Tim Lincecum is in store for an incredible salary via arbitration. How high it will be is the question.

EDITOR'S NOTE - This article was originally published in Nov. of 2009. With Lincecum filing for salary arbitration, the topic was worth reviewing.

$650,000

That’s what Giants starting pitcher Tim Lincecum made last season; the last season before “The Freak” hits salary arbitration. Now, it is not a matter of whether Lincecum will make more money next season, but how much. Lincecum will almost assuredly be getting a record-setting deal, but which “record” will be broken is the question.

On Jan. 5-15, players that have between 3-6 years of major league service time are eligible for salary arbitration, and can file for it. Lincecum falls into a small sub-set of players called a “Super 2”.

To qualify as a Super 2, a player must:

• Have at least 2 years of service, but less than 3, and;
• Have accumulated at least 86 days of service in the previous year, and;
• Rank in the top 17% of all 2-year players in service time.

The cutoff point generally falls between 2 years, 128 days of service and 2 years, 140 days. How much ML service time does Lincecum have? 2.148, or 8 days over the threshold for the classification.

Cutting to the chase, the salary arbitration process is designed to come to an agreement – a contract reached by the club and the player, mostly of the single-year variety. After filing for eligibility, a player with his agent, file a salary figure that they are seeking as salary for the upcoming season. In turn, the club the player plays for files their salary figure that they believe the player is worth for the same period; the upcoming season. After the figures are filed, there is a period of time in which negotiations occur to reach a contract ahead of a hearing to determine one figure or the other – there is no middle ground.

Based upon the exchange, the salary point in-between player and club figures are a major focus. This “mid-point” is where compromise would be met.  A player and his agent gets too cocky and files a salary figure too high or club files too low, and it can have consequences. At the least, it can force the sides to not reach a contract on their own, and the case goes to “hearing.” At the worst, millions of dollars can be lost when a side wins or loses in the hearing process. So, the figures that are filed are given incredible amounts of attention, not only by the players and clubs, but by the MLBPA and the Commissioner’s Office. The outcome for a case sets the market for players in salary arbitration, not only for his class of players, but in future years. As we’ll see, this has a large bearing on Lincecum’s case.

As background on the process, it is the last bastion in MLB where advanced statistics are not used. The reason is simple: a player’s “case” if it goes to hearing is heard by a 3 member arbitration panel from the American Arbitration Association; they are not “baseball people”. While the panel members are familiar with baseball statistics, the “old reliables” are still the focus. No WHIP. No VORP. No WAR. Instead, ERA, AVG, IP, Ks, BBs, etc. are the focus. In plain terms, simple is better in salary arbitration.

What Is In-Bounds and Out-of-Bounds in Salary Arbitration

Select the image above to read the criteria for salary arbitration in MLB

The rules for engagement in salary arbitration are centered on common sense. For example, it doesn’t make much sense to try and compare a pitcher to a first baseman. You’re looking to make a case that the player is like similar players. You can make a case that corner outfielders are similar. But, beyond that it’s really position for position.

It also makes sense that, for the most part, you need to compare players at their same point in terms of experience. You don’t want to use age as players enter the Major Leagues at differing rates. So, the focus here is on the Major League Service Time discussed prior in groups and the salaries they make. The premise is simple: make a case that a player is worth the salary of another player with the same amount of MLB experience, with some exemptions. (Select the image to the right to see the criteria as it is presented in the latest CBA)

The Exception

As the CBA defines it, there are exceptions to the rules. When there are players that an agent believes is so extraordinary as to have to no comparable players within his class to use within the process, they can make a case, as the CBA specifies that the criteria “shall not limit the ability of a Player or his representative, because of special accomplishment, to argue the equal relevance of salaries of Players without regard to service, and the arbitration panel shall give whatever weight to such argument as is deemed appropriate.

The Stare Down

As mentioned, the arbitration process is designed to reach a contract agreement. There is the possibility that the Giants could offer multi-year contract in the hopes of wrapping up Lincecum through his arbitration eligible years, and possibly early free agency. That would benefit the Giants, and could give Lincecum financial security, should he find himself injured. On the flip side, he’s in an incredible position to receive a record-setting arbitration deal, thus maximizing the ability of the arb process. That would mean a much higher salary in 2010 than he would get in a multi-year deal, and set the bar higher in the arbitration market for years to come, something that the MLBPA would like to see.

So, there are pluses and minuses depending on how Lincecum holds up. Continue to be of Cy Young caliber, and he will reap extraordinary salary increases each year through the arb process. If he falls apart; loses his stuff, or is injured next season, the guaranteed money in a multi-year contract dwindles.

Select Read More to see how career stats details for Lincecum, how much he may be asking in arbitration, how much the Giants could offer, and ultimately, what type of one-year salary Lincecum could recieve

Making the Case for Lincecum (The Pitcher)

Select the image to see Lincecum's stats

Lincecum will be a rare case in the salary arbitration process – that exception – a player that falls outside of the bounds of his peers within his service time group.

(Select the image to the left to see Lincecum’s career game-by-game stats)

Lincecum won his first Cy Young in his second season, something that had not been done since Dwight Gooden and Bret Saberhagen both won in 1985. Lincecum just won his second Cy Young, going back-to-back. He is one of only 15 players in history to win the award more than once. As a comparison, Tom Seaver won his first Cy Young in his third season, and his 2nd CY Young in his fifth season. Lincecum has won two Cy Youngs in his two seasons and change, an accomplishment no other pitcher has done. He is the first pitcher to go back-to-back as an NL Cy Young winner since Randy Johnson won four straight (1999-2002).

Selected stats that back up Lincecum as an“exception”:

• Led the league in strikeouts (second consecutive year)
• Had the third lowest ERA in the league (second consecutive year)
• Has a .702 winning percentage in his third season, ranking him close to Dwight Gooden (.756), who is considered to have had one of, if not the greatest early pitching careers in history.
• Lincecum’s career 10.2 Ks per 9 is better than Gooden’s after his first three seasons (9.1)

Awards Beyond Cy Young:

• 2009 All-Star Game starting pitcher
• NL Sporting News Pitcher of the Year (second consecutive year)

Based on research by Ari Kaplan of AriBall.com, Lincecum in 2009:

• Holds batters to 22% less batting average, 18% less OBP, and 28% less SLG, and 43% less ISOP (“Isolated Power”).
• Has greater overall dominance with his 3.83 K/BB ratio (2.54 is avg). He is the strikeout leader with 261.
• Strikes out batters 50% more often (per 9 IP), and walks batters 7% less often (per 9 IP).
• Attempts pickoffs 23% more often, yet 30% fewer consecutively (2 or more in a row).
• Allows 60% fewer HR per 9 IP, 25% fewer hits per 9 IP, 37% fewer TB per 9 IP.

Making the Case for Lincecum (The Star)

Lincecum is unorthodox in his delivery. His gangly frame contorts. His stride to the plate is of incredible length compared to his relative size… he’s “The Freak”, one that gets attention due to his uniqueness coupled with his pitching. It is his talent, his style (both on and off the field) that have made Lincecum a star, something sorely needed by the Giants after Barry Bonds left in a cloud of PED suspicion.

Last season, the Giants averaged 35,322 in attendance, compared to 36,708 when Lincecum started, a difference 1,386 more in paid attendance per game. Using Team Marketing Report’s Fan Cost Index for 2009, the Giants had an average ticket price of $23.28. When you place the figures against his 16 starts at AT&T Park, it translates to over a half-a-million dollars extra ($516,280.56) in additional ticket revenue alone each year that is potentially related to Lincecum. Taken further, if one uses TMR’s Fan Cost Index, which looks at the prices of two (2) adult average-price tickets, two (2) child average-price tickets, two (2) small draft beers, four (4) small soft drinks, four (4) regular-size hot dogs, parking for one (1) car, two (2) game programs and two (2) least expensive, adult-size adjustable caps, the FCI for the Giants was $222.63. If we were to say a 1/4 of the 1,386 that attended on days Lincecum pitched were part of the FCI, approx.  $77,000 more potential revenue related to Lincecum went to the Giants’ coffers this past season based on days he was up in the rotation compared to days when he was not.

While not wholly related to Lincecum, television ratings for the Giants were up 39% from the year prior on CSN Bay Area, the third highest regional sports network ratings increase in all of MLB for the 2009 season, a new record for the organization.

What Might Lincecum’s Filing Figure Be

Rick Thurman of the Beverly Hills Sports Council represents Lincecum, and you can bet he and the staff at BHSC have been crunching data and working to place the highest salary filing figure without going too far. Remember, the CBA says, the “arbitration panel shall give whatever weight to such argument as is deemed appropriate.”

There’s been talk that "The Freak", BHSC, and the MLBPA have discussed an asking figure of $23 million, plus one-dollar. The significance of the “$1” is that it would exceed C.C. Sabathia’s salary by a buck that he will receive next season as part of his 7-year, $161 million deal with the Yankees; a record salary for a pitcher in the league.

If that figure is filed, and the case were to go before an arbitration hearing, chances are exceptionally high that the panel would shoot down Lincecum’s case in favor of the Giants offering figure (provided the Giants weren’t foolish from filing exceptionally low).

There are several arbitration filing and contract figures to focus on:

• In his second year of salary arbitration eligibility, the Philles’ first baseman Ryan Howard filed an $18 million asking figure, the third highest ever. That came on top of his $10 million award that he gained by winning his salary arbitration case at hearing the year prior. Howard, at the time, had a RoY award in 2005 and was NL MVP in 2006. The $18 million filing figure was the third highest ever.
• In 2001, Yankees shortstop Derek Jeter filed an $18.5 million asking figure compared to the Yankees $14.25 million in his second year of salary arbitration eligibility. The year prior Jeter asked for a then record $10.5 million to the Yankees $9.5 million offering figure. The 2001 figure by Jeter was a reaction to Alex Rodriguez record setting 10-year, $252 million contract signed as a free agent with the Texas Rangers the month before. Jeter’s $18.5 million asking figure ranks 2nd all-time.
• Roger Clemens considered retirement before the 2005 season, but held off after the Astros offered salary arbitration as a free agent. The Astros submitted an offering figure of $13.5 million compared to Clemens’ $22 million asking figure, the highest asking figure ever to date. On January 21, 2005, Clemens and the Astros agreed to a one-year, $18,000,022 contract, thus avoiding arbitration. The deal gave Clemens the highest yearly salary earned by a pitcher in league history. But remember, Clemens’ salary arb deal is different in that he was a free agent offered salary arbitration.
• In terms of recent salary arb deals, Dontrelle Willis reached a $4.35 million deal with the Marlins in 2006 and avoided arbitration. Willis’ $4.35 million is the highest salary reached for a starting pitcher that was first time eligible. This past year, closer Jonathan Papelbon reached a one-year, $6.2 million agreement with the Red Sox as a first-time salary arbitration eligible player. It is the highest salary arbitration related contract for a pitcher within the normal 3-6 years of ML service time, as well as the most for a closer.

Based upon the historic figures, we can reach the following:

The Clemens figure, much like the Sabathia number, is unrealistic. The $22 million filing figure would be $4-$4.5 million over Howard and Jeter’s figures, and remember… Clemens was a free agent with 7 Cy Young awards under his belt at that stage who was offered salary arbitration by the Astros. However, the back-to-back Cy Youngs along with other career stats does not make an attempt at surpassing Howard’s $18 million filing figure out of the question.  Maybe $18.5 million? It would be risky, and bold. Howard is an everyday positional player, while Lincecum would be up in a rotation, most likely every 4 days. Lincecum, as a pitcher, would offer more value. While WAR is not used in the salary arbitration process, over Lincecum’s first three seasons he has amassed 18.9 wins above replacement compared to Howard’s 9.2 at the same ML service time.

What Would the Giants Offer?

The Giants are going to be looking at the figures mentioned prior, as well as seeing a couple of possible chinks in Lincecum’s armor.

The Giants will most assuredly point to Lincecum having issues with his back last season. Based upon data from AriBall.com:

• On September 8th, Lincecum had back problems "due to spasms and inflammation in the lower left side of his back"
• His fastball velocity dropped from 92 to 90mph and changeup from 83 to 82. His slider and curveball stayed the same velocity.
• He consistently threw first-pitch strikes 57% of the time, although it steadily went down from about 50% just before the injury that led to the missed starts. He threw just 40% first-pitch strikes after the back spasm and inflammation.
• Before the injury he threw fastballs 60% of pitches, while after the injury he threw them 50%. Curveball usage went up from 20% to 28% of pitches, changeup down from 20% to 16%, and slider down from 10% to 8%.
• After the injury, his slider, fastball, and changeup release points went up 1-2 inches and his curveball down an inch. Also all of his release points were 2-3 inches towards first base.
• For comparison purposes, he threw 57% first-pitch strikes in 2008, and 60% in 2007.

See the chart below to see how Lincecum’s pitching was over the course of last season with the back injury.

Select the image above to see details on Lincecum's pitching velocity across his pitches over the course of  the 2009 season (courtesy AriBall)

The Giants could – repeat could – bring up Lincecum’s now infamous pot bust this off-season. This is the first known brush with pot for Lincecum, but then MLB doesn’t report positive tests for marijuana; players are only fined and it is not publically disclosed. The Business of Sports Network has never heard of Lincecum having any other dealings with pot, but let’s say in some scenario, he did. Thurman and BHSC could point to Lincecum’s stats and awards and say, “And, marijuana is adversely affecting Tim’s pitching, how?” The pot issue would seem a desperate move without pointing to anything damaging his performance.

So, based upon Papelbon’s $6.2 million deal last year as a closer, and Lincecum’s value, both on and off the mound, an $8 million offering figure by Brian Sabean and the Giants seems possible. The figure is not outlandishly low; it would be a record setter for a starter and $1.8 million higher than Papelbon’s record setter last season. Based upon the fact that Sabean and the Giants haven’t been in these uncharted waters before in salary arbitration, the $8 million the figure would most likely look good to arbitrators, should they go to hearing. With offering and asking in place, the sides can then focus on the real matter at hand, the mid-point.

What Could The Final Lincecum Salary Figure Be

Based upon an $8 million offering figure and an $18.5 million asking figure you get a $13.25 million mid-point, a staggering record-setter. The key factor will be the asking figure by Thurman and the BHSC. If the idea is to set the bar by asking for a figure over Howard’s asking figure last year in his second year of eligibility, then something over $18 million will be in play… risky given a possible $10 million gap with the hypothetical $8 million offer by the Giants.

What seem s more likely would be starting with Papelbon’s record-setting deal, and working upward.

Thurman, and the Beverly Hills Sports Council could file a $16.8 million asking figure, which while not a record setter compared to Howard’s second-year arb eligible filing, would make a statement when looking at the mid-point with our hypothetical Giants offering figure. The mid-point between $8 million and $16.8 million is $12.4 million, or double Papelbon’s record setter. The figure would make a statement, but not be as risky as the $18.5 million figure.

So, that’s our mock target: Lincecum’s asking salary will be $16.8 million and the Giants will offer $8 million with a mid-point of $12.4 million. Thurman will meet with the Giants at the Baseball Winter Meetings in Indianapolis, which start on Monday. Thurman has said that they are looking for a one-year deal for Lincecum, and the Giants have said they won’t make any major moves until after the year.

"In Lincecum's case, it's Howard-like in terms of where this could go as a first-time eligible player," Sabean said. "Secondarily, because of the potential number that it could go to, we may be guarded, not wanting to talk about a long-term situation until you know the range. We could get something done in and around filling in the numbers."

Salary Numbers, Compared to 2009

The following would be increases in salary compared to Lincecum’s salary (both last year, and career)

• If $13.25 million mid-point - 1938% higher than 2009 salary of $650,000
• If $12.4 million mid-point - 1808% higher than 2009 salary of $650,000
• Lincecum’s total career earnings total $3,080,000 (signing bonus of $2.025 million, salaries of $405,000 in 2008 and $650,000 in 2009. If he were to land the $12.4 million figure he would earn more than 4 times his career earnings in 2010, alone.

Maury Brown is the Founder and President of the Business of Sports Network, which includes The Biz of Baseball, The Biz of Football, The Biz of Basketball and The Biz of Hockey. He is available for hire or freelance. Brown's full bio is here. He looks forward to your comments via email and can be contacted through the Business of Sports Network.

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