.

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  8. K-Farn says:

    The picks still matter, even if it is a 2nd or 3rd rounder. The Yankee lineup is aging fast and there are very few obvious replacements waiting in the wings.

    I’m not saying the lost pick is the main reason to go with Pettitte over Lowe. But it is just one of several reasons why Pettitte for one year is the better choice.

    The Yankees are making a mistake if they sign either Lowe or Burnett to 4+ year contracts.

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  9. Raymond says:

    FIP’s nice and all, but Pettitte’s BABIP has only twice been below .307. According to BP’s Delta Hits tool, he’s allowed 142 more hits than expected given the defense behind him over the course of 2700+ career innings, nearly 10 hits per 185 innings pitched. Over the last three seasons, it’s been 17 extra hits per 185. I wouldn’t have mentioned this normally, but Pettitte has shown a very strong proclivity over his entire career to post sub-par BABIPs and, fluke or not, it’s only gotten stronger the last three years. If “true” talent levels are what you seek to establish, isn’t a fourteen year body of work enough to determine that Andy isn’t so good at preventing balls in play from becoming hits?

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  10. Darren says:

    Eric,

    I made a similar argument yesterday about Pettitte. He’s in the same neighborhood as Lowe and Burnett, as far as overall production, but is only asking for a 1-year deal. This is a tremendous value for the Yankees, but they seem to want a super-duper deal instead. For his part, Pettitte seems to have learned negotiating from Tim Wakefield.

    Raymond brings up an interesting point on BABIP, but I would caution against reading to much into that for a few reasons. First, Pettitte has pitched on some pretty poor defensive teams with the Yankees. It’s not surprising to me that his best two seasons in BABIP came in front of the fantastic defense in Houston. Second, Pettitte makes up for giving up too many hits (a bit) by holding runners on first remarkably well with his pickoff move. Third, even when you compare these guys by ERA+ rather than runs, Pettitte still comes out to being nearly as valuable.

    One question, Eric. Is a bump from 3.67 to 3.80 in FIP enough to compensate from moving from the NL to the AL? It sounds awfully low.

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  11. Eric Seidman says:

    Darren, don’t worry, I’d also caution against reading too much into the BABIP. As far as bumping his FIP, why don’t you bump it up to different intervals and see when it makes sense for Pettitte to be over Lowe?

    I mean, there is no set conversion rate here, but I do think Lowe can remain an effective pitcher. You could certainly calculate his WAR at different FIPs to see the “break-even” point of sorts.

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  12. Darren says:

    Why me? :)

    I was just wondering how you arrived at .13 for the bump up. The estimates in league difference I’ve seen are usually around 1/2 to a full run. That would certainly change the comparison considerably.

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