For some reason over Thanksgiving weekend I found myself watching the Will Ferrell comedy-drama (coma?) "Everything Must Go." I say the term "watching" very loosely as it was mainly just on television in the background, and I don't think I could truly sit through attentively a Will Ferrell (loose) adaption of a Raymond Carver story.
The essence of the story is that Ferrell's character, Nick, is fired from work and is left essentially penniless due to a series of circumstances. Through a break he's given 3 days to sell off possessions through a yard sale. One the first day he is reluctant to let anything go due to his fond memories of the items. The second and third day he comes more to grip with his situation and eventually sells some items.
Let's pretend it's day 2/3 for the Royals and sell almost everything. We're going for scorched Earth here essentially. Anybody with any real trade value is getting moved. We'll focus on the "core" roster and not worry about backup players like Erik Kratz or Johnny Giavotella. We can immediately remove Jeremy Guthrie, Jason Vargas, and Omar Infante as well as the return for them is likely too small or they are unmovable given their contracts.
A few more rules:
Assume every player will be traded. This means the Royals will have nothing but available spots/holes
The Royals are not willing to eat any money of any contract
The Royals are seeking to not include any of their own minor league players in a deal
The Royals are looking for prospects only or players with little to no MLB service time
Any players with options in their contracts are going to be assumed to be exercised when figuring their value
We will consider 27-29 peak years
Any player pre-peak will have a modest ramp up and any post peak players will have a bit heavier ramp down
Estimated $/WAR values for the future:
I used $7.5M/WAR for 2014 with 5% increase every year. You can probably make the argument that it could be more than 5% increase, but 5% should level out some volatility of year to year changes. From 2013 to 2014 Fangraphs had the cost per win increase about 10%.
As far as the trade value of prospects we'll try to convert OFP to a possible 6-year fWAR average then to $/WAR to find what kind of surplus value the prospect may bring.
Here's a rough OFP table:
So there's about a one win drop off for every spot and the 75/80 guys are true superstar profiles (again, not guarantee they'll reach that of course).
For a 75/80 OFP player (there are none in the minors currently in my opinion) might be something like this.
Year 1: 2 wins
Year 2: 3 wins
Year 3: 4 wins
Year 4: 4.5
Year 4: 5
Year 5: 5 wins
Year 6: 5 wins
6-year average: 4.75 wins
That's obviously a really really good player and you absolutely shouldn't expect any prospect to produce at those level but there are prospects who have the tools and makeup that could produce at that level if everything went right for them. Elite level players should ramp up steeper and have a longer peak than the non elite level. Meanwhile, 40/45 OFP prospects need to take longer to reach their peak and even then it's only a rather modest one.
Using a similar WAR curve as above, assuming they start at about half their potential the first year or so then ramp up to peak in the final 2/3 years, we could get a win curve average like this:
So the two polar ends have similar results. The elite level prospects 6-year average beats their OFP level WAR estimate since they ramp up quicker and have a higher peak than their baseline of 4. Meanwhile, the lower prospects average less than their OFP level WAR given that they are slow to ramp up and their peak is right around their OFP level WAR. The middle group is bogged down slightly as they take a little longer to reach their peak so the first two years or so weigh their average down.
From there we can also use an average $/WAR value. There needs to be some tweaks for when they could debut by because an 18 year old player in rookie ball shouldn't be given the same $/WAR value year estimate as a 23 year old player in AAA. I'm going to use a moving average and assume 6 years of team control.
MLB experience or age 24+: 2015-2020
AAA experience or age 23: 2016-2021
AA experience or age 22: 2017-2022
A+/A- experience or age 21: 2018-2023
Rookie experience or age 20 or less : 2019-2024
That's a pretty loose estimate of ages so I'll reserve the right to tweak that a bit.
Those moving average would look like this
I feel comfortable calling this a population data set for prospects, and now we can take the mean of the sample means, which is $9.83M, for the average $/WAR.
Plugging that in to the OFP WAR table would look like:
|OFP||WAR||6-year WAR||6-Year $/WAR|
I want to also want to look at two more things possibly.
Prospects are kinda like an equity option. You've paid your premium (whether it be a draft slot bonus or international money) and now you own the right for the prospect's future. He could bust or he could succeed. If he succeeds (is "in the money") then he's likely to return a good amount of surplus value or gain. If he busts then "all" it cost you was your premium. Option pricing should have default risk and volatility built into them (although maybe not as high volatility as prospects). it isn't as black and white as that but we need to account for a prospects volatility and default/bust risk as well as the potential gain.
First, we need to discount the prospect due to his risk. How much do we discount is the question?
There's been some previous research on this done. Michael Valancius at fellow SB Nation site D Rays Bay found that a young, top prospect (ranked 1-5) was worth anywhere between $53M to $69M depending on the position.
Kevin Creagh used a similar study with his own tweaks for discounting found that the same top prospect type player could create $42.20M in surplus value.
Let's try this way:
Using Scott McKinney's prospect success/failure rate, we'll assume there are no 75/80 prospects and consider the 1-20 rank prospects as 65/70. Scott found that 45% of those prospects have busted under his criteria. Maybe that's too high a discount, or maybe too low, but I like it enough to use it. After all, there needs to be a significant enough of a discount to compensate the acquiring team fairly for their risk. Using that, we can discount the $162.2M 6-year $/WAR average $72.99M to make it $89.2M. Using the data Scott found, grouping them then discounting risk would look something like this:
|OFP||WAR||6-year WAR||6-Year $/WAR||Group||Average Discount%||Discounted 6-year $|
Of course, 91-100 guys are more so in the 50 OFP range than the 40/45 OFP guys, but I wanted to at least get everyone in the table. Likely the 40/45 discount rate is higher than 75%, but for the sake of ease I'll keep it at $12.55M.
Now, another option might be to look at the future earnings against return of these prospects. We know that these guys aren't going to be paid $0 over their career and the good players get expensive in year 4-5-6, sometimes at a steep rate. Using the OFP win curve above of a 75/80 prospect maybe it would look something like this:
Year 1- 2 wins at $9.83M (average $/WAR) is $19.66M, being paid $500K means a surplus of $19.61M
Year 2: 3 wins at $9.83M is $29.49M - $500K = $28.99M
Year 3: 4 wins at $9.83M is $39.32M - $500K = $38.82M
Now this is where it gets tricky. The player could be Super 2 and would already have been in arbitration by now, but let's just assume the team timed him perfectly. Now we are going to have to essentially guess what the player could see in arbitration. For a 75/80 OFP player we could be looking at a new record first year arbitration like Ryan Howard did when he got $10M his first time. Let's just assume he ties the MLB record for 1st, 2nd, and 3rd time arb eligible rewards. Those salaries are not adjusted for MLB inflation so they might be slightly low but should give us an overall feel.
Year 4: 4.5 wins at $9.83M is $39.32M - $10M (Ryan Howard 2008) = $29.32M
Year 5: 5 wins at $9.83M is $49.15M - $11.3M (Miguel Cabrera 2007) = $37.85M
Year 6: 5 wins at $9.83M is $49.15M - $15.5M (Prince Fielder 2011) = $33.65M
Total contract paid: $38.3M
Total value: $226.09M
Total surplus value: $187.79M.
Truthfully I don't like this method as it's too complicated and there's too many variables with arbitration. I think we'll stick with Scott's research and then discount it (the 6-year $/WAR not his research).
I'll try my best each time to find a team with the assets that can cover a trade and also has a need for that position.
We'll use Max's trade value rankings he introduced yesterday with some of my own personal tweaks. I'm only going to cover a few players at a time, and instead of starting at 15-11, we'll just start at the top.
1. Salvador Perez
Max FA date: 2019
Total money owed: $18.6M
3 year fWAR average: 3.16
2015 Steamer: 3.7 fWAR
The true gem of the Royals trade value, Perez was ranked as the 7th most valuable trade asset in baseball this past July by Dave Cameron at Fangraphs.
Perez is already a pretty good baseball player and one of the best catchers overall while being younger than every catcher ahead of him. There's concerns about his heavy usage this year, but there's still a good chance he's another 3-win catcher next year and possibly for the next few years. Let's say he's stays a consistent 3.5 win player for the life of his contract, which is 17.5 wins over the length. He'll be 30 by the end of his contract and of course catcher aging curves have been described more as an aging cliff than a curve as they start to drastically decline after their age 28-29 season. Perez's contract will expire a year after that so the Royals should control him through his theoretical peak then re-evaluate right before or at the start of his decline.
Dollar value: $172.02 (17.5 x $9.83M)
Total money owed: $18.6M
Total surplus: $153.4M
There's a reason why Perez was ranked the 7th best trade value and it's because of the ridiculousness of his contract vs his worth and $153.4M is quite a savings there. Russell Martin just got $82M for 5 years. Buster Posey got $167M over 9 years. Joe Mauer got 4/$34M to avoid arbitration then $184M over 8 years on an extension. Meanwhile, one of the best, and certainly the best youngest catcher, in baseball is making an AAV of $3.75M over 5 years or essentially being paid at about half a win value.
Good fit: Chicago Cubs
The Cubs are flirting with trying to contend this year and certainly are looking to contend in 2016 and on. One spot they don't have covered in their ridiculous depth of hitting prospects is catcher. Kyle Schwarber isn't catching on a full time basis in the majors but could relieve Perez a couple times a week perhaps (assuming Joe Maddon doesn't #Yost Perez).
Kris Bryant 3B: 65/70 OFP
Addison Russell SS: 65/70 OFP
Javier Baez 2B/3B: 65/70 OFP
Jorge Soler OF: 55/60 OFP
Albert Almora OF: 55/60 OFP
Kyle Schwarber 1B/OF: 50 OFP
CJ Edwards SP: 50 OFP
Dan Vogelbach 1B/DH: 40/45 OFP
Billy McKinney OF: 40/45 OFP
Eloy Jimenez OF: 40/45 OFP
Jeimer Candelario OF: 40/45 OFP
Jen-Ho Tseng SP: 40/45 OFP
It we wanted to piece something together for Perez the conversation has to start with one of the 65/70 OFP guys. Bryant isn't going anywhere and the most movable is Addison Russell or Javier Baez. Baez has made his MLB debut but maybe the Cubs are worried about the high K rate and likely needed move to 2B/3B. Then from there we'd need to add either two 55/60 OFP guys or one 55/60 and two 40/45 guys.
Javier Baez:: $89.2M
Albert Almora: $38.5M
Dan Vogelbach: $12.55M
Eloy Jimenez: $12.55M
This trade doesn't destroy the Cubs long term prospects necessarily. They still keep Russell/Castro for the middle infield with Bryant manning 3B. The outfield of Soler/Alcantara/Schwarber is still kept and of course Rizzo is still a 1B. The question is if the cost of the above players is worth the upgrade from Wellington Castillo to Perez. Castillo projects as a basically average player but knee surgery and a high strikeout rate may have the Cubs looking into other options.
The Royals get a 2B/3B who does come with some risks in his plate discipline, but he does have a track record of taking some time to get adjusted to each level. Obviously the major league level is the toughest so it should take him longer than the other leagues if he is able to come around.
PECOTA has the long-term forecast on Baez as:
2015: 2.8 WARP .286 TAv 36 HR
2016: 2.9 WARP .276 TAv 31 HR
2017: 3.1 WARP .280 TAv 34 HR
2018: 3.1 WARP .281 TAv 36 HR
2019: 3.0 WARP .280 TAv 34 HR
2020: 3.1 WARP .282 TAv 34 HR
That would put him as an above average player for his age 22-27 seasons and of course an outstanding 205 home runs in that 6 year span.
Albert Almora struggled this past year after receiving glowing praise for his prior results and work ethic. Almora brings one of the best bat-to-ball skills in the minors but much like the player he's being traded for, he doesn't walk or strike out due to his aggressive approach. Almora projects to have at least average tools across the board while his centerfield defense is near double-plus and his arm is a strong 60. A broken hamate bone seemed to slow him down this year.
Vogelbach is interesting. He's got the bat of a typical large bodied 1B/DH slugger with expected 60 grade power, but also a potential average hit tool. He's not a free swinger and draws an extremely high amount of walks at some levels in the low minors. The problem is he's a no doubt first baseman and even at the bag he'll be a below average fielder. If the Royals acquired him they'd put him at DH to let him focus solely on honing in on his bat and not having to worry about fielding. He truly belong on an AL club and the Cubs already have Anthony Rizzo at first for the foreseeable future.
Jimenez is a full bodied Dominican right fielder who was the consensus top prospect in the 2013 July 2nd signing period. He brings above average raw power but is still raw at the plate and is getting over a shoulder injury. There's a long way to go with him still and he carries very high risk.
The formulas I used above might not be ideal, but it was what I came up with. There should be several more articles to come about this (this one is nearing 3,500 words) and I'm open for improvements on them even if I need to go back and re-run the numbers. Feel free to suggest changes on anything.
We'll touch on others players in the upcoming articles.