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Friday, August 29, 2008

Draft Pick Compensation vs Trade Return

I’m not sure when this came online, but I do not remember seeing it mentioned here. Usually I seem to mention Camden Depot and sometimes (or maybe once) Repoz did.

This article is interesting as it uses the Adam Dunn trade as an example and impetus to analyze what one really gets when you choose draft pick comensation over trading a guy. It would have been nice if he had compared it to the Soriano non-trade. Instead of dealing, they got Josh Smoker who seems to have a lively arm, but batters have a lively piece of wood against him. Ooh, that came out wrong. They also got Micheal Burgess who has some incredible power in the Salley League, but also strikes out a bit. Both are 19, so the minors are their oyster still.

For a type A free agent, you have a 63% chance of getting a MLB player if you are able to receive a late first round pick. That drops to 51% chance if the late first round pick is replaced with an early second round pick. In addition, a type B free agent is associated with a drafted player who has a 29% chance of reaching the bigs.

louproctor Posted: August 29, 2008 at 08:39 AM | 5 comment(s)
Related News: Sabermetrics, Arizona, Cincinnati

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1. Harold Reynolds: An Erotic Life (AG#1F) Posted: August 29, 2008 at 12:21 PM (#2921487)

A nice simplistic analysis, but the threshhold of "one year in the majors" is kinda low. Unless I'm mistaken, his analysis would put Alex Rodriguez and Tony Pena Jr. as having the same value.

2. ColonelTom Posted: August 29, 2008 at 12:41 PM (#2921522)

I looked at this a bit myself back when Dunn was traded - as I recall, I looked at a 7-year period and found that 1st-round supplemental picks got to the majors at about a 50% rate, and only about 10% had any meaningful impact beyond your basic roster filler (my threshold was arbitrary, admittedly).

3. Monsieur Valentin Posted: August 29, 2008 at 02:37 PM (#2921697)

It should be noted that the sandwich designation is artificial as the size of this group changes each year as it is dependent on the activity in the free agent market.

Very true, and it can make a big difference in the value of the compensation picks. Last year the sandwich round was 34 picks, meaning that a type A pick could range anywhere between 16 and 79. This year the sandwich round was only 16 picks deep, so the worst comp pick would be at 61. I think the variability of the comp picks depress the value of rentals like Dunn more than fans realize.

4. louproctor Posted: August 30, 2008 at 09:45 AM (#2922692)

I think the liberal way in which he values the draft picks shows the best possible scenario. That way the only thing you can say is that he overvalues draftpicks. It makes the analysis somewhat easier to see how lop-sided trading for minor league talent is in comparison to major league talent. In fact, he writes:

This is a low bar of success, but I think it suits our purposes as it will overvalue the draft pick slightly.

The range of 15-30, 31-45, etc also seems to fit that liberal value for a draft pick.

That way I look at it is even with the best situation possible for a team trading away a type A free agent, what is the best that could happen with getting those picks.

5. Darren Posted: August 30, 2008 at 10:16 AM (#2922709)

I've long used Philly's great draft studies (one example here) in considering this question. If you look at his (or Rany's) work, you'll see that, on average, the "2 free picks" amounts to very little. You're looking (on average again) at a #30ish pick and a #40ish pick. #30 is going to average around 9 WARP3 and #40 is going to average around 2.5 WARP3. Combined, there's about a 1/6 chance that these two picks will result in a single 20 WARP3 player (Rico Brogna is the example Philly gives). You also have to pay their bonuses.

This is why it makes sense to trade a player like Dunn for B prospects who are near Major League ready. Owings+ seems like an improvement over what you'd get with these picks.

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Friday, August 29, 2008

Draft Pick Compensation vs Trade Return

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