A Phillie Phleecing? Is Halladay Worth It?
by Dan Turkenkopf on Jul 25, 2009 9:35 PM EDT
in Transactions & Rumors
39 comments
he hot rumor over the past few days has been Roy Halladay heading to the Phillies for a package containing pitchers J.A. Happ and Kyle Drabek and outfielder Dominic Brown.
At least that was Ricciardi's request. The Phillies are said to prefer to keep Drabek and include Carlos Carrasco. As of midday Saturday, it's unclear where things will go from here.
Do either of these deals make sense for Philly? Let's use Sky's trade value calculator and find out.
Update: I missed Dominic Brown's rise up the prospect lists and that changes things quite a bit.
I'm taking as given Halladay's $23 million surplus value (which Sky explained here). The Phillies are already extremely likely to make the playoffs according to our latest playoff odds, so there's no bonus available there.
What would the package of Happ, Drabek and Brown be worth?
J.A. Happ is a difficult commodity to value. Coming into this season, John Sickels rated him the Phillies fifth best prospect. Happ received a B- grade and a comparison to Mark Redman. Since that time he's found a place in the Philadelphia rotation and started his career 7-0 before dropping his first game last night.
Using the B- grade from Sickels, we estimate Happ's value at $7.3 million. But if we consider his success this season and value him as a bona fide major leaguer, we get a very different valuation.
The WAR totals assume he's pitching over his head so far this season, and that he's a lesser version of Mark Redman going forward. We can fairly call them conservative. As you can see, even with those caveats, this way of valuing Happ has him as more than a match for Halladay himself.
But is it fair to let a good half season of play increase his surplus value by $21 million? Perhaps, but perhaps not. Let's err on the side of caution and split the difference between his minor league value and his projected major league WAR value. That leaves Happ at 7.3 + 28.4 = 35.7 / 2 = $17.9 million.
Kyle Drabek was recently named to Baseball America's mid-season top 25 prospect list. According to Victor Wang's list of prospect values, that means Drabek has a surprlus value of $15.9 million.
Prior to the season Dominic Brown was rated by Sickels as the Phillies number six prospect, and was given a grade of B-. He's done well this season and moved up to number 17 on the top 25 prospect list. That puts him worth $25.1 million.
Add those three up and the Blue Jays are asking for a package of just about $59 million. That's an astounding $36 million return from the trade.
What would happen if Carrasco replaced either Happ or Drabek in the deal?
Carrasco was Philadelphia's top prospect this offseason according to Sickels with a B to a B+ grade, but he didn't make the Baseball America top 100 list. That puts him somewhere around $10 million in value.
So now we have three possible packages for Halladay's $23 million in value:
Happ, Drabek, Brown: $59 million. Surplus to the Jays: $36 million
Happ, Carrasco, Brown: $53 millon. Surplus to the Jays: $30 million
Drabek, Carrasco, Brown: $51 million. Surplus to the Jays: $28 million
No matter how you look at it, the Blue Jays are getting an amazing deal here.
The latest news is that the Phillies have said "no thanks" to the offer on the table. It's unclear what the teams will do from here.
Either way, it's going to be fun to watch the negotiations proceed over the next week. Stay tuned for further developments.
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Dominic Brown and Kyle Drabek
Why such a wide disparity in value? Brown was ranked 17th on BA’s updated top 25, while Drabek was only 24th. Drabek also received a lower grade in Sickels’ book (C+). Now, I like Drabek more than I do Brown, but it doesn’t make sense for Brown to be worth ~$12M less when he’s ahead of Drabek in both of the rankings that you are using.
by jar75 on Jul 25, 2009 8:42 PM EDT reply actions 0 recs
I missed Brown on the BA list.
Let me update.
by Dan Turkenkopf on Jul 25, 2009 9:29 PM EDT up reply actions 0 recs
Thanks
That changed things tremendously.
by Dan Turkenkopf on Jul 25, 2009 9:35 PM EDT up reply actions 0 recs
Why does Happ's WAR jump to 2 for one year?
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by bs.uf15bosox9bears23 on Jul 25, 2009 9:54 PM EDT reply actions 0 recs
shouldn' the fact that the trade calculator indicates that Happ for Halladay straight up is a wash
not indicate that it is another sabermetric folly?
by norm depalma on Jul 25, 2009 10:37 PM EDT reply actions 0 recs
Not totally a folly.
The issue arises because of two differences – first, Happ can contribute for a longer period of time at a cheaper price. Second, there are issues with the valuation of WAR at lower and higher levels, at least to me.
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by bs.uf15bosox9bears23 on Jul 25, 2009 11:07 PM EDT up reply actions 0 recs
The Jays already have 3 JP Happs in their rotation at this very moment
and about 3 more who could join the rotation next year if they wanted.
All lefties, all rookies or second years, all cheap, all good with promise.
So Happ is redundant.
versus Phillies getting Halladay. Who would in my estimation improve their word series winning chances to approx. 20-25%.
So in such a hypothetical trade, the Jays would simply dump salary…and so begins the inexorable procession towards a Montreal Expo franchise expiration.
by norm depalma on Jul 26, 2009 2:27 AM EDT up reply actions 0 recs
The point of the calculator is that it's supposed to be a context independent evaluation...
Aside from the part where you have to decide a player’s value in WAR for every season he has left under team control.
So, yes, Happ likely would have less value than Halladay, like you said, but not because he couldn’t perform well enough to eclipse Doc’s value, but because he wouldn’t have the chance.
@bs_uf15bosox9be:OverTheMonster-ALLERGEN WARNING:May contain PB.
by bs.uf15bosox9bears23 on Jul 26, 2009 2:53 AM EDT up reply actions 0 recs
Just to clarify, the reason I haven't yet incorporated "playoff leverage" into the calculator is because I didn't have a good way to do it, yet.
As Nick streamlines the process of calculating changes in playoff probability with additional expected wins, it’s something that definitely should be considered. We’ll also need to add a way to measure future playoff probability.
One idea is to take this year’s best true talent estimate of each team (Justin’s power rankings or Nick’s method of combining that with pre-season projections?) and then regress it towards expected team payroll, with more regression the further into the future we’re looking.
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by Sky Kalkman on Jul 27, 2009 2:14 PM EDT up reply actions 0 recs
And the actual value of a playoff appearance, which could value based on how deep a team goes.
The calc does it’s job as a base, and we’re supposed to judge it’s findings based on context ourselves.
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by bs.uf15bosox9bears23 on Jul 27, 2009 11:10 PM EDT up reply actions 0 recs
Happ for Halladay straight up is a wash over the period that they are under team control and based on their contract.
If you’re willing to ignore contract and length of team control, of course Halladay is more valuable, and “the sabermetrics” will tell you that.
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by Jack Moore on Jul 25, 2009 11:29 PM EDT up reply actions 0 recs
And, of course, this calculator ignores impacts on playoffs, etc.
Which is what the calculator is supposed to do. What you can do, as the person reading the data, is decide, based on the context, if the difference we see from the calculator is worth the intangibles of reaching the playoffs, etc.
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by Jack Moore on Jul 25, 2009 11:30 PM EDT up reply actions 0 recs
its mostly
just showing monitary value rather than impact
Carlos Guillen, the Latino Punto
by The_Fan on Jul 26, 2009 11:17 AM EDT up reply actions 0 recs
A good deal for the Jays
but the Phillies would get fleeced like you said. I tihnk Carrasco and Brown would be plenty for a team that needs to rebuild, but because he has another year after thism, another prospect is needed, so throw in a couple marginal prospects and Happ. Maybe we could put in one of our starters or Lidge who isnt doing too good
Carlos Guillen, the Latino Punto
by The_Fan on Jul 25, 2009 11:32 PM EDT reply actions 0 recs
Methodology Issues
Dan, I enjoyed this article, but I disagree with how the current trade valuation is being done, and I have proposed a change to make it more accurately reflect what is going on. The key issue is that you are treating all players as having equal values to different teams. Of course, we need to make assumptions to drive models such as this, but for the issue of trades, and particularly in-season trades, it does not make sense and misses what the point of a trade is— finding a meeting point between two people’s valuations of an asset whereby they both gain from trade.
The Phillies and Blue Jays are looking for a mutually beneficial trade. There is obviously a clear reason why this could happen— the Phillies have a comparative advantage in utilizing WAR from players who will perform better now, and the Blue Jays have a comparative advantage in utilizing WAR from players who will perform better later. The reason is that the Phillies are on the cusp of the playoffs.
The preseason approximation of $4.5MM/win is a very good estimate at what a team who signs a free agent will be willing to pay. It has been well documented that the value of a win is non-linear with respect to expected win total, as the primary source of marginal revenue from winning a game is the increase in the odds of making the playoffs. The reason the $4.5MM/win estimate holds is because 60-win teams rarely sign free agents in the first place, and if they do, it’s often at a discount or for trade bait later on. The $4.5MM/win is a good approximation for the value of a win for the teams that are most likely to have this trade impact their playoff chances.
However, the value of a win changes depending on the leverage of the game, and later in the season, the value of a win is much higher for teams on the cusp of the playoffs and much lower for teams not on the cusp of the playoffs.
I detailed my methodology in this article at BP this past Monday: http://baseballprospectus.com/article.php?articleid=9263
In this article, I mentioned an example to illustrate my point. At the end of the 2007 season, the Phillies and Mets were tied for the division lead, and the Mets sent Tom Glavine to the mound against the Marlins with the season in the balance. He was terrible. Had the Mets actually been able to trade for Johan Santana that Sunday morning to pitch that afternoon, they would have valued him at far more than 6 WAR/162 Games * $4.5MM/win. Right? Well, that number gradually increases over the course of the season for teams on the cusp of the playoffs.
In the article, I approximated the blind revenue gain using this method (ignoring salary to start) for Halladay’s 2009 value to be 6 WAR * 70 games/162 games * $4.5MM/win = $12MM. That’s not right for this season at all. In fact, to the Blue Jays, he is probably only worth about $3MM and to teams on the cusp of making the playoffs, he is worth about $15-$18MM. I approximated a value for each team.
What that means is that to a team like the Tigers or White Sox, the value of Roy Halladay at this point in the season is not the fraction of the season remaining times the difference between Halladay’s $27MM WAR value and the $14.25MM salary. That would imply Halladay’s 2009 is only worth about 43% of what it was worth at the beginning of the season. At this point, it’s worth 90% of what it was worth at the beginning of the season. That’s a huge discrepancy.
I would estimate total contract value at around $28MM for the whole season to playoff teams competing to trade for him, and probably only around $13MM to the Blue Jays. Since there are multiple teams competing for his services, it’s pretty reasonable to think that the Blue Jays could acquire about $28MM of value in a trade based on their bargaining position. There should be no “surplus value” or anything like that, because it should be that Halladay is worth more to one team than the other, and so they arrive at a value in the middle.
Things might work a little better if you valued Happ differently. I’m not sure where the WAR’s listed you have are coming from, but it doesn’t really make sense. He’s 26 years old. He shouldn’t be increasing in value into his 30s and is probably a lot closer to the $7.3MM value than the $28.4MM value.
I think the fact that the Drabek, Brown, and Taylor values are based on an approximation for “Top 11-25 Prospects” when they are all near the bottom of that group is overvaluing them too. It might be safer to split the difference between that group and the Top 26-50 group somewhat. Also keep in mind that those numbers are ballpark numbers.
Once you take into account present value, I think that the trades that include two of Drabek, Taylor, and Brown, or one of those along with Happ and a couple lower quality prospects start to make some sense for both teams.
by Matt Swartz on Jul 26, 2009 10:27 AM EDT reply actions 0 recs
I think
That Happ, Brown, a 3-5 C prospects should cut it. I wonder if the Jays would except that
Carlos Guillen, the Latino Punto
by The_Fan on Jul 26, 2009 11:15 AM EDT up reply actions 0 recs
They should
F%#& Billy Beane. Actually... I kinda like Holliday
by vivaelpujols on Jul 26, 2009 11:25 AM EDT up reply actions 0 recs
I think you're correct Matt
About the difference between preseason blind revenue gain when the season is pretty much a blank slate, and the projected revenue gain when a lot more information is known.
According to Nick’s playoff odds, the Phillies are at 88% right now. Adding 3 WAR over the rest of the season increases their chances by 10%. Sky likes to use $4 million as the value of making the playoffs, so a 10% improvement in their playoff chances should only be worth $400K. That’s fairly insubstantial in the course of things.
Granted, that’s assuming both the playoff odds and the $4 million number are roughly correct. It could be bigger.
And it also ignores the chances of winning the playoffs series. I think your approach in the other thread makes sense, although I’d probably quibble on the relative chances of winning the games (see my post over there).
That’s a long way of saying that while I agree that Halladay might be worth a bunch more to some teams than the blind calculation used in the spreadsheet would suggest, I’m not sure that the Phillies are one of those teams.
On the actual valuations I used for the Phillies players here, I could see lowering Drabek and Brown’s expected values because of their recent elevated status. I’m not sure changing it based on being lower in the rankings is correct though. I don’t know whether Victor even looked at a continuous function, but nothing in his writing suggests that the 15th prospect is necessarily better than the 25th. It’s probably fair to assume that, but I’ve been wrong on a number of things that appear to make sense in the past. Plus, the values are the expected value of the entire group, so theoretically it should more closely reflect the value of the middle players (the 17-19 prospects).
Happ’s was a little more difficult. I don’t think I’m really projecting a pitcher to get better into his 30’s. I’ve got him performing below his current level (and well below the pitcher Sickels compared him to) except for one “fluke” season where he’s worth 2 wins. I’m by no means wedded to this projection since I pretty much pulled it out of thin air, but I don’t think it’s out of the realm of possibility, or even that liberal. I don’t follow the Phillies to any great extent though, so you may very well be right.
Overall, I think the methodology does have some problems. I’m particularly troubled by the fact that the trades it predicts seem to have very little chance of occurring. I think the model leaves out some information, including the value to a given team at a given time, which is probably best captured using the playoff odds approach. It’s also missing some sort of risk premium that would presumably put more value on Halladay than the prospects. It’s definitely something that we should continue to tweak.
by Dan Turkenkopf on Jul 26, 2009 9:13 PM EDT up reply actions 0 recs
i don’t think the value of making the playoffs is $4MM at all. Nate Silver found $30MM four years ago, and I think his numbers are low. Think about it. The average team will go two rounds in the playoffs and will have about 5 home games or so. I know some of that money goes to the league, but a lot of it doesn’t, and there is so much money that gets made by teams in the playoffs selling merchandise and parking during playoff games, and a million other things. They also sell tons of tickets next year. I can’t see how $4MM would even touch the surface.
I also agree the Phillies are not really the team that would benefit most from Halladay. They just stand much more to gain than this methodology suggests. I think it does come down to playoffs too. The difference between the sub-70% that BP has, the 78%-ish that coolstandings has, and the 88% the vivaelpujols has is huge.
I read someone say somewhere that Victor Wang’s approximation of the value of prospects vastly overvalues them. He didn’t explain his reasoning, and I don’t remember where I read that. To me, the article that Wang wrote seemed to do things pretty well, but I’m not quite sure. My best bet is that it probably does overvalue them only because even the Santana trade looked lopsided for the Twins and the trade results really are off. I don’t think it’s risk premium or anything because those effects would just be too small. It’s tough to guess though.
by Matt Swartz on Jul 27, 2009 7:36 AM EDT up reply actions 0 recs
Actually, the number we use here is 25 million
which is pretty close to what Nate got.
The difference in BP’s PECOTA- adjusted playoff odds and my playoff odds are simply a function of the projections going forward. I project the Phillies to win 92 games exactly, while BP projects them to win 90.4. If I plug into PECOTA’s projections for each team into my spreadsheet, then our odds for the Phillies are nearly identical (64% for BPro, 66% for me). If you add 3 wins to the odds using PECOTA projections, the odds go up to 88%, which is a 22% gain.
It just becomes a matter of who’s projections you trust more, mine or BP’s. Given that we are both using the same prior (PECOTA preseason projections) and adjusting that with two different expected records (BtB power rankings for me, and 3rd Order Wins for BP), it’s a matter of which power rankings you like better. I think BtB’s is better because they use tRA to value pitchers, while BP uses reverse EqA.
What do you think?
F%#& Billy Beane. Actually... I kinda like Holliday
by vivaelpujols on Jul 27, 2009 11:07 AM EDT up reply actions 0 recs
I have no idea where I got $4 million from then
by Dan Turkenkopf on Jul 27, 2009 5:52 PM EDT up reply actions 0 recs
That was 25 million multiplied by the 15% of playoff probability that Matt Holliday added to the Cardinals
F%#& Billy Beane. Actually... I kinda like Holliday
by vivaelpujols on Jul 27, 2009 6:09 PM EDT up reply actions 0 recs
I haven't really followed this sub-thread...
But I definitely agree that including the expected revenue from increasing probability of a playoff spot is a smart decision.
I’m not sure that we want to get into judging every trade purely on economics, though. The big reason being is that every team has a different revenue curve. For the Pirates, they just might not get much of a return for adding anybody good who costs money. So the “logical” move is always for their good players to go to teams like the Yankees, who make so much more money off of each additional expected win. That maximizes both teams’ total revenue plus maximizes MLB’s total revenue.
If we’re trying to judge whether or not a trade was good in terms of winning more games or winning the world series, we need to stop strictly adhering to finances at some point and put things in terms of playoff probability or something like that.
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by Sky Kalkman on Jul 27, 2009 6:41 PM EDT up reply actions 0 recs
Ahhh.. that would do it
Thanks, I’m not completely crazy then.
So Halladay would be worth an additional $2.5 million to the Phillies then.
by Dan Turkenkopf on Jul 27, 2009 6:45 PM EDT up reply actions 0 recs
Not including the increase in World Series odds
Which I have yet to quantify. I already shot Sky and e-mail and he hasn’t come up with anything. Do you have any suggestions of how to figure out World Series odds? I think I might know how to do so, but I’d be pretty complicated, I’d like to see if you can come up with a simpler suggestion.
F%#& Billy Beane. Actually... I kinda like Holliday
by vivaelpujols on Jul 27, 2009 6:47 PM EDT up reply actions 0 recs
That's a tough one
Although easier for a pitcher than a hitter.
The most complete way, which would be a whole of work is probably something winning percentage per game with and without the player including home field advantage against each of the possible playoff opponents. Then use the binomial distribution to figure the chance of winning the division series against each opponent, weighted by the likelihood of them being the opponent. Add that all up and you get the chance of advancing to the next round.
Rinse and repeat for each round of the playoffs.
A simpler version would involve winning percentage against the “average” playoff team.
I haven’t put enough time to think through it, but you might be able to use the weighted average chance of making the playoffs (or each round) to determine the average team and save yourself a bunch of binomial calculations in the first step.
To figure winning percentage with/without a pitcher, use the approach Matt suggested in the Playoff Odds thread. For a player, you’ll probably need to calculate runs per game and Pythag.
It all sounds so easy when I don’t have to do the work.
by Dan Turkenkopf on Jul 27, 2009 8:09 PM EDT up reply actions 0 recs
This strikes me as specious
My best bet is that it probably does overvalue them only because even the Santana trade looked lopsided for the Twins and the trade results really are off.
I understand you were using this to illustrate a larger point, but let me demonstrate why using one particular anecdote is no good. Let’s say you trade for three prospects, each of which has a 50% chance of reaching his ceiling and a 50% chance of flaming out before reaching the majors. Assuming the probabilities are independent, there’s a (.5*.5*.5)=.125 probability that not even one of the prospects makes it to the big leagues. (The particular numbers I’ve chosen are just for effect, they could be anything.)
The point is, if you observed that outcome, it seems like a more outsized possibility ex post. But the fact of the matter is, about 1/8 of the time that is the outcome you would have expected to observe ex ante. It doesn’t necessarily mean the valuation is wrong, it just means you got unlucky.
It may in fact be the case that the Twins received a good package of prospects, and the expected value from that package was higher than the expected value the Mets could have expected from Santana. However, the fact that there was uncertainty means that the expected value was not a lock. Rather, it was subject to chance.
Until we have a better analysis of the value of prospects, we can’t throw around individual trades as proof that that average numbers are no good.
by Tommy Bennett on Jul 27, 2009 3:24 PM EDT up reply actions 0 recs
That's not what I did
I was talking about before the fact, as the Santana trade was discussed in the Victor Wang article (http://www.hardballtimes.com/main/article/the-bright-side-of-losing-santana/). My point is that if every trade looks like a fleecing by the seller over the buyer, chances are the methodology is a little off. Victor’s really smart and I can’t find anything wrong with his methodology, but I imagine there are other factors in play that would explain why buyers aren’t losing their entire competitive edge. I don’t think it would be enough to just say “payroll” and be done with it.
by Matt Swartz on Jul 27, 2009 11:25 PM EDT up reply actions 0 recs
I’m not sure I understand exactly what your point is. I am certainly willing to grant that the Wang’s methodology is flawed (in fact I’m almost positive that it is). My objection was to using one particular trade to make a point about something that is fundamentally governed by chance.
by Tommy Bennett on Jul 28, 2009 11:50 AM EDT up reply actions 0 recs
I’d like to hear why Wang’s methodology is flawed in your view. I can’t find anything wrong with it, but it seems to be getting bigger numbers than I’d expect.
The reason I mentioned the Santana trade is because it was the one that was frequently cited as being a ripoff at the time. The Abreu trade was another. On the other hand, many of Billy Beane’s trades for prospects were viewed as successes at the time, as were many of the Marlins’ trades over the years. My point is that if even the ones that seemed to be ripoffs at the time would be evaluated as successful by Wang’s method, and it seems to me like the perception should probably be closer to the reality given the information we have.
by Matt Swartz on Jul 28, 2009 2:28 PM EDT up reply actions 0 recs
I don’t think there’s anything wrong with Wang’s calculations, but rather some of the assumptions behind them. Here’s my relatively unscientific theory.
Using WSAB is perfectly defensible but it sets a common baseline that is independent of context. However, when a team makes a trade like the Santana one (or, for that matter, the Halladay one), they receive a basket of prospects that may be years away from reaching their ceiling. Not only do they have varying likelihoods of panning out, the payoff curve over time is shaped differently for different prospects. If a player arrives at an inconvenient time (say, when he is blocked in that organization), they do not get the benefit of those WSAB but rather the WS above whomever was pushed to the bench (think Utley replaces Polly in his first year).
However, the team acquiring the star can plug a hole immediately. That is to say, the acquisition is targeted and almost always gives the full benefit of the WSAB, because if there were no need, we assume there would be no trade. When you combine that effect with the risk premium, I think you can get a long way toward understanding why trades like this so often appear inefficient. What do you think?
by Tommy Bennett on Jul 29, 2009 12:50 PM EDT up reply actions 0 recs
I agree with the timing thing.
But it should mostly be accounted for in the current value of the “star” acquired. 4 WAR might equal 10% playoff probability on a random team, but 2 WAR over half a season might be 15% playoff probability added for a team like St. Louis this year.
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by Sky Kalkman on Jul 29, 2009 5:12 PM EDT up reply actions 0 recs
I see what you’re saying, but keep in mind that teams will generally trade players who are distinctly above replacement level but not starters. Not doing so is an inefficient use of resources. The Phillies traded Polanco. It took him two months, but even Ed Wade knew to trade him. I understand that it’s not a perfect market, but especially when you trade for pitchers, there is a complete enough market that you shouldn’t have trouble receiving the wins above replacement by trading the guy if you can’t use him yourself.
by Matt Swartz on Jul 29, 2009 11:14 PM EDT up reply actions 0 recs
how would you quantify winning a world series?
how much would the cubs value a world series victory? the philies? etc///
by norm depalma on Jul 27, 2009 1:37 AM EDT reply actions 0 recs
This hasn't been calculated yet.
Patience.
@bs_uf15bosox9be:OverTheMonster-ALLERGEN WARNING:May contain PB.
by bs.uf15bosox9bears23 on Jul 27, 2009 11:14 PM EDT up reply actions 0 recs
why
why would they insist on Haap though? it doesn’t make a whole lot of sense . Halladay’s value is calculated based on the theory that he is replacing a replacement level pitcher. not a 2 WARish guy like Haap, if looking through the context of turning into Halladay replacing Haap, then the value for the Phillies goes down .. A LOT. since the short term return is reduced.
Wouldn’t asking for Taylor + Brown and a random assortment of guys make a whole lot more sense? both in the Phillies short term outlook and the Jay’s long term well being?
by RollingWave on Jul 27, 2009 3:32 AM EDT reply actions 0 recs
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