Glad to see Matt still contributing. Great article here, I would love to see a GM operate an organization based on these principles.

Excellent article. Although as we see more and more of these player evaluations that incorporate the business side of baseball, we are no longer assessing a question of player impact, but a question of marginal profits. The only interesting information for fans derived from answering the second question seems to be that, if a move is sensible on the ledger, then the team will or at least likely to make the move. But to make this information tangible, we should at least understand whether teams are adopting this approach of evaluation. They need not be following the exact model, but should be following a quantitative and marginal approach. If most of the teams are not doing this, then the sound assessment in this piece and others like it will likely only inform spectator GM/owner wannabes.

"For instance, if Halladay is worth about six wins above replacement level (which is a good approximation for most teams’ fifth starters), we would say that the value of his replacing a typical fifth starter is about $27 million above the MLB-minimum salary of $400,000."

A fifth starter worth 6 WARP and $27 million? In what universe?

This probably is in the level of noise, but does an AL team have a little extra incentive to acquire Halladay because it means he won't be pitching against them the remainder of the season? I imagine this is doubly true for the Yankees and Red Sox since they would still face him a bunch of times if he either stays on the Blue Jays or goes to the other AL East behemoth.

Each team and market has its own unique win-to-revenue ratio and in this recession, clubs are likely not very confident in their models. It appears that an average is being applied to each team. All thing being equal, which is never the case, the Giants have more of a financial incentive to acquire Doc than the Brewers as they play in a much bigger market.

CAn I give this article a thumbs up?

Good stuff, Matt. I'm working on expanding my preliminary work in a very similar way. Your model for playoff probability added looks pretty good, but with our playoff odds we're going to plug in the extra WAR and actually see how it changes things.

While I agree with the full economic approach (different revenue curves for different teams) for certain questions (does this move make financial sense) I don't necessarily agree it answers other questions, such as "will this move help maximize the number of World Series we win over the next ten years." For that, you care more about playoff probability and only care about unique payroll/revenue situations in the sense that locking up players are certain rates gives a team a better or worse chance at the playoffs. (That is, the Yankees should "overpay" typical FA rates a bit for studs, while the Rays and Pirates should avoid paying anything close to free agent rates for decent players.)

Excellent analysis. It makes me think the way to go is to take Wells with Halladay for some decnt prospects, as the positive impact of Doc would offset the hit of Wells.
What I can't figure out is why the Rays are not in the running. I think Halladay would help them more than anyone.

I love it when you get all binomial.

Halladay has additional value beyond his VORP in how deep he goes into games. This makes the team more likely to win games in which he is not the starting pitcher, because it gives the bullpen more rest. It also directly reduces the number of innings thrown by pitchers who are not as good as Halladay, especially pitchers who would pitch the 6th and 7th innings of games with less durable starters.

Good analysis, but unless I missed something, it seems to ignore that Halladay would be worth a different number of wins to each team, which would also change the dollar figures for each team.

It is my understanding that VORP accounts for innings pitched.

I think it is a relatively riskier proposition for a team to satisfy the Jays asking price for Halladay, as historical marginal revenue curves may not be applicable this season. The only scenario that seems financially rationale is an owner that plans to sell the club in the near future.

Why doesn't anyone give any chance for Seattle to pick up Halladay?

Felix Hernandez
Roy Halladay
Eric Bedard
Jarrod Washburn

That's a pretty damn hot rotation to enter the playoffs with, regardless on how soft the offence has been.

Is this because Seattle is more in the market for a couple of bats and not an arm? Halladay over Garret Olson makes a HUGE difference.

Great, great article.

Great article and comments.

Another factor that Ricardi has considered and that any analysis of Halladay's value should consider, is that it is going to cost more for an AL East rival to get him than another AL team and more for an AL team than for an NL team. As hinted at above, the AL East team could come out slightly ahead just because they wouldn't have to face him. Conversely, the Jays don't want to see him 6 times a year for the next 5 years, either. So the price goes up for the Sox and Yanks (and O's and Rays) thereby lowering Haladay's value to those teams.