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As the trade deadline neared, I prescribed who should be buyers and sellers, and now that the deadline has passed, we can see whether those teams ignored their diagnoses. In discussing the rare success that selling teams have when making deadline deals, Steven Goldman wrote last week that “the vast majority of prospects don’t achieve anything close to greatness.” Of course this is true, but it does not mean that selling teams should not try because when these deals do work out, they tend to have very large positive effects. It is important to temper expectations, but that does not mean that selling is unwise. The reason that selling makes economic sense is that buying teams have more value from wins due to their position in the standings than sellers, and making a trade can be a mutually beneficial way to extract value from a player’s contract that you cannot gain by holding on to it.

The 2010 trade deadline was a buyer’s market. Nearly every trade was followed by a chorus of claims that the selling team got robbed, which naturally raises the question of whether analysts overestimated the price for win-now talent. As I mentioned in my chat last week, this is not a time when fans have tons of money to spend buying tickets for their local team's playoff run, so while there is still more value to winning, the difference is not as extreme as in previous seasons. Further, with interest rates so low, there is a smaller benefit to winning now and getting a bigger cash flow because teams will not accumulate as much interest from that bounty when leaving it in the bank. Thus, this year's trades need to be evaluated in that light.

Astros

The Astros were one of the teams that I thought did the best job of selling. In recent years, general manager Ed Wade, at the urging of owner Drayton McLane, has been stubborn in trying to build around an aging core that was not going to win while letting the farm system get weaker. This trade deadline, the Astros had three players who drew significant interest: Lance Berkman, Roy Oswalt, and Brett Myers. Wade traded the first two and extended Myers' contract through 2012

The return on Oswalt from the Phillies may have seemed particularly weak, but in this market, it was not that far off. Oswalt had health concerns, was owed a lot of money, and had a no-trade clause that he clearly was going to be picky about exercising. Keeping Oswalt certainly was of less value than trading him for the package they got. The Astros wisely ate $11 million on his contract in the deal, too, which is the best way to get a better value. Effectively, what the Astros did was buy $11 million worth of future wins from the Phillies, who were not willing to pick up all of Oswalt’s salary. The commissioner needs to approve all deals with more than $1 million changing hands, and it seems unlikely that he would ever approve one team paying $11 million for another team’s prospects. However, spending the equivalent money on Oswalt’s salary is something that is permitted, and it is one of the few ways that a rebuilding team can use cash to buy prospects and try to rebuild faster. The Astros continued this policy in getting the Yankees to surrender some prospects in Berkman’s deal. 

On the other hand, the Astros did not trade Myers. There was a rumor that the Astros were calling Myers untouchable, which of course makes no sense, because every player should have a value—presumably, the Astros would have been willing to trade Myers for, say, Stephen Strasburg. So, let’s call that “untouchable” claim a ploy to see if they could get a higher return. The Astros ended up extending Myers after not being able to get a high return, which is the type of thing that initially does not make much sense. They are not likely to be competitive in 2011 and even thinking of winning in 2012 is a stretch, but as I have highlighted before, teams truly know their own players better, as players who re-sign with their teams end up costing far less per win than players who sign with other teams.

However, the Astros also used their extra value in trading Oswalt to acquire J.A. Happ, a pitcher who will have one more year before he reaches arbitration, and then three years of arbitration eligibility before he reaches free agency. He will probably provide most of his net value in the next year or two. That means that the Astros are just allocating their resources toward being good in 2011 and 2012, which is too optimistic, and indicates that they still probably are not being future-oriented enough. A prospect swap of Anthony Gose for Brett Wallace, who moved into the major-league lineup, further indicates this line of thinking. The Astros made good moves in a business sense, but they should have worked on acquiring value further into the future.

Nationals

Why didn’t the Nationals trade Adam Dunn? The only good argument that I can think of is that they want to extend his contract or re-sign him as a free agent in the offseason. Like with Myers and the Astros, this makes some sense if the Nationals feel Dunn makes him far more valuable as a member of their lineup than his value on the trade market. However, regardless of how underrated Dunn is, he still had value, and any contract they sign him to would most likely be a bargain in the early years and a drag in the later years. Most free-agent contracts are bargains early and drags late. The Nationals, on the other hand, will be a drag in the early years and stand a good chance to contend in the later years. Dunn is just not a great match for them, especially when he would make such a better match as a great DH for an American League team. You could argue that Mike Rizzo needed to play tough so that he could get better value in future trades, but this was really an opportunity where he could get a lot for Dunn by setting up a bidding war between the teams looking to add a big bat, and those teams would have gotten far more value from him than the Nationals will this year as they are in last place. It was a wasted opportunity. Although the Nationals were able to pluck catching prospect Wilson Ramos from the Twins in the Matt Capps trade, they were said not to want to move Josh Willingham, though there was some interest in him. Willingham will be eligible for free agency after next season and the Nats probably will not contend in 2011. This was an opportunity to move a hitter with a nearly .400 OBP for two pennant races, but instead they appear to be keeping him for two non-competitive years. The Nationals are definitely building something, and with Ryan Zimmerman, Strasburg, and Bryce Harper (if he signs), they should have a roster filled with stars in a few years. However, we have seen countless teams in recent years fall short of the playoffs because they surrounded a core of superstars with below-average talent. Moving players like Dunn and Willingham is a good way to acquire that talent, and the Nats missed the opportunity.

I was at Nationals Park last weekend to watch the Phillies play the Nats, and when Dunn’s name was announced on the evening of July 31 after the trade deadline had passed, the fans erupted in thunderous applause. When my wife asked why they were so happy he was not traded, I told her that apparently the casual fans were more interested in the Nationals' quest for 70 wins this season than their quest for a championship in 2013.

Brewers

In early July, I made a detailed case explaining why I thought that the Brewers should trade Prince Fielder. The Brewers did not do so. What makes the case even stronger for trading Fielder is that the Brewers have made it clear that they are unlikely to sign the first baseman to an extension. So even if they felt that he was underrated in the market, they still are not going to have a good chance to re-sign him before he becomes a free agent after 2011. Although trading Fielder would be a public relations hit, it would be smaller that the hit they will take if they pass on the chance to get some kind of return for Fielder. Brewers fans would probably not like the trade, but they would also likely support a contending club in 2013 without him. The Brewers did listen to offers, but did not find one to their liking. They may look to trade him in the offseason, but why would they get a better package from a team looking for the slugger to aid them through one pennant race than teams who were looking to have him for two pennant races?

The Brewers also opted to extend Corey Hart's contract, rather than trade him. It is a risky move, but not indefensible. Hart’s terrible performances in 2008 and 2009, coupled with his 2010 resurgence, have left a big question mark as to his true talent level. If the Brewers believe Hart is ready to have some big years, then deciding to keep him is defensible.

Phillies

The Phillies were listed as a “hold” in my article written nine days before the trade deadline, but after winning their following seven games, that status changed to “strong buy” as their playoff odds approximately tripled. They did indeed buy as they traded for Oswalt. The Phillies are still far from a sure thing, but Oswalt gives them a powerful trio of aces in the rotation with three of the top 23 pitchers who had pitched at least 100 innings in the major leagues this season at the time of the trade in terms of SIERA. The Phillies still have an uphill battle, but Oswalt also gives them a solid rotation for 2011. The downside is that Oswalt also doesn't give the Phillies much wiggle room in the budget for next season as, with factoring in they likely already have about $150 million spent. However, it is money well spent since it gives them a contending team. The Phillies' roster is starting to get older and more expensive, and their window of competing will close at some point. However, this is the kind of move that helps a team in win-now mode get back into the pennant and also a good one because the Phillies did not give up any of their top prospects.

Rangers

The Rangers made a bold move early in July by acquiring Cliff Lee from the Mariners for a package headlined by first baseman Justin Smoak. The move is obviously old news at this stage, but one thing that I think is particularly notable about the trade is that the Rangers already had a 90 percent chance of making the playoffs when they made the move. That's why I don’t really like the move for them. The Rangers have a minor-league system filled with top talent, and they are likely to be competitive for years to come. Trading for Lee helps their already outstanding playoff chances, but will he really make them the favorite in any post-season series versus the Rays or Yankees? All the Rangers did was improve their odds a little bit for 2010 at the expense of future seasons, which is why I don’t think they should have done it. They did well in the last couple weeks before the deadline to not take this any further or move any more young high-end talent for a team, but unless Lee wins them a World Series or at least an AL pennant, the deal is going to be a waste.

Cardinals/Reds, Twins/White Sox

None of the Central division competitors made a move to improve significantly at the deadline, while both pairs are close enough in the standings that a move could have made a major difference. All four of these teams had achieved “strong buy” status by the time the deadline rolled around, but short of an outfielder-for-pitcher move by the Cardinals that was not even necessarily a lateral move, a pickup of a mid-rotation starter in Edwin Jackson by the White Sox, and a pickup of a new magical closer by the Twins in Capps, none of these teams really did anything to change the races. It seems one of these teams should have stuck their neck out and made a major trade to try to secure a division title.

Thank you for reading

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anderson721
8/06
I'm wondering if the Red Sox have inquired into Mr. Dunn of late...
ScottBehson
8/06
Re: Rangers & Lee. I remember how the 2001 Mariners, who won 116 games without an ace stood pat at the deadline and then lost in the the playoffs. I wonder if the Rangers remember this, too.
Edwincnelson
8/06
The question with Fielder remains to whom, and for what? Which team has the prospects, is ready to win now, and has the money to sign him to an extension so as to make losing the prospects worth it?
smocon
8/06
The "sign him to an extension" thought regarding a Fielder trade is a moot point. The question as to whether or not the receiving team can or will try to extend him, has nothing to do with what the Brewers should expect in return, or who they might deal with in this situation. Scott Boras isnt going to allow Fielder to sign an extension, no matter where he goes, so the point is worthless.

Fielder should have been traded to the Rays for Colome, Jake McGee, Nick Barnese and a PTBNL. Whether or not the Rays put forth an offer like this we cant know, but they could afford to do it, and would have loved to have Fielder in their lineup for this years playoffs. Doug Melvin would not have accepted the deal because he has the delusion, as does his owner, that they can win next year. But it would have been the right sort of move.

And I completely agree with the assessment made in the article regarding off season vs trade deadline deal. Any team that wants him for next year, would want him now. And a team like the Rays could use him until seasons end throught he playoffs, and then trade him again in the offseason for more prospects, and not have to worry about paying him his $16 million arb award.
Richie
8/06
Poor analysis, startlingly poor coming from Swartz.

"You can get more for a player during a pennant race." Brewer GM Doug Melvin believes yes for pitchers, no for hitters/fielders. The fielding part being the key there, come off-season many teams can dream about contending. Therefore the market for, say, a 1st basemen is bigger than come July, when the Seattles of the world find out, "wow, we sure ain't".

Forget your blackboard theory. Where's your data that field players return more in July than January? And, when an instance comes along where that field player just isn't returning much in July, you should go ahead and trade him anyway because July is the theoretically best time to do so???
crperry13
8/06
Wow, are you wrong (and insulting to boot, which serves no purpose). This isn't a market of beans in Mexico, where a surplus drives down price. This is premium talent in a very small niche market; the number of teams that consider themselves a real possibility for the post-season at any given point is completely irrelevant.

Clubs that have a real chance for post-season profits are more likely to pay a higher price if there is immediacy to their situation. Human nature is to reach towards the tape as they near the finish line, not from the starting block. The reality of impending post-season play and dollars changes the advantage from the buyers (pre-season) to the sellers, and so prices go up!

Supply and Demand may be a driver before the season, but your comment completely ignores timing. Early on, GM's say, "Let's see how we do for the first part of the season," rather than gamble by paying out the ear in prospects so early. Recent baseball history proves this, you don't need "data".

I'm no economist and I unabashedly struggle to understand most of Matt's articles, but it's just common sense that an elite trade-able asset would yield a greater return when the buyer sees more immediate reward.
swartzm
8/06
Actually this is pretty close to what I was going to say for part of my reply, though maybe including the snark about Nats' fans was unnecessary. I generally try not to do that.

Anyway, it's not really supply and demand in an intro micro sense. It's an auction market. The price is going to be determined by the next-highest bidder. There were a few 1B/DH types on the market, and more teams that could have used the boost, so the price was going to be determined by how much the next-highest bid would have been-- which is about value for two pennant chases, not one. And that team would likely have at least as good a chance as the Nats in 2011, so they would have more value for Dunn as well.

There is not going to be a mathematically rigorous way to talk about these market effects. It's certainly more true with pitchers, though I do think the Johan Santana return is probably a great example of what happens when you trade with one season left. I've seen a few examples over the years where the return was starkly different but I'd need to think about this before I could even devise a method of coming up with a rigorous way to analyze it. After all, establishing prospect rankings would be very tough to do in a non-contraversial way.
crperry13
8/06
I'm totally confused. Did you reply to the wrong post? I'm a Houston fan, I have no reason to take potshots at Nats fans...they have it better than me, currently.
swartzm
8/06
I was trying to reply to a few of his posts at once, and he mentioned a couple times that he didn't like my snarky comment about the Nats fans at Saturday's game. Sorry that wasn't clearer.
Richie
8/06
Onward: "The Nats should trade Adam Dunn (apparently for friggin' whatever) because they're unlikely to contend next year".

How unlikely? So long as you're not in the AL East, you have a shot at contention next year unless you're the saddest of sacks. This year's Padres are not that much of an anomaly. Did you go through the 'Playoff Odds' this site's put up before each of the last however many seasons to inform such an opinion?

If the Nats don't contend next year, obviously they can then try to trade Dunn again. Why is it at all important to instead trade him now for a disappointing package?

Oh, and as to your smug "casual fans" snark, ...
swartzm
8/06
The Padres clearly were doing something smart here and were the exception rather than the rule. They still aren't guaranteed to contend, and were able to make midseason improvements anyway rather than dipping into the free agent market. The Padres also played in a division where the Dodgers had not spent any money to maintain their performance, the Rockies were good but not necessarily considered a 90-win team at the time (though I had them very high), and the Giants and Diamondbacks weren't clear contenders. With the Phillies and Braves already looking pretty intimidating for 2011, it's not wise for the Nats to beat them now. The Phillies have a bunch of 30-33 year olds on deals that expire soon, and the Braves don't spent much money, leaving the Nats a real window if they aim for winning in a couple years, especially with having such elite players already in the fold and under team control. I just don't think the relative value is high enough now even if there is a 5-10% chance of making the playoffs in 2011.
Richie
8/06
Last one: "Teams A-M should be buyers and teams N-Z should be sellers." No, an individual's/firm's price is set according to its prognosticated expected value for the good. That is then compared to Whatever The Current Price Actually Is. You've absolutely ignored that last half of the equation throughout all this.
swartzm
8/06
BTW if you go to the first link in the article about buyers and sellers, I make a pretty detailed case on how to determine where the buy/sell line should be, and how large the range of prices which would work is. The teams with 1% or less change in championship odds are clearly sellers and the teams with 3% or more change are clearly buyers, and the 1-3% range in the middle is pretty small and those teams clearly are incentivized strongly enough to make major moves by either price.
Richie
8/06
Oh, and I normally really really enjoy your work. Just not this. And much more pomposity regarding "casual fans", well ...
swartzm
8/06
I understand and very much appreciate you clarifying. I shouldn't make unnecessary snarky remarks like the Dunn comment. If you were sitting in my section that day, you would probably agree those fans knew far less about baseball than you certainly do.
Lindemann
8/06
I'm a Nats partial-season ticket holder, and...you know how it's more pleasant when your team wins games? I certainly enjoy the feeling after the Nats have won the game a lot more than the feeling after they lose. Intellectually, I can appreciate the arguments for moving Dunn. But as an emotional person, I'm happy every time I see him in the batter's box, because it means we have a better chance to win the game than if Adam Kennedy is in as a defensive replacement or whatever.

In short, even accepting the validity of your arguments, I would have cheered. (And did cheer, the next day.)
swartzm
8/06
I'll say this. I'm a Phillies fan myself, and I watched through the late 90s and felt the same way you describe until 2008, when I was at (both parts of) Game 5, and realized every loss endured while the team was bad was worth it if it made that championship happen. I'd stay open to the possibility of changing your mind. That said, I never had the experience my cousin did: http://sportsillustrated.cnn.com/vault/article/magazine/MAG1161294/index.htm (btw, I'm the "number-crunching cousin" in that article).
tomterp
8/07
Arguments for trading players at the deadline usually presume that the offered packages are superior to what the team might net from a few more months of the player, plus draft picks if the player's offered arbitration. We heard similar shrill criticism of the Nats when they failed to dump Soriano a few years ago, instead offering arbitration and signing Jordan Zimmermann as one of the two compensatory picks. Fans never hear what great prospects a team could have had instead, so presumably you have some inside knowledge of what the Nats didn't get? Else, how can you conclude they should have dealt Dunn?

As for the knowledge expressed by the fans around you, presumably these were not the ones who bussed down from the Philly area (killing kegs en-route) and I trust you were treated at least as civilly as an opposing fan might be treated in Philly, a reasonably attainable threshold.
swartzm
8/07
I do not have inside knowledge of packages but I explained my reasoning in several articles, including this one, why the value is likely much higher. There were rumors that their asking price was through the roof, perhaps explaining why they did not complete a trade.

I moved to DC a year ago, so I didn't bus down, and I wasn't killing any kegs; I had a pretty good hot dog, though. I was treated civilly by fans that I treated civilly as well. The vast majority of fans in any city treat you well enough in their stadium if you behave yourself, and that's certainly true for DC and Philly.
Edwincnelson
8/06
I think in both the cases of the Nats and Brewers the argument that they will be unable to compete next year is a little silly, and I think it may be that idea that drives the Nationals and Brewers execs. BPs preseason prediction for San Diego was dead last in the west, and by no small margin.
http://www.baseballprospectus.com/article.php?articleid=10451

By trading Dunn or Fielder you are simply giving up when, despite the odds, you have some talent and a chance to win. Where would San Diego be if they had traded Gonzo? Once you're in the playoffs anything can happen (05' White Sox) and the best team does not always win.

swartzm
8/06
You aren't linking the PECOTA projections. You're linking the staff predictions. Mine, incidentally, had Cincinnati in 2nd, so that's not really a fair analogy. As I mentioned above, the Padres clearly tried something innovative that worked. And they still aren't a guarantee to make the playoffs, and they were able to spend some money midseason to correct things when they realized they were better than they thought. It's not a matter of giving up. You still play the games. You just allocate resources differently-- as in, you invest in 2012 when your odds of competing are three times as high, even if they are not zero in 2010.

Also, Dunn is a free agent after 2010 so his contract for 2011 would have to be a new deal, and wouldn't be a bargain. So, considering they'd be paying full price for him, wouldn't it make more sense to do so when they already know they're competitive (or to trade for a first baseman midseason if they are suddenly in the thick of the race in July 2011)?

Allocating resources is a big deal. I'm not saying the Brewers and Nats won't be good this year. I was wrong about the Padres this year. I'm saying that teams that have a lower percent chance of competing shouldn't spend money on winning now when that money could be used towards later. Similarly, they shouldn't hoard talent now at the expense of trading for talent that can help them later. Washington is a pretty big and wealthy city, and the Nats are going to be competitive if they are run wisely. A sustained period of success could come to them if they build the groundwork beneath them.
Edwincnelson
8/06
Also, as per preseason predictions those silly Reds have no chance at the division and should have probably traded Scott Rolen before the year started (his output is rapidly declining). Clearly 2010 was hopeless from the beginning.
Richie
8/06
Back again. What got me really irritated was the intended insult embedded in the "casual fan" remark. I charge, try and find you GUILTY! there, but I do typically find very few snarks in your writing. So I shall mention it no more forever.
crperry13
8/07
Good thing you have no judicial powers.
Richie
8/06
Two adult criticisms. First, on your theory itself. I feel you divorce it from the basic fact that everything has its worth. If no one gives you what it's worth to you, you hang onto it.

You're the first person I remember who likes what the Astros got in return for Oswalt+Berkman. What I recall reading everywhere else is 'man, Houston got just zip for those guys'. It seems you feel players like them have near-zero worth for a team in the Astros' position. When you value a type of player way much lower than most everybody else does, I'd like to see a good amount of evidence defending that.
swartzm
8/07
I don't like the return for Oswalt + Berkman, but I just think the demand wasn't there right now because they were expensive, Berkman was overperforming, and Oswalt had a no trade clause. I think the economy and interest rates made it a bad seller's market, but also made holding expensive players really tough on sellers. I did think Happ wasn't the best match for them.
bsolow
8/07
I'm just curious to know what value you think Oswalt and Berkman had to the Astros? The Astros were paying them a lot of money and weren't anywhere close to playing meaningful games. Everything may have its worth, but its worth is different to different people -- Matt would call this (and I would agree) a private value auction -- and I fail to see how the value of Oswalt and Berkman to the Astros could be much larger than zero.
Richie
8/06
Epistemological beef: You have a theory. Players are way more valuable come pennant race time. It is a theory. Nothing more than a theory, no matter how much it ought to be true, until empirically researched and validated.

Doug Melvin's been doing this for a living for a good long time, now. If he says the market for position players is generally actually better come December, I'm not necessarily going to believe that. But you give me no data to contest that, only premise-based logic. And you seem to proceed as if that's all you need to pronounce on this issue. I disagree with that.
swartzm
8/07
Fair enough, but how exactly would I go about proving that? I'd need to try and capture a market that was different every summer and every winter based on a bunch of different factors. I could see why it might be hard to trade position players whose value comes from their place on the defensive spectrum, but probably not 1B/DH types.
Richie
8/07
Simple to get evidence, I'd think. Look at what position players have been traded for in-season and out-season, then compare the at-time value.