Putting a value on Brady Aiken

The signing deadline for draft picks is rapidly approaching and the Brady Aiken conundrum has yet to find resolution. Evan Drellich and Ken Rosenthal have been on top of the situation, reporting that while the Astros are uncomfortable with the findings of Aiken's MRI, Aiken's camp claims that he is asymptomatic and healthy. If Aiken cannot reach an agreement with the Astros, the possibility of a grievance filed on behalf of Aiken comes into play. A victory in said grievance would culminate in Aiken becoming a free agent, a potentially historical development. If Aiken were free to negotiate with all 30 teams, the issue of the valuation of an 18-year old pitcher in free agency would arise. Today, I'm going to take a stab at creating the paramount valuation for Brady Aiken should free agency be granted.

Forecasting Aiken

To put a value on Aiken, the initial step is to study all pitchers with similar backgrounds. By analyzing the history of similar picks, we can forecast the future value that Aiken is expected to produce.

Setting the parameters of "similar picks" is tough because pitchers of Aiken's stature are sparse.  There have been two left-handed high school pitchers that have been drafted with the first overall pick, producing a total of 0.7 rWAR between the two. Searching for a larger sample size, I expanded the parameters to include all high school pitchers in the first round, including supplemental picks, drafted from the inception of the draft up until 2004. However, we will try and mitigate for that later in the process. The reason I look at pitchers only until 2004 is the fact that Phil Hughes, drafted in 2004, is the last high school pitcher to have accrued six years of team control and reached free agency. Of course, it's hard to compare Aiken, widely regarded as the best player available at the first overall selection, against a pitcher drafted in the latter half of the first round.

Next, I set out to quantify the bust rate (Bust%) of high school pitchers drafted in the first round. I categorized a bust as a pitcher who failed to throw a single pitch in Major Leagues. Even pitchers like Kurt Miller, who posted a -2.6 rWAR in his 80.2 innings in the big leagues, were not considered a bust in this study.  Of the 279 pitchers, 111 of them qualified as busts. The Bust% of high school pitchers is 39.7%, which I interpreted as the chance that Brady Aiken never throws a pitch in the big leagues.

After finding the Bust%, I found the rWAR of the first six years of every high school pitcher who was not considered a bust. The reason I took the first six years is the fact that you acquire the rights to the first six years of a player's career when drafting them. The total rWAR of all of the pitchers' first six years in my dataset is 688.1 rWAR. Dividing this sum by every player in our dataset gives us the mean rWAR of 2.46, representing the average production in the first six years of a high school pitcher drafted in the first round. I also found the mean rWAR of the dataset of solely players who pitched in the big leagues, which was 4.09.

While we found the mean rWAR, I chose to crosscheck this value by creating an Expected WAR (xWAR) of each pick. To calculate xWAR I used the following formula:

xWAR = ( E(average WAR of ML pitcher) * ( P(probability pitcher makes it to the MLB)) + ( E(average WAR of non-ML pitcher) * ( P(probability pitcher does not make it to MLB)

The xWAR came out to be nearly identical to the mean rWAR at 2.46. According to the messy math, Brady Aiken is expected to produce around two and a half wins of value in the first six years of his career in the big leagues. However, the thrust of this article is to put a dollar sign on Aiken's value to a team. Using Matt Swartz's excellent calculations of converting WAR to dollars, we find that a single win is worth exactly $7 million in the free agent starting pitcher market. This would put Aiken's value at roughly $17.22 million for the first six years of his career.

However, as aforementioned, 2.46 rWAR is the average value of any first round high school pitcher. The topic of this discussion is Brady Aiken, a southpaw widely regarded as the best true talent available in this year's draft. If Mike Elias and Houston's front office did its job correctly, Aiken should outperform his contemporaries selected in the latter half of the first round.

Accounting for Performance Variability

To account for the wide spread of possible outcomes in the first six years of Aiken's career, I created a percentile range similar to that of PECOTA's. The percentiles essentially work off of the median, which is 50%. What's interesting is that we find that our xWAR, which is the mean, is just under the 60^th percentile. This is likely due to the fact that elite pitchers like Frank Tanana and Dwight Gooden skew the data.

Percentiles	Rank in Dataset	rWAR	Dollar valuation (millions)	Recent Example
5	8	-1.8	$0	Todd Van Poppel
10	17	-1	$0	Jamie Arnold
20	34	-0.3	$0	Boof Bonser
30	50	0	$0	Kyle Waldrop
40	67	0.3	$2.10	Mark Rogers
50	84	1	$7	Dustin McGowan
60	101	2.6	$18.20	Homer Bailey
70	118	4.9	$34.30	Phil Hughes
80	134	6.4	$44.80	Gavin Floyd
90	151	13	$91	Josh Beckett
99	166	24.5	$171.50	Cole Hamels

As we have established, Aiken was the first overall pick in the draft. Scouts would like to believe that he will outperform the median high school pitcher selected in the first round solely due to his high draft selection. If he pitches in the 60^th percentile, matching the mean rWAR, very few people would be surprised. The next necessary step is placing Aiken in an appropriate percentile range. In fact, when it comes to structuring a contract offer, it comes down to subjective scouting.

Scouts who have evaluated Aiken must compare and contrast him against pitchers in our dataset to find his true value. The examples of recent and prominent players in each percentile in the table illuminate the potentially enormous value of the first six years of Aiken's career. If scouts decide that Aiken realistically has a role similar to Cole Hamels' (which was actually confirmed by one scout), the first six years of his MLB career would be with $171.5 million.

However, it makes little sense that a team would pay Aiken on the value that Hamels produced. As a 17-year old with years of development ahead, and a purportedly abnormal elbow, Aiken carries significant risk. Hamels has already produced that value; evaluators only believe that Aiken could match his performance.

With no scouting background and little actual scouting information on Aiken, the last part of my valuation comes with some guesswork and estimation. While we've established that Aiken has a realistic ceiling concurrent to Hamels, we also must mitigate for risk. I'm left to estimate a combination of years and dollars that mitigates for risk while is also reasonable for Aiken to consider.

An issue of potential length of the contract arises when trying to put together a deal. Normal team control is six years, three years with a requirement of league minimum, and three years of arbitration. The average high school pitcher drafted in the first round spends about 3.5 years in the minors before debuting. I recognize the fact that Aiken will likely spend multiple years in the minors, however, I would also like to acquire the rights to the six controlled years if I'm going to pay him by the aforementioned percentiles.

The compromise

Like any other negotiation, I find myself in the midst of a compromise. I realize that Aiken will likely turn up his nose at a nine or ten year offer, weary to sell what have the potential to be free agent years. Giving up so many years including those of the pitcher's prime would be a move of which many players would be reluctant to agree. I try to buy as many years as possible to give ample time for development as well as well as time to take advantage of his value.

The Deal

Num	Year	Value (million)
1	2015	$0.50
2	2016	$1
3	2017	$2.50
4	2018	$4
5	2019	$5
6	2020	$7
7	* 2021	$18
8	** 2022	$25

6 years, $20 million guaranteed

*-2021 options vests at either 400 innings pitched or 150 appearances

**-2022 option vests at either 575 innings pitched or 200 appearances

For the first few years, he makes a salary that will be exponentially larger than his contemporaries in the minor leagues. I entrust that he will be in the Majors by 2018, at which he point he will still be out-earning his fellow rookies on an extreme basis. From 2018-2020, I am buying the three years of team-controlled salary. I gamble that he produces anything upwards of 3 rWAR in as many years. For frame of reference, Phil Hughes produced around 4 rWAR in his first three service years.

The first option would potentially buy-out one year of hypothetical arbitration if Aiken throws an average of 133.1 innings from 2018-2020. If Aiken produces anything higher than 2.6 rWAR, it's surplus value. The next option requires him to throw 575 innings and gambles that he produces 3.6 rWAR or higher that year.

The deal buys out five years of team-controlled years, gambling that he accrues a 9 rWAR in roughly 5 years My deal pays Aiken under the assumption that he will have accumulated upwards of 9 rWAR by the time he is through with his age-25 season. This would land him right around the 85^th percentile alongside Jon Garland, not a bad place for a heralded prospect like Aiken to begin his career.

Why he'd agree

Assuming he spends three years in the minors, the deal buys out only five years of ML-service time as opposed to the normal six controlled years. He reaches free agency at age 26 having gotten paid a tremendous sum through the first few years of his professional career and a fair amount through the normal arbitration years. The deal guarantees him big league money despite their being a nonzero chance that he never throws a pitch above Hi-A. The vesting options are easily attainable. He's receiving $20 million guaranteed from age 18-22 despite never playing above high school baseball and owning a UCL that has already concerned multiple doctors. If Aiken stalls in the minors, he becomes a free agent at age 22 with $20 million in his pocket.

Why we'd do it

From 2015-2017, we're essentially frontloading the deal. Any value produced from 2018-2020 is surplus value, and that's just considering current market rate in terms of dollars per win. We pay fair prices from 2021-2022 because if he has reached his inning markers, chances are he's already provided surplus value. If market trends continue, he will be even more of a bargain then.

With spending depressed by the current collective bargaining agreement, we acquire a premium talent on the free market with no repercussions. As we've seen in the Cuban market, teams are willing to throw money around in talent pools remiss of sanctions. Even if Aiken were to need Tommy John, we'd have five years to extrapolate enough value to reap our returns on the deal.

Why it'd never happen and errors

Having to use pitchers from all different draft positions (two supplemental picks in the dataset were the 48^th player each to come off of the board) is a tough pill to swallow. I hope the percentiles did a fair job representing the outcomes of Aiken in respect to the history of pitchers with similar backgrounds. Yet even that had some margin of error, as it was a non-normal distribution curve.

Both Aiken and a front office would have a hard time hammering out a deal of such length. Vesting options are a risky proposition for both parties. If I had to guess, I would say I'm underselling a potential deal. I feel that I mitigated my underselling by giving ample money in what would be the arbitration years. Knowing market trends, agent Casey Close would likely be hesitant to use a current dollar per win valuation to project salaries as much as eight years in the future. It's a value that has soared in past years and will likely continue to do so.

I'm also quite likely not accounting for the fact that there are teams flush with cash and desperate for talent. Large market teams with barren farm systems, I'm looking at you Los Angeles and New York teams, would likely be more than willing to throw a hefty sum at Aiken. I can just see Theo Epstein and Jed Hoyer racing to get Aiken to the North side of Chicago. A team with a confident valuation of Aiken, and his medicals, could be willing to guarantee more than $20 million in order to acquire a talent of his nature.

Acknowledgements

While it is my name that appears on the byline of this article, this was a true team effort. Huge thanks to everyone on the Beyond the Box Score team; this piece would not have happened without you. For the help from behind the scenes, you know who you are, thank you.

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All draft data comes from Baseball-Reference. All WAR values come from B-R as well.

Daniel Schoenfeld is a contributor at Beyond the Box Score. He will be a freshman at Colby College this fall. He's had Tommy John surgery and will testify that it isn't very fun. He can be found on Twitter at @DanielSchoe.