1. SCRAP HEAP STARTERS Do Wounded Pitchers Represent an Opportunity for Value in Free Agency?

2. HEALTHY PITCHERS ARE EXPENSIVE Examples of market prices for healthy free agent starters at each tier: +1 WAR: Chen (2/9M), Harang (2/12M) +2 WAR: Kuroda (1/10M), Pavano (2/16M) +3 WAR: Buehrle (4/58M), Dempster (4/52) +4 WAR: Wilson (5/77M), Lackey (5/83) +5 WAR: Lee (5/120M), Sabathia (7/161M)

3. ADVANTAGES OF SIGNING PITCHERS WITH MEDICAL QUESTION MARKS Short Term Contracts Lower Cost Mid-Season Trade Chips Delay Service Time for Top Prospects Create Spring Training Competition

4. DISADVANTAGES OF SIGNING PITCHERS WITH MEDICAL QUESTION MARKS Larger Variance Unpredictable Availability Limited Long Term Benefit Increased Workload for Training Staff

5. 2011 STARTERS WHO SIGNED ONE YEAR FREE AGENT CONTRACTS LAST WINTER

6. BREAKDOWN OF PITCHERS IN SAMPLE Hiroki Kuroda Excluded – Special Circumstance Brandon Webb, Justin Duchscherer, and Ryan Rowland-Smith dont appear on the list – they didnt pitch in the Majors last year 19 total starters signed one year MLB deals Base salaries estimated at $41 million Incentives push actual payout to ~$50 million

7. PRODUCTION OF PITCHERS IN SAMPLE 350 Starts, 2,073 Innings Pitched, 5.93 IP/GS 6.8% BB%, 15.9% K%, 42.7% GB% 103 ERA-, 105 FIP-, 104 xFIP- +23.7 WAR $2.11 Million Per WAR +1.8 WAR per Roster Spot Absorbed

8. 2011 MLB STARTING PITCHER AVERAGES 6.03 IP/GS: -0.10 difference 7.5% BB%: +0.7 difference 17.5% K%: -1.6 difference 44.4% GB%: -1.7 difference 103 ERA-, 101 FIP-, 100 xFIP- +2.5 WAR per Roster Spot : -0.7 difference $4.5 Million Per War: -2.4M difference

9. ONE YEAR CONCLUSIONS SPs on one year deals were the best value proposition in free agency of any player type in baseball in 2011. Brandon McCarthy provided the highest return on investment of any player signed last winter, and the As still have him for 2012 as well. Only 8 of 19 (42%) were busts, and they cost a grand total of $17 million between them. Two Year Contract Guys: Pavano, Correia, de la Rosa, and Westbrook cost $59M combined.

10. WHAT ABOUT PREVIOUS YEARS? Injury Information is Imperfect and Difficult to Obtain Not All Injuries Are Created Equal Reporting on Incentives is Inconsistent Effects of Global Economic Struggles In 2009 Shift in Run Environment Went Back to 2006-2007 Offseason

11. 2006 OFFSEASON Six pitchers signed one year MLB deals after spending at least 15 days on the disabled list during 2006 season: David Wells, Randy Wolf, Wade Miller, John Thomson, Tomo Ohka, Tony Armas Wells was going into age 44 season, so hes something of an outlier Six pitchers combined for +2.1 WAR and $18M salary Wolf was 44% of that total by himself

12. RANDY WOLF 2006 numbers were atrocious 57 IP, 12.6% BB%, 16.4% K%, 37.3% GB% 121 ERA-, 139 FIP-, 119 xFIP- -0.3 WAR $8 million contract from the Dodgers He performed much better in 07 (+1.7 WAR), but only in 103 innings pitched

13. MARK MULDER AND WOODY WILLIAMS Mulder got 2/13 from Cardinals despite injury plagued 2006 season (93 IP with 7.14 ERA). Williams got 2/12.5 from Astros at age 40 to leave Petco Park. Huge gap between ERA (3.65) and xFIP (5.09) suggested trouble. Mulder pitched 12 innings in 2007-2008. Williams threw 188 replacement level innings in 2007, was released, and didnt pitch in 2008.

14. 2007 OFFSEASON Five pitchers signed one year MLB deal after spending 15+ days on DL in 2007: Randy Wolf, Kenny Rogers, Mark Redman, Matt Clement, Mark Prior :( Those five combined for +3.2 WAR and $16M salary Wolf took a 40% pay cut despite a bounce back season Kenny Rogers threw 63 innings at age 42, then got $8 million guaranteed for his age 43 season. Only multi-year deal given to SP that winter: Carlos Silva…

15. 2008 OFFSEASON Nine pitchers signed one year MLB deal after spending 15+ days on DL in 2008: Randy Johnson, John Smoltz, Andy Pettitte, Brad Penny, Daniel Cabrera, Mike Hampton, Carl Pavano, Tom Glavine, Bartolo Colon Those nine combined: +12.5 WAR and $32.5M salary Remove Pettitte: +8.8 WAR for $27M Durable starters Burnett ($83M) and Lowe ($60M) were handsomely rewarded.

16. 2009 OFFSEASON Nine pitchers signed one year MLB deal after spending 15+ days on DL in 2009: Ben Sheets, Rich Harden, Brett Myers, Vicente Padilla, Chien-Ming Wang, Justin Duchscherer, Scott Olsen, Erik Bedard, Claudio Vargas Those nine combined for +5.0 WAR and $35M salary Durable starters Pineiro and Marquis got 2/15M each. Durable starter Lackey got 6/83M Randy Wolf finally earned multi-year deal and successfully made it on every slide in this presentation

17. WHAT ABOUT THIS PAST WINTER? Paul Maholm (4.75M), Erik Bedard (4.5M), Freddy Garcia (4M), and Chien-Ming Wang (4M) set market for wounded starters Roy Oswalt didnt like that price, still sitting at home Mark Buehrle rode durability to 4/58 from Miami Jeff Francis (MILB deal) and Chris Capuano (2/10M) show how market values strikeouts. If your arm is going to hurt, miss bats when it doesnt.

18. CAN WE DRAW ANY CONCLUSIONS? Price of damaged goods SPs certainly lower in 2011- 2012 than in prior years These pitchers were generally not very good from 2007-2009, and were rarely worth the contracts they were given Price drop suggests a market correction as a reaction to recent failures. Despite success of damaged pitchers in 2011, no positive reaction to pursue this pitcher type for 2012.

19. WHO SHOULD PURSUE WOUNDED STARTERS? Contenders with large ability to absorb risk Non-contenders who could use significant value pieces Teams with top prospects who may be ready by May Teams in pitchers parks who can offer comfortable place to rehab and re-establish value In short – almost every team in baseball. Wounded starters are lottery tickets, but ones worth buying at current prices.