The Royals and forced valuation of players

One of my favorite prospect analysts (and baseball writer in general), Kiley McDaniel at FanGraphs, has returned from working for an MLB team to now coming back to the public sphere. One of his first pieces since returning is a look at how smaller market teams (the Pirates in this specific article) are forced to value players.

As a consequence, lower-payroll teams are forced to, in deals like this, focus on a long-term asset or assets with a good chance to appreciate in value. Felipe Rivero’s value has gone up since the Pirates acquired him, so this doesn’t just mean prospects. Building on the earlier example of the minimum-salary starter’s value to the low-payroll team, it compounds due to the multiple years of control and again if that club can get multiple starting-caliber players at once, particularly if they are young enough to improve and turn into difference makers.

There are several good ideas and points brought up in that piece. One of the most salient being that a league-average, cost-controlled player to the Oakland A’s isn’t the same value as that to the Los Angeles Dodgers.

With this in mind, it’s probably reasonable to say that a league-minimum, league-average rookie left fielder is worth more to the A’s than the Dodgers for a few reasons. The roughly $10 million in savings from the free-market alternative to the rookie is almost 12% of the A’s payroll. It’s less than 4% of the Dodgers payroll, however. The Dodgers can still essentially afford any player before or after signing the free agent, but the A’s now can get a couple extra market-priced role players or another average starter, instead of minor-league-deal types whom they’d be forced to use without this rookie.

The one I want to discuss though is the main thesis of the article, summarized as: small market teams can be forced to value players differently because of their forced payroll constraints inherent to their market. In other words, when the Pirates traded away their two best players in Gerrit Cole and Andrew McCutchen for a return that looked weak, given how they are forced to value players, the return made sense. Effectively, “only” getting back some league-average players meant a lot to the Pirates because a league-average starter means more to them than a league-average starter does to the Dodgers. This isn’t a full synopsis, and the piece itself is worth reading.

Obviously the Royals and Pirates operate with similar market restraints. In the most recent CBA, the two teams are right next to each other in the market score order to determine which teams receive revenue sharing:

Saint Louis 57

Pittsburgh 56

Kansas City 53

Milwaukee 52

The Pirates though have never quite splurged like the Royals have. While the Royals have run payrolls of $140M+, the Pirates have barely dipped their toes above $100M. This is in part due to Pirates owner Bob Nutting and his past of being somewhat unwilling to spend money when it was needed, so much that Pirate fans are calling for him to sell the team after this past series of moves. Whereas Royals owner David Glass has been fine with going deeper into his pockets to help support the Royals’ playoff run (though I disagree that he took a loss in any season—more likely, he just approved lowering his bottom line a bit from a lot of money to “just” a few million).

Though it would stand to reason that perhaps the Royals and the Pirates should think of players the same way, given the same restrictions. They may have just been doing that recently given their most recent trade.

To ring in the new year, Dayton Moore traded away Scott Alexander (in a deal I didn’t think really made sense at the time) for Trevor Oaks and Erick Mejia from the Dodgers. Mejia isn’t a complete non-prospect but he’s pretty close to it with his ceiling being a glove-first utility guy, but perhaps there’s some safety in that. The main piece though was Trevor Oaks, a guy who put up good but not great minor-league numbers and doesn’t necessarily have much projection left. He sort of just is who he is, but what he might be is a 1-2 win pitcher. Again, the Royals are taking safety.

This past July they traded away former top 100 prospect Matt Strahm and high-upside but high-risk Esteury Ruiz for Trevor Cahill, Brandon Maurer, and Ryan Buchter. Part of this was making the decision to go for it at the deadline, but part of it feels like they were looking to get two controllable okay guys in Maurer and Buchter. Maurer was obviously a mess in a KC uniform, but he’s still controlled for two more years, so there is time to recoup value. Buchter wasn’t much better, but he’s controllable for several more years and isn’t terrible.

The Royals seem to follow a similar path to the Pirates, targeting controllability and safety over upside. There are even hints of it in the draft as they’ve taken players like Christian Colón, Brandon Finnegan, Foster Griffin, and AJ Puckett early on. Part of the reason why the Royals top pitching prospects recently have been “safer” #4/5 starters like Jake Junis, Eric Skoglund, Scott Blewett, Nolan Watson, and Puckett.

Even looking at the Royals top prospect list for 2018 from sister site Minor League Ball looks like a collection of “safer” guys:

Nick Pratto - A good defensive 1B with below average power for the position

Foster Griffin - A low-90’s back end type with fair command

Hunter Dozier - A safety pick in the 2013 draft to save money for a later pick

MJ Melendez - A defense first prep catcher without much power

Eric Skoglund - Average across the board college guy who is a #4/5 type

Michael Gigliotti - Good speed, line drive centerfielder with well below average power

Nicky Lopez - Similar profile to Gigliotti but on the infield with a utility type ceiling

There are only a handful of guys in the top dozen with high-upside/low-floor potential (Khalil Lee, Chase Vallot, Seuly Matias, and possibly Josh Staumont).

That isn’t inherently bad, but truly good systems aren’t built on high-floor players. They are instead supplemented with them as depth. How many successful systems in the past have been compromised mainly from these high-floor types?

As much as I like McDaniel’s ideas, I disagree that the Royals should be going alongside with the Pirates. Instead they should be following along the Brewers path, targeting high-upside players instead of high-floor.

The Royals can’t afford high-upside in the free-agent market, so they have to try to get it elsewhere. That means targeting high upside in the draft, trades, and on the international front. For the Royals, a 4+ WAR player is much harder to come by for them via free agency than a 1-2 WAR player as opposed to a team like the Yankees or Dodgers. While McDaniel argues that the Pirates should value 1-2 WAR guys higher perhaps than the Dodgers, I think they (and the Royals) should value them lower.

If you accept the fact that the Royals can’t afford to buy high upside players, then their only choice is to trade and draft them. The Dodgers and Royals actually share some characteristics here. Both teams can supplement 4+ WAR players with 1-2 WAR guys but in different scenarios.

The Royals can draft/trade for a 4+ WAR player and then go out and buy a 1-2 WAR player to supplement their stars. For the Dodgers, it’s easier for them to enact a strategy of buying 4+ WAR players and then supplement them with a 1-2 WAR home grown player than other teams. Obviously this isn’t something they want to chase in perpetuity (they’d rather just have 25 homegrown stars, but you get my point).

Let’s say the Royals were offered two different lottery tickets for one time only (give me a break on the math here I’m just trying to make a point):

Ticket A: 70% chance of winning $5,000,000

Ticket B: 5% chance of winning $50,000,000

Sure, the 70% odds seems like a nice bet, but $5,000,000 isn’t going to change the Royals’ operational status quo. However, $50,000,000 would represent a huge windfall for the Royals. If the Royals could buy multiple chances, they should go after the $5,000,000 ticket, but here they only get one shot. The Dodgers might take the much higher odds ticket. While $5M doesn’t mean as much to the Dodgers as it does the Royals, $50M means more to the Royals than it does the Dodgers.

The Brewers turned their farm system around rather quickly (per Baseball America):

2014: 29th

2015: 21st

2016: 9th

2017: 8th

In a span of two years they went from near last to top ten, and they did it all with having only one top ten draft pick in the past decade. What they did is target high upside players:

Lewis Brinson - Toolsy prep outfielder who was very strikeout prone and then cleaned up things (traded from the Rangers)

Josh Hader- A prep lefty who was traded once before already and couldn’t throw strikes (traded from the Astros)

Luis Ortiz - A thick-sized prep good velo kid who was often injured (traded from the Rangers)

Brandon Woodruff - 11th-round draft pick

Isan Diaz - Strikeout prone, violent swing having 2B with above-average raw power and a decent fielder (traded from the Diamondbacks)

Corbin Burnes - 4th-round pick who had a fair amount of reliever risk given his delivery

Tristen Lutz - 2017 CBL pick with contact issues but above average power

Lucas Erceg - 2nd rounder who transferred to a junior college because of off-the-field issues

Freddy Peralta - An undersized fireballer with command issues (traded from the Mariners)

Brett Phillips - A questionable hit tool power guy with good speed and a big arm (traded from the Astros)

Trent Grisham - 1st rounder from 2015 with one of the weirdest swings to ever be drafted

Monte Harrison - A two-sport tooled up but super raw outfielder

Marcus Diplan - A potential three plus pitch guy with poor command

Cody Ponce - Second rounder who is a would-have-been first rounder if not for college injury

Phil Bickford - Tested positive twice for drugs of abuse but had a huge fastball and slider (traded from the Giants)

Obviously these types of guys don’t always hit, and in fact, they miss much more than they hit. When they do hit, though, they can change your whole system. That isn’t to say the Brewers don’t have some high-floor guys in their system (Mauricio Dubon jumps to mind), but it is primarily made up of high-ceiling players. This is the type of player the Royals have to go after. They can’t afford to try to collect 1-2 win, high-floor players.

It doesn’t seem as if the Royals are planning on trading away their best assets like Danny Duffy and Salvador Perez, but if they do, they need to trade them for ceiling. It’s a bad, bad move for the Royals to swap 3+ win players for 1-2 win controllable pieces, because 3+ win players are hard to come by for them.