As Orioles players report to Sarasota for spring training, discussion turns to possibility and hope. Gone are the cold winter days wrought with worry of a front office exodus. The questions surrounding the team, ones that used to concern leadership and contracts and dollars and cents, are now about player performance. It’s an infinitely more satisfying place to be. It’s better to see performance, any performance, than the horrible absence of baseball activity that is December and January.
(You can discuss this on the BSL Board here.)
But who will we see perform when the games count? Spring training is an opportunity for dreaming for the fans, but also for the players invited to camp. For some players, this short period in Florida is their opportunity to win a coveted roster spot on a Major League Baseball team, and a good one at that. They’ll spend their time building scenarios that allow them to break into the bigs and to make a difference. It’s only natural that we as fans mix and match the roster as well, constructing it in our image as fictional managers.
For the first time in many years, the Orioles have more capable starting pitchers than they have traditional starting pitcher roster slots. Atypical rotations notwithstanding, only five men will be placed on the Opening Day roster with their job descriptions demanding that they begin the game on the mound. This is a welcome wrinkle to spring training roster speculation; rather than wading through the muck to find a pitcher that doesn’t make fans groan, we wonder whether one will be left in the minor leagues or moved to the bullpen.
I won’t speculate on the Opening Day roster. I haven’t seen anyone’s work in Sarasota! Instead, I’ll describe the process that the team should use to determine its Opening Day rotation (and, really all of its roster slots). The reason I’m taking this alternative route is because I’ve heard too often that Ubaldo Jimenez is being paid too much to be the odd man out. This is not the right approach.
The Orioles made organizational history last offseason by breaking their unwritten rule of 3-year pitcher contracts and extended an offer to Ubaldo Jimenez totaling 4 years and $50 million. The important thing about MLB contracts is that they are all guaranteed. The Orioles will pay Ubaldo Jimenez $50 million unless someone agrees to do so in their place, which, based on recent history, seems unlikely. The contract guarantee is important to my preferred method of roster construction, because save for a trade, it’s largely immutable.
In economics, there exists something called a sunk cost. Sunk cost is any cost that is already incurred and cannot be recovered in its original form. To go with sunk costs, there is a logical fallacy known as the Sunk Cost Fallacy. In this fallacy, people are so concerned with averting loss that they’ll consider a cost that has no bearing on the decision at hand. It’s known in the stock market as throwing good money after bad.
A simple illustration of both of these is the purchase of a ticket to an Orioles game, which is nonrefundable, without a secondary market.1 If you were to pay $25 for an Orioles ticket for a game in June, you would be incurring a sunk cost. When that date in June rolls around, it may be 100 degrees, or the Orioles may be underperforming, or you may have just been invited to play an awesome game of laser tag, or maybe all three occur at once. “I can’t go play an awesome game of laser tag,” you think, “because I already have this Orioles ticket.” This is irrational behavior, say economists. You have no way to retrieve the $25 you spent on the ticket, so the expenditure is no longer important to your decision about what to do with this sweltering June afternoon. At this point, the rational way to make a decision is to weigh the net benefit, or utility, that you would get from going to the Orioles game in the heat against that which you would get from playing laser tag. If you’d have more fun playing laser tag – even after considering the added cost of playing laser tag (one that hasn’t been made yet and is therefore still relevant to your decision) – you should go play laser tag!
Back to the birds: the Orioles can’t recoup the cost incurred in signing Ubaldo Jimenez without the existence of a secondary market for his services, which has not given us an indication of existing. They’re paying him for this season whether he pitches well or poorly or not at all. The team should use the five best starting pitchers at its disposal on its Opening Day roster regardless of contract numbers,2 just like you should go play laser tag if you want. The Orioles would be better for it, even if you might sweat just as much.
1. Of course, a secondary market for tickets exists, and it’s called StubHub. The price your ticket would fetch on StubHub is a benefit for playing laser tag instead of going to the game.
2. For the sake of simplicity, I’ve completely ignored team incentives in contracts, such as delaying arbitration by holding a player in the minors until later in the season. More important to this Jimenez vs. Gausman debate is that Jimenez’s trade market and the Orioles’ contract isn’t perfectly immutable. They could play him in the hopes of trading him and recovering some of the cost of employing him, but that carries with it its own risk. I’m personally of the mind that the Orioles would have to give too much in the trade to make Jimenez someone else’s problem, and that playing him wouldn’t help that. As such, find a place where he can be better than the next-best player or just plain old cut bait.
Patrick was the co-founder of Observational Studies, a blog which focused on the analysis and economics of professional sports. The native of Carroll County graduated with a Bachelor’s degree in Economics from Loyola University Maryland. Patrick works at a regional economic development and marketing firm in Baltimore, and in his free time plays lacrosse.