And the trade season is officially here. We have our first significant trade of the year on July 2nd, and the timing of this move is not a coincidence.
First, the details, per Keith Law.
— keithlaw (@keithlaw) July 2, 2013
For the record, he meant Steve Clevenger, but he’s a throw-in in this deal, and it’s not like Baltimore is acquiring him to unseat Matt Wieters or anything. This deal is basically Feldman for two pitchers and, in a first for MLB, pool allocation money that will allow the Cubs to be more aggressive in international free agency. We’ll get to that part of the trade in a second. First, let’s start with what the Orioles are getting in Scott Feldman.
Over the winter, Feldman was one of my favorite undervalued free agent options. I wrote a piece comparing him to Brandon McCarthy, which in turn led to McCarthy noting that their similarities were due to his copying of Feldman’s transformation when they were in Texas together. Feldman has gone on to justify the faith that article placed in his skills, and is another recent example of the power of DIPS theory.
While Feldman’s results have made him a nifty trade piece for the Cubs, there’s really nothing different about him now than there was several months ago. His walk rate is hanging around 7% as always, his strikeout rate remains at around 18%, and he’s getting his normal share of ground balls. This is who Scott Feldman is, and has been for quite a while. Last year, though, his .318 BABIP led to a 5.09 ERA, while this year’s .255 BABIP has led to a 3.46 ERA.
You know the drill at this point; Feldman is better than his ERA suggested last year and not as good as his ERA suggests this year. Ignoring the year to year fluctuations in results show the new-and-improved Feldman to be roughly a league average starting pitcher. Since 2011, when he returned with the cut fastball as a new weapon and changed his approach to pitching, Feldman has thrown 247 innings and posted a 103/92/96 (ERA-/FIP-/xFIP-) line. Opposing hitters have posted a .304 wOBA against Feldman during that stretch.
While he’s never going to be mistaken for a front of the rotation ace, Feldman is a quality innings eater, the kind of guy that stabilizes a rotation and keeps contenders from disaster starts. He’s a +2 to +3 win pitcher over a full season, and since the Orioles have had to rely on replacement level arms in their rotation, they’ll get the full value of this upgrade, though getting him for half a season means that the upgrade is worth more in the range of +1 to +1.5 wins.
Those wins could be extremely valuable for the Orioles, however. The AL playoff race is a total dog fight, and that win could make a huge difference. Right now, our forecasted final standings have the Orioles finishing 87-75, one game ahead of the Rays in the race for the second wild card. These forecasts will certainly change as contenders load up over the next month, and the Orioles absolutely had to try to improve their roster to make a real run at a spot in October. Feldman is a significant upgrade over their internal rotation options, and even though he’s not going to be seen as a difference maker, the marginal value of the win he adds could easily be the difference between a playoff berth and sitting at home.
And that’s why the Cubs were able to extract a pretty nice package in return for a guy who was in moderate demand as a free agent over the winter. Jake Arrieta is the main part of this deal for the Cubs, as they’re basically repeating the bet they made with Feldman, just with a younger cost controlled arm this time. Arrieta’s career 5.46 ERA is pretty ugly, but his xFIP is a much more palatable 4.45, and his future projects to be better than his past.
That said, Arrieta is 27-years-old and his Triple-A numbers aren’t anything amazing, so while he was labeled a top prospect a few years back, there’s probably not quite as much upside here as you might think. He’s got a 94 mph fastball but a history of not really knowing how to command it particularly well, and he’s never missed as many bats as you might expect from a guy with his stuff. I wouldn’t be too shocked if he ended up in relief with the Cubs, though I’d imagine they’ll give him another chance to stick as a starter before making the conversion.
If Arrieta can make some improvements, there’s a chance he could turn into a quality rotation depth piece, and his service time means that he’ll be under team control for another three seasons after this one. He’s the kind of lottery ticket arm that rebuilding teams should be giving chances to, and he’d be a nice return for a rent-a-veteran just by himself. But, the Cubs didn’t just get Arrieta; they also got the ability to buy some better prospects for the future.
That’s why this deal was made on July 2nd. Today is the first day of the international signing period, where teams can officially sign the 16-year-old amateurs they’ve been scouting around the world for the last year. The most recent CBA implemented a new structure for these signings, however, giving teams varying amounts of pool allocations to sign players based on their prior season win-loss record. Basically, it’s a draft system just without the draft part, so players are free to sign with whichever team they choose, but the pool allocations serve to give losing teams more money to play with than winning teams.
In this deal, the Orioles sent two of their bonus pool allocations — three and four, to be exact — that combine to be worth $388,100, or about 20% of their total bonus pool. According to the fantastic work from Ben Badler at Baseball America, the Cubs have now raised their bonus pool from $4,557,200 to $4,945,300, giving them the largest spending pool of any team, barring future trades that move more money around. Badler forecasted both of the top two international prospects — Dominican OF Eloy Jimenez and Venezuelan SS Gleybor Torres — to sign with the Cubs, but he noted that they would need to trade for additional pool space in order to make it happen.
Well, the Cubs have done exactly that, and there is already a report out this morning that Torres has agreed to sign with the Cubs. Jimenez’s signing should follow in the not too distant future now that Chicago has enough money to sign both of their prize targets.
So, yes, the Cubs traded Scott Feldman for Jake Arrieta, but that was likely not the primary motivation for this deal from Chicago’s perspective. The value of the pool allocation should not be undersold as part of the trade, even though it will take third billing to Arrieta and Pedro Strop. I’m sure the Cubs are happy to have both of those arms in their organization, but this was a trade about the long term future in Chicago, and securing premium international talent in the process.
The Orioles needed a guy like Feldman, and they may very well not have been able to put that international pool money to the same use, so this trade makes sense for a team in win-now mode that didn’t have the space to pursue the top guys. Arrieta and Strop might end up performing well in Chicago, but the Orioles needed to upgrade, and they didn’t part with pieces that can’t be replaced. This is a smart upgrade for Dan Duquette, even if it won’t draw big headlines the way some other names would, and Feldman is a good fit for their team.
The Cubs, though, have to be thrilled with how this worked out. For the $3 million of Feldman’s 2013 salary that they ended up paying out, they got a half season of quality pitching, then turned that into an interesting young pitching prospect and nearly $400,000 in cash that they can use to sign a premium 16-year-old that could turn into a future franchise player. They bought a couple of lottery tickets who may never pan out, but turning a mid-level free agent into this kind of upside in just a few months time is how good organizations get rebuilt. Theo Epstein, Jed Hoyer, and the rest of their front office are doing things the right way.
Update: The Cubs also just traded prospect Ronald Torreyes to the Astros for two of their bonus slots, raising their overall pool even more, and decreasing Houston’s at the same time. The Cubs now have far and away more money to spend than anyone else, and it seems pretty clear that Badler was correct when he noted that they were going to come away with the top prizes of this class.
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