Matt Morris and Sunk Costs

On Sunday, the Pittsburgh Pirates released veteran right-handed pitcher Matt Morris. This closes a book on one of the hardest-to-understand deals that I can remember. Just before last season’s trade deadline the Pirates sent reserve outfielder Rajai Davis to San Francisco for Morris, leaving the Pirates on the hook for Morris’s remaining salary: a prorated portion of his 2007 $9.5 million salary, $9.5 million in 2008, and a $1 million buyout of 2009. When the trade occurred Morris was a few days from turning 33 and his best days were clearly behind him. Why the Pirates at 42-62 felt it was a good idea to take on this contract was a mystery to everyone.

Morris’s 2008 season has been a disaster. In 22 1/3 innings of work he has given up six homers and seven walks, while striking out only nine batters, and posting a 9.67 ERA. The Pirates did what many have suggested and cut him.

The Pirates are still on the hook for the remainder of his contract, but it’s a sunk cost. Right? Well yes, and that is why I am not so sure that cutting Morris was the right move. His contract ought to be irrelevant to the team’s decision to keep him. What is relevant is the quality of pitching and the additional salary of his replacement.

The Pirates called up John Van Benschoten from Triple-A to take Morris’s spot on the roster. Phil Dumatrait is taking Morris’s spot in the rotation. Van Benschoten, a 28-year-old right-hander, has posted an unimpressive 44 strikeouts, 48 walks, and 7 home runs in 67 2/3 innings of work in his major-league career, and his minor-league numbers don’t indicate that he is a better pitcher than he has shown. Dumatrait is a 27-year-old lefty with a career major-league line of 22 strikeouts, 25 walks, and 8 home runs in 38 2/3 innings pitched. Yuck.

Though Morris has been awful this season—and it is possible that he is done—his recent history suggests that he is not this bad of a pitcher. And even if he is not what he once was, I think he is likely to be no worse than his replacements over the course of the season. In the past two seasons, he has averaged 4.84 strikeouts, 2.75 walks, and 0.88 home runs per nine innings for over 200 innings a season. It’s not ace material, but it was worth about $9 million per season in revenue to his teams.

So, instead of getting Matt-Morris-quality pitching for free—the contract is sunk—the Pirates have to pay other pitchers to cover those innings. And it doesn’t appear that the replacements offer any improvement over Morris. It’s the same reason I didn’t like the Frank Thomas release. In this instance, I believe the Pirates forgot about ignoring sunk costs and dropped him because of the size of his deal. The move looks smart, but it isn’t.

I think that a better move would have been to do what the Giants have done with Barry Zito: move him to the bullpen. This would have given him the opportunity to work out his recent problems to see if he was really as bad as he has pitched this season. Plus, because he wouldn’t have to pace himself like he does when he starts, he might be an effective reliever. If he turned out to be finished and the Pirates become contenders, then you can cut him. If he improved, he could help the team, or be shipped to a contender with the Pirates eating a smaller portion of his contract. At this point in the season, I don’t see how this is a smart move. And I will not be surprised if Morris pitches in the big leagues again this year with much better results.

The lesson here is that sunk costs don’t mean that cutting an underperforming is always good idea. Cutting a player who is no worse than his replacements actually increases your losses.

5 Responses “Matt Morris and Sunk Costs”

  1. Ken Houghton says:

    Dumatrait, according to Beyond the Box Score, is one of the Three Mouseketeers who has been killing the Pirates in middle relief.

    Now he gets to start, and someone they thought was worse than him at the start of the season goes into the middle relief spot.

    Less than 1/3 walk per inning would have significantly improved the Arson Squad. So you’re spot on for this one.

  2. Frank says:

    Leave it to the Pirates to somehow make an awful deal (trading for Morris in the first place) into something even worse. No wonder they’re at something like 16 losing seasons and counting. Too bad the Braves didn’t get to have a go at Morris or his replacements earlier this month.

  3. Ed says:

    I’m curious at what point Barry Zito becomes a sunk cost. If Pat Misch comes up and pitches well, and Noah Lowry comes back and pitches well, then the replacements for Zito would be better than Zito. Should the Giants write him off at that point, or do they need to spread the consideration of sunk cost over the lifetime of the contract? There is way to tell today if the number 5 starter for the Giants in 2011 will be better than Zito’s fifth year with the team.

    Does the possibility of improvement mitigate the desire to write Zito off, and at what point should ZIto be written off?

  4. Charlie says:

    I like your logic, I’m just not sure that Morris is really a sunk cost. If he continues to pitch poorly, which he probably would, wouldn’t he still be hurting the team and thus, “costing” them? The way I look at it the team has two options:

    1. Keep him at no extra monetary cost (if you want to call it that), and have him continue to pitch with a fairly high baseball cost (admittedly, with the chance (a small one) that he improves and actually helps the team).

    2. Cut him and purchase a triple-a contract for a small, albeit significant, monetary cost. And have this player provide some “baseball” benefits for the team (with the chance, of course, that he doesn’t provide benefits)

    I can see how it would be a difficult call to make, but I still like option 2.

  5. JC says:

    Both Zito and Morris contracts are sunk costs, because the players have to be paid as long as they show up to play. The question is if the continued play of these players increases or decreases losses.