The Price for David Price

The hot stove raging inferno season has included a lot of activity so far, but despite all the moves and the rumored moves, there hadn’t been a lot of reported activity around the winter’s biggest trade chip, at least until last night. That’s when Jeff Passan reported that talks with Tampa Bay about acquiring David Price were expected to heat up soon, naming the Mariners, Dodgers, Angels, Rangers, Pirates, Diamondbacks, and Blue Jays among interested teams. But the more interesting part of the story was this:

The 28-year-old Price immediately would be the most sought-after name on the trade market, and teams expect him to net a far bigger package than the Wil Myers-headlined deal Tampa Bay received from Kansas City last season. Despite the potential for $30 million in salary over the next two seasons before he hits free agency after 2015, Price is a rare commodity – an available ace – that is drawing interest accordingly.

The Wil Myers deal was one of the worst overpays in trade in recent history, and Passan is suggesting that people are expecting the Rays to land a “far bigger package than the Myers-headlined deal” for David Price. Suffice it to say that I don’t think teams should view egregious overpays as market-setting preedents, and I wouldn’t advise anyone to base their offer for Price on analysis that goes something like “Shields got Myers, and Price is better than Shields, so Price should cost more than Myers.” So let’s talk about what Price should return in trade.

Projecting Price’s value is actually relatively simple. By FIP-based WAR, he’s been worth +13.5 wins over the last three years, or an average of +4.5 WAR per season. By runs allowed, he’s at +14.2 wins over the same time frame, or an average of +4.7 WAR per season. And by FIP, it’s been a very consistent three year run, as he’s been no lower than +4.3 and no higher than +4.8. David Price has roughly established himself as a +4.5 WAR pitcher, and heading into his age-28 season, there’s no huge reason to think he’s going to diverge from that path any time soon.

So, for the next two years, it’s fair to expect Price to produce something like +8 or +9 WAR, depending on how much you want to regress for aging and how concerned you are about Price’s velocity and strikeout drops in 2013. Let’s just give Price the benefit of the doubt and call it +9 WAR over the next two years, keeping him at the rate he’s established over the last two years.

Over those same two years, Price is going to earn roughly $30 million in salary via the arbitration, since he was a Super-Two and his Cy Young season helped accelerate his earnings. $30 million for nine projected wins is certainly a pretty great deal, as we’re seeing the market pay something closer to $6 or $7 million per win right now. If Price was a free agent and told teams he would only sign for two years, I think he’d probably end up around $60 million, maybe even $65 million, for those two seasons.

So Price is both pretty expensive and massively underpaid at the same time. Any team acquiring Price is going to be giving up a good chunk of their financial resources, but they’re also going to be getting a guy who is earning half of what he should be making, relative to market prices for elite players. And that — along with either the chance to try and sign him to a long term deal before he reaches free agency — is why Price has a ton of trade value at the moment. He absolutely should command a huge return for the Rays.

But just as Price is a hugely valuable commodity, so are Major League ready young players with 6+ years of team control. Even if they’re unproven, untested prospects, the forecast value of a prospect who could be reasonably expected to contribute at the big league level in 2014 is even higher than Price’s value.

Let’s just use Gregory Polanco as an exmaple, for instance. The Pirates are one of the teams that has been linked to Price, and as a team on the bubble of contention, they’re in a position to make a future-for-present trade and have it work out, given that the added value of current wins in their situation is extremely high. Polanco is the kind of prospect that could be viewed as a Wil Myers type, an impact outfielder with tools and performance, and not too far from being big league ready. He will likely rate in the top 10 on most prospect lists this winter, just as Myers did last year.

Polanco could probably help the Pirates win in 2014. Steamer projects him as a roughly league average hitter next year, and as a toolsy center fielder who is blocked by Andrew McCutchen, he’d likely rate as a premium defender in a corner outfield spot, racking up significant value with his glove as well. Some 2013 comparisons for his expected performance, based on average hitting and some defensive value:

Andy Dirks: 484 PA, 89 wRC+, +0 BSR, +5 DEF, +1.7 WAR
David DeJesus: 439 PA, 102 wRC+, +1 BSR, +4 DEF, +2.0 WAR
Leonys Martin: 508 PA, 87 wRC+, +6 BSR, +10 DEF, +2.7 WAR
Gregor Blanco: 511 PA, 99 wRC+, +1 BSR, +10 DEF, +2.8 WAR
Denard Span: 662 PA, 97 wRC+, 2 BSR, +12 DEF, +3.5 WAR

That’s the kind of production you expect from a roughly league average hitter with some speed and defensive value. And this isn’t just wishcasting either, as Dan Szymborski recently gave a preview of what ZIPS forecasts for Polanco on Twitter:

ZIPS sees Polanco as nearly a +3 WAR player in 2014. Steamer’s at +1.2 per 600 PA (mostly on the basis of projecting Polanco as an average defender), so even if we just split the difference and call Polanco a +2 WAR player in 2014, that would give us something like this expected value over the next six years.

Year WAR Salary Value Net
2014 2.0 500,000 $12,000,000 $11,500,000
2015 2.3 500,000 $14,950,000 $14,450,000
2016 2.6 500,000 $18,200,000 $17,700,000
2017 2.9 5,000,000 $21,750,000 $16,750,000
2018 3.2 10,000,000 $25,600,000 $15,600,000
2019 3.5 15,000,000 $29,750,000 $14,750,000
Total 16.5 31,500,000 122,250,000 $90,750,000

There’s obviously a lot of assumptions in there that may or may not be true. I started the value of a win at $6 million apiece and inflated it by $500,000 each winter. I bumped Polanco up +0.3 WAR per season from age 22-27, and then I gave him $5 million raises each time through arbitration. You can quibble with any of these assumptions, so this isn’t to be taken as gospel.

But look at that bottom right hand number. If we think Polanco is a league average player now, and will improve into a minor star by the time he’s at his physical peak, he’d be projected to produce about $91 million more than what he’d be paid over the next six years. This forecast has Gregory Polanco as a $91 million asset, or about three times as valuable as David Price. Even if you just focus on the next two seasons, this would suggest that Polanco is a $26 million asset in 2014/2015, almost nearly equal in surplus value to Price by himself.

Now, you might quibble with the idea that two years of a league average player making the league minimum is of near equal value to a two years of a #1 starter making $15 million per year, but the gap is so large that you can adjust the numbers however you want and Polanco is still going to come out as a bigger asset. Even if you cut the value of Polanco’s wins down to $3 million apiece now — based on the David Murphy/David DeJesus signings — and redid the calculation, you’d still come out with Polanco as a $40 million asset over the next six years. And that’s without factoring in the huge upside that Polanco comes with that guys like Murphy/DeJesus do not.

Gregory Polanco, right now, is a more valuable property than David Price. Just like Wil Myers was more valuable than James Shields. A team is better off with a young average big league player making the league minimum than they are with an expensive +4 to +5 win pitcher on a two year commitment. The Pirates should not be interested in putting Polanco in a deal for David Price.

This goes for pretty much every team with a prospect that projects as roughly league average in 2014 and has long term team control remaining. The Rangers should not give up Jurickson Profar for David Price. The Mariners should not give up Taijuan Walker for David Price. The Diamondbacks should not give up Archie Bradley for David Price.

Guys who are on the cusp of adding value at the big league level are not worth trading for two year rentals of expensive players. You keep those guys, use them to fill holes on your roster, and allocate the salary you saved by not paying a veteran to fill another hole. The prospects that you trade for short term rentals are guys who can’t help you in 2014; guys who need more development, who are not yet big league ready, or if they are, aren’t likely to turn into any kind of star. Trading high ceiling future stars who are already able to contribute value in the short term is just bad business.

Low level high ceiling guys? Sure, David Price is worth that and more. Big league ready guys with limited long term value? Yeah, add them too. Price is absolutely worth giving up potential long term value for, and he’s worth giving up short term fill-ins, but he’s not worth players who could start for you next year and turn into franchise building blocks by the time Price is hitting free agency.

The Wil Myers trade should not set the market for David Price any more than the Doug Fister trade should. One was an awful overpay, one was an amazing underpay; Price should bring back something in between those two deals. He has a lot of value, but two years of an expensive ace is not worth a big league ready contributor with star potential. Those are the guys you keep and build around, not cash in for a short term improvement that isn’t actually that much of an improvement once you account for the cost of paying Price’s salary as well.




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Dave is a co-founder of USSMariner.com and contributes to the Wall Street Journal.


193 Responses to “The Price for David Price”

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  1. Marco says:

    Dave,
    Who is the more valuable trade commodity:

    David Price (2 years of control for about $30M)
    Corey Kluber (5 years of control, cost difficult to predict)

    Thanks

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  2. wespom9 says:

    Its nice to have those numbers, but

    1. Prospects are not proven. We can’t know Polanco will be worth any more or less than those projections. Price is a known commodity. I truly feel this is a factor in these trades. Any team who takes a prospect for a proven commodity is taking this risk. They will of course try to take the best prospect who they think will recuperate that value. In my mind, it is perfectly reasonable to demand a Top 10 prospect for a proven Cy Young contender

    2. The Pirates with Polanco next year are not as good as the Pirates with Price would be. The team is clearly paying to get that jump in expected wins and making a sacrifice from years 3-6 of value to get higher value in the next two (those two being the ones that would have Price). In this hypothetical deal, the Pirates (if they believe they have a window to win a World Series) will have to give up long term value to get short term value.

    If the Pirates made this trade and won the World Series, would the people of Pittsburgh care if Polanco became a star for the Rays knowing Price got them a title? I think this is the big question.

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    • Dave Cameron says:

      There is no such thing as a known commodity. Every player’s future is uncertain, regardless of past performance. Every single one. Believing that there are “proven players” and “unproven players” is perhaps the most dangerous mistake in forecasting one can make.

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      • Marco says:

        I think when people say “proven” vs. “unproven” what they really mean (or are trying to get at) is lower vs. higher std deviation of performance level.

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        • JKB says:

          which translates into: “unproven” = wider error bands (confidence intervals) around the forecasted performance than does “proven”

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        • Sleight of Hand Pro says:

          Marco, he knows that. It’s just Cameron being Cameron.

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        • ValueArb says:

          There is no error band on a Price decline/arm injury. His team is out as much as $30m.

          Polanco fails for free. That’s a great deal of compensation for his higher level of variance.

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      • Natman says:

        Right. The past is a guide but uncertainty still rings true. For instance Adam Dunn was a “proven” hitter until his 2011 aberration. Or Paul Konerko last year.

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      • jdbolick says:

        Ugh, this kind of response from you is both frustratingly typical and irritating. Of course there are proven players and unproven players. We use that distinction all the time when discussing potential outcomes. We did it when discussing Jacoby Ellsbury and saying that even though we all think it’s unlikely that he will hit 32 home runs in a season again, he has actually done so. Chose “established” rather than “proven” if you’re really that hung up on semantics, but it is a documented and real level of past performance.

        You’re conflating proven with guaranteed when the two are very, very different. wespom9 is absolutely correct in pointing out that David Price has an established performance level at the major leagues while Gregory Polanco and other top prospects do not. We operate through these terms regularly so for you to pretend that you don’t understand that distinction is grossly disingenuous.

        Now of course Price isn’t guaranteed to maintain his performance at his current level. He could get hurt or he could suffer a sudden and dramatic loss of performance. wespom9 wasn’t suggesting otherwise. But there is still a huge difference between someone having a proven major league track record and someone who doesn’t. Anyone who does projections knows and accepts this.

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        • David says:

          Everyone knows that prospects don’t have an MLB track record; this is already incorporated into the analysis. Lumping prospects together as “unproven” and asking “what if they win the WS?” is basically choosing not to do any analysis of the trade at all and adds nothing to the conversation.

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        • Nick says:

          The point is, all prospects are not created equal, just as all major leaguers are not created equal. Would you trade a top prospect for a number 4 starter? Even if the latter was a “proven”, consistent major league pitcher? Of course not.

          Is Wil Myers “proven”? Yasiel Puig? Gregory Polanco is unproven, just as the 150th best prospect in baseabll is unproven. It’s not semantics. These labels are useless and misleading. The reality is we all use a sliding scale in these discussions, whether it’s mentally/subjectively or analytically.

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        • Prince of Logic says:

          Basing value of a player on established performance is what got the Phillies in to trouble. Look at David Price’s numbers from last year. His FB velo had a pretty significant decline, his strikeout rate also declined. Couple that with a mysterious injury to his pitching arm/shoulder that caused him to miss over a month of the year, and there should be some concern about his future.

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        • lowcountryjoe says:

          Out of curiosity what’s the track record on proven free agent players’ performances meeting or exceeding the dollar value over the life of their contracts. And how about towards the end of those contracts when some contracts don’t look like they one did? Has anyone done work on presenting this in a concise article or spreadsheet? if so, where can I find it without

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        • Buddy says:

          Dave is trying to trade apples for apples on this. It’s an expected high performance for high dollars (at least in the Pirates world) vs. average performance for low dollars. I think a more apt trade would be for a pitcher who had more long term value at a reasonable price would be Chris Sale. If the Red Sox wasn’t in the same division as the Rays, they could absorb that 2 years at approx. $30 million a lot easier than the Pirates could. Whether any of us like it or not, teams like the Yankees & Red Sox can absorb this kind of hit if Price turns into Johan Santana than what the Pirates can. Now, if Polanco or any of the other prospects that the other clubs would be using, was still a year or two away from producing for their team, they would be a piece worth considering in this type of trade.

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        • ValueArb says:

          Polanco has to be worth only 5-6 wins total in his first 4 years to be worth Price’s surplus value over the next 2 years after that $30M fixed cost. If you think that’s going to be all you get out of Polanco I’d take Price and win now.

          But it’s a ridiculously low estimate for Polanco.

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      • Hurtlockertwo says:

        I disagree, proven players have the ability to succeed but could get injured or have an off year. Very few pitchers like Price all of a sudden become bad players, although they could get injured. Rookies, on the other hand, fail at a pretty good rate even if they are highly touted.

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        • RC says:

          “. Very few pitchers like Price all of a sudden become bad players”

          This just isn’t true at all. Pitchers just losing it isn’t uncommon at all. Josh Beckett was a 4 WAR pitcher in 2011, and below replacement level (and then hurt) in 2013. Ubaldo Jimenez went from a 6 WAR guy to having averaged 2WAR the last 3 years. Johan Santana went from being a stud to out of baseball in a couple years.. and all these guys had established a performance level HIGHER than Price’s, and done it for longer.

          Price is good, and hes about as good a bet as you can make on a pitcher, but the idea that there are safe pitchers just isn’t true.

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        • cass says:

          Don’t forget Tim Lincecum.

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        • skmd says:

          Rick Ankiel. Daniel Bard. Sammy Sosa….

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        • Nyyfaninlaaland says:

          Ahhh, good old analysis by anecdote.

          The meaning here lies in relative probabilities. Anything can happen – what is more or less likely to happen is what analysis is based on.

          Same argument Dave C made relative to the Ellsbury – Yanks deal. The standard anecdote attached to that was Carl Crawford. The reality is that viewed overall the situation is different.

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        • lowcountryjoe says:

          Yankee fan in LA: at some point the volume of anecdotes becomes a number and can be translated into some kind of data that won’t tell you shit other than this game and the players who play it are wildly unpredictable. We all know this so I’m not breaking any new ground here. The armchair GM thing is fun; I get that. But when there’s some push-back on the statistical analysis from some fantastic point to be made, just remember it’s because there’s enough anecdotes out there to make one hell of a large sample size. Embrace some of the skepticism, won’t ha?!

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      • wespom9 says:

        i’ll agree that “established” is a better word than proven, I may have erred with that choice of adjective. We can’t know for sure what Polanco will do because he hasn’t been there. We can be reasonably sure what Price will do because he has done it AT THAT LEVEL and there is no discernible reason to suggest that he will fall off a cliff. HE MIGHT, but (in my eyes) the fact that he has experience/success and Polanco currently does not immediately tips the value factor toward Price.

        I am truly curious though about my 2nd point, which no one directly addressed. If the Pirates made this deal, do they have a better chance at the World Series and possibly win? I have to say yes. 6 years of Polanco is not as good for them RIGHT NOW as 2 years of Price, which makes them (I think) a great contender. It’s up to the Pirates to decide if they believe their window could open with two years of Price. That in and of itself is value to them – think of what a World Series title does to teams. I HAVE NO PROOF OF THE FOLLOWING STATEMENT, BUT – are free agents more likely to go to teams with recent championship success? would it be dependent on a win? If Price gets them to playoffs both years, is the cultivation of success worth the loss of 6 years of Polanco, regardless of how good he becomes?

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        • Saves? Really? says:

          Playoffs are too much of a crapshoot for this type of analysis. Tigers, with a healthy Miggy, should win the ALCS over the Sox. But Miggy gets hurt and the coin flip comes up Sox. Price makes the Pirates’ odds of reaching the playoffs over the next two years better. But how much does the loss of Polanco reduce those odds in years 3-6? Unless you’re the Yankees/Dodgers (or any other franchise that decides there is no real budget), a GM’s job has to be to maximize times making the dance.

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        • Ruki Motomiya says:

          It is much easier to project the next two years instead of years 3-6.

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        • Jason B says:

          Saves? – That’s a great point. It’s about maximizing chances of playing in October, then hope you win some coin flips (that may be slightly weighted one way or the other)

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      • jfree says:

        I understand your general point. But there is a big difference between the “future” of a prospect v the “future” of a current MLB player. The “future” of a prospect requires both a)their own future against more difficult competition than they have ever faced AND b)the accuracy of some computerized projection system in estimating it.

        You are only correct in talking about tweaking a forecasting system. Not in talking about a player’s actual future performance.

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      • Slugger27 says:

        if you had this exact same comment and took away the “dave cameron” part, it would have 20 thumbs down by now.

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      • Stinky Pete says:

        Hellsyeah. Price’s arm could fall off tomorrow. The velo drop could be a leading indicator for all we know. And Polanco’s WAR could just as easily be 3.0/3.3/3.6/3.9/4.2 over the next 5 years as it could be 2.0/2.3… as Cameron projected.

        Every player’s forecasted performance is a bell curve, and their value should be taken as the integral of the area under that curve. Just because a player has a wider curve doesn’t make him more or less valuable.

        Asserting inherent value in a “known commodity” is like saying:

        “Yeah, no thanks, I don’t want the results of the dice roll. I’ll just take an automatic five.”

        The dice roll averages out to seven. The roll is the smart answer even if it bites you in the ass with snake-eyes.

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        • Zen Madman says:

          Of course it’s a curve, but I wouldn’t assume it’s going to be the same bell shape for every player. The exact shape of the curve, or for that matter the 3D projection of multiple years, would influence the actual value to a specific team depending on their exact situation.

          I’m not saying that justifies a Myers for Shields or Polanco for Price trade. But the equation is more complex than a simple question of which player provides more surplus value over the years of team control.

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        • Stinky Pete says:

          Zen: I’m not talking about a bell curve with performance on the y-axis and age on the x-axis.

          I’m talking about for *one* projected year, performance is on the x-axis, and *probability* is on the y-axis. Thus, the most probably outcome is the top of the bell curve.

          And I don’t really care about the exact shape of the curve. It’s going to be roughly bell shaped.

          I suppose it’s not impossible there’s such a thing as a boom-or-bust player, who either has a great year or a terrible one, but I can’t really think of anyone who’d *project* like that. Some players behave that way in retrospect (every once in a while you’ll hear a half-wit announcer point out some guy who’s good in “even” years and bad in “odd” years, but that’s just fitting data to a bad theory after the fact,) but they don’t actually *project*out* that way.

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        • Stinky Pete says:

          So the tendency to have a “wide” or “narrow” bell curve represents a smaller range of possibilities in the projection. A player with more variance such as a prospect has a much wider bell curve than a “known commodity”.

          Is there value in a “known commodity”? Sure. But the value exists in the valuable part of the win-value proposition.

          If you *absolutely* know that your current team is an 88-win team, and you’ve got a player who’s worth 4 wins, +/- 0.5 wins is much more valuable than a guy who’s worth 4.5 wins, +/- 3.5 wins. But that’s an anachronism of the extremely high value of wins #’s 89-92.

          Plus, we’re talking about ridiculous, impossible hypotheticals. You KNOW your team’s exactly an 88 win team? Who told you this information? A leprechaun? Riding on a unicorn?

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      • AJ says:

        While I feel that this is true, the reverse is also true. While it is dangerous to say that this guy will do this or that next year, I would certainly place a higher level of confidence in a player who has done it over a player who may do it or even ‘likely will’ do it.

        AAA is littered with players who have great skills, but a hole in their game.

        There is no reason to believe that David Price will be anything other than David Price next year, particularly if he moves to a larger park or even to the National League. Do you put no stock into a pitcher who has dominated in the AL East against teams that hit 1-9, vs a National League schedule where most teams have 6 or 7 good hitters?

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    • edgar4evar says:

      To point 1 I believe Dave would say that the “proven veteran” canard is a myth. The better projection systems’ assessments of what a high-level prospect will do are as a accurate as the track record of veterans in predicting performance. Veterans have slumps, get injured and thus are as unpredictable as young players. While it would be foolish to assume that a young player will take a “big step forward,” if you look at a reasonable projection of a top-notch prospect, it’s a good bet that’s what they’ll do. At least as good a bet as signing Josh Hamilton.

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      • Bryrob58 says:

        “The better projection systems’ assessments of what a high-level prospect will do are as a accurate as the track record of veterans in predicting performance.”

        Is this proven? I feel like that is the key here. I would expect it to be true, but you know, question everything.

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        • B N says:

          It’s definitely not proven because it’s downright not true. There is a qualitatively different level of play between the minors and the majors. This level of play can expose relatively minor weaknesses and exploit them, leading to the flame-out of top prospects.

          I mean, think of chess. If you can clean up against the best guys in your state, what does that say about your ability to play with the world masters? Not very much, compared to your record actually playing against them. Likewise, poker: if one master player can figure out your tell, you either need to eradicate it or retire.

          Games naturally have that element where the top level of play will find and exploit weaknesses ruthlessly. And since nearly all players have weaknesses, much of the game is trying to adapt and correct them.

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      • jdbolick says:

        That’s not even remotely true. It is far easier to project someone with major league experience than someone who lacks it.

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        • AJ says:

          I agree totally. What about taking a pitcher like Price, who has dominated in the AL (against teams that do not bat a pitcher and hit from 1-9) and move him to a larger NL ballpark facing 6 or 7 hitters at most? WHAT’S THE ADDED VALUE THERE?

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      • Sean says:

        Gotta disagree on this point. Look at the trade for Halladay from the Phillies a few years ago. I know it’s not the same for a variety of reasons, but Kyle Drabek was a top 25-30 prospect by anyone’s estimation, and Travis d’Arnaud was a top 100 player who had a massive amount of upside (which has now landed him as a top 10 ranked player). Furthermore, d’Arnaud was involved in another comparable trade with the Mets for Dickey, getting yet another aging pitcher to a short term deal for the club.

        To say that Polanco is more valuable than Price right now really doesn’t hold any water, based on players who have flamed out in the majors (Drabek), players who still seemed poised to have a strong career in the majors (d’Arnaud), and by the fact that a player is worth what a GM will pay for them, and I do not think there are many people that would agree with the sentiment that a prospect is worth more than a Cy Young winner. Please don’t bombard me with the fact that some GMs are dumb, because I’m well aware of it, but I don’t think that this is as clear cut as it’s made out to be.

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        • RC says:

          “based on players who have flamed out in the majors ”

          You seem to believe that only prospects flame out in the majors, and not “proven Cy Young Winners”, like Johan Santana.

          Pitchers are risky. Even elite ones.

          I think the chances that Polanco busts are probably similar to the chances that Price gets hurt and misses a big chunk of the contract.

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        • Ralph Lauren says:

          ^RC

          Not sure why you think the bust rate would be the same for Polanco v. Price. Saying Price isn’t bust-proof is one thing, but saying the rate is the same is another.

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        • Los says:

          “and by the fact that a player is worth what a GM will pay for them”

          People need to stop perpetuating this myth. Some things have intrinsic value. The fact that someone pays more (or less) for it than it is worth does not change the value. If you need a roll of quarters to do laundry and I sell you one for $20, that doesn’t mean the roll is worth $20. It is still worth $10.

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        • RC says:

          Yes, some things have intrinsic value. Baseball players aren’t one of those things.

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        • Sean says:

          Look, I won’t take it much further because I know that certain trades make a lot of sense, but if you think that a fringe top-10 prospect has the value of an All Star player who is under team control for the next 2 years, then please please please trade with the team I like. I’m totally ok with anything you do.

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        • Sean says:

          Please call Ruben Amaro ASAP, because you guys are so right and we need to GET YOUNGER NOW!

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    • Wade8813 says:

      Are the Pirates better with Price than they are with Polanco PLUS whoever else they might be able to use that $15 mil to acquire?

      (Also, I’m not 100% convinced that the Pirates are obviously better with Price than just Polanco, although they probably are)

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  3. PWR says:

    ideally, you could use some sort of net present value concept when comparing the surplus values of 6 years of one guy to 2 years of another. Has anyone done that?

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  4. Garrett says:

    I don’t think Polanco is comparable to Myers. Myers was a sure thing top 5 prospect with consideration for number 1, who also was named the MILB player of the year. Polanco is more in the 10-15 range with no where near the same pop.
    Also, assuming that ZIPS can accurately project a players worth for the next half decade for a player who has never played in the Majors is tough for me to do.
    I know it’s all you have to go off of but if this idea was used than no MLB player would be traded ever. If 2 years of Price isn’t worth a prospect who is probably in the 10-15 range than who is? the fact is you have to look at past trades to determine a players worth. The Shields comparison is similar and will probably be pretty close in return despite your argument

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  5. Kyle says:

    This is why I think that if the Blue Jays are interested in Price, they should absolutely base the package around Aaron Sanchez and not Marcus Stroman. Stroman is ready now (and ZIPS projects him for something like 2 WAR in 2014), whereas Sanchez is more than likely a year or more away from regular duty. Sanchez may have the higher upside, but Stroman is the pitcher who can help the 2014 and 2015 clubs greatly, and therefore should not be used as currency in a trade attempting to help the 2014 and 2015 clubs.

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  6. Bryrob58 says:

    So, seeing that David Price made the top 50 for this year’s trade value list, does this mean than every top 10 prospect should easily be on that list..? And considering that the value of Polanco here is literally double that of Price, how far down the prospect lists do we go? I’m going to say that the risk with Price is a bit less than that of Polanco… I agree with the premise of the article, I actually wrote a very related one. Anyways, good stuff here Dave.

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    • Spencer says:

      Was it a ranking of perceived market value or true $/WAR value?

      If it was just a ranking of perceived value I think that it would skew more towards guys like price rather than polanco.

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      • Bryrob58 says:

        Interesting question!

        I’m going to say it was true $/WAR value. Kind of hard to say, as a big part of the list is projection-based. In seeing someone like Joey Votto miss the list, I think it is true value.

        Hopefully I understood you correctly.

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        • hsc says:

          If you don’t mind me asking, where do you write?

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        • Bryrob58 says:

          Just to clarify, hsc, the trade value list I was referring to was the annual one here at Fangraphs.

          I’m not sure I’m allowed to link you to where I write, but I’ll do it anyways and see what happens I guess. My site is found by clicking my username here, ProProjections.com. My work is also published via battingleadoff.com!

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    • JH says:

      2.5 years of price (with half a year at his 2013 salary was worth more than 2 years of him.

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  7. LaLoosh says:

    the far scarier thought is Jack Z considering a swap of Taijuan Walker for 2 yrs of David Price…

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  8. LuckyStrikes says:

    If more MLB teams accepted this valuation of prospects, would it not serve to drive up the price of signing free agents? After reading this I’d rather have Ubaldo Jimenez + Polanco rather than Price, even if it costs $60M for Ubaldo. You were going to pay $15M to Price in 2014 anyway, so why not pay it to the lesser arm and keep your $90M+ long term asset in Polanco? But, this hoarding of young assets is exactly why it costs $15M/year for a Ubaldo…

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    • jdbolick says:

      Plus the generally accepted notion that a 6 win player is worth more than two 3s.

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      • Bryrob58 says:

        This has been proven to be false, also… Counter-intuitive, I know.

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        • RC says:

          “This has been proven to be false, also… Counter-intuitive, I know.”

          No, it hasn’t.

          It’s only not true in situations where a team is constrained more by payroll than by roster slots. IE, for bad teams.

          For teams in big markets, roster slots are far more important than maximizing WAR/$.

          Look at the Red Sox for instance. The only position they had last year that didn’t produce more than 3 WAR was 3b. Converting a replacement level 3b into a 6WAR player would be significantly more valuable to them than finding two 3 WAR players.

          WAR isn’t really what we should be looking at for teams. What we should be looking at is WAWWH (Wins Above What We Have)

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        • Pirates Hurdles says:

          That has not been proven in any manner that I am aware of. The debate of a 6 win vs 2x3win comes down to consolidation of injury risk on one side vs. ability to find a 2nd player worth more than 0 wins on the other.

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        • Bryrob58 says:

          In reply to RC:

          I understand what you are saying. My point is based off of articles like this.

          http://www.fangraphs.com/blogs/linear-dollars-per-win-again/

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        • RC says:

          That says that players are paid in a linear manner, not that they’re worth that.

          And the whole thing is silly, because its mostly an artifact of the way fangraphs measures WAR and calculates their pool of FAs to use as the dollar figures.

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        • Phil says:

          RC has hit the nail on the head. If not, the new market inefficiency would be to sign 50 1 WAR players at low cost. Comparing surplus value over 6 years to surplus value over 2 years is not a foolproof approach, because it assumes you will not fill that roster spot with anything above replacement level for the other 4 years (and that they will be free). The analysis also ignores other factors, such as that Price is likely to net a pick if he isn’t extended through a QO, whereas Polanco might or might not

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        • Los says:

          While not “proven false” it still hols true. The fact of the matter is that salary constraints start to kick in before the roster size constraints do.

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      • josh says:

        thx klaw

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      • JKB says:

        My H2H league was full of managers trying to trade me two 3s for one 6. I kept telling them that two players can’t play the same position at the same time…

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        • cass says:

          Fantasy value, budgets, and contracts definitely work the same as those of real teams.

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        • Sam says:

          No, but there certainly are similarities. I think the point made by JKB is very applicable to real teams.

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        • B N says:

          Well fantasy, unless you play in a SUPER deep league, is biased by the issue that replacement level is way higher. So a 3 WAR real-life guy is more like a 1-WAR fantasy guy, while the 6 WAR guy is still a 4-WAR fantasy guy. That’s why you almost never see this go down in fantasy sports, but will in real life teams.

          But, if you properly adjusted to the fantasy replacement-level, you’d still see a preference to conserve your roster spots. I’d definitely rather have a 6 WAR guy than two 3 WAR guys for the same price. I could then use that spare roster spot for a platoon or something else where I could stack some value.

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        • Los says:

          Ok…but if everyone thought the same way as you do (and most do) then the price will not be equal. People will overbid for the 6 FanWAR (fantasyWAR) players. And a platoon player is not 0 FanWAR. The argument always boils down to 6 + X > 3 + 3 and everyone is certain they can extract value from X. I have news for you guys, if there is a freely available player that you can plug into your lineup that produces expectation of a net positive, you have your replacement level set too high and it should be lowered. I honestly think people are confusing WAR with raw stat totals. I would rather have a 40/40 player and a scrub than two 20/20 players. The reason for this is that ANYTHING the scrub provides is a bonus. That is not the same with WAR. I think playing in a points league helps show the value of players more than Rotisserie.

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  9. Slats says:

    The Mariners officially signed Willie Bloomquist!

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    • FeslenR says:

      off tangent much-and yay?

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    • AJ says:

      And based upon the premise that past performance being no indicator of future value, which so many people are throwing around in this forum, Bloomquist is a just as likely as any to hit .400, breaking Bond’s record of 73 HRs and Hack Wilson’s 191 RBI mark.

      Again, this is facetious, but if folks are going to say that Price is unlikely to retain current performance levels, then they must concede this. :)

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  10. RC says:

    One of the major problems with this sort of analysis (just finding total value over replacement) is it doesn’t control for roster slots.

    If you had a team full of 7 1-WAR relievers, 5 2-WAR SP, 8 2-WAR starters, and 5 1-WAR reserves, all making league minimum, you’d have the best value in the league by far.

    And you probably wouldn’t make the playoffs.

    Put simpler, its a lot easier to find a bargain on 2 WAR than it is to find a bargain on 5 WAR, and having a couple very good players means you’re less likely to run into roster space limitations.

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    • James Lahey says:

      I’ve heard that 40 WAR puts you in the wild card discussion. Depending on your division, it could be a title. I think it’s a stretch to say that a 38 WAR team “probably doesn’t make the playoffs”.

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      • Joe F says:

        No, he’s got the right idea. If a replacement-level team is 47, 48 wins, a 40 WAR team is something like an 87, 88 win team. Look back over the last few years and list out the teams who’ve won their division, let alone a wild card, with less than 92. It’s a low number. The 2012 AL Central needed 2 epically horrid teams in its basement to let the tigers take the division with 88 wins. Unless you’re counting health and luck for that team to gift them 4 or 5 wins – the equivalent of winning or sweeping at least 2 series during the regular season that they had no business winning. Or multiple cellar dwellers in their division.

        A real competitive team should be putting out a 48 WAR roster at the bare minimum.

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      • Noah says:

        38 WAR team wins 85.7 games, so its not a stretch.

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        • Ivan Grushenko says:

          Now you have the problem of only being able to use 1 pitcher at a time to actually and have 3 pitchers in the field. But aside from that, your math seems to work.

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      • Phil says:

        Well done for completely missing the point. Whatever the bar is, RC’s point is correct – the 25 best $ per WAR options are not going to be the best real life roster

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        • ValueArb says:

          That’s not RC’s point. He made up a mythical roster devoid of cost that would make for a competitive team, and stated it probably wouldn’t make the playoffs. The counterpoint is that it would have a good chance.

          The other counterpoint is that his mythical example means and proves nothing. In his example a team could have two 4 WAR position players combined with six 1.5 WAR position players and be in the same spot. So what’s the point?

          Teams should use their best $ per WAR options whenever possible, but that doesn’t mean they won’t overpay (accidentally or intentionally) for more WAR in spots. It’s impossible to predict exact performance.

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  11. James says:

    I feel like in the last few seasons several fangraphs articles have talked about the immeasurable advantage most teams feel they gain in re-signing these types of players. Any team trading for Price would have 2 seasons of exclusive negotiating rights for an extension.

    Are we not counting that value anymore?

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    • Bryrob58 says:

      Also the value of the qualifying offer picks if he leaves. Maybe the two kind of cancel each other out.

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      • Bryrob58 says:

        Actually, on second thought… 1) It was an ignored point, or 2) There is no value in signing Price long-term as his next contract will probably create little to no surplus value.

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        • James says:

          The point has also been made on this site in the past few years that teams are willing to sign or acquire players who are being paid large sums of money.

          If Price signs the Greinke contract that would be a pretty fair deal given the value he’d be expected to provide. With a win now worth about $6 million, and rising, $25M AAV is about right for a 4.5 win pitcher.

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    • RC says:

      The negotiating rights are only valuable if the player signs a team friendly deal.

      If the players signs an Adrian Gonzalez extension, then they really weren’t worth much.

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      • Phil says:

        Except that baseball games get played on a field as well as on a $ per WAR basis. Surplus value is obviously very important, but its not the be all and end all to a high budget team trying to push itself over the top

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  12. FeslenR says:

    I think it’s worth it from both clubs standpoint. The Pirates fell short of reaching the WS, though it had more to do with just poor pitching. Adding an ace like Price could be worth the troubles of losing a top prospect.

    The Rays always need to rebuild and getting top prospects aids their continuing competitiveness. I know prospects don’t always turn out, but when they do…

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  13. Bill says:

    I think Price is a far better pitcher than Shields. I also think there is a big difference between trading a position player prospect versus a pitcher prospect.

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    • Pirates Hurdles says:

      Yes, this is a big distinction, an elite position player prospect has a better success rate than an elite pitcher based on injury risk alone. I do think that Walker or Taillon or whomever for Price makes more sense than Polanco or Myers or whomever. That said, I’m in Dave’s camp that trading impact prospects for short term talent rarely is a good idea. Its an even worse idea for a low revenue team that can’t easily sign a RF to replace Polanco’s potential production in years 3-7. The all in or window theory is a pretty crappy approach for a low revenue team (ask Marlin fans). I’d rather do things like Tampa and resist these quick fix temptations.

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    • ValueArb says:

      Price is also going to cost roughly $8M more than Shields the next two years.

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  14. Rock says:

    I am not a native English speaker so please forgive my grammar and odd vocabulary.

    I think you somewhat overestimate what Polanco can bring to the Rays, and that’s not because of the assumption, but the method you use.

    First, the way to calculate $/WAR can only tell the cost, not the value. I think it makes sense to assume value/WAR is greater than cost/WAR in most cases. In this way Polanco’s value is underestimated, but here comes the second point.

    The $6M/WAR is for average. Averagely, a club is willing to pay $6M to buy a win. However, Rays is very likely below average in terms of value/win, and thus is very likely willing to pay less than $6M to buy a win.

    In addition, I saw many blogger on this site using $/WAR to analyze whether an FA worth his contract. However, the formula to calculate $/WAR is subtracting (base salaries times 40 roster players times 30 team) from total payroll, and then divided by total (wins – RL wins).

    To use this formula to estimate FA value, we are assuming pre-arb players, post-arb players, extended players, and FAs all the same, which is not true. The average cost to buy a win is $6M, and most players other than FAs are underpaid. That means the cost to acquire an FA is much higher than $6M.

    Also, the margin value of each win is different. The $6M is, again, taking average. Most teams that buy FAs are teams that with higher margin value per win. Using average figure to analyze can’t tell the true story IMO.

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  15. Michael says:

    Dave, how about the Michael Choice deal. Does this analysis imply the A’s should have kept Choice?

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  16. Abcd says:

    Shouldn’t the future value estimates be discounted to the present? A dollar of surplus value in 2018 is less valuable than in 2017, which is less valuable than the same dollar in 2014. In addition, Polanco would require a greater discount rate than Price because of greater uncertainty. Both the Rays and Pirates are also currently contetenders which increases the value of current production, thus increasing the discount rate.

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    • RC says:

      “A dollar of surplus value in 2018 is less valuable than in 2017, which is less valuable than the same dollar in 2014″

      But the value of a win is more dollars in 2018 than in 2017, etc. It’s probably pretty close overall.

      IE, While $6M today is worth more than $6M in 2018, a win may actually be worth $9M in 2018, and 6M today isn’t worth more than 9M in 2018

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      • Abcd says:

        But the surplus value is a de facto cash flow. The increased market price of a win shouldn’t be relevant to the decision to discount future cash flows that are represented by the player’s value minus the estimated market price of that value.

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    • Ivan Grushenko says:

      Yes it should, and the discount rate varies by individual. An analysis of which discount rate leads to maximum franchise value would be interesting

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  17. Jeffrey says:

    This posting completely ignores winning time frames.

    If the pirates believe they have a limited window to win, then price could help them win over 2014-2015 more than pol ancho could.

    Of course, again, this assumes that is how the pirates evaluate themselves.

    But for the Rays to actually part with Price, he’s gonna cost polanco and one of Jameson and cole.

    And I can’t see the pirates doing that.

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    • Ivan Grushenko says:

      Yes, although in this case if Polanco is only a 1-2 WAR downgrade from Price in 2014 future vs present is not that big a deal.

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      • Jason B says:

        But for teams in the ~85-93 expected win part of the curve, a 1-2 WAR upgrade can be *massive*, as it could mean the difference between reaching the postseason or not.

        For a team expected to win, say, 68-75? Eh, not so much.

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    • ValueArb says:

      Because teams don’t care about winning after the fictional “window”. Somehow the Ray’s window has passed, yet they keep trying, someone should tell them.

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  18. Sean says:

    So if Gregory Polanco: 2014 ZiPS, 262/310/393, +10 DEF, 2.8 WAR.
    and
    Gregor Blanco: 2013, 511 PA, 99 wRC+, +1 BSR, +10 DEF, +2.8 WAR

    http://i.imgur.com/1KsMK.gif

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  19. mario mendoza says:

    Is the price of 1 WAR really 6MM? That can’t be right.

    Teams would sign a “proven” (ahem) 2 WAR player to a 1 year, 12 million dollar contract? David Dejesus, a 2 WAR example of your own, signed a 2 year, 8.5 MM contract 3 years ago. That’s 2.1MM/WAR. The Rays just exercised an optional 3rd year at 3.25MM/WAR, presumably a value… but Kelly Johnson just signed a 1 year, 3MM contract (1.5-2MM/WAR,) so… I just don’t see it.

    Maybe the average cost per WAR is brought up by high-end players. But that suggests teams value WAR on a curve, and in fact Price’s 3rd, 4th, and 5th WAR per season really are worth more than several years of mediocrity from Polanco.

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    • Brandon says:

      Teams pay for wins on a linear scale.

      Also, the whole Kelly Johnson thing is cherry picking. There are plenty more guys that get payed 3MM that end up being worth about half a win.

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      • mario mendoza says:

        cherry pick away: show me one player with a 2-WAR/yr track record that was signed to a 12mm/yr contract.

        I still suspect that the first and second WAR a player contributes per year aren’t worth the same as the higher ones, and the market will bear the evidence, I just dont have the time!! Maybe someone who gets paid to write about this…?

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    • RC says:

      For every guy like DeJesus, there is a guy like Josh Beckett, who made $19M, and produced -.1 WAR

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      • mario mendoza says:

        when teams sign contracts they are paying $/EXPECTED WAR. the price per WAR we use here should be the market rate, not post-facto results… true?

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    • AK7007 says:

      Bench/platoon player markets are wonky. Dejesus is a platoon player.

      Look at full time starting players if you want to know more about $/WAR conversions. And not every player gets exactly the average amount.

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      • mario mendoza says:

        2 WAR is 2 WAR. And 2WAR players get platooned.

        Further, whats to say Polanco isnt a platoon player at 2WAR/yr? Especially when Dejesus is such a good comp? Show me a 12mm 2war player and I’ll accept DC’s valuation of him (even considering the leap of faith he’s placing on his later years, whereas Price “pays” you up front — neither is known but one is a lot less likely than the other)

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    • JKB says:

      Time to break out the mixed models and estimate $/WAR for FAs as a random effect of team, position, tenure in MLB, injury history, etc…

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  20. Sparky says:

    I think the Pirates would benefit more from adding an elite closer than a starter. I’d look to do something like a three-team deal with the Braves:
    Pirates send Polanco to Rays
    Rays send Price to Braves
    Braves send Craig Kimbrel to Pirates and Ernesto Mejia to Rays

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    • Vrev says:

      The Pirates closer was by many metrics (e.g. FIP, WAR) better than Kimbrel last year.

      I think they would be crazy to do the deal you suggest.

      I’d think the same even if the Pirates closer was terrible last year.

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  21. Tucker says:

    I would be interested in an analysis like this:

    – David Price has been worth x WAR over his age a through b seasons (last 3-4)
    – Create sample of other pitchers worth nearly same WAR over same age seasons, particularly those with consistent year to year WAR such as Price
    – Take the average/median/quartiles of those players WAR over the two following years
    – Use this to create projection for Price
    – Find article on FanGraphs (can’t remember who wrote it) discussing prospect “flame out”/success rates
    – Multiply success rate by your chosen prospect(s) forecasted WAR over next two years to create expected value
    – Compare with the WAR numbers from Price’s sample

    Obviously you would be making some assumptions, and you could adjust everything depending on your own feeling, but this should give a more accurate/detailed comparison.

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    • Tucker says:

      An appropriate response would be “do it yourself then,” which I may look into when I have time. If someone else does, more power to them.

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    • Bobby says:

      Well, I’ve done that.

      Briefly, I looked at pitchers from 1996 on who had accumulated >16 WAR over their age 24-27 seasons, and threw at least 700 innings. I then looked at their performances for their age 28-29 seasons.

      The 22 pitchers in my sample averaged roughly 400 innings and 8.5 wins over their age 28-29 years. Remove Pedro Martinez (far far ahead of the field in age 24-27 WAR) and the sample averaged 8.1 wins over their age 28-29 seasons. 3 of the 22 pitchers (Jake Peavy, Ubaldo Jimenez, Tim Lincecum) failed to reach 6 WAR over that 2 year span.

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      • Bobby says:

        To create this sample I used the custom pitcher leaderboards and specified the following parameters:
        – 1996-2013
        – Ages 24-27
        – >16 WAR
        – >700 IP

        I made a new player list using players from that resulting table then removed those who did not throw an age 28 or 29 season on account of age (Kershaw, Felix Hernandez, Cain were the three, I believe).

        Interesting to note Brandon Webb is in the sample, and finished runner-up for Cy Young in both his 28 and 29 seasons. Threw 463 innings good for 11.7 WAR. Then of course he only threw 4 innings after that, ever.

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        • RC says:

          If you’re going to take players significantly over 16 WAR, you need to take players below it too. You can’t select a sample with Price at the bottom of it and use it to predict his performance.

          Price produced 17.4 WAR, so maybe 15.4->19.4 WAR over that age range?

          Also, any reason you picked 4 years instead of 5, other than it supports what you want better? He put up 1.3 WAR in his age 23 season.

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        • Bobby says:

          Changed the table parameter to >15 WAR, >850 IP over age 23-27 seasons, remove Pedro. Average 28-29 performance: 383 IP, 7 WAR. Now 7 of the 26 (Mulder, Jeff Weaver, Lincecum, Jimenez, Hampton, Zito, Peavy, Carlos Zambrano) accumulated 6 WAR.

          More instructive might be to find guys more comparable to Price by using data prior to 1996. This was all back of envelope stuff and not a whole lot of thought went to selecting criteria for the sample, either

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  22. Julian says:

    The Price for David Price? Really? David’s Price was staring you in the face.

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    • JKB says:

      The meat of this article was about estimating the value of Gregory Polanco, which I found interesting, bookended by a review of the consensus Price for David Price.

      I am one of the minority that thinks the Rays might surprise us by going against conventional wisdom on this one. If they can’t get top-shelf talent AND many years of team control this time around (like they did in the Myers trade), they might opt for top-shelf talent with fewer years of control. Why? The Rays have been a contending team for 1/2 a decade now, and they have been trying to get a new stadium in Tampa that whole time. A World Series trophy would help that cause.

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  23. makeitrayn says:

    The rays are selling Price to the highest bidder not trading him. Gaining Price provides more than just surplus value. Using this method of evaluation by only surplus value would mean the king Felix extension was a bad deal, which you said otherwise. Just keep it consistent Dave.

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  24. semperty says:

    By this theory, a team would always be better off keeping their prospect and overpaying for someone on the open market – no? That just doesn’t seem right.

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    • jtmorgan says:

      Theoretically I think this may be correct, but would imply an almost limitless budget. When working within a budget and you have $15MM in room getting Price at 2/$30MM and worth 4.5 WAR/yr is better than spending your $15MM on a 2.5 WAR guy in the FA market. The years make a huge difference on long-term impact of budgets if you couldn’t go out and offer say Choo a 6/$90MM deal but only stick to a 2 year deal.

      When you’re in contention and your options are either get a little better by getting a 2-3 WAR FA that likely replaces somebody worth 0-2 WAR or getting Price at 4.5 WAR and replacing your worst starter which is probably in the 0-1 WAR range. There’s a big premium to pay in buying that extra 2 WAR for this season.

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      • IDontThinkSo... says:

        While you are correct in a way, a limitless budget may not be needed because you were not trading the prospects you have. Teams would also likely have far less control over their windows.

        If teams all came to the conclusion that trading prospects is not in their best interest though, it creates an extremely interesting landscape. Teams really holding strong to this, or possibly a rule discouraging such moves, would likely have a profound ripple effect throughout the game as a whole.

        Without prospects being traded are star players more likely to stay with their originating teams longer? Not having the option of trading a star player for a prospect return, I would imagine you are more likely to try and resign them nearly regardless of cost. You would solely be comparing their cost against the cost of a market replacement and that replacements expected value. You would not necessarily be able to trade for a star at a later date though, so if you feel you will need a star at that specific position in the near future then keeping the one you have would become quite important. The above mention of the Shields trade reminds me that KC might have overpaid to keep Greinke with the possibility of trading for a replacement two years down the road having been largely eliminated. And if every team is deciding like this, top talent might hit the market far less often. Star for star swaps could become common though.

        And while star players would possibly end up staying with their clubs longer, marginal players may not. You would need to budget for the stars so marginals would be expendable once their costs exceeded budget allotment, and their having more marginal value means they would be easier to replace from within. Or would the market for such players become saturated to the point price drops rather drastically, thereby eventually increasing the odds they stay with a team until the team decides to move on?

        With such a simple change the game may very well end up looking closer to how it did prior to free agency, oddly enough.

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        • jtmorgan says:

          I agree you won’t really need a limitless budget, but the ideas presented work better in a vacuum where you don’t have to account for wins today versus wins in the future. Being a team in contention today you only have a limited way to add wins to the current team. Either through cash available in your budget in order to acquire the talent through Free Agency or paying through value in the future in prospects for somebody that is underpaid relative to their 2014 projected levels of production.

          Also you’re going to overpay 1 way or another either in paying for the decline years of a free agent and that might put more strain on the budget in 4+ years than the value lost in paying prospects in order to just get the value of the good years of a player.

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    • RC says:

      That’s pretty much the Red Sox modus operandi – Keep the prospects, sign value guys to fill holes, extend anyone you can at a below market rate.

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  25. leeroy says:

    I was actually just reading a piece on prospect valuation the other day. The average value of a 1-5 overall prospect who is young and plays outfield is ~$63MM. A young outfielder ranked 6-15 on the top prospect list is expected to be worth is ~$51MM The process used a $5MM / win assumption, but no discount rate for the preference to consume wins now rather than later. Either way, the $91MM value assumption looks way too high. $51MM seems more reasonable and would still be more valuable than 2 years of Price.

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  26. Jonathan Adelman says:

    Using ZiPS to project Polanco’s value when he hasn’t even spent time in the majors yet seems suboptimal to me. An alternate approach would be to use Victor Wang’s work (or find a derivative study) as you’ve done most other times you’re trying to determine prospect value. Yes, Polanco is probably major-league ready, but that’s reflected in the fact that he’s probably a Top 20 overall prospect at this point. And that’s very valuable, and that’s probably more valuable than Price considering service time and salaries for the players…but it’s a lot closer than it would be if you relied on Polanco’s ZiPS going forward instead.

    Just my two cents!

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  27. Hank says:

    So if we use this SAME methodology to evaluate the Doug Fister trade….

    Did the Nats still steal Fister from the Tigers?

    They might not be big impact prospects in that deal, but if you use ZIPS projections, guestimate arb raises and look at surplus value would the deal still be considered a steal?

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  28. Nick Doyle says:

    You also have to add in the value of price not accepting a qualifying offer if they ultimately planned on not trading him in season during his last season under contract and the draft pick compensation that they would get by simply keeping him and letting him walk

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  29. Ruki Motomiya says:

    Polanco is NOT the most valuable property right now…he just has the potential to be.

    Perhaps more importantly while he may accrue more extra value, he will presumably put up less WAR. Unless the extra value accrued can be used to generate more wins, Polanco’s extra value is worthless.

    You can’t just calculate $/WAR, after all. For example, if the Pirates do not trade Polanco but do not sign players who are equal to the difference in WAR made with the money they are saving then they are losing WAR and ergo wins, even if they are getting more value for each of those wins.

    In addition, there is the factor of the ease of projecting the next year/2 years compared to 3-6. Polanco might put up surplus value later on, but the Pirates might not even be in contention by then…which means the value isn’t worth a lot (It would mostly be in converting it to trade value, unless they could project to become contenders again while Polanco is around).

    Finally, there is probably more risk, or error bars, in Polanco’s projected stats than in Price’s, as data must be extrapolated from non-major league levels.

    Not sure I’d make the deal, but it is mostly because I’d have to think on how I project the Pirates next year.

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  30. Kirk Davenport says:

    Sellers in most any market (business, real estate, MLB) are looking at the precedents and justifying the cost on that basis. i.e. See R.A. Dickey trade, Myers/Shields trade, Cliff Lee trade. TB will be looking to get a similar deal for Price. Buyers may like the approach in this article about a full examination of the numbers. When it comes own to it, when there will be many buyers interested in Price, owners like in TB will have more leverage in a deal. Bottom line is someone will overpay for Price either now or during the season

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  31. schlomsd says:

    That projection for Polanco is insane. He’s being projected for about 10 WAR the next 4 seasons – here’s the list of Under 25 outfielders by WAR: http://goo.gl/Dwa0zH

    Basically you’re projecting him to be better than Carlos Gonzalez and about the same as Jay Bruce. I can’t imagine what his projection would be if he hit better than the 263/354/407 in Double A, would that make him Andrew McCutchen then?

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    • Everett says:

      The problem with the chart is that Gonzalez only played 270 games over that stretch, so he’s not really projecting as better than that. I think Dave’s projection is probably a bit aggressive, particularly in going the full 6 years, as there should be some “regression” present to account for the odds of flame-out, which is included of course in Victor Wang’s work, which does seem to be relevant here.

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    • Krog says:

      Your leaderboard only shows 3 seasons. Make it four seasons and he is being projected in the Colby Rasmus / Cameron Maybin range.

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    • Gaupo says:

      Polanco is a very good CF. He’ll be stuck in RF. That’s going to inflate his WAR significantly. That has a lot to do with Dave’s numbers.

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      • Jonathan Adelman says:

        No, it won’t, because the positional penalty for RF is heavier than for CF in WAR calculations.

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      • jtmorgan says:

        It won’t inflate his WAR, but will move more of the WAR to defensive value which isn’t paid the same in free agency or in arbitration.

        His bat will see less value and that’s what you’re really looking at. A corner outfielder with a league average bat is pretty meh even with really good defense.

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    • ValueArb says:

      Your data is wrong. Adam Jones had 14 WAR, not 5 during that period. Cargo 16.8 WAR, not 9.4, Rasmus 10.4 WAR, not 5.6. Parra had 9.9 WAR, not 5.2. Reddick 9.1 WAR, not 6.5. Looks like your search is cutting off 2013 for some players, probably a glitch in the filtering software.

      When data doesn’t make sense, you should double check your source.

      And you are misreading your own data. It’s not every player who produced 10 WAR+, it’s the group of top players who together averaged 10 WAR, some over-performed, some under, but that’s the group you are projecting. So you are probably looking at 30-50 players now. Then ask your self if Polanco is a better or worse prospect than the average prospect from that group.

      And even id you do all that, your sample will still be biased. Not all of those players have reached or exited arbitration, in fact few have because young players don’t get to play every game. Teams get more years of control from the players who have to go back to the minors for stretches or who get hurt, blunting some of the negative impact. Gerardo just became arb eligible after making $3.7M over 4 years. So did Heyward. Stanton has not as yet.

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  32. Why has it come to this?? says:

    Very sad. I used to look forward to Dave’s post with great enthusiasm. The good ole days. Barring an irresistble headline or topic I’m obsessed with, this will be the last Cameron article I bother reading.

    The value of a win goes up for a competing team. David Price giving the Pirates 93 wins instead of 90 wins in 2014 and 91 wins instead of 88 wins in 2015 is so much more valuable than Polanco giving them 78 wins instead of 76 wins in 2020. I learned this from a Mr. Dave Cameron.

    League average players lose value because of finite roster spots. A team of league average players will leave you… Well, league average, now won’t it. You have to maximize your roster spots. Ironicly, I learned this from a Mr. Dave Cameron.

    I won’t even address the proven versus unproven vomit.

    Very sad indeed.

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  33. So Price was on the DL with a mysterious throwing arm/shoulder injury, has lost a somewhat significant amount of velocity, had a considerable decline in strikeout rate, yet teams are willing to pay him AND give up a blue chip prospect? Dumb.

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    • Devil's Advocate's Devil's Advocate says:

      I guess we’re ignoring the Cliff Lee type control Price showed after the stint.

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    • jtmorgan says:

      It was a triceps strain, so nothing major long term. Also I suspect there’s a non-zero chance that there was a change in the way they collect the velocity ratings. Every Rays starter lost about 2 MPH on their fastball. Even the younger guys like Moore and Hellickson. Specifically in Hellickson’s case he went from 91-92 AVG to 89-90. I suspect there was some decline in velocity as most players see, but nowhere near the loss of 2 MPH like is being seen.

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  34. Jim says:

    This article was very upsetting to Rays fan.

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  35. Dan says:

    Quibbling with your values in the table- you massively overstate the likely arbitration salary values of Polanco. A good comp may be Austin Jackson- who actually ridiculously outplayed Polanco’s projection in terms of WAR in his first 3 years (i.e. establishing his arb 1 value – Jackson had 11.5 WAR to Polanco’s projected 6.9) – and Jackson is likely a 3M, 5.5M, 8.5M type of player. Therefore, even generously assuming Polanco has as good of numbers as Jackson – you overestimated Polanco’s salary by approximately 17M, and the net value of Polanco will be even greater than you estimate- in excess of $100M.

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  36. schlomsd says:

    If you use the same projection as Polanco for a player that you project for 1.0 WAR for his age 22 rookie season than you’d get $62.250m in surplus value, or double the value of David Price (if you assume he’d make about half as much in arbitration as the Polanco projection). Even if you start with a replacement player (0.0) he’d produce somewhere between $22m to $27, (depending on how much you pay him, he’d create about $30m in value).

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    • jtmorgan says:

      And that would be assuming a team went through and gave him the playing time through his 0, 0.3, 0.6 and so on WAR seasons. Most likely they’d give him a shot because of his prospect stock, but by the time he’s arbitration eligible he’d be non-tendered. And the 0.9 WAR received over 3 years of playing time would be worth negative value to the team on the field even consider he’d be getting paid next to nothing, approximately $1.5M over those 3 seasons.

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  37. BMarkham says:

    I agree Polanco’s 6 years will probably provide more surplus value than Price’s 2 years. As a Cardinals fan I would be happy to see Price traded for Polanco. We’d have to fade two years of them being a much stronger team but there’s no chance they would resign him. The Pirates aren’t even willing to sign Burnett, and the Pirates are the only team he wants to play for. They’re not even going to want to pay Price’s arbitration salaries. Plus they need an upgrade in RF and Polanco has been they’re plan for that all along. The Pirates are smart enough to understand signing Burnett and keeping Polanco is a much better idea than trading Polanco for Price.

    That’s why I’m very happy the Cardinals signed an imperfect solution in Peralta rather than trading their young talent for someone like Tulo. It would be fun to see the current Cardinals lineup upgraded by penciling in Tulo, but there was no way they could get more surplus value out of Tulo then they will out of the players it would have taken to get him. Peralta probably won’t provide any surplus value, but he didn’t cost them any players or picks.

    The Mariners on the other hand may be desperate enough to trade Walker for Price. It also seems to make more sense for the Rays since the current Rays without Price would be a team who’s biggest need would be a starting pitcher. Adding Walker wouldn’t replace Price’s presence, but it would shore up the rotation in the event of him leaving. It makes them a bit worse in the immediate sense but it frees up money for them to add somewhere else in the present, and makes them much more likely to be competitive in the future. With the new Playoff TV money, the Rays can probably afford to pay Price, but they would surely prefer to swindle somebody. And that’s what I think will eventually happen this offseason.

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    • Seanto says:

      It’s always more fun to swindle!

      The Rays CAN afford to pay price, but his contract would become an albatross in 3 years for them. A contract like the one Price will command would be tough for a team spending less then $120 million a year to absorb.

      The Rays will probably be able to raise the payroll in a few years once they put together a long term plan for the stadium. But even then, and with the new TV money, their payroll will still likely max out at around $100 million.

      If they trade Price and get a Rays-esque return on him, they’ll continue to be competitive until that new money becomes a reality. Then, they can buy a couple of mid-tier free agents (something like Shin Soo Choo this year) to fill out the roster and have Longo, Myers, Moore, Guerierri, Jennings, and the return from Price. That’s a potential group that could win a Series. Watch out!

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      • BMarkham says:

        Sorry, when I said they can afford Price I should have clarified, what I meant is they can afford to pay his arbitration salaries. I’d be really surprised if he resigned. And in the end at least they get a draft pick. If the Rays were presently a weaker team it would be a lot easier decision to trade Price. Being that they are a strong team right now it makes it more important for them to extract major league ready talent. Trading for Polanco or Walker now makes them less likely to compete right now (especially with the Rangers, A’s, Mariners, Royals, Yankees, and Blue Jays all trying to win next year) but makes them much more likely to have a good window in a couple years with a lot of guys in their primes and still controllable.

        But, if they can’t get a return like Polanco or Walker, then it might be best just to hold on to Price for the next two years and compete now. And at least they get a draft pick when he leaves. I don’t think it comes down to that though, some team is going to end up paying off the Rays this offseason.

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  38. Yehuda Hamer says:

    David Price will end up on a big market team.

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  39. DNA+ says:

    This column might make sense if the point of baseball was to build the team with the most $/WAR. ….since the point of baseball is actually to the win the WS, it makes very little sense.

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  40. Antonio Bananas says:

    You should create a range of potential values with livelihoods and then overlap them. Polanco also has a much higher chance of producing 0 WAR.

    Also you should adjust what price is worth to the pirates pay for a 4-5 WAR ace. Given how close they are to a ring, they would pay a premium for a star. One 4-6 WAR player is more valuable than 2-3 2 WAR players. I think Polanco for Price is a lot closer to a good deal than the two surplus values you listed show.

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  41. Seanto says:

    Dave, quit spouting off all of this logic and sense! We Rays fans need some moronic GM to look at Price and think he’s worth everything they’ve got in the coffers!

    Besides, the Rays play the hypnosis game better then any team in the league. How else do you explain Wil Myers AND prospects for James Shields and Wade “Wild Thing Without the Specs” Davis?

    I’m thinking that Gregory Polanco and Jameson Taillon will be in Tampa next year. Go Rays!

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  42. Qualifying offer says:

    Another small piece of value that Pittsburgh is likely to get is a 1st rounder in 2016 unless they resign Price. First rounders aren’t as valuable as top prospects, but that will cushion the blow.

    If you are a team with a limited window, doing this trade will open up another window 4-6 years down the line when you start letting those good guys go due to price.

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  43. Matt P says:

    From 2000-2013 there have been a whole 45 offensive rookies worth 2.8 WAR or more their first year. We’re talking about 3 a year. There were 116 worth 2 WAR or more or about 8 a year.

    It’s very possible he’ll be one of the top ten offensive rookies in 2014 but that isn’t the bet I’d take.

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  44. E says:

    Three team deal, with the center pieces being Price to Pittsburgh, Polanco to Seattle and Tai Walker to Rays. Is this a good deal for the M’s?

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    • Garrett says:

      Do you think david Price is only going to cost the pirates Polanco?
      A more realistic trade would have a lot more moving pieces which teams have an excess of

      Price, Joyce to the Pirates (From Rays)
      Polanco, Lobaton to the Mariners (From Pirates/Rays)
      Walker, Franklin to the Rays (From Mariners)
      Glassnow, Hanson, Sanchez to the Rays (From Pirates)

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  45. Leo Walter says:

    BMarkham : ” The Pirates aren’t even willing to sign Burnett, and the Pirates are the only team he wants to play for.” In case you didn’t get the memo,the Pirates ARE very willing to sign AJ Burnette,just not for anythin at otr above the qo. The problem here is that Burnette has not decided if he wants to put in another season of MLB.Just one other point with you : when the Cards realize the new SS isn ‘t all that defensively,where will they play him ?

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    • BMarkham says:

      lol, Burnett was a 4 WAR pitcher this past year, and projected to be a 3.8 WAR pitcher next year. Based on that his value on the free market would be $20+ million for another year. Which is my point: The Pirates are too cheap to want Price. If they wanted to spend money they’d give Burnett the $14-$15 million he wants and keep their prospects rather than trade for Price. If I was a Pirate fan I would be pissed if they didn’t resign Burnett because they wouldn’t give him as much as $15 million. If now isn’t the time for the Pirates to start spending then when is? And for the record as a Cardinals fan I like the Pirates being competitive. 2013 was a great season to watch because of how close our division was, especially the fact that for most of the season the NL Central represented 3 of the best 4 records in the league. We got the fun of a close race and the pride of being one of the toughest divisions.

      Also, lol at the Peralta remark. The Cardinals know Peralta isn’t all that. I said myself he was an imperfect solution. They had a choice to overpay in money, propects, picks, or some combination of the two. Our FO decided that the best option was overpay in money, ensuring that we keep our young core together while also not hurting future growth by losing a draft pick while adding another valuable player to our lineup.

      I don’t expect Peralta to play SS for more than three years, and I’d be somewhat surprised if he played more than two. But signing Peralta made us even better now, while not sacrificing anything in the future. It was an amazing move. I would have preferred a 2 or 3 year deal but that’s part of the sacrifice of signing a FA and it was worth it. And according to the metrics, Peralta is above average defensively right now. And a huge upgrade offensively over Kozma.

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  46. SABRphreak says:

    Surplus value doesn’t equal wins. Additional wins are worth different amounts to teams based upon where they are on the win curve. For example, each additional win is worth more to an 88 win team than a 75 win or 100 win team. The WAR value of Price over two years to a playoff caliber team or a team on the cusp of the playoffs is much more than a prospect that can add more surplus value over the course of 6 years. You don’t win an award for “projected surplus value” over long time periods. You need total value in terms of a projector like WAR. Dave says: “two years of an expensive ace is not worth a big league ready contributor with star potential.” I say that depends on where your team is — a rebuilding team or one not yet ready to contend needs the high end prospect but a team in a brief window to win (especially with a budget that can easily absorb the contract) needs the ace.

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  47. peric says:

    One thing not considered by both the author and by the more knowledgable commenters is Price’s uniqueness. He isn’t just a better and younger Jimmy “Big Game” Shields, he’s a left-handed starter with STUFF! One with stuff good enough to get him a CY Young. That in and of itself is enough to want him in the rotation if you are in a division with a a lot of good left-handed hitters. The Phillies before they became very-long-in-the-tooth provide a good example of this. Atlanta until they swapped out their outfield for the Upton brothers and now they’ve lost McCann.

    I don’t think this has any bearing on Seattle’s pursuit of Price. IMO I think Mr. Zduriencik got himself in deeeeep do-do with the fans and the ownership with last season’s moves most especially the Michael Morse move. I remember that right after that deal the guy who runs the statcorner.com site pulled his whole site down and put up a banner that read “Mariner suck” for a good long time. And then Mr. Zduriencik’s manager quit on him. Basically, let’s face it he looked pretty inept and incompetent for a baseball GM after last season. Now, he’s under the gun to pull in enough resources to put together a winning season. His job may be more important to him than the franchise’s future.

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  48. Mike C says:

    If we’re going to use financial economics analysis to value wins in dollars, then you can’t just use the return side of the equation; you have to incorporate risk. Valuing Polanco’s wins as equal to Price’s is ignoring the variance in expected returns, and tantamount to applying the US Government’s interest rate (“risk free”) to a payday loan to some crackhead. The rate is different because, largely, the risk is different. Accordingly, if one assumed arbitrarily that these sure thing prospects only hit 50% of the time! then you have to adjust Polanco’s wins value to half (and Price’s by some analogous, lower, number). Hence, Polanco’s risk adjusted expected value is less than the risk free approach incorrectly used here and in like every freaking baseball analysis like this. If that prospect discount rate is 50%, it’s basically saying “over time, half will work out and half will flame out.” Therefore, each prospect that fits the same sure thing profile will get a 50% haircut. That’s why trading for Price can make sense: different perceptions of risk.

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  49. 40/40club says:

    I don’t know how may times I’ve said it, but baseball is about winning as many games as possible, not building a team as efficiently as possible. These ideas aren’t mutually exclusive, and making good cheap signings often allows additional roster flexibility and a greater margin of error, but you still need good players.

    Dave, which of these two player would you rather have over the next three years?
    Player X
    2014-2016 salary: 72 million (24 per year)
    2014- 2014 wins: 12
    or
    Player Y
    2014-2016 salary: 1.5 million (league minimum per year)
    2014- 2014 wins: 3

    According to your calculation, player X produces 6 million in NET value, while player Y produces 18 million in net value. Yet I highly doubt anyone would choose player Y over Player X.
    (Btw, Player X is an approximation of Zack Greinke, while Player Y is Wily Peralta in case anyone is wondering).

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  50. Drew Jenkins says:

    I see what the point of this article is, but it does not look at historical content. A majority of trades for starting pitches end with the team that is acquiring the pitcher losing value. Teams know this is true historically going into the trade- yet they still do it because pitching is such a commodity. Stats like WAR do not value simply being a pitcher as much as MLB front office’s do. Time and time again teams will grossly overpay for starting pitching in the short term at the expense of the long term.

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