First things first, I’m an Englishman and baseball is my favourite sport [I’m English, so Americans, you’re getting an extra “u” there]. This makes me rather unusual in my home country. Most popular in English sport is soccer, a ball game you play with your foot [let’s not go there]. I’m guessing there may be a few Premier League fans here who read Fangraphs, but with the assumption that most of you won’t have much interest it, I have a suggestion to fix some of MLB’s financial problems by importing an EPL solution. MLB needs proper prize money.

I’ll address the elephant in the room. It might sound a bit mad to try and fix MLB’s financial problems by importing strategies from the Premier League, where free-market capitalism is stronger than in MLB and player contracts on small teams can be bought out by rich teams in player transfers. It made it hard to compete if you weren’t a rich team, until recently. In 2016, Leicester City became the only team in 20 years to break the strangle-hold the four richest teams have had on the Premier League title. One reason they managed it might be the way the EPL shares its money out.

Most money made in sport today comes from the TV rights deals made so fans can watch their teams play without needing to go to the stadium. The EPL does this better than any other sport, so despite coming from one of the world’s middle nations in terms of population, it brings in more money per team than almost any other. It does this by the league selling all the commercial rights collectively. This income gets shared out as prize money between the teams based on their records at the end of each season, with a good baseline for all. This meant that last year, Sunderland, finishing as the worst team in the league, got £93.5m ($132m – I’ll convert all figures to dollars from now on) and Chelsea, who won the league, got $212m in prize money. The worst team received around 62% of the prize money the best team did.

Baseball’s TV rights money is (mostly) negotiated separately team-by-team and is one major cause of the variance between incomes of the rich teams and the small teams. One reason the Yankees and Dodgers have the highest payrolls is because of the huge chunk of TV money they collect. The reason the Rays, Pirates and Marlins are at such a disadvantage is because they can’t collect anything like as much. The result is, in order to be competitive at all, they might need to consider losing more, draft well and return to competitiveness in a few years with good, cheap, young players. Financially, they don’t really lose out much by doing so and there are great risks in spending beyond their means in free agency to try and improve (both in results and financially).

It might also lead small and mid-market teams to be conservative in the free agent market. A lower income team might not risk signing a player to a big contract as one big mistake prevents them having the money to fund a good team with their financial burden. A common belief amongst Braves fans was their rebuild in 2014 was in part precipitated by the two big contracts that started producing little on-field value in Melvin Upton and Dan Uggla (together $25m for around zero WAR in 2013 and 6 years left on their contracts). With their good performance, the Braves might have made the playoffs. Without it, they didn’t have the money to replace them, leading to mediocrity or a rebuild. The risk of a big contract failing to provide value dissuades small-market teams from signing free agents much more than big market teams. This off-season’s cold stove has also seen high-income teams saving rather than spending. But there may be a way to encourage the lower-income teams to spend more:

Distribute significant prize money based on winning percentage at the end of each season, funded by collectivizing the TV rights money for all MLB teams. [You could also add a bonus pool for playoffs]

This would do a number of things. Assuming a breakdown of prize money like in the EPL, outlined above (worst team gets 62% prize money of the best team), it would give a higher baseline income to the very low-income teams like the Marlins/Rays/Pirates/A’s. The Marlins new management claimed the club’s losses required them to lay off their expensive contracts this winter. They flooded the market with good players which helped suppress the FA market. The Rays wouldn’t need to trade Longoria for money reasons. The A’s wouldn’t need to trade any good player they have who gets too expensive in arbitration.

The prize money would also provide better financial incentives for teams to try to win more games. The Royals made some significant payroll increases when they started winning in 2014-15 because of the extra revenue it generated. But the majority of that revenue came from their playoff appearances. This method would also provide some incentive to the mediocre teams. The last few years have seen mediocre teams like the Braves, Padres, White Sox and now the Marlins and Pirates trade away some decent core players through having little incentive to remain mediocre and aim upwards. Having good players on the trade market every offseason has (in part) led to the “super-teams” and “rebuilding-teams” dynamic and is likely helping suppress free agent contracts. Let’s say that being mediocre led to $30m more in prize money than being awful. That money might motivate some middling teams to spend and push upwards to the playoffs rather than trade downwards to a rebuild. Middling teams spending more might also threaten the positions of the “super-teams”, pushing them into spending more in the free agent market.

Coda:

The EPL still hasn’t fully overcome its problem with rich teams winning the league every year and poor teams having no chance. Manchester City is amongst the league’s richest teams and are top of the league by a long way this season. Chelsea (another rich team) won last year. The original winning/financial inequality came about because the top four teams (Man U, Arsenal, Liverpool, Chelsea) qualified for the Champions League every year so got significantly more income (through its TV rights) than those who didn’t qualify. This led to the same four rich teams filling the top four positions in the league from 2003 to 2009, often because they could afford to buy other team’s best players. That aspect hasn’t really changed; only five teams have won the title in 20 years. However, as the prize money in recent years went above $80m for the bottom placed team, the mid- to lower-income teams were able to afford really great players too. If you watch every week you can’t help but notice how much more competitive every game is now. Rich teams are often beaten by poorer teams; Manchester United dropped out of the top four, so did Liverpool, replaced by Spurs and Manchester City; Leicester won the title. It made the league more competitive and better to watch. Perhaps until this year when the transfer market went bananas and suddenly $132m might not buy much anymore. This year’s Man City team could be like this year’s Yankees team. Rich and dominant. I’m sure fixes will be needed in future to stop the dominance of money. But baseball could still learn a thing or two from the Premier League.

Resource:

http://www.telegraph.co.uk/football/2017/05/16/premier-league-2017-prize-money-much-club-line-earn-season/

http://www.bbc.co.uk/sport/football/40125394

https://www.forbes.com/teams/kansas-city-royals/

https://en.wikipedia.org/wiki/List_of_professional_sports_leagues_by_revenue

https://www.fangraphs.com/blogs/estimated-tv-revenues-for-all-30-mlb-teams/

Who got the most out of the Shelby Miller trade?

At the moment, based on present values of prospects, players and wins? It’s the Braves. Based on the industry consensus? It’s the Braves. Based on which team will be better next season? Maybe still the Braves. How did Arizona get so comprehensively fleeced in this deal? There have been some great articles written on FanGraphs these past two weeks about the GM of the Arizona Diamondbacks. Dave Stewart seems to want to do things differently from all other teams, going with his gut when building a roster. Gut decisions can work. His gut identified Shelby Miller as a good player and so wanted him on his team. But wow did this gut decision miss something. How much something? How about 225 million dollars?

That’s right, I am suggesting that, with present values of prospects, players and wins, Dave Stewart, GM, gave away $225M more value in this trade than he got back. See below for how I got to that number.

FanGraphs’ staff have been using a great contract tool recently to estimate the value of major-league free agents. It estimates that players get better each year until aged 27 then worse each year after reaching 31. I’ll be following their method, which estimates an aging curve using WAR where players improve by 0.25 WAR each year in their 18-27 age years, keep steady WAR in their 28-30 age years and get worse by 0.5 WAR each year in their 31-37 age years. It also includes an inflation increase in the market value for each WAR, starting at $8.0M in 2016 and increasing by 5% each year going forwards.  We end up with an estimated value for players over the lifespan of their contract.

I’m going to use last season’s FanGraphs WAR as the starting value for any major-league players (I’ll discuss the minor-league prospects later). I realise I could use ZiPS or many other predictors of players performance (which offer much lower WAR values), but it seems fair as both major-league players in the deal have some issues with their peripheral numbers that seem to balance out. The tool is an estimator based on current performance, so it seems fair we start with what they achieved this last year. Anyway, let’s get started.

The Major Leaguers

Shelby Miller (worth $98.48 M) – to Arizona

Ender Inciarte (worth $172.91 M) – to Atlanta

Holy cow! Not looking good for Arizona already. Shocked how much Inciarte is worth by this model? Me too. Those wins get expensive. He’ll do well to keep his performance at this level, but I’d argue that Miller has the same issue.

The Minor Leaguers

This isn’t quite as simple to work out. Minor-league players have a habit of not making it to the majors (an average 70% bust rate of ranked players not making a significant contribution to the major league team, according to this excellent article by Scott McKinney). I have used the valuations on ranked MLB prospects from Kevin Creagh and Steve DiMiceli with a couple of modifications.

Summarised, using historical prospect rankings, they took prospects ranked between 1-100 in the top prospect rankings each year and found the average WAR produced over their first six major league seasons at different rankings. These values are in the table below:

Creagh and DiMiceli were looking at surplus value produced by a prospect. I’m more interested in total value. For each ranked prospect (Blair and Swanson) I found the average WAR produced by historical players with a similar prospect ranking (potentially flawed; I’d probably prefer median WAR for each group), then used an inflation model (again 5% per year starting at $8.0M/WAR in 2016) and an assumption that 2/3 of a prospect’s value is accrued during years 4-6 in the majors to find an estimate for total value.

Finally, some minor-league prospects don’t improve enough to reach the majors (they “bust”) so they aren’t as valuable as major-league players. This reduces the value of the prospect. Lower-ranked players are more likely to bust than higher ones so they should have a greater reduction in their value. The historical likelihoods of a prospect bust are shown in the table above (Bust % Zero WAR or less) for different ranks of prospect (again from Creagh and DiMiceli).  To account for the chance of a prospect bust I reduce their value by a factor of the bust percentage, taken from the table above (% Zero WAR or less). It isn’t perfect, but seems reasonable, I’m happy to discuss in the comments.

Dansby Swanson (worth $137.2M) – to Atlanta

• #10 prospect currently (on MLB.com)
• Hitter
• Worth 15.6 WAR on average in years 0-6
• Arrives in majors in 2017
• 33% of value in years 0-3 (at 2018 cost per WAR) – 5.2 WAR – $45.76M
• 67% of value in years 4-6 (at 2021 cost per WAR) – 10.4 WAR – $105.04M
• Bust chance of #10 hitting prospect – 9%
• Estimated total value – $137.2M

Aaron Blair (worth $14.85M) – to Atlanta

• #61 prospect currently (on MLB.com)
• Pitcher
• Worth 3.4 WAR on average in years 0-6
• Arrives in majors in 2016
• Assume only lasts 3 years in majors (due to low WAR total)
• 100% of value in years 0-3 (at 2017 cost per WAR) – 3.4 WAR – $28.56M
• Bust chance of #61 pitching prospect – 48%
• Estimated total value – $14.85M

Gabe Speier (worth $negligible) – sorry Gabe – this trade wasn’t about you.

Final value totals

Arizona:

• Shelby Miller – $98.5M

Atlanta:

• Ender Inciarte – $172.9M
• Aaron Blair – $14.9M
• Dansby Swanson – $137.2M
• TOTAL – $325M

DIFFERENCE IN VALUE – $226.5M

There are a number of obvious caveats here. Miller could be better than this, Inciarte may not be that good, Swanson may never make it, Blair may never make it. However, at this moment, these are some of the values that you could reasonably ascribe to these assets. This is a staggering loss for Arizona. In what business can you lose $225M dollars in one transaction and keep your job? By this rather flawed measure, the Braves have just increased the value of their organisation by $225M. That pays for half a new stadium. Or Jason Heyward’s recent contract. Or the next 3 years of performance of Mike Trout (Trout is seriously valuable). I realise that the money can’t be accessed like that, but still, wow. Dave Stewart might be using his gut feeling when making deals, but he’d better start listening more to his analytics department or he’s liable to get robbed again.

A lot of the inspiration (it wasn’t plagiarism, honest) for this article came from Craig Edwards and his piece on “Attempting to rationalise the Shelby Miller Trade”. I just took it a different way. Thanks to Craig though! You should read it – http://www.fangraphs.com/blogs/attempting-to-rationalize-the-shelby-miller-trade/

Wow. Craig Kimbrel traded right before the start of the season. I have to admit to being rather shocked. I know the Braves are rebuilding this off-season and it made sense to trade him. He is very highly valued for a player who only pitches 60 innings a season, perhaps over-valued. If the Braves are going to be hopeless this year then who needs a dominant single-inning pitcher?

The trouble is I love watching Kimbrel pitch, no matter the situation. I live in London, in the UK, so a lot of Braves games happen from 1-4am and I don’t get to watch them live. Every morning I use my MLB.com subscription to check the last night’s action. If I don’t have the time to watch the whole game, which is common, I skip to the innings where the Braves scored plus any inning Kimbrel pitches. Pace, a banana curveball and strikeouts, Kimbrel is one of those rare players who is worth watching every minute he plays. Even when he is (rarely) hit you feel a strikeout is coming next. So emotionally, I hate to see him traded (just like I hated seeing Heyward traded). Lots of reporters are saying the trade is a good deal for both sides or an outright win for the Braves, so in emotional despair, I thought I’d have a proper look into it.

The facts of the trade

To the San Diego Padres:

• Craig Kimbrel – 3 years at $34.75m (includes option buyout) or 4 years at $46.75m
• Melvin Upton Jr – 3 years at $48.15m

To the Atlanta Braves:

• Carlos Quentin – 1 year at $11m (includes option buyout) or 2 years at $18m
• Cameron Maybin – 2 years at $16.2m (includes option buyout) or 3 years at $24.2m
• 2 prospects and 41^st pick 2015 draft

N.B. Bold text highlights the likely choices.

I’ll not be analysing the prospects in much detail, instead ignoring the less relevant trade pieces and looking at the end outcomes. My method is below, but if you like, skip to the summary, that’s the important bit.

Methods

From the Padres POV

• Upton not wanted/needed. Treat him as a league-minimum replacement-level 5^th outfielder for 3 years (cost $1.5m). Add the rest of his salary to the Kimbrel contract.
• Dumped 2 unneeded players and $27.2m in contracts off the books. Remove these values as savings for the Kimbrel contract
• Gained Craig Kimbrel. Assume option taken (it is great value – see later*). Contract for 4 years at $46.75m – $27.2m (from Quentin and Maybin savings) + $46.65m (Upton cost)
• Given up 3 prospects (effectively); 1 good (Wisler), 1 risk (Paroubeck) and 1 draft pick

I feel these are all reasonable assumption/treatments. The Padres want Kimbrel, don’t care much about what they get from Upton (assuming he continues as in 2013-14) and used the Quentin and Maybin savings to pay for it all.

From the Braves POV

• Quentin not wanted/needed (not sure why – seems a better bench bat than most and nobody will trade for him as they know they can get him for minimum once the Braves cut him). Add his contract to the 2015 payroll – $11m
• Maybin – Assume continues poor health/form and option buyout is taken. Treat as decent defensive replacement OF (23 career DRS in 8 years). Possibly gets 75 games a season but produces nothing more than T.Cunningham in AAA so set effective salary to league minimum – $1m for 2 years. Add rest of his contract to 2015-16 payroll ($15.2m over 2 years)
• Payroll changes:
  • Savings – Kimbrel ($46.75m – 4 years), Upton ($48.15m – 3 years)
  • Wastings – Quentin ($11m – 1 year), Maybin ($15.2m – 2 years) – both include buyouts
• Receive 3 prospects (effectively); 1 good (Wisler), 1 risky (Paroubeck) and 1 draft pick

Again, I feel these assumptions/treatments are reasonable. Maybin may produce better than this, but his batting numbers were as bad as M. Upton the last few years (70-80 wRC+) so I don’t think we can expect much more of him than Melvin (apart from his defence being better).

Summary

Padres POV

• Get Craig Kimbrel – effectively 4 years for $66.2m ($16.55m/year)
• Get spare replacement-level 5^th OF at minimum salary for 3 years
• Lose 3 prospects; 1 good, 1 risky, 1 draft pick

Braves POV

• Lose Kimbrel (and M.Upton)
• Get spare replacement-level 4^th OF at minimum salary for 2 years
• Payroll savings $67.7m over 4 years ($16.9m/year average)
• Get 3 prospects; 1 good, 1 risky, 1 draft pick

Analysis

Lots of contract money going back and forth, but the end result is that the Braves get payroll savings of around $17m a year for 4 years and 3 prospects and the Padres give up 3 prospects to get Kimbrel at a reasonable free agent price* of around $17m a year for 4 years.

If you consider that the Padres would have lost that 3^rd prospect (the draft pick) if they signed Kimbrel as a free agent, the deal starts to look pretty good for San Diego and AJ Preller. The Padres almost certainly wouldn’t have been able to sign Kimbrel as a free agent with other teams competing (everyone needs a Kimbrel and the Dodgers/Yankees/Tigers/Red Sox etc all have the money for him). The contract would certainly have been longer as well (see footnote on Kimbrel’s historic value*). The Padres are paying Kimbrel a lot, but the amount is fair and they didn’t give up much.

The Braves had signed Kimbrel to a much friendlier contract than he would have got as a free agent (he’s homegrown and a Braves fan so gave a large discount – again see footnote*). Kimbrel gets $13m /year for his free-agent years, when he could have had much more. John Hart effectively used Kimbrel’s generosity to swap the spare value for 3 prospects, one of whom is extremely risky (Paroubeck) and one who is completely unknown (the draft pick). The Braves have rid themselves of Upton, but in taking back other contracts they have effectively only saved the money they should have been paying Kimbrel (had he not given a home discount).

In conclusion, John Hart basically declared he didn’t want a well-paid but high-value closer and swapped it for one good (but not great) prospect and two unknown prospects. So how do I feel now? I would have preferred to watch Kimbrel play for my team every week… Enjoy it San Diego.

*A footnote on Kimbrel’s free agent value

Craig Kimbrel is currently 26 years old and 10 months. Below is a summary list of contracts for comparable relievers and their ages when signing.

You’ll notice that Kimbrel is younger than them all and although the average yearly value is not as high as Kimbrel’s $13.0m 2016 salary, the elite arbitration-eligible relievers are likely to beat them all (apart from maybe Rivera). If he were a free agent this last winter, you can assume that he would have been offered 5-year (and possibly longer) contracts.

Kimbrel’s career numbers are also historically unprecedented at his age. This has been said many times before, but my favourite Kimbrel stat is the WAR leaders for relievers over the last 10 years. Kimbrel has the 5^th highest WAR from 2005-2014. He entered the league at the end of 2010. Since entering the league in 2010 he leads reliever WAR by 1.5 over Holland and Chapman (who have comparable service time). Before signing his (very team friendly) extension Matt Swartz estimated his first year of arbitration salary should be $10.2m. For a detailed analysis of how much Kimbrel is worth I recommend you read his article (http://bit.ly/1GEjKyT). The point being, he is probably worth at least a $17m/year, 4 year contract.

References

http://www.spotrac.com/mlb/san-diego-padres/melvin-upton/

http://www.spotrac.com/mlb/atlanta-braves/cameron-maybin/

http://www.spotrac.com/mlb/san-diego-padres/craig-kimbrel/

http://www.spotrac.com/mlb/atlanta-braves/carlos-quentin/

http://www.fangraphs.com/statss.aspx?playerid=5015&position=OF

http://www.fangraphs.com/statss.aspx?playerid=5223&position=OF

http://www.fangraphs.com/blogs/evaluating-the-prospects-san-diego-padres/

http://www.baseball-reference.com/players/r/riverma01.shtml

http://www.fangraphs.com/leaders.aspx?pos=all&stats=rel&lg=all&qual=y&type=8&season=2014&month=0&season1=2005&ind=0&team=0&rost=0&age=0&filter=&players=0

http://www.mlbtraderumors.com/2013/10/arbitration-breakdown-craig-kimbrel.html