There has been some incredible research done on the value of prospects, especially by Victor Wang. You can read his full reports here (beginning on page 3) and here. His reseach has enabled me to share some ideas with you, the loyal readers of Pinstripe Alley.
Through some extensive research, Wang concluded that players ranked in certain levels of Baseball America's prospect rankings had an average amount of value to his parent club. His chart can be found here.
On top of Wang's research, I will also be using another incredibly valuable tool: Sky Kalkman's Trade Value Calculator. His calculator is quite simple. Plug in an individual's past WAR and his salary for those years. Keep going throughout the life of the contract, and insert future projections of WAR. The calculaion then gives you a player's net worth, or trade value. It also allows you to choose if the player will be a Type A or Type B free agent.
When an organization is looking to make a trade, and especially a major one, there are five things that go into encapsulating a player's value to an organization. Teams must assess the player's present skill, future potential, how long the player is under team control, the expected costs of paying the player, and the risks involved with projecting future performances.
There are reasons players like Miguel Cabrera and Alex Rodriguez do not have high trade values. Their contracts are enormous, and teams are extremely hesitant to take on long term commitments. Dave Cameron provides a nice example of this:
Often times, a team trading the player of value with a significant contract will offer to pay a portion of the remaining amount due to the player in order to increase the return they’re getting in talent. There is no way around it – teams are explicitly stating that they value player X at a certain threshold when he’s paid salary Y, but they value him at a higher amount if he only has to be paid salary Z instead. His value is inextricably tied to how much money he earns.
Due to this, prospects, young players, and players with very team friendly contracts have incredible trade value, especially when they are extremely talented. When guys are rated in Dave Cameron's Top 10 Trade Value, you can be sure that they have team friendly contracts and are very skilled baseball players.
For the purpose of this post, I will be looking at Josh Johnson. He is a player I would love to see the Yankees look into as a potential trade target, and the young right hander came in at number 9 on Cameron's Trade Value list.
Using Kalkman's Trade Value Calculator, I plugged in Johnson's salaries for the 2011, 2012, and 2013 seasons. For these three years, he will be making $7.75MM, $13.75MM, and $13.75MM, respectively.
Now, it is time to predict his future WAR. In 2009, Johnson had a 5.6 fWAR, and a 6.3 fWAR in 2010. For 2011, 2012, and 2013, let's assume Johnson stays healthy. These three years will cover his age 27, 28, and 29 years, so he will be in his prime. Due to this, there is no reason to expect him to regress significantly. Additionally, his career FIP, at 3.13, is very close to his career ERA, at 3.00. During his outstanding 2010 season, his 2.30 ERA was very close to his 2.41 FIP. To put it simply, Josh Johnson is a very good pitcher, and there is no reason to expect him to regress or collapse, especially since we are assuming he will stay healthy throughout the life of his contract.
Therefore, it is safe to say his WAR will most likely fall somewhere between his 2009 and 2010 seasons over the next three years. For the sake of this post, let's assume he is a 6 win pitcher per season over the remainder of his contract.
According to the Trade Value Calculator, Johnson will be worth $47.1MM in net value, or trade value. Now, we need to head back over to Wang's prospect chart to see who the Yankees would need to give up in order to trade for Johnson. In this hypothetical trade, the Yankees will keep Jesus Montero and Manny Banuelos, but the talent leaving the organization will still be painful to see.
Gary Sanchez, ranked number 30 on Baseball America's top 100 list, will be on his way out. According to Wang's chart, he is worth $23.4MM. Dellin Betances, ranked number 43 on Baseball America's list, will also need to go to Florida. As a top 50 pitching prospect, he is worth $15.9MM. Andrew Brackman, ranked number 78 by Baseball America, will also be on his way out. As a 75-100 pitcher, he is valued at $9.8MM. An added filler prospect such as David Adams, a Grade C+ prospect as graded by John Sickels, should finish off the deal nicely. Grade C prospects, age 23 and higher, are worth $0.5MM.
The Yankees receive Josh Johnson and agree to pay the remainder of his contract. His total projected value is $47.1MM in net worth. The Marlins receive Gary Sanchez, Dellin Betances, Andrew Brackman, and David Adams, totaling $49.6MM.
There you have it, folks. Prospects are valuable, but so are aces with team friendly contracts. It would be hard to see all of that talent and potential leave the organization, but Josh Johnson is an outstanding pitcher.
I would pull the trigger on this trade. Would you?