More on Trade Valuations
Last night began our journey into the land of trade valuations, looking at how the Eaton-Otsuka for Gonzalez-Young-Sledge deal compared to the Colon for Sizemore-Lee-Phillips deal. If you recall, it was not even a contest, as the Colon deal vastly favored the Indians. I didn’t expect the post to take off the way that it did but a personal thanks to all of the commenters is in order for not only bringing about different trades to look at but also discussing the process itself. Tonight we will talk a bit more about the valuation process itself, based on a few comments in the thread.
The process used to determine lopsidedness involved looking at the win values for the players, on their new teams only, avoiding the usage of career win values as well as wins added to teams other than those who acquired the players in question. So, when the Expos acquired Bartolo Colon in the aforementioned deal, they received +2.3 wins only, since he left for the White Sox the following season. Likewise, the Indians do not get credit for Brandon Phillips‘ play on the Reds, just his -1.1 wins with the Indians. Put together, the value of this trade is the contributions of Lee and Sizemore compared to the +2.3 wins from Colon.
But how do we take into account the ideas of club control and and free agency. A comment was brought up with which I wholeheartedly agree in that the Doyle Alexander for John Smoltz deal cannot be evaluated, straight up, as twenty years of Smoltz vs. a couple seasons of Alexander. The underlying reason being that Smoltz re-upped himself with the Braves a few times, choosing to re-sign with the team as opposed to traveling to greener pastures, pun completely intended. Similarly, the Jeff Bagwell for Larry Andersen trade is not properly valued by stacking up Bagwell’s entire potentially Hall of Fame career with the one season Andersen spent with the Red Sox.
The solution to this problem would be to include only club controlled years in the valuations. Reverting to the Bagwell example, the deal would be limited to Andersen’s lone season with the Red Sox vs. Bagwell’s club controlled tenure with the Astros. Things get a bit trickier, though, when it is remembered that teams tend to lock up talent early, occasionally buying out a year or two of free agency. Grady Sizemore is a prime example of this, as his current contract lasts through his first year of free agency eligibility. Do we count the entire duration of this contract? Or do we steadfastly stick to the club controlled solution, discounting his final season with the Indians while valuing the Colon deal?
The former makes a bit more sense and I’m very comfortable using that as the criteria from here on out. This way, certain trades don’t look as ridiculous and are more accurately measured. After all, as a free agent, signing with the team that most recently employed you should not be treated any differently than joining another squadron. And when players joined new teams, like Colon with the White Sox, we stopped adding their production into the mix.
I’m extremely interested in finetuning this system even further, so please do not hold back any and all ideas. Hopefully, we can continue our intellectual discourse.
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This is extremely off topic but i was wondering if it was possible to project Bonds for this year, if a team decides to give him and chance. Also home much do you think he would be worth?
.374 wOBA, 416 plate appearances, -6 in the field, 1.9 WAR
Fair market value around $9 million, signs a one year deal with a base of $5.5 mil and incentives that could reach $12 million total, though they only reach $9.75 mil as he misses the regular and postseason MVP bonuses and a few of the playing time elevators. He retires after the season and is enshrined five years later…AS A BLUE JAY.
That would actually be the smartest signing ever. Of course, he wouldn’t cost nearly as much as a 5.5 million dollar base and he would have to DH with old Snidy in left, but he could potentially be a huge offensive force again.
He plays for San Francisco this year, actually, the only city on Earth that can stand him. Then, as a giant fuck you to the entire fan base, he signs a one day contract with Toronto next March so he can retire as a Jay and wear one of those sweet retro caps on his plaque. You know the one I mean.
Question: Should there be some system in place to take into account the wins Brandon Phillips gave the Indians after he left the Tribe. I mean they flipped him for some minor leaguer that eventually got them Mark DeRosa this year. Should not DeRosa count towards the amount of wins gained by Indians through the Colon trade since Phillips eventually netted DeRosa?
Upon thinking about this further I think a system can be devised to count the wins that Derosa garners the Indians as a result of the trade that sent the minor leaguer Phillips was traded for to the Cubs for DeRosa. I am not sure who else was packaged into the deal for DeRosa but for arguments sake lets say he was 1 of 4 people the Indians traded for DeRosa. I think only 1/4 of DeRosa’s win output should be totaled into the discussion of of the Colon Trade. Perhaps this percentage way of thinking could be fine tuned even more? For instance you would take the total amount of wins that Chicago garners from the DeRosa trade figure out what percentage of those wins the minor league pitcher that was traded for Phillips garners and then take use that same percentage to decipher the amount of wins DeRosa gives the Indians as a result of the Colon trade.
Personally, I think that if a player is extended during the initial contract, then that contract should count – however, when a player is declared a free agent, that is when his value should not be counted – at that point, he is available to everyone.
For example, you give the Grady Sizemore example. His first free agent year should count because he was extended DURING his initial contract.
However, lets take A-Rod. His stats (vs. Soriano and Joaquin Arias) should count up until the end of the 2007 season where he opted out. Once he became a free agent, its bupkis.
Anywho… hope my 2 cents helps. I think this logically makes sense. Feel free to respond.
I agree. The exclusive right to exchange long-term financial security for a potential bargain is one of the reasons trading for club-controlled players is valuable.
In finance and economics there is the idea of the time value of money. A dollar today is wroth more than a dollar one year from now (in normal economic times – who knows in today’s climate). I think a similar idea should be in effect here. How would one go about discounting future wins to find the equivalent value of present wins?
Trent -
I’m with you on this one. In a book called Diamond Dollars (Vince Gennaro), he devotes part of one chapter to calculating the value of present wins versus future wins based on an empirical examinuation of prospect for MLB player trades. He concluded that teams value a win next year at about 65% of a win this year.
I apply this concept to my dynasty baseball leagues. For example, to calculate the “surplus value” of a player, I take a projected $ value for each of his years until free agency (i.e. what he should get paid in the FA market), subtract the salary I’m paying him, and then multiply the result by 0.65^(Y-2009) where Y is the year in question. Add up that total to get the net present value of a player.
Totally arbitrary guidelines:
- All club-controlled years by the receiving club are counted and converted into money
- All discounts off free-agent salary (for instance Sizemore’s contract if he performs at the expected level and doesn’t get injured) are added to that amount
- All ‘toss-ins’ that are flipped for other players can be counted if the trade occurs within 1 season of the trade (logic being that player development can add value)
- The value of marginal wins needs to be added to the value of mid-season trades to playoff contenders, offset against talent sacrificed (for a quick-and-easy calculation, create a multiplier for wins over 88 or some baseline, and separate multipliers for each playoff victory)
- For prospect-veteran trades, the value of the pick they would get from them leaving needs to be included for the team that gives up the prospects. If you trade for a soon-to-be Class A free agent, you’re getting a draft pick if you want it, so that should be factored in (not in relation to the specific player selected, however)
And rather than wins, the sum should be in money. Because that’s what really counts — revenues. Let’s say team A needs 2 wins to be guaranteed a playoff berth, and has a zero chance of getting those wins from anywhere else. They have an oracle or something. Team B is a cellar-dweller who can trade those 2 wins for 20 wins of prospects. Their revenues don’t increase (though their costs decrease), while Team A goes on to win the World Series and has a huge boost to their revenues. Wins simply don’t do the calculation well there.
You can normalize the value per win if you’d like across years and to control for inflation just to make it simpler, but ideally you’d also toss in the time value of money and all that.
To add an addendum, for any playoff victories, WPA should ideally be used over standard metrics. And those wins should be counted a lot more than regular season wins.
I don’t think you’re going to be able to fine tune a system, because there are too many unknown variables. Trying to figure out how to credit teams for keeping players beyond their initial contracts is a tough one and I doubt it has a definitive answer.
One quibble I would make with your current methodology is that I think it’s a mistake to count only the value that a player gives to the receiving team directly. If the Indians trade for Brandon Phillips, they are trading for that player. If they later make a decision that he is no longer part of their plans, that really doesn’t affect how good the original trade was. Especially if the GM changes in between. The later trade of Phillips should be evaluated separately.
My general rule of thumb in evaluating deals (and I’ve done the Smoltz/Alexander deal for my Tigers blog) is to look at players until they declare free agency. In the case of Smoltz, I stopped counting him in 1996 or somewhere around there.
However, if you start including salary you can start to reward club control years.
Here’s my Smoltz/Alexander look about a year ago using WARP…
http://tigers-thoughts.blogspot.com/2008/03/trade-reviews-late-80s-disasters.html
Another thing that is tough to deal with is multiplayer deals. For example, Dontrelle Willis was part of the package sent to Florida for Derrek Lee. Now, he was packaged with Miguel Cabrera for a package of players. How much of the value produced by Maybin et. al. can be attributed to Willis for the purposes of the Lee deal?
I vote for using their original contracts (team control). The team that buys out arbitration is taking a calculated risk. The way people calculate it now is close enough. Using money would be nice, but it makes it unnecessarily complicated.
Using money is the only way to really value what each team is getting in the case of contract extensions that buy out free agent years and the like are. Sizemore cannot get a contract from any other MLB team while under Indians’ control. That means that any deal the Indians make is made possible by the fact that they own exclusive rights to his contract. They should get the benefit of making that contract in comparison to what they would have had to pay otherwise rather than getting the full value.
I suppose you could make it a ratio of wins paid for to wins created if you really wanted, but money just makes more sense as it also allows you to properly quantify benefits from playoff berths/victories. During a 3-round playoff a player may have a maximum of 19 games. Add in a do-or-die elimination game like Colorado-San Diego in 2007, and that’s 20 games (1/8th of a season). But obviously the leverage in those games is far higher. We need to include that too, and money seems like a better way than traditional wins.
There definitely needs to be a valuation added to a playoff hunt.
Take the Beckett & Lowell for H-Ram, Sanchez, Garcia, and Delgado.
Win values since 2006:
Beckett – 13.7
Lowell – 11.8
Ramirez – 18.0
Sanchez – 1.8
Garcia – -0.1
Delgado – -0.1
So Red Sox = 25.5 wins, Marlins = 19.6 wins. But maybe Lowell and Beckett’s seasons gain short term significance in 2007 due to lhelping the team to the title.
Also, a weighted system (5x for the 1st year after a trade, 4x for the 2nd year, 3x from the 3rd on, or something of this nature) could also work. This system would give the Marlins an index of [5(6.2) + 4(5.8) + 3(7.7)]/(5+4+3) = 6.44
Red Sox = [5(5.5) + 4(11.8) + 3(8.2)] / 12 = 8.275
This could make some sense.
Delgado put up 4.1 wins in his one season with the Marlins.
I agree with Sal, what about say in the CC Sabathia trade, you have to account for the Yankees 1st Round pick and compensation pick and eventually what those two picks turn into. So really you can’t value a lot of trades until far after.
However, to argue against my point, a future decision based on indirect elements of a trade should not be weighted equally.
Well, it’s the second-round pick, actually, but that’s a minor quibble. Quite honestly, you have to pretty heavily discount draft picks, because the value at the major-league level is years away, and that’s if the guy contributes at the start. The draft picks are a consolation prize, not a goal.
It’s impossible to get the whole picture. For completeness’ sake, shouldn’t, for example, the Colon deal include for the Expos the players they got from the White Sox? But that could go on forever.
That’s why I suggest that you only count trades for players that were traded for within a season. I don’t think any of us know (or are likely to know in the near future) how much an effect each team’s minor league system has on player development and future value. For instance, let’s take a team with a great farm system (Team A) who picks an 18 year-old raw talent from a team with a poor farm system (Team B) and then flips him to another team after 3 years. While the value from an 18 year-old on Team A to an 18 year-old on Team B probably doesn’t change much, the difference in perceived value for the same 21-year old who spent 3 years in Team A’s system over Team B’s system is probably significant.
The merit of a certain team having a player can raise that player’s value, especially in the tender development years. There are so many players out there with enough raw talent to make it to the majors that it’s a matter of picking which ones are most likely to develop that talent, and actually developing it, rather than getting the raw materials. I think that making an arbitrary cutoff to include that distinction should be done as well.
I think adding requirements like “years under team control” make it way too difficult to apply. I would just apply it based on the player’s vallue for the next 5 years independent of whether that player stayed on that team for that whole time. For Brandon Phillips, the fact that the Indians traded him before he provided value is besides the fact. I suppose a concession can be made for deadline deals where an acquired soon-to-be-FA doesn’t re-up as this is truly a rental (with no further compensation aside from a draft pick).
But that’s utterly illogical, because it ignores the fact that you don’t trade players, you trade contracts. If the Braves were getting Teixeira for five years instead of a year and a half (or a year, as it worked out), the king’s ransom they paid would have been more justified. But (and Boras clients are perfect for this point) because he was only under control until the end of the 2008 season, at which point he was going onto the market for the highest bidder, how can you count what he does for the Yankees over the next 3-4 years in evaluating the trade for the Braves?
In this system, if I trade for a player at the deadline, and he gives me 3 wins in that short period of time, and I give up players who average .2 wins a year for all 6 years of club control, I’ve lost the total win value of that trade 4.8 to 3. I got half a season of one of the best players in the major for 4 barely replacement level players, and I lost the trade?
No, and that’s why we’re talking about discounting future wins, similarly to how we would do a future value of money calculation.
As a heads up, you can probably skim through the next three paragraphs in twenty seconds and not really miss anything as it’s basically the same thing over and over. While the same goes for most of my posts, it’s especially true of this one.
We’ll never be at a loss for variables to work out. Your 3 WAR player gives you a playoff push and increases your shot at first making the playoff and generating nice playoff revenue and then winning some playoff games. The supplementary pick you receive for losing him to free agency is spent on a toolsy guy with huge upside who is given way too many chances to prove himself at the major league level, blocking the mid-range prospect you have at AAA and stunting his development. Seeing no clear-cut path to the show, the prospect, now 24, demands a trade and his team sells low on him only to watch him develop into a perennial All-Star.
Meanwhile, clearing out the four spare parts in the original trade opens up room at AAA that year for a former first round pick out of high school whose ceiling was limited by questionable mechanics. The timing couldn’t be more perfect as the Triple-A pitching coach who would leave after the season to become the bench coach of another ML club notices and fixes a tiny hitch in his delivery and his potential is finally realised. He becomes a breakout star and at next year’s deadline is the centerpiece in the trade that nets the newest homegrown Marlins All-Star before he can become eligible for free agency.
The All-Star is signed to a six year, $110 million contract and the mid-market team is now a tad handcuffed by financial constraints. They pass up the consensus pick in a subsequent year’s draft for signability reasons and settle for a safer, non-Boras-represented player. The player is an unequivocal bust while their original choice falls to a division rival for whom he becomes the next Willie Mays. The entire course of baseball history is forever altered, and to think the whole thing started with once innocent little trade…
This hearkens back to the Babe Ruth example in the other thread. It’s easy to understand the monumental impact Ruth’s trade had on the Red Sox and Yankees, but the truth is it affected everyone and everything in major league baseball from that point on. All the numbers we have indelibly etched into our minds—61*, 4256, 755—would not be the same ones we know now had Ruth not left Beantown. Maris could have been a Pirate, Rose a Cardinal, Aaron a Jew. While this exercise certainly has its uses, there’s simply no way to account for everything, and honestly, that’s the best part.
Shouldnt the likelihood of signing with the your current team be taken into consideration? I kind of agree with the sentiment that players like Sizemore never hit free agency and thus that value past his contract year should not be ignored.
If you’re evaluating the players’ respective values to the teams receiving them in trades, then it should be calculated in dollars, not wins. You have to take into account salaries (the cost of the wins a player is adding), the value of players or draft picks received by a team after a player in the trade leaves the team through another trade or free agency (just because the player no longer plays for a team doesn’t mean that his departure didn’t create additional value), potential playoff revenue during the season of the trade, and that future wins are less valuable than current wins.
With multi-player trades and arbitration-eating contract extensions, this becomes quite a hairy proposition.