Looking Back at the Mark Teixeira trades

The distinction between decision and outcome is still not clear for most people. When someone makes an investment, and then loses money, he often says that he made a bad decision. If he would make the same decision again if he did not know how it would turn out, then he would be more accurate in saying that he made a good decision and had a bad outcome.

—Ronald Howard, Professor of Management Science and Engineering, Stanford University

In retrospect, the decision to trade for Mark Teixeira at the 2007 trade deadline looks like a poor decision for the Atlanta Braves. They were not able to make the playoffs in 2007 and have struggled in 2008, leading to the recent decision to trade Teixeira to the Angels for Casey Kotchman and pitching prospect Stephen Marek. While it is easy to criticize the Braves now, a more accurate evaluation of the Braves decision requires us to look at the trades with only the information the Braves could have had at the time of their trades. By doing this, we can try and determine if the Braves made a good decision, regardless of the bad outcome that occurred for them. Obviously that is easier for us to do with the more recent trade to the Angels that the Braves made.

To evaluate the trades the Braves have made, I am going to look at the surplus value that was exchanged in these trades. Surplus value is equivalent to a player’s win value in salary form minus his actual salary. I did similar evaluations for the CC Sabathia trade and the Rich Harden trade.

On July 31, 2007, the Texas Rangers traded Teixeira along with Ron Mahay to the Atlanta Braves for Jarrod Saltalamacchia, Beau Jones, Elvis Andrus, Matt Harrison, and Neftali Feliz. Using the 2007 Marcel projection and the Fielding Bible defensive statistics from 2004-2006, Teixeira rated at about 4.55 WAR (Wins Above Replacement) at the time of the trade, which was similar to how he was performing at the time of the trade, which is worth about $20.4 million. He was making $9 million for the year and since the Braves got him at the trade deadline, they would have him for about 1/3 of the year which means Teixeira’s surplus value for the rest of 2007 could be expected to be $3.8 million. Players in their last year of arbitration typically make 80% of what they are worth, so for Teixeira the Braves could have expected to pay $16.3 million in 2008. While they were able to cut a deal for about $4 million less than that in the offseason, there was no way we could have known that at the time.

Thus, the expected surplus for Teixeira for the 2008 season would be expected to be about $3.7 million in net present value. While Ron Mahay had a pretty poor projection coming into 2007, he was pitching pretty well during 2007. Using THT’s Marcel Utility (http://www.hardballtimes.com/main/article/is-this-guy-for-real/), Mahay was about a 0.5 WAR player at the time of the trade. With what he was paid, Mahay had a surplus value of about $.5 million for the rest of 2007 after the trade. Now we need to consider the addition the Braves would get for moving up the win curve. At the time of the trade they were 56-51, 3.5 games back from first place in their division. The Braves were on pace to win 85 games at that pace. If we assume Scott Thorman is a replacement level player along with whoever Mahay was replacing, the Braves would be expected to win 87 games. That would increase their playoff odds about 15 percent, which is worth $5.25 million. While this is not the most scientific way to evaluate a team’s playoff odds, I don’t think their chances would increase by much more than 15 percent with different calculations. When we factor in that Mahay and Teixeira would likely be eligible for draft picks when they left as free agents we get this as the surplus values the Braves got back.

Braves Receive:
Teixeira: $7.5 million
Mahay: $.5 million
Increased Playoff Odds: $5.25 million
Mahay Draft Picks: $5 million
Teixeira Draft Picks: $9 million

Total Value: $27.25 million

I downgraded the value of Mahay’s draft picks since the Braves could not have been sure that Mahay would have gotten them compensation picks at the time of the t;ade. Teixeira’s draft pick value also loses a little value since the Braves would have to wait an extra year to receive the picks. Now let’s take a look at what the Braves gave up. Coming into 2007, Jarrod Saltalamacchia and Elvis Andrus, and to a lesser extent Matt Harrison and Neftali Feliz, were highly touted prospects. Saltalamacchia was rated as the No. 36 prospect in baseball by Baseball America, No. 51 by Kevin Goldstein, and No. 60 by Deric McKamey for an average ranking of 49. Andrus was rated No. 65 by Baseball America, unranked by Goldstein, and rated No. 37 by Deric McKamey. If we insert a ranking of 125 for Goldstein, we get an average ranking of 76 for Andrus. Matt Harrison was rated No. 90 by Baseball America, No. 79 by Goldstein, and was not ranked by McKamey. Harrison was ranked in the 76-100 range by two sources and I am comfortable saying that Harrison was a 76-100 caliber pitching prospect coming into the 2007 season. Goldstein was the only one to rank Feliz, and he ranked Feliz as his No. 98 prospect in baseball.

Beau Jones was not ranked by any of the three and was not a very highly regarded prospect. Saltalamacchia’s stock did not change much during the 2007 season so I will leave him as a 26-50 hitting prospect. While Andrus may not have put up the best numbers throughout 2007, I think it’s fair to say his stock was a little higher than the average ranking of 76 before the season. Therefore, I am going to rate Andrus as a 51-75 hitting prospect. I will subtract some from his surplus value since he wouldn’t be ready for a couple of years at the time of the trade. Matt Harrison’s stock also did not change much during the first half of 2007 so I will keep his ranking a 76-100 pitching prospect. For Feliz and Jones, I will make what I think are fair valuations based off of the prospect valuation tables (http://www.hardballtimes.com/main/article/the-bright-side-of-losing-santana/). Here is what I get for the value Texas gets in return at the time of the trade:

Jarrod Saltalamacchia: $19.56 million
Elvis Andrus: $10 million
Matt Harrison: $8.16 million
Neftali Feliz: $5 million
Beau Jones: $0.5 million

Total $43.22 million

From this I think it is fair to say that Texas got the better end of the deal, even if we were to factor in a prospect risk premium. Atlanta may have gotten affected by the heat of a playoff race and the hopes that Teixeira would resign at a discount. However, they still gave up a plethora of talented prospects. The trade for the Rangers was a great start for the Rangers rebuilding, who now have one of the most talented farm systems in the game. With the young talent on both Oakland and Texas, the AL West could become a very interesting division in the near future.

While the Braves did not make the playoffs in 2007, they still had Teixeira on the roster for 2008 and it appeared at the beginning of the year that while the Mets were favorites in the division, the Braves had a decent shot of making a playoff run. However, things continued to get worse for Atlanta as the season went on and with John Smoltz and Tim Hudson out for the year, along with Chipper Jones on the DL, the Braves decided to trade Teixeira to the Angels for Casey Kotchman and Stephen Marek. With his updated Marcels and Fielding Bible stats, Teixeira rates as about 4.3 WAR while Kotchman rates as about 2.6 WAR. When we factor in Teixeira’s contract, his surplus for this year is about $7 million or about $2.3 million for 1/3 of the season.

The Angels will get draft picks at the end of the year if they don’t sign Teixeira which on average are worth about $10 million. There have been some rumors that the Angels may resign Teixeira, though. I am assuming that if they do resign Teixeira they will not get any discount from Scott Boras and will put the chances of that occurring at 20%. Believe it or not, the Angels do not get much of a win curve bonus by adding Teixeira. MGL’s playoff odds simulator has the Angels chances of making the playoffs without Teixeira as 99.8%. So if you want to boost their odds to 100% after the trade, I suppose you could give the Angels an extra $70, 000 in surplus value, but that will hardly make a difference in the analysis. When we factor in Kotchman’s expected contract, the Braves will have Kotchman for the rest of this year and three more years until he is eligible for free agency, and the prospect the Braves received, the surplus values look like this:

Angels get:
Teixeira: $2.3 million
Teixeira’s draft picks: $8 million
Playoff Boost: $.07 million

A comparative study on an unwritten rule of baseball.

Total: $10.37 million

Braves receive
Kotchman: $17.4 million
Stephen Marek: $2 million

Total: $19.4 million

So in this trade the Braves have about a $9 million edge in surplus value. You could discount that a little bit since Teixeira increases the Angels’ chances of winning the World Series. Overall, the Braves received $46.65 million in value while trading $53.59 million in value. While the Braves were able to recover some value in the Angels trade, they gave out a hefty amount in their first trade. I’m sure they now regret trading away five prospects for Teixeira but even at the time of the trade, it would have been a questionable decision. And while the Braves may have had some bad luck over the course of the 2007 and 2008 seasons, their decision to originally trade for Teixeira definitely appears to be a costly one.

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