How to Evaluate a Trade

Yesterday, I did a short bit about the two parts to evaluating a trade. Well here’s the full post.

This will try to be as comprehensive as possible.  If I miss something, please post in the comments any additions you think should be made.

OK, so your favorite team wants to make a trade at the deadline.  So here comes a two part question.

1. Should your team be buyers or sellers?  Or should they stand pat?

There’s a pretty fine line between buyers and sellers and where that line is drawn is

  • a) how far out a team is from the division title or wild card spot and
  • b) how many teams are in front of it.

Highly cluttered division races tend to make a lot of buyers and distant division leaders create sellers.  The NL West right now is kind of close (as of July 30, Padres have 3-game lead over San Francisco Giants, who lead the wild card; 7-game lead over Dodgers).  The Giants, Padres and Giants are all buyers right now.

The problem with this, for the Dodgers at any rate, is there’s no player that’s worth 4 wins in only half a season that they could acquire.  So winning the division or the wild card is dependent upon their current roster playing better than they have. (This, if you’re wondering, is why I’m against the Dodgers being buyers).

Teams that should stand pat are generally teams caught in the middle: teams that are overperforming and close to the division title or teams that are underperforming and far away from the division title.

So should your team be a buyer, a seller or a stand patter?

On to question 2:

2.  What places does your team need to improve in?

This is the easiest question. Padres could use some improvement on offense, so they traded for Miguel Tejada.  Even if Tejada is washed up, he’s a surprising improvement to what they had.  And this is WITH the division lead.

For sellers, any good prospect is worth trading for, it’s just a matter of evaluation.  All things being equal, trading a player with two years left on his contract will net better or more prospects vs. a player with one year left.  Or at least it should.  The exception is if you’re Jerry DiPoto.

3.  Who’s available?

What’s out there that can match the holes you need filled.

4. What’s the market rate for a player in that position going for?

You’ll sometimes see a first trade happen for a pitcher or position player. This year, Jerry DiPoto traded Dan Haren, who was under contract for another two years after this year, for Joe Saunders, a decent prospect who’s a few years away and some spare parts. This was noteworthy only because it supposedly set a going rate for trades of high-level MLB pitchers, but as we can see from the Edwin Jackson trade today, that’s not so. Jackson was traded for a very good prospect in Daniel Hudson. Hudson may be worth more than Jackson as soon as next year.

Interestingly, though, Roy Oswalt went for roughly what Haren went for, even though Oswalt has fewer years and more money (per annum) due to him: a #4 starter in JA Happ, a decent toolsy player in Anthony Gose and another piece. Gose was then traded for Brett Wallace.

5. What’s the balance between giving up too much and giving up not enough at the time?

This is the trickiest part of trades and the most controversial. You’ll often see teams giving up prospects cry and whine about the prospects lost and the team giving up the marquee player in the trade whining about not getting enough. Quite often, the lower the stakes of the trade, the more “eh” reactions.

Most trades that fans are critical of involve a player of very good talent and prospects with very high ceilings. With good reason, too–those trades tend to be the ones that can build or destroy a franchise for 5-10 years. Delino Deshields for Pedro Martinez. AJ Pierzyski for Francisco Liriano, Joe Nathan and Boof Bonser.

There’s also trades that are on the other side: Adrian Gonzalez was traded by the Texas Rangers to the San Diego Padres for Adam Eaton and Akinori Ostuka (you’ll notice neither is with the Rangers anymore; but even worse, neither pitcher did very well in Texas). Mark Teixeira was traded from the Braves (who traded a lot to get him the year before) to the Angels for virtually nothing. It’s not only possible, but likely that the Braves would’ve gotten more for Teixeira if they just let him become a free agent.

And hilariously enough, the Angels drafted Mike Trout (currently the no. 1 prospect in the minors who hasn’t reached the majors yet) with the draft pick they received from the Yankees for Teixeira.

5a. Remember to keep in mind what the value was at the time.

I’ve posted about this before, but a lot of people don’t keep in mind value at the time. This is what leads to a lot of outrage–teams, and especially their fans, don’t want to get burned badly on a trade, but most times you don’t know if your team got burned until years after the deal.

However, there are deals that are easily objectionable at the time they happen. The Dodgers famously gave up great catching prospect Carlos Santana at the 2008 trade deadline for Casey Blake. Santana was a legit prospect at the time and has been crushing the majors this year, a year when the Dodgers are in desperate need of offensive help.

The point being, though, that high-risk high-reward prospects and very good prospects in the lower minors are more likely to be moved because, as you can guess, they’re more likely to be hit or miss. In those cases, more prospects are usually involved (five-prospect packages, usually).

The number of prospects and the skill level of those prospects will depend on four things:

a) the talent of the player traded for.
b) the player’s current contract, both how much he’s owed and how many years.

The most legit prospects go for the best players, usually, but sometimes you’ll see a trade that’s horribly unfair as it happens. A Mark Teixeira with a year and a half left on his contract should return more and better prospects than a Mark Teixeira with a half year left. A Dan Haren who comes cheaper over the next year and a half should return more than a Dan Haren who’s owed more. A four-prospect package should net a better player in return than a three-prospect package, all things being equal–though sometimes that’s subject to change

But those are “shoulds” and reality is sometimes different.

In which case,

5b. Use common sense.

Some fans latch onto prospects really hard. This is because prospects are dirt cheap if they hit the majors and are for years. This isn’t rational if the return for the prospects is worthwhile.

As you can guess, this:

Buster_ESPN
Heard this: The Astros are picking up a lot of the money owed to Lance Berkman in their agreement with the Yankees, and the NYY won’t be giving up any major prospects.#trades

is bad news for the Astros. If you’re giving up a good player with a heavy contract, you either want to give up the player’s money owed with him or get some prospects in return. The Astros may have gotten neither.

Yes, if you’re going to make a trade, both teams should be getting something out of it. If this rumor is true, then the Astros gain nothing out of losing Lance Berkman other than not having him on the roster. Some GMs are better than others at negotiating, so you’ll get lopsided trades. That’s just how it happens.

But with that in mind, we’ll start talking about trade deadline acquisitions tomorrow.

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