The Roy Oswalt Trade: Houston’s Perspective

Before we can fully understand Houston’s motive in dealing Roy Oswalt, we have to answer a number of questions. Just a couple off the top of my head:

1) Was moving Oswalt necessary from a payroll standpoint? Follow-up: For 2010, 2011, 2012, or all of them?

2) Do they realize his peak value now, while teams battle for playoff spots? Or would they be able to work out something perhaps more favorable to the club this winter, when they don’t have a looming deadline?

Then there’s the obvious question of the value they got in return. For the most part these questions will require us to speculate. But with the information we have available we can at least make informed speculations.

Was moving Oswalt necessary from a payroll standpoint?

Since they appeared in the World Series in 2005 it seems like the Astros have tried to spend their way into a return trip. That year their payroll sat at $75.8 million, but it jumped all the way to $92.5 million in 2006. Of course, since they bumped the payroll they haven’t made it back to the playoffs. The spending, it seems, has come in the wrong places.

In 2009 the Astros had a payroll just shy of $103 million, more than $10 million above their previous ceiling. It bought them only 74 wins. They were able to shave $10 million off that number for 2010 due to the departures of Miguel Tejada, Jose Valverde, and a few others. Still, a $92 million payroll is a bit high for the results the team has produced. Ditching Oswalt’s remaining 2010 salary, plus his 2011 salary and 2012 buyout, will help them start the rebuilding process.

Yet that’s not the whole story. The Astros sent $11 million to the Phillies as part of the deal, which covers all of the roughly $5 million he’s owed for the remainder of the season, plus more than a third of his 2011 salary plus option buyout. In other words, the Phillies will pay $10.5 million for a year and two-plus months of Oswalt, while the Astros will pay $11 million for him not to pitch for them. If that seems a bit odd, it is.

Given the evidence, it doesn’t seem like moving Oswalt was a financial necessity. But given the team’s current composition, both in the majors and on the farm, it was probably a wise move to deal their most expensive player. He likely wouldn’t be around for the next contending Houston team, so they might as well try to get the most they could for him. That leads us nicely into the next two questions.

Is this the best time to deal Oswalt?

Intuitively it seems like a team in the midst of a pennant race would pay more for a high-quality player than a team in winter remodeling mode. They have more at stake, and therefore might be willing to pay a premium for a player that can help them. That goes especially for a player under contract for the following season and beyond, since they’ll be able to realize further value from him. But as we’ve learned from years of following the game, intuition doesn’t always provide the correct answer.

Only small number of teams become buyers in July. We’re past the halfway point, and while few teams have outright given up on the season, that doesn’t mean that they’ll do something foolish and trade prospects for a player who, while helping the team, won’t put them in the playoffs. It also seems like many, if not most, teams are butting up against their payroll limits, which further limits the market. Dealing in July, then, means finding a team desperate enough to pay even though they know the competition is reduced. Dealing in the winter opens the floor to more teams, not only because everyone is a contender in the winter, but because teams will have more payroll flexibility, at least early on.

With Oswalt the situation becomes a bit more complex. The Astros included a full no-trade clause in his contract, which even further reduces the market for his services. He clearly didn’t want to leave Houston — he was one win short of tying the franchise record, and, well, he got the NTC into his contract for a reason. Houston was limited in any dealing with him, deadline or not. It does seem, though, that they were down to one or two possible teams. That rarely makes for a robust return.

We’ll never know what Houston could get if they chose to wait until the winter to deal Oswalt. They still would have had the issue of the NTC, and there’s no telling whether Oswalt would have waived it if the deal didn’t send him to a contender. Since it’s easier to identify a contender now than it will be in the winter, perhaps they did do the best they could. Without knowing definitively, I’d have to lean that way when making a judgment.

Did Houston get enough in return?

Given all the above, it doesn’t seem like Houston was in line for much of a return. By himself Oswalt is a valuable player, a No. 2 pitcher who has been an ace in the past. He’s signed only through his age-33, which helps his prospects, but that’s still a large contract whether deserved or not. That no-trade clause further limited the situation. Even a team that seeks to add a starter knows that Houston is in a bind.

The ideal return for Houston was high-ceiling, low-level players. Keith Law ranked their farm system No. 28, so it doesn’t look like they have much of an immediate future. As he notes, though, their new scouting director, Bobby Heck, has assembled some decent talent during the past few years, so Houston might be back in contention by, say, 2012 or 2013. Picking up guys playing A-ball, then, could be the best course, since they’ll be nearing readiness at that point.

The centerpiece of the deal, though, not only has major league experience, but already has over a year of accumulated service time. J.A. Happ spent all of 2009 with the big league club, and his 47 stray days in 2007 and 2008 will probably make his short minor league stint this year moot. That is, he’ll almost certainly have two years of service time at the end of this year, meaning the Astros get him for one year at a mid-six figures salary before heading to arbitration for three years. That can be good, though, since he’d have some experience when the team is ready to contend again.

Baseball America rated Happ the Phillies No. 9 prospect heading into the 2009 season, noting that he “lacks a standout pitch and doesn’t figure to get all those strikeouts on fastballs as easily in the majors as he did in Triple-A.” That rang true in 2009. After striking out 8.9 per nine in 2007 and 10 in 2008, Happ struck out just 6.45 per nine in 2009. He doesn’t have a great walk rate, but he has generally kept the ball in the park despite a fly ball tendency. He has pitched just 15.1 major league innings this year because of a forearm strain that kept him on the DL from mid-April until recently. He hasn’t had problems with that part of his arm since he missed 15 days in 2007 with elbow inflammation.

The other two players in the trade, Anthony Gose and Jonathan Villar, are both 19-year-olds playing in A ball, Gose in advanced and Villar in low. Of the two Gose is the better prospect, ranking No. 6 in the Phillies’ system per BA and seventh on Marc Hulet’s list. Yet he’s irrelevant at this point, because he’s been traded to Toronto. That leaves the return from that trade plus Villar. Or Villan. Whichever you prefer, I guess.

Update: Houston received 3B/1B Brett Wallace from the Blue Jays. This, I think, changes the equation a bit. From what I’ve heard the consensus is that Wallace will end up at first, which gives the Astros a replacement there should they decline Lance Berkman‘s 2011 option. Hell, it might even open up a trade for Berkman before the deadline, though that does sound unlikely. Hulet ranked Wallace the Blue Jays’ No. 1 prospect and BA rated him No. 27 overall. Wallace has hit for more power this year in the PCL, though he’s walked a bit less. In any case, he’s another player who will be in place, with some experience, when the Astros are rebuilt. This changes the trade for sure, making it look a bit better from Houston’s perspective.

Baseball America ranked Villar the Phillies No. 22 prospect, saying that he “has as much upside as any Phillies infield prospect.” He showed in 2008 that he’ll take a pitch, walking in 11.8 percent of his PA. Yet this year he’s cut that rate almost in half, all the way down to 6.2 percent of his 420 Sally League PA. He has also gone from striking out in 22 percent of his PA to striking out in 24.5 percent this year. These are not uncommon trends for a developing 19-year-old, but it’s troubling when BA says that he’ll need to work on his contact and he suddenly starts making less of it. Again, either Smith or Hulet will have a fuller look at him.

The bottom line

We finish right where we started, with two questions about the deal.

1) Did Houston get players that will help them more than Oswalt?

2) Could they have gotten more?

To No. 1, we’re not sure. Happ is a nice pitcher and should present an upgrade to the remaining rotation. He has four more years of team control and could still be around when the team climbs towards the top of the NL Central. He’s no Oswalt, but he’ll be there while Oswalt probably would have bolted after 2011. Villar and whomever the Astros get for Gose might not work out, but they give Houston a few more chances. That’s no small consolation for a team that spent years with the worst farm system in baseball.

To No. 2, we don’t know for sure. Looking at the Dan Haren trade, it doesn’t look like teams are sacrificing much in exchange for veteran pitching. Haren was a more attractive target than Oswalt for a number of reasons, and realistically Houston might have gotten a better return. I’d certainly put my money on Happ over Saunders, even more so when you consider service time and salary. Perhaps Houston could have found a few more suitors during the winter, but that was no sure thing. From all appearances Houston wanted to get rid of Oswalt, and sending him to a contender mid-season seemed like the best vehicle for doing so.

I’ve seen plenty of comments which suggest the Astros got fleeced in the deal. In a vacuum this might be true, but we know that nothing in baseball operates in a vacuum. There are plenty of other considerations, and I think I covered them in this article. What I think it boils down to is what Patrick Sullivan of Baseball Analysts wrote: “At some point, if enough sellers ‘get fleeced,’ it’s just the market.” Considering what we’ve seen so far, I’d say that’s the case.



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Joe also writes about the Yankees at River Ave. Blues.


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Hot damn!
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Hot damn!

Looks like Gose turned into Brett Wallace.

Bill
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Bill

How has his stock fallen that far? We already knew he couldn’t play third when he was traded in the Holliday deal.

Big Jgke
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Big Jgke

If Wallace becomes Gose, then why did the Jays trade Taylor for Wallace in the first place?

Nitram Odarp
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Nitram Odarp

His numbers are pretty underwhelming considering he’s doing his work in Las Vegas in the PCL and he’s locked into 1B. He’s not walking, his strikeouts are still fairly high, and that power really isn’t good for a 1B given where its coming. I’m not sure he’d crack my top 10 1B prospects right now.

NEPP
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NEPP

Maybe the Jays’ priorities changed. Maybe their opinion of Wallace changed. Wallace hasn’t really broken out this year as projected.

On paper, his .868 OPS in AAA looks nice but he plays at a launching pad (Team OPS of .838).

The bar for 1B is very high offensively.

Stereotypical Fangraphs Commenter
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Stereotypical Fangraphs Commenter

Must be a middle reliever named Brett Wallace because Ed Wade is terrible amirite guyz?

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