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Tuesday, July 08, 2008
A really good analysis of a trade (CC to the Brewers)
Victor Wang wrote this really good article in THT analyzing the CC Sabathia trade:
http://www.hardballtimes.com/main/article/evaluating-the-cc-sabathia-trade/
On Ballhype, I made these comments:
Great analysis! Especially this:
“When we evaluate player trades, what we care about is the surplus value of each player involved. A player’s surplus value is equivalent to his win value in a dollar figure minus his salary.”
Too many people, including some smart ones, ignore or do not understand this concept.
On Rob Neyer’s blog, he wrote this:
“When you trade a great player you lose unless you get a great player in return, and LaPorta has a real shot at becoming a great player.”
To which, I replied:
“We (Rob and I) have discussed this before, but that is patently false, or at the very least, misleading or incomplete. When you trade a player, what you ‘should’ get in return has nothing whatsoever to do with how good that player is. It has to do with his value (how good he is) AND his status/contract. For example, If you trade a great player who is making 20 mil a year, you ‘should’ get nothing in return. If you trade an average player who is under your control for the next 3 years making the minimum salary, you should get lots (about 25 million dollars worth) in return. Etc.
C.C is making 8.88 mil this year. He is worth, as a FA, around 20-22 mil, as a 5 WAR player. So a team who acquires him should be willing to give up around 5.5 mil in talent (the difference between his prorated salary and his prorated FA value for the remainder of the season).”
So, Wang and I are in agreement as to the surplus or trade value (equity, like in a house) of Sabathia.
I only have a couple of quibbles with Wang’s analysis:
His “algorithm” for computing Sabathia’s talent level (current value above replacement) is missing perhaps the most important thing in a projection system, especially for pitchers, which is a regression toward the mean. Consequently, he is going to overvalue Sabathia. Even with that oversight, I agree that CC is worth around 2-2.5 wins to MIL for the remainder of the season.
Two, he says that adding CC increases MIL chances of making the post-season from 21% to 50%. Those are based on some very general assumptions (the chances that an 87 win team compared to an 89 win team makes the post-season). When I run my “season sim” I get that MIL makes the post-season 51.3% of the time (as a .525 team from now to the end of the season). Before the trade, MIL made the post-season, according to the sim, 36.4% of the time, for an increase of only 14.9% rather than Wang’s 29%.