Trade Deadline Market and Who Will Win

What’s My Point?

Teams that understand the market and the value of a player can cherry pick players from those teams who misjudge what they have.

Why Does it Matter?

Trades can make a team a playoff and World Series contender or they can set a team back years from having any hope of post season.

Market

To fully understand any business we must first understand what is valued.  The old way was that “Big Market” teams would just buy players and the small market teams would acquire club controlled players.  Those are players who have more than 1 year away from free agency.  Everything was going great until smaller market teams started to compete and take down larger market.  Think of the A’s and Billy Beane as an example.  But then the Red Sox changed everything with John Henry.

John Henry was a futures trader and with that seemed to come a new disciplined philosophy.  Insert Theo Epstein.  The Yale grad became GM at age 28 and that must have shocked other MLB owners.  One would think that he would feel tremendous pressure to “make things happen.”  Instead, Epstein said this in the USATody on November 30, 2002:

“”There’s going to be a lot of pressure to go for the quick fix,” he said. “If that means sacrificing more of the future than we’re willing to do, we have to remain disciplined and pass on a potential quick fix.”

In my opinion, it is this discipline and clear vision that will determine if a team is going to win or loose in the short and long term.

Assets

In baseball, the players are the assets in this market.  Teams are free to trade players or cash as long as the player doesn’t have a no-trade clause.  A no-trade clause can be controlled by the player, or it can be a partial no-trade where the player can block the team from trading him to certain teams.

The value of the player has to do with performance on and off the field.  Off the field in terms of marketing the player with merchandise or publicity.  On the field, the player’s value is determined by how much he contributes to a team win.  A player may have value that we as fans cannot see in the form of leadership or special skills.

Value

In simplest terms, value in baseball is found when a team pays less than the output for a comparable player.  This has 2 factors.  The first is salary.  The second is the teams control of the player’s rights before free agency.  This is where we hear the term “Club controlled.”  Each player’s true value is at the intersection between salary, controllable years, and performance.  Of course that is not easily defined by each team.

Teams use different systems to evaluate these factors.  The team that clearly defines to their scouts what they are looking for in a player is the one who will spend money more efficiently.  Efficient spending and accurate evaluations are what get teams to the post season.

Today’s Trade Market

I have noticed a change in the way teams are assessing value.  In the past a team may pay for a “big name” they could market.  Now it seems like they are understanding that comparable players may provide more value.  The player may not produce as much, but they provide the team with more flexibility in controllable years (which will cost less than that same player in free agency) and salary.  By being more efficient with capital, the team is able to agile in a market allowing them to consistently adjust and compete.

What do you think?

It is important to me to get your opinions and ideas.  Do you feel like certain teams are better at the trade deadline?  What do you think the Astros are going to do with Oswalt?  How about the Brewers with Hart?  Now is your time to teach me!  What do you think?


30 Comments on “Trade Deadline Market and Who Will Win”

  1. Karen says:

    Because of Oswalt’s contract, I wouldn’t be surprised to see him in an Astros uniform on Sunday. From what I have heard and read, the teams that have expressed interest–particularly the Dodgers–want the Astros to pick up a sizable portion of Oswalt’s contract for this year and 2011, which really doesn’t make a lot of fiscal sense for the Astros. I’m still trying to figure out why you would pay someone to take a player off your hands who still has value. After all, you really cannot justify trading a player to “save money” (in other words, replace an expensive player with those who cost less, such as minor leaguers or players who have not entered the arbitration years) if you end of paying a significant portion of the player’s contract. I’ve read that the Phillies are interested, but I’m not sure that the Phillies have the available talent in the minor leagues that the Astros should be looking for in exchange (and I don’t think there are any players on the Phillies major league roster that would be of interest to the Astros who would be included in a deal). If Oswalt is traded, I hope that Ed Wade is smart enough not to trade him within the division, because I certainly would not want to be an Astros fan who sees Oswalt pitching for the Cardinals (another team that is in the mix).
    I know that Corey Hart is also on the market, but I’m not as familiar with those circumstances, so I won’t comment on them. But from what I’ve read, he’s not the only Brewer who apparently is available; Prince Fielder is also being shopped around.

  2. K9 says:

    It boggles my mind that teams ‘ give away’ players. Prince fielder, Cory Hart, Jayson Werth, etc. Does it not occur to them that the fans like certain players and that’s who they pay to see?
    I don’t think the Dan Haren trade was particularly smart- we’ll see if I’m wrong.
    I agree with everything Karen just said, so I wont repeat her points. I doubt RoyO will be traded anytime soon- too many variables.
    I understand how a problem player can be dealt for morale ( braves/ jays SS springs to mind) but to get rid of them to avoid paying them next year (prince fielder, Jayson werth) is dumb. These have been good producers on the bases and at the gate.
    I’m still in shock the Rangers got cliff lee (yay!) and I hope they aren’t renting him, keep him long term and give him th no- trade contract he wants.
    That’ll put seats in the seats!

  3. K9 says:

    PS
    doesn’t it also have a lot to do with prospects and the stAte of the farm system?
    In 2007 the rangers tradred Texiera, and everyone wondered why. They got an all star closer (feliz) a SS (andrus) catcher / firstbaseman and I think one more. So while the trade seemed one sided or dumb at the time, it worked out well.
    One reason they got Lee ( rangers) was the strength of the farm system, smoak, and the
    prospects Seattle got in return. Seattle can start to rebuild a young team and do like the Rays did a few years ago😉
    It will make an instant impact on

  4. Rick says:

    I think it comes down to teams who use a wins/value framework and those who don’t. To answer your question, you can tell through the negotiations how teams make their decisions. There are front offices who are very clearly aware of the total values certain players provide and go about valuing those players in the team’s context. And there are those that do not.

    I think this is most apparent when looking at how teams handle role players and stars. For example, Dan Haren was expensive, yet he was a bargain. And he gets traded for Joe Saunders, a back of the rotation starter who will be overpaid next year and a few mid-level prospects? You don’t improve your organization by trading away surplus value. And you can’t build a winning team by overpaying role players and middle relievers (i’m looking at you Houston and KC).

    Morgan, sort of a side question, but one I imagine others are interested in: How do players tend to feel about being discussed as “assets” and the like, particularly among fans. Obviously there’s a range of reactions, but what does that look like. Do they resent being “diminished” to what’s the on their Fangraphs page (aka, the new baseball card)?

    • nstab says:

      Great comment from Rick. It’s important to note the huge gap that’s opening up in baseball in regards to the assessment of player value.

      Sabremetrics is here to stay, and players, coaches, managers, announcers and analysts who leverage these new tools will evolve with the game. Those who don’t, won’t.

      The Haren trade is a great litmus test: If all you can see is a 7-9 pitcher with a 4.57 E.R.A you’re going to get fleeced in the new market.

      In response to Karen’s question about Oswalt, the reason you paying a significant amount of the remaining $$ on his contract is so you get the best possible prospects in return. Keeping some payroll for next year wont have a big impact on what should be a 2-3 year rebuilding plan.

      In response to K9’s comment, I think that’s a perfect example of the old style thinking. With a small # of exceptions, fans don’t come to see great individual players, they want to see winning baseball. If you cant compete this year, and you can negotiate a good return in prospects, then moving your big star can make sense. This goes double for players who you won’t be able to resign (Fielder) or those reputed to be “clubhouse cancers” (Werth).

    • Rick, we are used to treated by like assets. That is usually why there is little loyalty.

      Morgan

  5. Morgan! Great post – and your words ring particularly true regarding my Cubs as a Forbes magazine blogger recently named them the LEAST efficient major league team payroll-wise. Here’s the link:

    http://blogs.forbes.com/sportsmoney/2010/07/assessing-mlbs-mostleast-efficient-teams/

    Speaking of the Cubs, could I ask you a really quick question regarding clubhouse protocol? I’d really appreciate a response. As you may have heard, Carlos Zambrano recently went on ESPN to apologize for his dugout tirade. Problem is, he made this very public apology BEFORE apologizing to his teammates. Do you feel it was in any way disrespectful to Big Z’s teammates that he went to the media first before apologizing to all of them?

    Thanks!

    • Dat- I am all about guys apologizing and I know that Carlos has a good heart. What it looked like to me is a guy who was allowed to do whatever he wanted. That is never good if anyone feels like they can do whatever whenever. He messed up, but I know he is a good guy.

      And going to the media first is lame. People first always. Leave the camera’s out of it. Be human.

      Morgan

  6. lisa gray says:

    the brewers really should trade Da Prince, as his value is highest NOW, and he is a boras guy and is going to go on the market and go to the highest bidder.

    corey hart is not a particularly good fielder, but is having a better than usual year with the bat, and again, the crew NEEDS to sell high.

    problem with that Organization is that they don’t really have anyone good at AAA, as mat gamel looks as if he is not going to recover after surgery (lousy stats) and would have to play 1B as he can’t play 3rd any more.

    they have like zero young pitching and desperately need to stock up.

    as for OUR organization,
    well, we can’t trade berkman, who isn’t hitting or driving in runs; carlos lee has a no trade and even IF his stats were the same as last year’s, he would again refuse to be traded

    i hear tell from more than 1 source that many teams have asked about bourn, pence, myers (who is definitely at PEAK sell value), lindstrom, lyons, wandy and roy.

    i have ALSO heard that drayton.ed wade are extremely difficult/unreasonable to deal with (what a surprise)

    sometimes trades are made strictly because of money (the dbax trading haren for a 4th starter and mid grade prospects)

    but really, truth is that even Organizations like the rays make mistakes every now and then (the best traders over the past 5 years, in my not so umble opinion) and sometimes Organizations like the A’s make trades just because they can – over the past 5 years, billy beane has made bad trade after bad trade without any sort of improvement to his team

  7. teamlittleguy says:

    Morgan: man, I was getting ready to scramble the Texas Rangers to make sure you were OK! Been missing the posts, but I do hope that you are enjoying the summer.

    I’m with Karen on Oswalt – that’s a big contract to try and move in the marketplace today. It would be one thing if he would be a free agent at the end of the year, but with a 2-3 year commitment for big dollars, it shrinks the pool of bidders considerably.

    As for Hart, I suspect he’ll be gone. Too many teams in need of extra offense here at the deadline.

    As for the efficiency question, I think most teams do a reasonable job managing their rosters. Prospects are such a crapshoot that it’s hard to know winners and losers for a good while.

    Pittsburgh is a team that doesn’t seem to have a coherent plan at all. I have to say that the Astros approach on trading players at the proper time has been lacking as well.

    Boston does really well (as you mentioned) – and even the Yankees seem to overspend on the right kinds of players more and more these days. Seems to me they weren’t quite as discriminating in the past on giving out big contracts and it lead to disappointing results.

    • TLG I am here! Great calls. I think they are right on. What would you do if you were the Pirates though…long term?

      Morgan

      • teamlittleguy says:

        Morgan: not so sure about my calls, man! Oswalt is a Phillie now and Hart is apparently staying in MIL for now! (As a Brave fan, kudos to the Phils for doing something bold to shake things up. I wish them mixed success down the stretch.)😉

        Personally, I think the Pirates should invest in their scouting & minor league system. Try to become the best at finding talent & developing players. There’s no excuse for any franchise to go nearly 20 years without so much as one winning season.

        • B says:

          “Personally, I think the Pirates should invest in their scouting & minor league system.”

          That’s exactly what they’ve been doing the last couple years under Huntington…

          • teamlittleguy says:

            Good to hear, B. That’s a great city and franchise and they deserve a product they can feel good about.

            Thanks for the update – I hope it starts paying dividends for them soon!

  8. Matt Lentzner says:

    Just want to mention that it is not appropriate to evaluate a trade by whether or not it worked out. It’s like hitting in Blackjack on a 17 and the dealer is showing a 6. If you get a 4 you can’t claim it was a good play! It was stupid and you got lucky.

    I can’t, off the top of my head, think of any Beane trades that were universally panned. There’s nothing like the Haren heist. Maybe you could criticize the Sheets deal, but there were a lot of extenuating circumstances like not pocketing too much money and risking the ire of the player’s union.

    Furthermore, a small market team has to take bigger risks. They are calculated risks if you are a smart GM. If you have an 81 win team with a spread of plus/minus 5 wins you have almost no chance to make the playoffs. But if you have a an 81 win team with a spread of plus/minus 10 wins then there’s a chance you could make it along with a greater chance of sucking as well. Being bad has it’s advantages as well since you can unload your expensive veterans for cheaper talent. The fans may not like it, but the ultimate goal is to get a flag. Being mediocre year after year is not an exciting prospect.

    Now a team like the Yankees want to minimize that spread as much as possible since they already have the best team money can buy. So if you are a little guy you trade certainty to the rich teams for upside risk.

    It seems like a lot of Beane’s gambles haven’t worked out lately, but that doesn’t mean he was doing anything other than exactly what he was supposed to be doing given his circumstances.

    Matt

    • Matt I really learned from your comments. I think baseball teams can squeeze out wins by paying attention to detail at all levels. That needs more explanation, but hopefully you understand what i am trying to get at.

      Morgan

  9. Ashitaka says:

    Some teams certainly do a better job than others. The Angels, for example, just picked up a controllable, semi-young ace-caliber pitcher in Haren without giving up a single one of their Top 10 prospects as ranked by Baseball Prospectus, and all because Haren is having a down year (and due mostly to bad luck in my opinion, but we won’t get into sabermetrics here). He’ll likely bounce back, and they’ll have a lethal 1-2 punch of Haren and Weaver for several seasons to come, not to mention this one.

    I don’t know about everyone else, but at this point, I have zero faith in Drayton McLane. He’s proven time and again that he refuses to accept the fact that the Astros need to rebuild, and because of it, he refuses to make any trades unless he can absolutely rob the other team blind. A recent report stated that he wanted Matt Kemp AND three or more top prospects from the Dodgers for Oswalt. Absolute insanity. If he were willing to do what was necessary, Oswalt, Berkman, Myers, Wandy and Lindstrom should all be dealt before the deadline. My guess, though, is that none of them will go anywhere, and next year it will be more of the same P.R. spin about wanting to be “CHAMPIONS!!!” as this franchise continues to be the laughingstock of baseball.

    I almost hope that Mark Cuban outbids Nolan Ryan for the Rangers, maybe then Nolan Ryan could buy the Astros and we’d get someone in charge with half a brain.

    • Ash I know that it is frustrating. Hopefully the Astros will get back on track. My concerns have to do with developing the players in the minors. It doesn’t matter if you have the best baseball players in the world if you aren’t able to teach them how to play correctly.

      Morgan

  10. Drew says:

    If the Astros were to pick up any portion of Oswalt’s contract, they would get more prospects in return. Think of it as buying prospects. With that said, I think more teams are going to start following business models like the Florida teams do. Do you think a lot of people were upset with Scott Kazmir being traded away, the all time Rays strikeout leader? Look at him struggle in Anaheim now. Do you think Marlins fans were happy to see Josh Beckett & Mike Lowell traded away? Beckett has been on and off, with good odd years and bad odd years (06, 08, 10) and Hanley Ramirez has turned into the face of the franchise.

    Baseball is a business. I understand the fan nostalgia of certain guys, I mean its great to have a guy like Biggio get drafted and spend an entire career with one team, but realistically unless you have a Derek Jeter on your hands, if you want to win you have to look at things with a cold and business mindset. Boston is a pretty good model, look at how many players they lost after 2004 and still made the playoffs in ’05 and then came back to get MLB’s best record & world series championship in 2007. A lot of the guys they drafted in 2005 were because of the free agents they lost in 2004. You want to have a strong farm system and a competetive team. If you lose Orlando Cabrera to free agency, Dustin Pedroia is knocking on the door right behind him. If you trade away Jorge Cantu, you have a solid 1B in Gaby Sanchez ready to take over behind him.

    A strong farm system with the money to retain players of actual value, but be careful not to make extremely long term and overpriced commitments that will end up costing you in their later years of the contract (Alfonso Soriano, Carlos Lee, Mike Hampton, etc)

  11. Drew says:

    Actually I think I ignored your post entirely. What I’m saying is fans might love having Craig Biggio on the team for 20 years, but if you look at it from a business model he was hitting .250 in his last year. Sure, he got 3000 hits and is a hall of famer. But what if the Astros had a less nostalgic view and a more business-like view? Biggio wouldve spent 2007 pinch hitting for someone else and the Astros mightve had a 28 year old 2B hitting .290. Right now the Astros are stuck with overpaid players because of long term contracts. You cant honestly tell me Carlos Lee is worth the $20 million hes getting this year, or the $12 M (whatever it is) Lance is getting paid. Fans might hate to see it, but there might be better and cheaper options in the farm system to play first base or LF (Brian Bogusevic).

  12. B says:

    Hi Morgan, love your blog, read all your entries, never commented before. Really cool that you’re engaging fans and the public the way you are and giving us unique perspective we don’t really get elsewhere.

    Moving on to my comment, I think there’s one aspect of trade deadline deals you aren’t considering. A win isn’t worth the same to every team. If an extra 1-2 wins you get from a deadline deal are enough to turn you from a non-playoff team into a playoff team, that’s HUGE. Those wins are worth more than other wins. So you can essentially have a fair trade where both teams end up as winners – if one team is out of the playoff race, they can essentially trade a win this year to a team that needs that win, and receive a win in the future when they might be playoff contenders, and it’s an even trade where both sides win.

    Basically, you need to consider the marginal value of a win (and maybe the present value, if you believe future wins should be discounted!)…

    • That is a great point B. I was trying to say that both teams could be hurt. The team that is out of it this year could really hurt itself more and that needs to go into the equation.

      Morgan

  13. Will says:

    While big market teams are beginning to value their prospects and club controlled players more in today’s trade market, their biggest advantage remains their ability to take on bigger contracts from smaller market clubs. Teams like the Rays and Twins cannot afford to have a bad free agent signing or pay someone $5 million to come off the bench. The Mets, Cubs, Yankees, and others can do this and will if they determine the player is worth that amount of money.
    Additionally, teams like the Red Sox and Yankees realize that having a strong farm system allows them to develop multiple players at the same position and trade off whichever pieces they don’t view as having a long term future with the club (look at the Yankees and their catcher depth). While in the 90s and early 2000s big market teams were quicker to trade their minor league depth away for quick fixes, they have become more patient in today’s game. The Yankees won’t trade a player like Jesus Montero unless they get an elite talent like Cliff Lee in return, whereas in the past they may have traded him for any big name starting pitcher. Teams have changed how they value minor league prospects recently and it has allowed them to continue to be competitive instead of having a 5-7 year window.
    Big market teams were accused for years of simply buying talent with little regard for their future. In reality, they were taking advantage of a situation that is no longer as skewed in their favor. Mid-market teams realize they can afford to “rent” a player for a half season if it will put them in the playoffs. Big market teams have adjusted and use their monetary advantages to restock their farm systems with quality talent, by either drafting high price amateur players or signing international players who don’t have to enter the draft. Eventually smaller market teams will adjust and find ways to take advantage of this as well and each team will have to find a new way to use their resources in the most valuable manner possible.

  14. lisa gray says:

    morgan,
    you said

    “My concerns have to do with developing the players in the minors. It doesn’t matter if you have the best baseball players in the world if you aren’t able to teach them how to play correctly. ”

    and it CERTAINLY appears that the astros have NOT done this at ALL.

    i have never understood the attitude about “filler” – why on earth not try to get as many major leaguers as possible from each draft class?

    seems to me that teams pick their pets early and ignore the rest.

    • Lisa you are right on. Scouting is communication. If a team doesn’t inform their scouts what they should be looking for then they are going to be handing in all the same prospects as the other teams. What is most important is not giving up on late round picks. The teams that really put effort into day 2 of the draft are the teams that will do the best over time. But, I believe that most players can be taught how to play the game. Attention to detail and explaining to players why a team teaches the game that way is vital.

      Morgan

  15. Dustin says:

    I think Ed Wade did a good job. He did what no other Houston GM has been allowed to do, trade the hometown heroes. It’s interesting to me how fans will criticize the Wade’s trades basing the judgment on what “experts” have reported that a team “could” have allegedly gotten. I think it’s also funny how H-town fans get on Ed for dealing with Philly. It has less to do with the Philly organization as it does his being more familiar with the PLAYER(s) that he wants. When he deals with any other team he only has numbers on a piece of paper and what a scout says, whereas with Philly he’s much more familiar with the player (which I’m sure also helps him sell it to a particular owner from Temple). At the end of the day, I think trader Ed did a good job.

    Oswalt – At first I was nervous about the outcome but when he announced the Wallace deal it made much more sense. Oswalt = starting pitcher + starting first baseman + minor league prospect + shredding some $. Initial winners = Astros, Oswalt, and Phillies

    Berkman- Saturday was like the day that Glenn Davis got traded, gut wrenching yet you know it needs to happen. Love the big Puma (more b/c of his character than his bat these days) but excited for him. Have no clue about the dudes we got in return but this wasn’t about that. Puma = opportunity for Wallace + shredding $ + two minor leaguers. Initial winners = Astros, Yankees, Puma, and fans watching a Texas boy in the big apple!

    Your thoughts on the Wizard & Puma trades?

    • Dustin,

      Although we would all like for our stars to stay with us, it doesn’t necessarily help our team. Now calm down….I am not saying Roy and Lance were the problem. I am simply saying that the baseball market is competetive and if you have your hands tied due to contracts then you are not competing on a even playing field. Roy and Lance are great players who wish that they could have stayed in Houston. The fact is that the organization slipped and the result was trading cornerstones.

      The Astros learned a valuable lesson with the trades. Fans want honesty and people who will make the tough decisions. Maybe this is a new culture in the organization.

      Morgan


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