Monday, 23 December 2013

Trading for David Price: Fun With Surplus Value

One of the hottest commodities on the potential trade market these days is the Tampa Bay Rays’ ace lefty David Price, and fans of many a franchise are understandably salivating at the prospect of seeing him don their team’s uniform. It’s not every season that a player of Price’s caliber becomes available while still in his salary arbitration years, which Price will be for the next two seasons. Trade speculation is obviously a favourite off-season pastime of fans everywhere, so there has been rampant speculation in all corners of the media and internet about where Price might end up and what it might take to get him there.

With the winter meetings now concluded without having provided much excitement for Jays fans, I wanted to do a bit of a pivot off some of the analysis I’ve seen recently that is either directly related to the Blue Jays’ quest for starting pitching, or at least very closely related to it. Much of the analysis regarding trades these days has to do with the notion of surplus value, which is calculated by finding a player’s value in $/WAR terms and subtracting their salary ( WAR * $/WAR – Salary ). The difference between the player’s on-field value and their salary is their surplus value. This is significant for obvious reasons. The less you pay for wins from one player, the more money you have to allocate to buying wins from other players. Trades can be analyzed by comparing the projected surplus values of the pieces involved to see which team ended up “winning” the deal from a value perspective. As mentioned, surplus value is at the heart of most transaction analysis, and for good reason.

It’s important to consider surplus value when considering trading close to the majors prospects and their six affordable years of team control for established major leaguers, even very good ones like David Price. For example, in a recent FanGraphs piece, Dave Cameron shows how six years of a top prospect like the Pirates’ Gregory Polanco, projected to provide six years of league average-ish production starting in 2014, provides about $120 million in surplus value against just $30 million in surplus value from Price over his final two arbitration-eligible years for a difference of about $90 million. You can quibble with any of the projections and $/WAR figures, but no matter how you slice it, a prospect like Polanco is likely to contribute far more surplus value over the remainder of his team-controlled years than Price is. Cameron concludes that even in a one-for-one swap, a prospect like Polanco who is ready to step in and contribute for league minimum salary is an overpay for David Price.

That's certainly one way of looking at a trade, but the market doesn't always behave in such a coldly logical manner. In a vacuum, a transaction analysis based strictly on projected surplus value makes perfect sense, but as we know, teams don't operate in a vacuum. Teams have a tendency to overpay in long-term surplus value for players they believe can help them in the short-term, usually when they consider themselves right on the verge of playoff contention. Intuitively, we know this to be true, even without the numbers to back it up. This is where I feel that a lot of transaction analysis based on a comparison of surplus value falls short, in that it compares players as if their values exist in a vacuum. It's a great analytical method, but doesn't necessarily paint the full picture. A team's perception of its own situation, its needs, and the supply of players to fill those needs in any given year all affect a player's value on the trade market in ways that aren't necessarily well accounted for by a strict surplus value analysis.

Monday, 9 December 2013

Roy Halladay Signs With Blue Jays! Promptly Retires...

It certainly wasn't the Roy Halladay signing a certain sentimental (read: stuck in the 2000s) segment of the Blue Jays fan base was hoping for, was it? All snark aside though, there was a certain warm fuzziness about Roy Halladay's decision to retire as a member of the team he began his dominant career with, and I say that as a pretty unsentimental sports fan. So, that even I was a bit moved to learn that Halladay was announcing his retirement, and had signed a one-day contract so that he could do it as a Blue Jay, should say something about the significance of Roy Halladay to Blue Jays fans and the organization.

It would be really easy for me to just stuff a post full of the Doc's career numbers, accomplishments, and great moments and call it content, but quite frankly if you care enough to be reading this I'm sure you know all that stuff already. In fact, many of you probably have more vivid memories of some of them than I do.

Confession time. There was a period in my life when I just wasn't much of a baseball fan. Lacrosse had become my summer sport of choice. Somewhere along the way I decided that when it came to hitting things with a stick I was much better at hitting people than hurled projectiles. If you don't see how this fact is relevant to my baseball fandom, I have a challenge for you. Try to find a minor lacrosse tournament that isn't selling "The Boys of Summer Play Baseball, The Men of Summer Play Lacrosse" t-shirts. Yeah. It was like that.

Thursday, 5 December 2013

Hijacking a FanGraphs Chat: Pitching, Price, Marginal Wins and the "Dickey Effect"

I'm not sure if this will become something I do regularly or not, but there were a few Jays-related tidbits in last week's FanGraphs Chat with Dave Cameron that I felt were worth unpacking a little bit more. The format of the chat doesn't really lend itself to lengthy responses so Cameron can definitely be forgiven the brevity of some of his answers. I just thought it would be fun, without pretending to know Dave Cameron's mind of course, to expand on what he was saying a little bit. 

Comment From Tom
Shark gets traded or extended? Whats your gut tell you?

Dave Cameron: Traded.

Comment From Jays fan
As a Jays fan am I wrong for not wanting to give up either Sanchez or Stroman for Jeff Samardzija?

Dave Cameron: No. Only two more years of team control.

Obviously these two comments sort of go hand in hand, and if you've been paying attention I'm sure you're already familiar with the trade rumours that have been swirling around the Cubs and Blue Jays. Basically, the Cubs have been having trouble getting a contract extension done with Jeff Samardzija so he may be available in a trade. The Jays were rumoured to be "putting together a package of young players" to land the Shark, which of course sparked a lively debate in Blue Jays circles about whether the Jays should be willing to part with one or both of their prized pitching prospects Aaron Sanchez and Marcus Stroman in order to get a deal done.

I sided with Dave here, pretty much deciding that parting with either of Sanchez or Stroman would be too much for Samardzija. Unlike Cameron though, my primary concern wasn't the Shark's two remaining years of team control.

Monday, 2 December 2013

A Sad Day for Fans of Handsome Catchers...

... but a great day for fans of winning baseball games! We can finally get off the pins and needles, those of you who, like myself, have been nervously watching the catching market grow thinner and thinner without the Blue Jays having upgraded at the position. But now, at long last, this from Ken Rosenthal: