Evaluating Deals vs. Players

After reading a wide array of comments either on recent threads here, regarding evaluating free agent signings, or on the forums that chose to link to the same articles, I felt compelled to briefly discuss a certain point of contention. A difference exists between signing a good player and signing a player to a good deal. As simple as that sounds, it is an aspect of analysis all too often forgotten amongst many types of fans and writers. What this means is that it is very possible to sign a bad player to a good deal or a good player to a bad deal.

Likewise, when discussing trades and returns on these trades, it is possible to obtain a good player even though the trade is deemed poor on your part. I don’t want to discuss Gil Meche any more than we have recently, but he seems like the perfect guinea pig on which to illustrate the point. When people discuss Meche and his contract, there are two camps: those who feel it was a great deal and those who still think it was a poor decision on the part of the Royals. Though both camps differ on the signing from the standpoint of a GM or franchise insider, each side is in agreement that he has performed quite well.

It is not as if those who feel the signing was poor derive their opinions from thinking Meche has been a bad pitcher in 2007 and 2008. Rather, their opinions are based on a plethora of off-the-field issues, such as the opportunity cost of his salary, or how his performance has done nothing to increase attendance or television ratings. Now, I do not want to start up another Gil-debate, but it is important to understand that when we evaluate free agent signings, we are looking at much more than simply the quality of the player being signed.

With trades, not only do salaries come into play, but also the return. I was not a big fan of the Joe Blanton deal earlier this year, even though they acquired a pitcher pretty superior to Adam Eaton or Kyle Kendrick. Add in that Blanton does not cost much, is durable, and is under control for another few years, and it seems like a solid move. What they gave up, however, I estimated to be worth more. Who knows exactly how that one will turn out, but the point is that I never felt that Blanton was a bad pitcher.

Nobody is going to debate that Alex Rodriguez is a phenomenal player, one of the best ever, and a clear first ballot hall of famer. However, his deal with the Rangers was largely considered a bad deal, because it hamstrung the team and vastly limited the number of teams to whom they could deal Madonna’s new beau. Along similar lines, Dave took a look at the Mike Hampton signing yesterday, and astutely showed that even though Mike has injury problems, is not durable, and is not worth much over replacement level, the small fee and commitment of $2 mil for just 1-yr is a pretty solid deal. This would be an example of a “bad” player signed to a good deal.

Again, I don’t want to start debates about certain players, but I see this mistake too often in comment threads and felt it needed a bit of clearing up.




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Eric is an accountant and statistical analyst from Philadelphia. He also covers the Phillies at Phillies Nation and can be found here on Twitter.

4 Responses to “Evaluating Deals vs. Players”

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  1. Sal Paradise says:

    I’m of the camp that signing an above-average player to a sub-market deal is always a good deal for that team. While many teams don’t leverage the added value (or can’t), in theory the team is sitting on more value than it’s paying for.

    Let’s say that Meche is worth an extra 2 million dollars over what he’s being paid now. And let’s say that the Royals value a win at 3 million. That means that after 1 year they’re paying 5 million over what he’s worth to them.

    However, if he has a great first season then you can get that 2 million over 4 additional years back on the market theoretically, by pointing out that his actual value is 2 million/year over his salary. And that’s ‘free money’ for almost all intents and purposes because they didn’t have to give up prospects to get him.

    Basically, they pay 5 million in the first year to get 8 million back, in theory. Of course the market isn’t perfect, and there are a lot of caveats, but it’s hard to say that signing a player to an under-market deal is a poor choice unless it’s entirely impossible to leverage that added value.

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  2. B says:

    Joe Blanton played a pretty big part in the Phillies winning the WS. Take him out and replace him with Eaton/Kendrick and they aren’t world champs. Cardenas could turn out to be an all star and this trade still would have worked in their favor.

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  3. Eric Seidman says:

    B,

    I agree but that isn’t the point or the reason I brought it up. The point is that when people evaluate deals they tend to ONLY evaluate the player received, not the value of what was given up or the salary they acquired along with the player. The Blanton deal looks better now than it did before but the true evaluation of it would have to include other factors like how long Blanton is controlled, what he will cost per win relative to the wins he will add, and what the prospects surrendered are likely to turn into, etc.

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  4. wake49 says:

    what award did you win for screenwritin. just wondering. good article by the way

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