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April 13, 2010

Expanded Horizons

Trading Evan Longoria

by Tommy Bennett

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Evangelism

Some things in life can be compared to one another. Despite a common aphorism, apples and oranges are an excellent example of two items that can be easily compared (I'm an apple guy myself). You can compare them on the metrics of sweetness, durability, longevity, shareability, and even aesthetics. Perhaps as a reflection of all possible attributes of each fruit (including costs of growing, demand, weather, and transportation), we can compare the two on the altar of the almighty dollar. (Although, of course, the market is most liquid for frozen-concentrated orange juice.) Other types of things cannot be reasonably compared in such a way. Take the classic example of incommensurable values: the life of a mother and the life of a nun. The virtues of motherhood are distinct from and incommensurable with the virtues of the convent.

It is a basic faith of quantitative baseball analysis that baseball players are commensurable goods. Whether the comparison is across eras, positions, leagues, or teams, sabermetricians labor to establish a single baseline of commensurability for all players. I don't want to spoil the ending, but the early returns have been sensational. We now have easy ways to compare players across all-time in the easy-to-grasp metric of wins (WARP3). We have ways to translate wins into dollar amounts (Nate Silver's MORP, with Matt Swartz's forthcoming updates). Critics of this approach tend to doubt the possibility of commensuration of players who can be so different. How, they wonder, can we say exactly whether Prince Fielder is worth more than Ichiro Suzuki? They are such different players that the comparison is a sham, the argument goes.

Part of the reason why it is important to be up front about our valuations is because implicit valuations happen all the time. Every trade and free-agent signing is a data point in a broad comparison of players to one another and to dollars. In fact, those very data points are what enable people much smarter than myself to develop these sophisticated and powerful metrics. Even casual arguments among fans can provide information about those particular fans' valuations of players. It's very clear, no matter what your individual valuations may be, that not every player is worth exactly the amount he is paid. Some players are really great bargains, some are paid fairly, and some are paid more than they are worth on the field. That got me thinking.

Ball on a Budget

This year, I participated in the sort of fantasy league that appeals only to the most spreadsheet-bound type of fan. Run over at my old digs, the Ball on a Budget league gives each manager $60 million in salary and a 25-man roster to fill out. It proceeds via snake draft, but the trick is that each player must be paid the amount he will earn in 2010 (irrespective of incentives and bonuses). For both pitchers and hitters, the only scoring category is Wins Above Replacement.

Now, let's see if you can guess who the first overall pick was. Got a guess?

Evan Longoria, who is set to earn $950,000 this year, was worth 7.9 WARP last year. He was the consensus first pick for a very good reason. Even entering the third year of his contract extension, his contract represents an enormous bargain over what he would earn on the free-agent market. Part of that is because the Rays took an impressive gamble: exactly six days after he was called up to the major leagues, Longoria had signed his current deal, which covered his six team-controlled seasons and gave the Rays options in each of his first three free agent-eligible seasons. Even if all the options are exercised, the total value of the contract over nine seasons would still be just $44 million.

Thanks to the peerless Jeff Euston, here is a breakdown of the Longoria deal:

2008: $500,000
2009: $550,000
2010: $950,000
2011: $2M
2012: $4.5M
2013: $6M
2014*: $7.5M
2015*: $11M
2016*: $11.5M
*Team option year

Let's be conservative. PECOTA's weighted mean projection for Longoria this year calls for him to be worth just over six WARP. Let's say he's worth five wins a year for each year of the deal. Given what we know about the cost of a WARP, that would make Longoria worth about $25 million per year. Netting out the salary he is owed and assuming a fixed $25-million value, from 2010-16, Longoria will be worth about $130 million over the next seven seasons. Pretty good, right?

But how good? I got to wondering whether there is any player whom the Rays could be offered that would get them to consider trading Longoria. This question is quickly disposed of, since no player combines Longoria's a) proven track record, b) low service time (two years), and c) guaranteed contract with team options.

Like Rob Base and DJ EZ Rock

What if we let a package contain two players? Then it starts to get interesting.

Ryan Zimmerman and Stephen Strasburg

Zimmerman is under team control through the 2013 season, and is set to earn $41.2 million over the next four seasons. PECOTA is less optimistic about Zimmerman than it is about Longoria, pegging him for five wins this year and declining faster than his Tampa Bay counterpart. If we take Zimmerman to be a 4.5-win player over the next four seasons, he'll provide just under $50 million in value to the Nationals. What about Strasburg? He's unquestionably the most popular Senator in Washington, and my goodness what a curveball. But most estimates of his value on the free market hovered around $50 million prior to the 2009 draft, and he'll still hit the arbitration escalators on the back end of his contract. It's pretty tough to predict his value, but let's put it this way: In order to make this deal work for the Rays, they'd have to value Strasburg at something like five wins per year after discounting for injury risk for each of the next six seasons. Such a performance would effectively make Strasburg Tim Lincecum East, and while such a performance is possible, it probably isn't close to the most likely outcome.

Hanley Ramirez and Mike Stanton

Ramirez is a sensational player, and probably the second-best position player in the game right now. WARP ranks him just a notch ahead of Longoria going forward, but he is owed substantially more money. Under contract through 2014, Ramirez is owed a total of $64.5 million over the next five seasons. At a six-win-per-year clip, he projects to provide surplus of about $85 million to the Marlins. As for Stanton, different studies have produced different figures for the value of prospects. Victor Wang, for example, has valued a top-10 hitter (which Stanton is) at about $36.5 million. PECOTA likes Stanton more than that, and depending on when he is called up to the majors, could be worth more than $50 million. The trick is the "could be." In fact, Stanton would have to be worth $45 million, or the equivalent of about two or three wins per year on average over the next six years, to make the deal worthwhile. Again, it's possible, but it would come at considerable risk (risk which would probably not be compensated for). Unlike the previous deal, this deal does not give the Rays a clear replacement at the hot corner, although playing Ramirez at short would give them even more flexibility with their backup infielders; they could assuredly find 162 games' worth of third basemen on their roster.

Brian McCann and Jason Heyward

McCann is under contract for three more years, with a team option for the fourth. If the option is exercised, he'll be earning $32.5 million through 2013. As a 4.5-win player, he'll provide a net surplus of just under $60 million to the Braves. Heyward, on the other hand, is harder to predict. Players like him don't come around too often, and they tend to be pretty good when they do. Over the next six years, PECOTA likes Heyward for an average of just over five wins per season, which is extremely good. If he were to put up such good numbers, he'd be worth about $95 million (or so) in surplus, but again, I'm not adjusting for risk. He'd need to be worth at least $90 million to justify the Rays parting with Longoria for this package, and I'm not sure he would be after accounting for risk. This package also doesn't provide a clear replacement for Longoria at third, although the Rays have roster flexibility enough to fill the holes, while McCann would represent a massive step up behind the plate.

Question of the Day

 Those are some pretty impressive trade packages, and I'm not convinced any of them are a clear take for the Rays. If you were running the Rays, would you accept any of those trade offers for Evan Longoria? Would you definitely reject any of them?  

Related Content:  The Who,  Year Of The Injury

43 comments have been left for this article. (Click to hide comments)

BP Comment Quick Links

2White

This article had me at Rob Base. It Takes Two is by far the greatest song in the history of hip hop.

Apr 13, 2010 06:49 AM
rating: 0
 
Brian24

My vote would go to Bring Tha Noise. Rob Base wouldn't appear anywhere near my Top 100. Guess we have different tastes in hip-hop!

Apr 14, 2010 00:59 AM
rating: 0
 
CRP13

I don't see any clear incentive for any of those teams to trade the player packages you named. Trading Strasburg would make the Nats fans revolt once and for all, and Longoria isn't enough an upgrade over Zim to turn them into a winner. Ramirez, Stanton, and Heyward all (arguably) have more upside than Longoria, and Ramirez is already clearly the better player, simply because of the speed, average, and position scarcity that he offers. Not to mention that the Rays are loaded already with a good young Shorstop, good young pitching, and excellent young outfielders.

I don't usually poo-poo articles here (usually I defend the author against the poo-poo'ers), but this is the kind of speculative stuff I would expect to see on Bob's Baseball Blog, not at BP.

Apr 13, 2010 06:56 AM
rating: -3
 
Tommy Bennett

I, for one, am a big fan of Bob's Baseball Blog.

Apr 13, 2010 07:44 AM
rating: 0
 
CRP13

Me too, in an entertaining sense. Don't get me wrong, it's a fun article, just straying a little from what BP's core audience comes here for.

Apr 13, 2010 08:55 AM
rating: -3
 
krissbeth

Me too. I like old school barroom articles like this one, although it does have the modern twist of including salary.

Apr 13, 2010 13:17 PM
rating: 2
 
Ben L
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This is one of the most ridiculous articles I've read here.

Apr 13, 2010 07:02 AM
rating: -16
 
tommybones

That's why I like it.

Apr 13, 2010 08:32 AM
rating: 3
 
Jim ONeill

Actually, I find this a rather interesting take on the issue of valuation. Certainly. this is a bit "outside the box", which was a hallmark of BP.

Apr 13, 2010 07:36 AM
rating: 4
 
jdtk99

Loved the article. The only aspect not addressed is that the Rays are a "win now" team. So the correct baseline is not WARP but the actual 2010 Rays roster. I think the only package that might make them a better team this year would be the McCann/Heyward deal.

Apr 13, 2010 08:46 AM
rating: 4
 
jimgar73

Even in a win now mode, trading LonGo for Zimmerman and Starsburg not only achieves their current goal, it more than likely makes Tampa a better team. Once again WEashington does have the #1 overall pick, they could draft another high upside pitcher. Everyday players like LonGo don't come around often. Strasburg would fit nicely into the Ray's rotation Garza.


Tx

Apr 13, 2010 11:09 AM
rating: -1
 
cyborg

Why would the Rays, Marlins, or Braves make these deals? No way they even consider it.

Even the established star players in this deal are 25 or 26 years old and have yet to reach their prime. All three players are also locked up with long term deals through at least 2013. It might be an interesting read if it even had a remote aspect of taking place.

Apr 13, 2010 09:08 AM
rating: 0
 
krissbeth

Because the combo of Longoria and that contract are just that good. Plus, having Longoria gives teams a huge competitive advantage by being able to afford more good players on the roster.

Apr 13, 2010 13:19 PM
rating: 1
 
keef66

I think the thesis of this article is "Andrew Friedman is really, really smart."

Apr 13, 2010 09:08 AM
rating: 7
 
ramtax

What a great article. Makes you think seriously about valuation, risk, etc. Great stuff. And to Chris and Ben, this is not trade speculation, it's a think piece. None of the teams involved would make any of these deals. But we, as fans, like to talk about the relative values of players like Longoria, Ramirez, etc.

Apr 13, 2010 09:40 AM
rating: 3
 
CRP13

Respectfully disagree. This is the type of article that BP has avoided in the past as useless speculation (and rightfully mocked in some places). That's not to say that it's ill-written or un-fun (new word), I just don't think it belongs here. Tommy has done much better work.

Not surprised I got minused though. Disagreeing with or criticizing the authors always leads to that.

Apr 13, 2010 09:53 AM
rating: 1
 
cyborg
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You get a + from me.

Apr 13, 2010 10:13 AM
rating: -8
 
Bill N

It takes a normally non-sensical form of reasoning and tries to apply a process to it. How is that not BP?

Apr 13, 2010 12:29 PM
rating: 0
 
LukeKasdan

You didn't disagree with the author so much as you seem to be touting the opinion that Baseball Prospectus should provide content that Chris Perry feels is worthy of the site.

For my money, BP's the best baseball site around and there's no shame in a well-written article that feels like you're throwing around what ifs at a sports bar.

Should Avatar and the Hurt Locker not play at the same theater? Should Treme not be on the same station as Curb?

Apr 13, 2010 14:56 PM
rating: 4
 
CRP13

First paragraph unnecessary and untrue. I don't feel the need to defend myself to you.

Apr 14, 2010 06:30 AM
rating: -3
 
wijamie

While I agree with everything you said about Longoria, I'm surprised you didn't mention Ryan Braun. He's also an over-7 WARP player signed to a sweet deal for his team. His contract runs through 2015 and will total only $45 million. He's only making $1 million this year.

That extra year (2016) for Longoria is big, but I'd argue that Braun's value to the Brewers makes him virtually untouchable as well.

Apr 13, 2010 09:56 AM
rating: 4
 
RedsManRick

I would definitely like to see this sort of analysis done in consideration of the range of possible outcomes as opposed to simply the average expected outcomes. One significant advantage to having two players is the mediating effect on the extremes. In any investment strategy, level of diversification is always a consideration.

The other concern is that you've made value the #1 concern, rather than production. I could put an extremely value positive team on the field and win just 75 games. That's hardly considered success. And that's what makes these trades seem so silly on the face of them. All of the players listed here are considered bargains in the big picture. If you're looking to get more value for your payroll, you don't go about it by trading guys who are only really, really good bargains for a guy who is the best bargain. There's just way too much excess salary elsewhere which can be trimmed without the production expense that goes along with it.

Though perhaps this is your point. The only trades that would make sense for the Rays would make no sense for the other teams; thus Longoria is virtually untradeable.

Apr 13, 2010 10:01 AM
rating: 4
 
krissbeth

"The other concern is that you've made value the #1 concern, rather than production." That would be the model behind the Twins, As and Marlins, yes? Be economical, good enough to compete for a playoff spot and then hope for lightning in a bottle.

Also, your observation is false because you're assuming that the number one concern FOR THIS TRADE is the over-riding value in team construction overall. It doesn't have to be; if the Red Sox or Yankees had a Longoria, both would then turn the profits over to further player acquisition (or to revenue sharing).

Apr 13, 2010 13:26 PM
rating: 1
 
Guancous

This article isn't advocating for a trade or predicting one will happen. It is pointing out how much value his contract provides the Rays. Point well made.

Apr 13, 2010 10:16 AM
rating: 5
 
cyborg

Actually the last paragraph of the article asks, if you were the Rays would you accept any of these trades?

So, with that, I would disagree as the article's summary point clearly is advocating for contemplating these trades. The fact that none of the other teams would consider any of these deals makes, IMO, the article pointless.

Apr 13, 2010 10:58 AM
rating: -3
 
Richard Bergstrom

I guess it depends on if it is a keeper league and what stats count, but I'd consider Tulowitzki to be very valuable. Something like Tulowitzki and Greinke might be too rich, but both have very favorable contracts.

Apr 13, 2010 10:25 AM
rating: -3
 
macolyte

The major leagues are a keeper league, or am I missing something here? The real take-away I took-away from this piece, which is both fascinating and fun, is that there is no comparable to the deal the Rays have with Longoria. Nothing they can get straight up which could serve them so well over the life of his contract. More than that, if they could find a multiple player swap which interested them, the risk (in a 2 for 1, for example) becomes twice as high that they would get half the value. Easy to see. Very cool.

Apr 13, 2010 11:03 AM
rating: 2
 
fellajsmall
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The Rays would trade away Longoria in every one of those deals...cool idea for an article but its not even close to reality.

A better proposition might have been: Brian Mccann and Jair Jurjjens...something like that.

Apr 13, 2010 11:03 AM
rating: -5
 
chewbalka

Had fun with all three scenarios but I would have gone after Strasburg to make the Tampa pitching staff a knockout. Considering their division it might be the only area they can dominate, plus they have Jennings coming so as good as Heyward and Stanton look, they still have some stud hitters.

Apr 13, 2010 11:08 AM
rating: 0
 
chewbalka

And no, I would not reject any of the other "deals" because my bottom line would be getting two hitters for one so you would always be able to trade one of the guys for a favorable contract situation.

Thanks for the article Tommy.

Apr 13, 2010 11:20 AM
rating: 0
 
rsambrook

Great article, Chris and Ben shouldn't assume what other readers want to see here. This is obviously not a ridiculous trade speculation article. I believe he was merely underscoring what a great asset the Rays have in Longoria's contract. By comparing the valuation to some over the top player combo's on other franchise's, he's achieved that handsomely.

Apr 13, 2010 11:43 AM
rating: 6
 
nghunter

Actually, I am with our author here. I don't think the Rays do any of those deals. I think the thing that has not been mentioned (and is incredibly important) is that The Rays have serious budget constraints. So, there's a big difference between paying $40 million for $140 in value versus paying $120 million for $220 million (or even $250 millon) in value. This is both true because paying $40 million for one player is much more palatabe to The Rays than $120 for two players and (somewhat relatedly) because the ratio of benefit on $40 mil for $140 mil versus $120 mil for $250 mil is much better. Getting more than three times your investment in value is a lot better than getting two times your investment in value even if the net benefit is lower.

Thus, the more likely package to work would be a group of 5 young players all pre-arb eligible with juicy contracts and solid to excellent prospective futures. Of course, this assumes such a group exists on 1 team (though multi-team trades are doable) and that The Rays need the "bulk."

Apr 13, 2010 12:34 PM
rating: 2
 
Kampfer

maybe like 3 Yunel Escobar?

Apr 13, 2010 12:41 PM
rating: 0
 
krissbeth

Actually, the Rays have such a good farm system that they don't need the bulk, especially in the OF and SP positions.

Apr 13, 2010 13:28 PM
rating: 0
 
Kampfer

The fun thing is, the more I think about it, the more reasonable those deals are. I think if the Rays actually pull the trigger, they may be the loser except the Zimmerman package. People keep on forgetting what the extra dollars you save from Longo can do for you. You can go shop for all the boring but cheap veteran like the Damons and the Cabreras with dollars saved. At the end of the day you may actually field a better team! Remember that the money can be turned into wins too, unless you are into buying the corpses of formerly good players

Apr 13, 2010 12:36 PM
rating: 3
 
AlexMcCrum

Pricing "untouchable" guys seems like a useful idea to me--I mean, if the Rays really were offered one of these trades wouldn't this be how they'd have to think about it? And what's more, if it weren't for the untouchable status of players like these, plenty of teams might be able to make mutually beneficial deals. That said, I don't think any of these really are.

The Nats really would alienate their fanbase a lot by trading Strasburg--and he'd be replacing a pretty good pitcher in Tampa, one who will eventually cost less than Strasburg will. Granted, that pitcher might be traded for someone useful in another area...

Heyward/McCann has similar problems--Heyward would block quality players and how badly does Chipper Jones want to move back to LF? Plus, the risk of a catcher adn a 20-year-old would seem to make it the sort of deal you don't want to make from Tampa Bay's perspective. I also thing Atlanta benefits more from spreading that offensive value into two spots than TB would.

Finally, HanRam and Stanton are more useful to Florida than they are to Tampa Bay--who would replace them? Certainly not quality players like those they'd block or force trades of in TB.

It seems to me that the way to make a value superstar trade work would be in a way that reallocates resourses to free up blocked players, or between teams with different goals.

Now, suppose that Milwaukee falls out of contention this year (I know, a shock) and that neither Burrell nor Blalock succeeds as DH in Tampa Bay (also a shock, I know). How about trading Longoria and Jeremy Hellickson (or whoever happens to be 6th on the Rays depth chart by midseason) for Ryan Braun and Prince Fielder.

If the Rays are in a pennant push, making Prince the DH for a couple months, sliding Braun into left, Zobrist back to 2B, and whoever is better between Reid Brignac and Sean Rodriguez over to 3B. Think about that lineup for a moment.

The Brewers trade their two best (and most popular) players, but in return get a new (and cheaper) franchise player while unblocking their top prospect (who could now be either their LF or their 1B) and probably acquiring their second-best pitcher. All while saving money to make use of later. And the Rays? They probably make themselves World Series favorites.

Apr 13, 2010 13:41 PM
rating: 5
 
louisbarash

I agree that the article is an interesting way to analyze players and the value of their contracts. I don't see it as designed to generate the talk radio trade nonsense that appropriately doesn't appear in BP.

One thing that is not discussed is whether it is better to have all that value wrapped in one package or two. I agree with the comment above that having two players diversifies the risk. On the other hand, when any of these players' contracts expire, they are going to be expensive to sign at market value. A small market team might be able to sign one of them, but probably not two, suggesting that having max WARP in one player is an advantage.

The article made me wonder: who is Longoria's agent? Over the first three years of the deal, he got less than $1 million over the minimum (and less if Longoria turns out to be a super 2 player). For the three arbitration years, he got substantially less than Longoria would make even if he turned out to be 1/2 of the player he has become. And while the club options may have seemed like big money at the time to a player who hadn't played a few major league games, they are club options and Longoria will get that money only if it is to the Rays advantage and Longoria's disadvantage; (note that it is not three separate option years; the first year is an option and then the Rays can pcik up the last two). The upside of this contract to Longoria is that it gave him the security of about $13.5 million if he had a career ending injury (or turned out to be a bust, which I guess was possible). The downside is that he walked away from a potential of at least $50 million (I assume here that he would average $20 million/yr in his first three free agent years and half that in his three arbritation years; based on the numbers in the article, that is conservative). Baseball life is short. Longoria will be thirty when he signs his next contract. Walking away from $50 million or more from a players' peak production years is money that is never going to be recouped. I think this was a poor deal.

Ps The answer to the question is that Paul Cohen is Longoria's agent. He is also the guy who signed up Troy Tulowitski for six years @ $30 million. Here is an article discussing those signings, which recognizes both sides of the issue: http://www.sportsagentblog.com/2008/05/08/take-the-money-and-run-or-walk-hard-and-wait/ What it doesn't mention is that the well established agents (e.g. Boras, Tellem, the Hendricks) have made and will continue to make enough money that any one contract won't make their year, and they are in a much better position to urge clients to take risk than agents who do not have many big ticket clients and a single $30 million contract is a huge percentage of their revenue. On the other hand, Boras (among others) has made so much money that his incentive is to hit a home run every time, and he may urge a client to take too much risk (as he almost did with ARod two years ago). When dealing with this much money, it is a high wire act.

Apr 13, 2010 16:13 PM
rating: 7
 
jsullivan03

The only thing I think you're overlooking here is the fact that a professional athlete has a very narrow skillset that erodes quickly. While it's easy to look at Longoria's contract from the team's perspective and say that it's a fantastic deal for them - which it is - I think it's more difficult to say that it's a bad deal for the player. At the time he signed, Longoria had *one week* of service time; he was guaranteed nothing more than the terms of his original pro contract, the majority of which was probably the $3 million signing bonus he received out of college. That's not an insignificant sum of money, but his new deal guaranteed him $17.5 million.

He had very little leverage to negotiate a higher salary for the next three years, during which there's just a ton of uncertainty from an athlete's perspective. If he suffers a catastrophic injury during this period, he wouldn't even make it to arbitration. So while the deal is insanely club-friendly, this is due to the fact that a team can afford to be less risk-averse than a player. They spread their risk over many assets while a player has his risk concentrated in a single asset - his baseball skills - whose utility doesn't transfer to other industries very well.

Apr 13, 2010 20:19 PM
rating: 3
 
vtadave

Love to see a Matt Kemp feature next. Kemp is a bit pricer give his 2/15 deal and one more year of arbitration that could be worth another $15 million, but what would be his worth on the market? Pedro Alvarez and Garrett Jones? Neftali Feliz and Justin Smoak? I can see why others would find this piece less than admirable given the BP target audience, but lighten up - this is fun.

Apr 13, 2010 22:33 PM
rating: 1
 
saigonsam

I liked the article although I don't think the risk of losing Longoria to an injury (or collapse) was taken fully into account.

Without doing the math, I doubt the Brewers would give up the combo of Braun/Gallardo for Longoria.

Apr 14, 2010 02:37 AM
rating: 0
 
amazin_mess

Adding comments was the worst thing ever to happen to BP.

Apr 14, 2010 16:56 PM
rating: 2
 
mcjacob
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everything you say is shit.

Apr 15, 2010 12:38 PM
rating: -5
 
amazin_mess

Go fuck yourself, pal.

Apr 15, 2010 15:53 PM
rating: -2
 
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