Friday, July 14, 2006

Mid-season trades

News flash: Cincinnati Reds trade Austin Kearns, Felipe Lopez, and Ryan Wagner to Washington Nationals for Gary Majewski, Royce Clayton, Brendan Harris and prospects Bill Bray and Daryl Thompson.
Before unleashing a torrent of emotion concerning this trade, I thought I'd take the opportunity first to look at the mid-season trade, set up some guideline by which they can be judged, and then judge the Kearns deal by those criteria.

Mid-Season Trades
Teams make mid-season trades for two reasons; to acquire players to help in the stretch run, and to get rid of expensive or useless players. Prospects go from side to side, sometimes cash changes hands, and there is a great deal of PR hoo-hah. But I thought the best thing would be to establish a solid set of guidelines or criteria by which trades could be judged. I'll try to take into account all the various aspects that could affect the team in the aftermath of a trade and seek to explain the reasons for the deal in the first place. We'll start simple:
1. Equality of talent exchanged.
This is the first one everybody thinks of. "Did we get the better players? Did we get the slugger/closer/starter that we needed?" Everybody wants to know who won the deal; i.e. which team got the better players in exchange for less. But as we will see later, there are many other mitigating factors besides talent level involved in trades. Sometimes, a trade that looks lopsided in terms of talent can actually benefit both sides.
In terms of actually measuring "talent" or "production," there are several different ways of measuring this. I prefer to use either VORP (Value Over Replacement Player, expressed in runs) and Win Shares: I prefer these because they are a comprehensive measure of a player's contribution, and thus can be used in broad strokes; it's easier than having to consider home runs, batting average, RBI, and stolen bases all separately. Here's an example of a trade expressed through VORP, with the number in parentheses representing the amount of VORP a player compiled after the trade:
TEAM A: Trades away 1B John Smith (48) and SS Cecil Benny (27.6) in exchange for P Jimmy James (37.2).
Based purely on VORP, our measure of pure production exchanged in the trade, it looks like Team A "lost" this trade, in the sense that they didn't receive as much as they gave up.
2. Money.
This is, to many people including most GMs, more important than #1. I once heard the expression, "GMs don't trade players; they trade contracts." This is a vital piece of information; it's often the most crucial factor involved in trades, and yet is often overlooked by casual fans and even some commentators.
In the spring of 2004, the Red Sox put Manny Ramirez on irrevocable waivers. This meant that every team in the majors would get a chance to have Manny Ramirez, simply by paying the waiver price. Looking merely at Point #1 above, it sounds like an awful deal: Manny Ramirez for nothing (actually just several thousands dollars). Why would the Red Sox subtract arguably their greatest player in exchange for virtually nothing?
Because of Point #2: Money. Manny Ramirez would go on to make $22.5 million in 2004 and $22 million in 2005. Manny is making $19 million this year, $18 mil. next year and $20 mil. in 2008 (at the age of 37). There is a $20 mil. "option" for 2009 and 2010; I don't know if it's a club option or a player option; if it's a club option, the Red Sox will NOT exercise it and pay Ramirez a "buyout" of the option. If it's a player option, Manny will likely take the money and laugh all the way to the bank.
The Red Sox simply determined that Manny Ramirez, great a player though he is and was, was not worth this much money. They made the decision that they would rather give Ramirez (and his contract) away to some other club and spent that $20+ mil. per year elsewhere. They decided that Ramirez's production, good though it was, did not justify his salary. They felt that they could replace Ramirez, at least for the most part, for a fraction of his salary, and spend the rest elsewhere. The fact that Ramirez's contract runs through his age 37 season (with options for 38 and 39) also had a lot to do with it, as did Ramirez's fussy attitude and often difficult demeanor.
As crazy as it may sound, the Red Sox might have been doing the right thing in "giving" away Ramirez. But guess what? No team claimed him. Because although every team would like to pencil Ramirez into their starting lineup, only a handful can afford his salary, and even those teams apparently decided they would rather spend that money elsewhere.
So the salaries of players being traded are just as important, if not moreso, than their level of production. Trading away your star player may make you a pariah among local fans, but it's likely that you can replace most of that star's production with cheaper players and spend the rest of the money on your other needs. And while fans (as well as GMs) get excited when the sign that big-time player to a big-time contract, the truth is often that the player -- in most cases -- won't play well enough to justify their exorbitant All-Star salary.
Some attention is given in trades to other monetary aspects besides salary, but most of these are overblown or at least overestimated. People talk about the impact a "star" has on ticket sales, merchandising, and ad revenue, and while this is true, it's never as great a factor as people make it seem. Study after study has proven that fans don't come to the ballpark to see stars; they come to see winners. There are fewer exceptions than you may think. Because in baseball, a star who doesn't win isn't that much of a star anymore; and an unknown who starts to win can become a star quickly. The Red Sox would miss the sale of Ramirez jerseys and bobbleheads at Fenway, but that's a very minor factor to consider, especially when the salaries in question are at the $20 million level.
3. Age
This is another key aspect of trades that, while not as important as the first two, is one of the most overlooked. General consensus in baseball circles is that the player reaches his peak productivity at age 27, or somewhere between 25-29. This is much younger than conventionally thought; it was generally considered that the age of 30 was a ballplayer's peak, but several sabermetric studies keep concluding that it comes at a much younger age.
This is of vital importance when considering a trade. One of the reasons the Sox were ready to "give away" Ramirez on waivers was because they knew that at his age, 32, he was heading toward his declining years. Even at the age of 37, when his productivity would presumably have diminshed, he would still be earning peak years salary.
The mantra of Branch Rickey was "better to trade a player a year too early rather than a year too late." This is not an unfamiliar belief in the stock market -- sell while you're still high -- but it was foreign to many baseball people. Since the advent of free agency, Rickey's mantra has become even more true. As players age, their performance is less likely to merit their salary -- they're more likely to be overpaid. So it's better to trade your star player while there's still a market for him, because if you wait too late, nobody will take him and his monstrous salary on, as the Red Sox discovered.
So while a trade in terms of talent and money may seem to favor one team, check the ages of the players involved. If Team A trades away 2 good players for 3 mediocre players, it seems like they've "lost" the trade. But if the two good players are 33 and the 3 mediocre players are 25 -- now it looks like Team A has made a steal. Because in the long run, Team A really did get the better players.
4. Free Agent Status & Arbitration
I also must mention the importance of arbitrartion-eligible players. If you're not familiar with arbitration, read on. If you are, skip the next paragraph.
For a player's first 6 major league seasons, he is controlled entirely by his team. There is no free agency during your first 6 major league seasons unless your team releases you. For your first three seasons, you'll probably be making the league minimum. For your next 3 seasons (the last before free agency), your salary is eligible to be determined by "arbitration."
Simply put, if the player and the team can't agree on a salary or a new contract, the case will go in front of an independent arbitrator. The team and the player both submit one salary figure to the arbitrator. After hearing each side argue its case, the arbitrator the salary figure he feels is fairest. He can't split the difference -- if management submits $2 million and the player submits $10 million, it's going to be either/or. For this reason -- and because of the unpredictable nature of arbitrators -- very few cases actually go to arbitration these days. The player is usually able to work out a salary with management.
This is true in years 4, 5 and 6 of a player's major league career. As a player gets more service time, the salaries increase. If the player does well on the field, of course, that will also merit an increase in arbitration money. But -- and this is crucial -- even the most expensive players in arbitration cost less than they would on the free agent market. So it is in a team's best interests to develop -- or trade for -- their own young players, because they are inevitably cheaper than free agents. People talk about a free agent "bargain" -- but there's no greater bargain than getting an MVP-level season from a player making $360,000 (which is what the Pirates got from young Jason Bay last year).
Arbitration is a microcosm of the way baseball used to be -- a slave labor market. And while you can certainly debate its merits (or demerits), any good GM needs to take advantage of this fact and acquire as much "slave labor" as he can.
And so a player's "arbitration status" is important when considering trades. A player with two years left of arbitration is inherently more valuable than a player with one year of arbitration left, simply because it means that you get two cheap years of slave labor before the player reaches free agency, as opposed to one.
Which brings me to my next point: getting a good player is important, but it depends on how long you will have him. For example, more teams would be more interested in the Nationals' Alfonso Soriano if it weren't for the fact that he becomes a free agent after this year. What's the use of giving up big-time prospects to get 2-3 months of playing time from a player? Some teams will trade for players approaching free agency with the knowledge (or understanding) that they will then sign the player to a contract extension, thus avoiding free agency. The White Sox did this when they traded for Freddy Garcia in 2004 -- Garcia was to be a free agent at the end of the year, but the Sox avoided a bidding war by signing Garcia to a long-term contract in mid-season. Players are much more accessible when they're already wearing your uniform and don't have other teams on the phone offering more money.
5. Prospects (and all their trappings . . .)
You will often hear the term "prospect" tossed around in trade talks. Often a team will refuse to trade away their star unless they get "top prospects." This is a thorny issue, but I'll try and boil it down to this:
Every trade is based on risk and reward. How much are you willing to risk and how much must the potential reward be? This is why GMs are often compared to stock traders: you have "stocks" (players) who have a certain inherent value, but when making a trade, you have to make your best guess as to what the future holds for them. Good traders trade high and buy low; they trade overpriced stocks while they are at their peak and buy undervalued stocks on the cheap. The key, of course, is knowing who's overpriced and who's undervalued.
It's also important to know in which direction your stock is headed. Age is a big deciding factor in this, as mentioned before, but with age, you can only speak in generalities. Players generally peak before their age 30 season; that doesn't mean that your 30-year-old star has definitely reached his peak; it's possible he hasn't.
All of the above is even more true with prospects. Prospects are -- in stock terms -- "volatile." You can't guarantee any sort of future performance, simply because there is no (or at least very little) past performance to base it on. And for some prospects, you have to project their future value some 2 or 3 years from now. Anything can happen in two or three years, even to the best of prospects. So while it's great to get "good prospects," it's also important to point out that for every 10 prospects, only 2 or 3 will really contribute in the majors. The better the prospect, the better their odds of succeeding, of course -- but even great prospects can sometimes fail dramatically (Shawn Abner, Brien Taylor, far too many to mention) due to injuries, bad luck, or just fate.
I must also point out here that pitching prospects are even more volatile than any others, because the risk of injury among pitchers age 18-25 is absurdly high. This inspired the sabermetric truism/acronym TINSTAAPP, or There Is No Such Thing As A Pitching Prospect.
6. Filling a Need
Sometimes GMs will make otherwise bad trades simply out of desperation to fill a certain need. While it's true that said desperation is usually the fault of the GMs themselves, it's also true that sometimes you have to make a "bad" trade by some of the above criteria simply due to a pressing need.
Here's an example: the 1987 Detroit Tigers are in the middle of a very tough race for the AL East title. The Tigers know they need starting pitching help if they want to be competitive. So they make a trade: they acquire veteran starter Doyle Alexander from the Braves in exchange for pitching prospect John Smoltz. In retrospect, of course, we can all see that that was an absurdly unequal exchange of talent, since Alexander was nearly finished, and Smoltz was on his way to a Hall-of-Fame career.
But was the trade really a failure? Because it accomplished exactly what the Tigers wanted it to -- Alexander went 9-0 in 11 starts with Detroit, posting a 1.53 ERA. The Tigers won the AL East by a bare 2 games over Toronto. So it's pretty safe to say that without Alexander, the Tigers would not have won the AL East in 1987. In that sense, then, the trade was a perfect success, because it did exactly what the team wanted it to -- it got them to the postseason. They were perfectly aware that they were giving up a good pitching prospect (although it must be said that Smoltz was not considered a great prospect), but they decided to take the sure thing here and now rather than take a risk for the future. And who knows? Maybe Smoltz would have gotten injured in Detroit and accounted for nothing. Maybe he would have stayed there, pitched 6 decent seasons, and then signed with the Yankees as a free agent. Either way, a desire to fill a "desperate" need can often be an extenuating circumstance when viewing a trade -- particularly when the postseason (or a shot at the postseason) is on the line. This can also be due to injury, or some other totally unforeseen circumstance that creates a problem on the team. In closing, though, I must reiterate that many of the "desperate" situations GMs face are of their own making.
On the other side of the coin, it can sometimes be a good idea to trade away a player, even if they are otherwise valuable, if you have another (cheaper) player to replace them. There are many instances throughout history of teams trading away a quality player because they have a young (cheap) rookie ready to take their place. If the rookies don't work out, these trades can look pretty dumb, but depending on the age and quality of the player you're trading away, it can be a fine idea. When the Rangers traded away Alfonso Soriano, they did so not only to get a quality outfielder in Brad Wilkerson, but because they had a major-league ready prospect named Ian Kinsler ready to take over at second base. Kinsler can't hit like Soriano (although he is a better fielder), but Kinsler is making the minimum, whereas Soriano was about to receive more than $10 million in salary arbitration. The Rangers felt the the combination of Wilkerson and Kinsler could replace Soriano, with plenty of money left over to help.
7. Context/Circumstances
When a player switches teams, he is also switching home ballparks and (in some cases) leagues. This is important information when considering the impact of a trade.
A good example here would be a trade the Boston Red Sox made this off-season that acquired pitcher Josh Beckett from the Marlins. Beckett was a very good (if injury-prone) starting pitcher, still arbitration-eligible, and also the 2003 World Series MVP. Sounds like the Red Sox got a good player. In fact, many New England fans felt that Beckett would be their ace, replacing Pedro to give the BoSox a 1-2 punch alongside Curt Schilling. Some even predicted that Beckett would win the Cy Young Award.
Not so fast. Beckett is a fine pitcher. But there are two important distinctions to make here, in regards to point #7: Beckett switched from the National League to the American League, which is tougher on pitchers in general, but is also generally recognized to be a better league with a much higher level of competition. And Beckett was leaving pitcher-friendly Pro Player Stadium and going to Fenway Park, every hitter's fantasy. The results:
Beckett 2005 (FLA): 3.37 ERA, 14 HR allowed in 178.2 IP
Beckett 2006 (BOS): 4.75 ERA, 26 HR allowed in 110 IP
Now granted, I doubt that Josh Beckett is really as bad as a 4.75 ERA; but I think this illustrates point #7 perfectly. It's true that Beckett may just be having a bad season (or a bad first half), but 26 HR allowed doesn't look like a fluke; it looks like an unfriendly welcome to Fenway. Beckett's previous career high in HR allowed was 16, set in 2004 (156.2 IP). He's already run straight past that, and is on pace for nearly 50 (albeit in more innings).
But remember the league and consider the ballpark. When any trade is made involving the Colorado Rockies, come to point #7 first, not last.
Clarifying Value
It's been said recently that mid-season trades don't really help a team nearly as much as you'd think. Well, let's go knee-deep in stats to see how much a mid-season trade would really mean:
Let's start with a most extreme example. Travis Hafner currently leads the major leagues in VORP, or Value Over Replacement Player, with 55.8. This means that, so far this year, Hafner has been 55.8 runs more valuable than a readily available cheap replacement player. When speaking in terms of "runs," at least in the sabermetric sense, 10 runs is considered equal to 1 win (which kind of makes sense; every 5 runs scored and 5 runs saved equals about 1 win). So, if you'll follow along with me here, Hafner has contributed about 5.58 wins to the Indians over replacement level. So, to sum up, if you replaced Hafner's production with Travis Lee, or some other replacement-level first baseman, if would cost the Indians 5 or 6 wins.
So, just to push this point home, let's imagine a trade. Let's imagine that the Indians trade Travis Hafner, the most valuable player in baseball according to VORP, for Rondell White, the least valuable player in baseball, with -22.8 VORP (this means that replacing White with someone like Dustan Mohr would have actually benefited the Minnesota Twins, by some 2 wins). So Hafner and White are traded for each other. Let's assume, for the sake of argument, that each player is as good (or bad) as they were in the first half of the season. And let's say that they would also get the same amount of playing time as they did in the first half. So, here's the math:
Hafner after the break: 55.8 VORP, adds 5-6 wins for the Twins
White: -22.8 VORP, costs the Indians about 2 wins.
So trading the best player in baseball for the worst player in baseball would cost the team about 7 or 8 wins.
That's an eye-opener, huh?
Just to check our accuracy, let's make the same trade, but measure it according to Win Shares (where 3 Win Shares = 1 win):
Hafner after the break: 17 Win Shares
White after the break: -3 Win Shares
Trade costs the Indians 20 Win Shares, or about 6-7 wins. Pretty much the same answer.
What a truly eye-opening scenario. Trading the best player in baseball for the worst player in baseball only costs a team 6 or 7 wins?! Of course, the impact would be greater over the long run. And yes, we're ignoring other practical considerations like Rule #7. But this is far, far lower than even I would have expected.
And of course, no one has ever traded the best player in baseball for the worst. Let's envision a more reasonable trade. Let's say that the Nationals trade Alfonso Soriano to the Yankees for Robinson Cano and Melky Cabrera (not the specific names that would go in such a trade, but a better approximation of the value of a specific trade):
Soriano after the break: 16 Win Shares
Cano & Cabrera: 5+5 = 10 Win Shares
The trade would benefit the Yankees by about 6 Win Shares . . . or about 2 wins. Yes, 2 wins can be important, and could certainly be the margin between making the postseason and not making it. But it's very important that when considering a mid-season trade, we realize just how little effect they tend to have on a team's actual performance. And this, of course, ignores the long-term implications of such trades. Many GMs trade away valuable prospects or actual big-league players in the hopes that this one trade will "make the difference" in the season. Well, it usually doesn't, which should make most GMs think twice before including that big-name prospect in such a trade. It should also make the GM of a half-hearted contender (someone who doesn't really stand a chance, but just might maybe possibly have one) refuse to even consider such a trade, since 2 wins isn't likely to mean squat to them in the long run.
Which brings me to the Cincinnati Reds . . .
Well, since I've set up such an orderly system, let's examine the trade step-by-step:
1. Value
Here's what these players have contributed so far this season, in terms of Win Shares:
Reds: Kearns (9), Lopez (9), Wagner (minors)
Nationals: Majewski (4), Clayton (6), Bray (1), Harris (o), Thompson (minors)
VERDICT: The Reds are giving up more than they're getting, by one full win.
2. Money
Here's the salaries/contract status of the players involved:
Reds: Kearns ($1.85 mill.; eligible for arbit. in 2007 and 2008. Free agent after 2008)
Lopez ($2.7 mill.; arbit. status same as Kearns; Free agent after 2008)
Wagner (minor league contract, about 2 years of ML service)
Nationals: Majewski (1 yr. ML service; presumably making about $350,000)
Clayton ($1 mill. Free agent after this yr.)
Neither Bray, Harris, or Thompson have spent a full season in the majors yet. All are presumably making the minimum.
VERDICT: The Reds save money here; Lopez and Kearns would have gotten big raises in arbitration in the next two years, whereas the Players they received are young in ML service time, and Clayton's gone after this year.
3. Age
Reds: Kearns (26), Lopez (26), Wagner (24)
Nationals: Majewski (26), Clayton (36), Harris (26), Bray (23), Thompson (20)
VERDICT: Weighing in the Reds favor until you look at Clayton, age 36 and playing like it
4. Free Agent Status & Arbitration
See #2
5. Prospects (etc.)
This is where the Reds are completely undone. Whereas Kearns is a very good hitter entering his prime and Lopez is a good-hitting, if defensively-challenged, shortstop. Both project to be quality everyday major-leaguers based on their immediate track record, with Kearns especially having the potential to be an All-Star.
Nothing that the Reds got in return replaces the production of Kearns and Lopez, either in this year, or any other year. Clayton is a shortstop who couldn't hit when he was young and can't field now that he's old, making him a waste of space -- literally (the 25 spots on a roster are precious). Majewski is a decent relief pitcher who had a good year last year, but there's nothing about him to suggest that he's a really good relief pitcher, and anyhow, relief pitchers are the most volatile "stocks" in all of baseball. You can't expect Majewski's few decent relief innings to replace a hot bat in right field.
Thompson and Harris are no-names; throw-ins. But Bill Bray is a legitimate prospect. According to Baseball Prospectus 2006, Bray is a good young reliever. He's potentially a closer, but also possibly a good set-up man. Bray is likely the best player in the deal for the Reds, but here's the catch: Bray is still too young to make much of a contribution in the big leagues, seeing as he's still pitched barely 50 innings in his minor league career. So while Bray may be a good prospect, he will do next to nothing to help the Reds in 2006, which was (I heard) the reason for the trade.
VERDICT: The Nationals fleeced the Reds in spectacular fashion.
6. Filling a Need
Remember how I mentioned earlier that some teams' desperation is their own fault? I should also mention that many teams, through desperation, make a trade that solves one problem but just creates another, bigger problem. Of the 5 candidates for the outfield/first base foursome in Cincinnati at the beginning of the year, only 3 remain. Austin Kearns, Sean Casey, and Wily Mo Pena have been traded away. GM Wayne Krivsky had a problem in that he had too many outfielders; now, due to his overzealous trading, he doesn't have enough. I'm guessing that Right Field in Cincinnati will be manned by either Chris Denorfia or Ryan Freel. Denorfia is a genuine prospect, and Freel is a pretty good hitter. But Krivsky had several options to get Denorfia and Freel into the lineup that did not involve trading Austin Kearns. The case at shortstop is even sadder; the Reds are taking a huge downgrade by replacing Felipe Lopez with Royce Clayton. Not only was Lopez fairly cheap and pretty productive, they also controlled him for two more years. After this year, shortstop is dead empty for the Reds once again, forcing Krivsky to make another trade to compensate for his last trade. Such is a vicious cycle.
The truth is that Wayne Krivsky made a dumb trade, because he wanted to shore up his bullpen. There's nothing wrong with shoring up your bullpen (and the Cincinnati bullpen is poor), but a) this trade won't shore it up much, certainly not much until Bray reaches the maj0rs and b) it cost Krivsky far too much in exchange. Krivsky (apparently) comes from the school of thought where offense is just a necessary evil, whereas pitching and defense are what it takes to win. But this is utter bullshit, and it's one of the main things that keeps old-fashioned thinkers like Krivsky out of the playoffs. You can never take offense for granted. The Reds came into the season with offense to spare, but since Krivsky has traded off nearly half of their offensive production, that is no longer the case. Trading away one outfielder for good pitching isn't a bad deal. But trading away an outfielder and a first baseman before trading away another outfielder and a shortstop in exchange for middling pitching really is a bad deal. It's such a bad deal, that I won't even address Rule #7. I'll just take my headache and go to bed.

No comments: