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Tuesday, December 04, 2007
How much is Troy Tulowitzki worth in a trade?
I’m using Tulo here, but I really mean the most valuable young player in MLB. If I had to guess in 3 seconds, I’d say it’s Tulo. If you want to bring up someone else instead, please do so.
Anyway, how much is a player like this worth in a trade? Tulo has it all: he’s
a good overall hitter, he was clutch in 2007, he’s a great fielder, plays a premium position, and is on the upward slope of development. Let’s make him a +3 WAA (wins above average) player, or a 5 WAR (wins above replacement) player. Let’s also keep him at 5 WAR for the next 5 years. A free agent at that level would earn 136MM over the next 5 years. In the real-life baseball world, where his years 2 and 3 are paid at under a million $ each, and the next 3 are discounted because he’s arb-eligible but not unrestricted, his total payout for those 5 years is 56MM.
So, by not going public with this asset, the Rockies are able to show a value of 56MM, instead of 136MM. That’s an astounding 80MM that the Rockies are able to earn on this player. This is of course countered by the 20MM or 30MM it takes every year in lottery tickets (player development, scouting) you have to buy to get a chance at such a player.
What about lesser players? Even a young player, who is league average, and is expected to remain league average, will provide substantial savings. A league average rookie should expect to make 23MM in the next 5 years. If he were a free agent, he’d make 56MM. That’s 33MM in surplus free agent dollars that he’s providing.
The only reason to give up on surplus value like this, is if you are in a sweet spot, on the cusp of earning substantial more money (through playoffs or contending runs). But, if you are willing to give up such surplus value, there should be alot of teams that will make competitive bids.
What’s being offered for Santana is way beyond reason. Santana (6 WAR for 1 year) has some 13MM of surplus value, plus whatever extra playoff-money he can force onto a team. Just a single average rookie (2 WAR a year for 5 years) should be enough to get him. Plus the 12MM you save in not paying for Santana, but paying the rookie, can buy you a 2.5 WAR player. You end up losing 1.5 WAR this year, but you are gaining alot more in the following years.
The Twins would be crazy did let him play out, and settle for 2 draft picks, which we’ve learned is the equivalent of a single below average player. Santana is very attractive because of the 13MM of surplus value, value that Twins need to tap into. They need to turn that untapped value into players or wins.