February 19, 2015

Painting the Black

The Last Shall Be First

by R.J. Anderson

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Jeff Luhnow knows the value in picking first. Since usurping Ed Wade in December 2011 as the Astros general manager, Luhnow has batted leadoff in each of the three drafts he's supervised—a streak assured to end in June, when Houston selects second (compensation for failing to sign Brady Aiken) and fifth. By then, Luhnow ought to be accustomed to choosing later than normal. That's because, for the first time in his tenure, the Astros will enter the season without the top waiver priority.

While official statistics aren't kept on such things, a dig through past game logs reveals the Astros entered with a share of the majors' worst record (and first dibs on waived players) in 24 of Luhnow's first 29 months on the job. Luhnow has since flipped 10 pages in his calendar since his team was baseball's worst, but the point remains: He understands the benefits in serving as the gatekeeper of the waiver wire better than any active GM does.

The public, on the other hand, remains relatively uneducated. When compared to the time spent discovering the marginal yields between other ordinal numbers—draft-pick slots, prospect tiers, and farm-system ranks—little fuel has burned in pursuit of uncovering the advantages of the waiver catbird seat. To remedy that oversight, let's examine what Luhnow and the Astros gained during their reign.

For our purposes, we're only interested in the waiver claims occurring between December 2011 and April 2014. As arbitrary as it seems, that stretch envelopes Houston's run of terrible baseball in which they 1) held the top priority more than not and 2) swiped right on the fourth-most players in the game, at 18. Here's a scorecard of the players and how they performed while donning the H-star:

Houston's Waiver Claims, December 2011-April 2014

*On the 40-man roster
**Projected to make the 25-man roster

Those on waivers are often there for legit reasons—typically they lack the requisite talent, health, and/or options to hang on the 40-man roster—and so it is, almost by definition, a collection of replacement-level players. Using that framing, Luhnow exceeded expectations by excavating two quality contributors from the dregs, in Justin Maxwell and Collin McHugh. Yet the amount of whiffs necessitates a cost-benefit analysis—were the hits worth the misses?

Each time the Astros took in a new waiver-wire rescue, they shelled out $20,000 to the player's former organization. But while those 18 players totaled $360,000 in claiming fees—or less than a full season of the big-league minimum salary—there were other costs to consider, some monetary and others not. You learned in physics class that every act has an equal and opposite reaction. What Newton meant is every addition to a full 40-man roster requires a subtraction, which leads to some players being claimed by other organizations or heading to the minors, where they received higher pay than the typical non-rostered farmhand. Additionally, those incoming players took reps away from the incumbents.

The costs aren't exorbitant on their own, but they do exist and can exceed what a team wants to spend given the low expected return. As such, teams are compelled to make choosy claims, rather than buying in bulk; this was particularly true about Luhnow, who would've been awarded mostly any submitted claim. Did Luhnow guide the Astros wisely, gaining a dollar for pennies, or did he throw money away?

In an attempt to judge the "correctness" of Luhnow's decisions, here's a look at the 10 players claimed off waivers during our time period who have contributed the most WARP since 2012 (including their pre-waiver numbers):

The 10 Most Productive Players Claimed Off Waivers, 2012-2014

Luhnow once again looks competent, having claimed two of the top three and three of the top 10 producers; no other team is represented more than once. What is represented is the reality that opportunity is the currency used when playing the waiver-wire shell game, not cash. Consider Pearce evidence.

Luhnow claimed Pearce off waivers from the Orioles in July 2012. Four weeks and an unmemorable 21-game stint later, he sent Pearce to the Yankees in a small trade designed to clear space for Jimmy Paredes. (Paredes would depart Houston via waivers about a year and a half later.) Pearce wouldn't stick in New York, hitting the wire again before the season ended. The Orioles brought Pearce back, but would designate him twice more in the ensuing 18 months, including as recently as last April. No team claimed Pearce either time, however, and he remained with the Orioles, with whom he resurfaced a month into the season en route to a banner year.

In all, Luhnow and the Astros passed off or passed on Pearce three times in under two years. Lord knows if Pearce would have flowered in Houston as he did in Baltimore, but the story reinforces an important notion: Luhnow and the Astros were choosing between more than bottom-of-the-roster players when they were sifting through their waiver-wire options. They were choosing players to empower with playing time—a resource that bad teams possess in greater number than their good counterparts.

Since we're playing around with the data anyway, and since claiming talented players then letting them escape without a trial run is arguably worse than passing, let's compare Luhnow's Astros to a handful of other teams with interesting waiver-wire narratives. Those teams are . . .

• The Cubs: another progressive organization with a horrendous record over the past few seasons;
• The Athletics: arguably the smartest franchise in baseball;
• The Yankees: a big-monied club that needn't cut corners on payroll;
• The Blue Jays: a should-be big-monied club that hoards waiver claims like preppers;
• The Tigers: the least active claiming team in baseball, one that had twice as many wins in the ALCS during our period as they had awarded claims.

The below table displays the number of claims awarded, the percentage of those claims who reached the majors with that team, the percentage of claims who topped the 40-game mark (or a quarter of a season), the cumulative WARP of those claims, the individual with the highest WARP of the group, and the team's winning percentage over the 2012-2013 seasons (remember—the April 2014 waiver period reflected the 2013 results).

Predictably, the numbers gel with common sense. Our bad teams did provide their waiver claims more opportunities than the good teams did, and the Astros went out of their way (compared to the similarly poor Cubs) to sample their finds. Blame Luhnow for passing on Pearce thrice, for the Astros staying in the cellar for so long (perhaps intentionally), or for the franchise's poor standing inside and outside of the industry; just don't accuse him of ignoring his waiver claims, or dismissing the value of the top spot.

What was that value? For Luhnow, it manifested in more than four WARP over a 29-month span. Obviously some (most?) of the value stems from circumstance—would the Astros have stuck with those waiver claims if they had a respectable roster?—and it's not a franchise-altering amount. But as far as player-acquiring avenues go, the stakes are relatively low, thus minimizing potential downside.

Not that teams should tank for the top waiver priority. The league as a whole has improved on their roster-management skills, allowing fewer and fewer quality players to leak onto the waiver wire. Yet for a team likely to be in the dumps for a while anyway, having the gatekeeper position could result in netting a quality contributor (or two) on the cheap. Just ask Luhnow.

R.J. Anderson is an author of Baseball Prospectus. Follow @r_j_anderson
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