Baseball for the Thinking Fan

Login | Register | Feedback

btf_logo
You are here > Home > Baseball Newsstand > Baseball Primer Newsblog > Discussion
Baseball Primer Newsblog
— The Best News Links from the Baseball Newsstand

Tuesday, May 20, 2014

MLB: Stephen Drew signs 1-year deal with Red Sox (1Y/$10M)

Well that free-agent strategy could’ve gone better.  Scott Boras completely and utterly blew it for his client (obviously Drew would never have signed this deal if any serious multi-year deals had lurking out there).  I’m not entirely sure what the Red Sox are doing here, either…but at least they don’t have to give up a draft pick.

[T]hus ends an odyssey that started with Drew rejecting Boston’s qualifying offer of $14.1 million last November, only to return on a one-year deal that will pay him $10 million for the remainder of the 2014 season, multiple sources confirmed to MLB.com.

While the Red Sox haven’t announced the signing yet, manager John Farrell acknowledged that Drew will undergo a physical in Boston on Wednesday. Assuming there are no complications, the deal will become official then. [...]

Before Drew makes his debut for Boston in 2014, he will need a Minor League rehab assignment of roughly 25 at-bats, according to Farrell.

Rookie Xander Bogaerts, who has been the starting shortstop through the early part of the season, will move to third base once Drew is activated.

Depressoteric Posted: May 20, 2014 at 07:01 PM | 76 comment(s) Login to Bookmark
  Tags: boston red sox

Reader Comments and Retorts

Go to end of page

Statements posted here are those of our readers and do not represent the BaseballThinkFactory. Names are provided by the poster and are not verified. We ask that posters follow our submission policy. Please report any inappropriate comments.

   1. Walt Davis Posted: May 20, 2014 at 07:39 PM (#4710397)
I'm stunned.

He has basically signed for a pro-rated $14 M for this year only. He really doesn't think he can get some sort of multi-year deal in a few weeks when the draft pick comp goes away? I didn't expect anybody to go crazy but I figured he might get something like a deal through 2016 at $30 M. If it's true that he couldn't get an offer like that then the lack of interest in him had virtually nothing to do with the lost pick.

They can't offer him a QO next year so maybe he/Boras think he'll get a better multi-year deal at the end of this year but that risk doesn't make sense to me either.

In the end, declining the QO has cost him "only" about $4 M. A bad outcome obviously but quite possibly worth the gamble.

Moving Bogaerts to 3B strikes me as odd as well unless the Sox don't think his future is at SS. Note, I'm not saying this means they won't move him back to SS next year just that, if I was going to move him back to SS next year, I'd be telling Drew to move to 3B now and if he wouldn't sign under those circumstances then tough luck.

So, Gene, it's not a bad move but I'm giving it a thumbs down from both sides.
   2. bjhanke Posted: May 20, 2014 at 07:41 PM (#4710398)
Why is this supposed to be Scott Boras' fault? Yes, Boras plays agent hardball like he was Babe Ruth. But still, no matter how good an agent you are, you can't possibly know what deal may be out there once the season gets started. All contracts are, inherently, gambles. Your perennial injury case might suddenly rip off five healthy years (see Paul Molitor). Or your never-missed-a-game guy might blow his shoulder up tomorrow. As an agent, you have no way to control that, any more than the GM, who is the agent for the owner, can control it. The worst you can say about Boras is that he made a mistake. His percentage of mistakes is very low, which is why he is as famous as he is, but still is not a guarantee. If you have never made a mistake in your chosen profession, no matter how well compensated, go ahead and throw stones. I can't do that. - Brock Hanke
   3. Rough Carrigan Posted: May 20, 2014 at 08:00 PM (#4710406)
Brock. "You can't possibly know what deal may be out there . . "?
That assumes that agents can't talk to GM's before a guy becomes a free agent, that they can't act counter to rules prohibiting tampering. I have no inside knowledge but I would guess that Scott Boras has not always obeyed those rules. I would guess that Drew expected that Boras would break those rules and that knowledge gained from breaking those rules informed his advice to Drew to turn down the qualifying offer.
   4. Publius Publicola Posted: May 20, 2014 at 08:03 PM (#4710409)
His percentage of mistakes is very low, which is why he is as famous as he is, but still is not a guarantee.


I imagine Drew is finding that pretty cold comfort right now.

OTOH, maybe he can wipe his tears away with that 10 mil for 4 months of work.
   5. Davo Dozier Posted: May 20, 2014 at 08:04 PM (#4710410)
It seems like a very reasonable compromise to this Draft Pick Compensation problem might be to just make it a a one-time thing: If a player accepts it for the 2014 season, once that season's over, he's a completely free free agent, with no draft pick compensation attached ever again.
   6. Nasty Nate Posted: May 20, 2014 at 08:08 PM (#4710414)
if I was going to move him back to SS next year, I'd be telling Drew to move to 3B now


I think the defensive gain for 2014 of drew at ss and xander at 3b instead of vice versa outweighs the development gain for Bogaerts, considering he will probably end up w lots of SS innings this year.
   7. Bhaakon Posted: May 20, 2014 at 08:11 PM (#4710416)
The worst you can say about Boras is that he made a mistake. His percentage of mistakes is very low, which is why he is as famous as he is, but still is not a guarantee.


Is it? Not that there have been that many "mistakes" from the player side of the FA market, hardly anyone of significant profile signs below market, but I think Boras is more known for his home runs than his lack of strikeouts.

He makes a lot of risky players, usually they pay off, occasionally they pay off huge, but I wouldn't be surprised to find that he's had more deal blow up in his face than most other agents.
   8. Davo Dozier Posted: May 20, 2014 at 08:13 PM (#4710420)
#7--You may be right, but part of what would complicate this is that he works with more high-profile free agents than anyone else.
   9. eric Posted: May 20, 2014 at 08:27 PM (#4710430)
If you have never made a mistake in your chosen profession, no matter how well compensated, go ahead and throw stones. I can't do that.


I agree completely. In fact, I'd add that if someone never makes mistakes they probably aren't doing an optimal job. Kind of like poker; if you never get caught bluffing then you aren't bluffing enough and if you never make a call with the worse hand, you aren't calling enough.
   10. Jim Wisinski Posted: May 20, 2014 at 08:45 PM (#4710452)
He has basically signed for a pro-rated $14 M for this year only. He really doesn't think he can get some sort of multi-year deal in a few weeks when the draft pick comp goes away?


I doubt he can get the deal he wants, I've never believed that the draft pick was that big of a deal anyway. Drew was asking for ridiculous money for a player with his resume and at least at the start of the season reportedly wasn't budging from those demands; that's what scared teams off. Any multi-year deal would likely be much, much less than what he wanted, if he wants that big payday his best bet is to get out there, hopefully perform well, and go onto the free agent market with another good season under his belt.
   11. KT's Pot Arb Posted: May 20, 2014 at 09:23 PM (#4710475)
The draft pick was clearly a big deal to his key teams. Signing now makes him an unrestricted free agent with far more potential suitors than he would have had in June, supply/demand says this is a big win for Drew.
   12. villageidiom Posted: May 20, 2014 at 09:44 PM (#4710490)
It seems like a very reasonable compromise to this Draft Pick Compensation problem might be to just make it a a one-time thing: If a player accepts it for the 2014 season, once that season's over, he's a completely free free agent, with no draft pick compensation attached ever again.
There is no draft pick compensation problem. Drew and Boras went into the offseason with the QO, and with full knowledge that other teams would lose a draft pick if signing him. They misestimated the demand for his services on a multiyear contract.

Jody Reed similarly screwed up, and nobody claimed there was a Free Agent problem in need of a compromise.
   13. Jose Can Still Seabiscuit Posted: May 20, 2014 at 09:56 PM (#4710500)
There is no draft pick compensation problem. Drew and Boras went into the offseason with the QO, and with full knowledge that other teams would lose a draft pick if signing him. They misestimated the demand for his services on a multiyear contract.

Jody Reed similarly screwed up, and nobody claimed there was a Free Agent problem in need of a compromise.


Agreed. This is no more a problem than a team overpaying by $40 million and 2 years for some free agent. Drew/Boras misread the market, simple as that.
   14. KT's Pot Arb Posted: May 20, 2014 at 09:56 PM (#4710501)
There is no draft pick compensation problem. Drew and Boras went into the offseason with the QO, and with full knowledge that other teams would lose a draft pick if signing him. They misestimated the demand for his services on a multiyear contract.


Or they realized demand was soft because of the QO and knew taking it meant he would get another next year. They waited and got a far better deal that broke them out of QO hell and set Drew up for the biggest possible long term contract.

Guaranteed money >> one year contracts. Drew will be ecstatic even with a 4 year $40M deal that locks down an additional $26M guaranteed, all for low low cost of only $4M.
   15. Lance Reddick! Lance him! Posted: May 20, 2014 at 09:59 PM (#4710504)
Drew "screwed up" the way Kevin Millwood and Kenny Rogers screwed up, as will be demonstrated in about six months.
   16. Depressoteric Posted: May 20, 2014 at 10:28 PM (#4710521)
Or they realized demand was soft because of the QO and knew taking it meant he would get another next year.
I was under the (perhaps mistaken) impression that a team was not allowed to extend consecutive qualifying offers to a player.
   17. Nasty Nate Posted: May 20, 2014 at 10:31 PM (#4710523)
They waited and got a far better deal that broke them out of QO hell and set Drew up for the biggest possible long term contract.

Guaranteed money >> one year contracts. Drew will be ecstatic even with a 4 year $40M deal that locks down an additional $26M guaranteed, all for low low cost of only $4M.


Drew "screwed up" the way Kevin Millwood and Kenny Rogers screwed up, as will be demonstrated in about six months.


Drew's been a free agent for 2 straight years. Why do you guys think next year he will magically get some multi-year deal at a decent AAV? His age isn't going backwards.

If he had accepted the QO last fall, there would have been a solid chance the Sox wouldn't even want to extend him the QO after this year.
   18. RoyalsRetro (AG#1F) Posted: May 20, 2014 at 10:32 PM (#4710524)
There is no draft pick compensation problem. Drew and Boras went into the offseason with the QO, and with full knowledge that other teams would lose a draft pick if signing him. They misestimated the demand for his services on a multiyear contract.


I think its a bit of an issue if a player keeps having to sign one-year tenders and can not reach free agency because he's too good to not get a QO, but not good enough to get a long-term deal from a team willing to forfeit a draft pick.
   19. Nasty Nate Posted: May 20, 2014 at 10:40 PM (#4710526)
I think its a bit of an issue if a player keeps having to sign one-year tenders and can not reach free agency because he's too good to not get a QO, but not good enough to get a long-term deal from a team willing to forfeit a draft pick.


But the player doesn't have to keep signing them. If a long-term deal is his priority, he can sacrifice some money and sign one.

What might be considered a problem is that the QO affects different players differently for somewhat arbitrary and random reasons. The QO system didn't affect guys like Saltalamacchia or Anibel Sanchez at all, and it affected guys like Ellsbury and Cano less, proportionately, than Drew and Nelson Cruz.
   20. RoyalsRetro (AG#1F) Posted: May 20, 2014 at 10:42 PM (#4710529)

But the player doesn't have to keep signing them. If a long-term deal is his priority, he can sacrifice some money and sign one.


Not if no team is willing to forfeit a draft pick, as in the case of Drew and Morales.
   21. Nasty Nate Posted: May 20, 2014 at 10:45 PM (#4710532)
Not if no team is willing to forfeit a draft pick, as in the case of Drew and Morales.


How many millions of dollars do you think teams are valuing their pick?

Lots of teams would have forfeited a pick for those guys if the salary was low enough, otherwise they wouldn't have gotten a multi-year deal even if they didn't have a QO pick attached.
   22. Joyful Calculus Instructor Posted: May 20, 2014 at 10:53 PM (#4710536)
How many millions of dollars do you think teams are valuing their pick?


I'd guess about $6m. It seems like a good study for the fivethirtyeight guys.
   23. Roger McDowell spit on me! Posted: May 20, 2014 at 10:53 PM (#4710537)
I think it came down to Boras overestimating really only one team's interest - the Yankees. And frankly, I (and most of us) probably did too.
   24. Depressoteric Posted: May 20, 2014 at 11:45 PM (#4710556)
And frankly, I (and most of us) probably did too.
Yes, but it's not our job to make a proper estimate of such things. It IS his.
   25. Davo Dozier Posted: May 21, 2014 at 12:17 AM (#4710564)
The Qualifying Offer system--as currently constructed--is really bad for free agents who would typically sign something like a 3-year, $40MM contract...players like Stephen Drew or Nelson Cruz or Kendrys Morales. They just get stuck in a cycle where they're forced to keep accepting QOs, unable to ever secure a long-term contract.

I just don't see the downside in giving players like this "amnesty" from the QO system the year after they accept a QO. (In other words: Allow Drew to accept the QO the Red Sox made November of 2013, but with the condition that when he becomes a free agent in November of 2014, they can't make another QO, the market will be completely free, with no draft pick compensation for other teams to worry about.)
   26. Walt Davis Posted: May 21, 2014 at 01:14 AM (#4710576)
Not if no team is willing to forfeit a draft pick, as in the case of Drew and Morales.

But it's pretty clear this WASN'T the case for Drew. If the draft pick was the major hold-up to a long-term contract then, in three weeks when the draft pick disappeared, he'd have signed a long-term contract. Drew/Boras clearly did not think a long-term contract (to their standards) was awaiting them in three weeks.

Morales and his agent just made a very bad decision. I don't see how he was gonna do better than 1/$14 even without the draft pick comp.

The draft pick was clearly a big deal to his key teams.

Like above, there is no evidence of this. If it was that big of a deal, then he signs with one of these "key teams" (whoever they are) in three weeks, not today.


Signing now makes him an unrestricted free agent with far more potential suitors than he would have had in June, supply/demand says this is a big win for Drew.

I see no reason to believe this. Scenario 1: team has control over a SS for 2015 and beyond but Drew is better. If you want Drew for 2015 and beyond, get him in June 2014. Scenario 2: Team had control over a SS for 2014 and didn't want Drew for 2014 but loses control and will want Drew for 2015. Potential new market for Drew but how many teams is this and why not pick him up in June 2014 when supposed competition is light? Scenario 3: Team would have wanted Drew for 2014 without draft pick comp, now has a SS under control for 2015 and beyond ... no longer interested in Drew. Scenario 4: Would have wanted Drew in 2014, came up with a one-year solution, may still want Drew in 2015 ... again why not sign him June 2014 then and how many teams can this be?

I can see an argument the Yanks are in the hunt for a SS in 2015 and that can only work to Drew's favor. Beyond that, I don't see his 2015 market being better than his June 2014 market. And any advantage one does see in the 2015 vs. 2014 market has to be balance against the real possibility that Drew will put up a season like 2011 much less 2012.

In the end, I think we have to say our "best available information" is that nobody wants Drew on a multi-year contract for very much money and that's not going to change at the end of this year.

I'm not saying he made a mistake turning down the QO -- I thought he'd do fine. I'm not saying that, once it became clear that he wouldn't get that multi-year deal, that waiting until after opening day to sign was a mistake -- that was obviously a good move. I am saying the fact that he/Boras apparently don't think he can get a good multi-year offer in June 2014 means (if they're right) he ain't gonna get one for 2015 either and I'm willing to trust Boras on that.

Maybe it's strictly a money thing ... like Drew was asking for Peralta/Granderson type money and teams don't think he's worth it. But if that's true then there was little risk in accepting the QO -- he'd get a year at $14 and if the Sox offered the QO again then that's still a higher AAV than he can get. The main reason to turn down a QO when you're not a star is to sign a 3/$33 deal rather than 1/$14 and take your chances. But if that 3/$33 deal isn't out there, take the 1/$14 and take your chances.

Like I said, neither Morales nor Cruz (IMO) had a reason to expect 3/$33 was waiting for them, Drew did. But to take $10 now and your chances at the end of the year over, say, $30 through 2016 in three weeks looks like a bad choice for Drew. So to take $10 now tells me that $30 contract wasn't waiting for him.

But I've gotten this wrong at each step, no reason for me to get it right now.
   27. KT's Pot Arb Posted: May 21, 2014 at 02:16 AM (#4710583)
Drew's been a free agent for 2 straight years. Why do you guys think next year he will magically get some multi-year deal at a decent AAV? His age isn't going backwards.


Why do you ask such a misleading question when clearly his value in those two free agent years was severely compromised?

Stephen Drew massively destroyed his ankle half way through the 2011 season. He was still rehabbing almost half way into the 2012 season, which so frustrated the Diamondbacks that they bullied him into coming back early. He obviously wasn't ready, and stunk so badly they traded him for nothing a few months later. He finished 2012 with 79 games of .223/.309/.348/.657 and subpar defense that combined for sub-replacement level. Oakland declined to pickup a $10M option, and it's obvious why no one risked a long term deal on him given it wasn't clear whether he'd ever fully recover.

A healthy Stephen Drew was a valuable player, from 2008-2011 he averaged 2.9 WAR/year, including the half year in 2011 due to that shredded ankle. Per 150 games he actually averaged 3.4 WAR, and played in over 90% of games from his callup in 2006 till the ankle shredding. Last year he put up his typical 3.1 WAR, but in only 124 games, due to a concussion & a hamstring injury. So teams might still have been wary about his fragility (ie. because of his brother), but most importantly signing him for this year would have cost a draft pick valued at somewhere between $5M and $25M, depending upon who is doing the math (but smart people think it's clearly closer to $25M than $5M).

The compensation pick clearly hurt his market value, but now it's gone. He's a year older, but without the cost of the draft pick cost, if he stays healthy and plays to his standard this year, he will clearly be the most attractive free agent he's ever been. A healthy Stephen Drew is worth at least $50M on a 4 year deal, even if you think he'll only provide 8 WAR on it. Jhonny Peralta got $54M/4 years at 2 years older coming off a PED conviction.

What's really magical is how Boras managed to slip him out from under the yoke of the QO, and add at least $10-$20M to his off-season market value.

   28. KT's Pot Arb Posted: May 21, 2014 at 02:24 AM (#4710584)
I'd guess about $6m. It seems like a good study for the fivethirtyeight guys.


That implies an average output for a late first rounder of 1 WAR, when it is actually more than double that. So $10M should be the floor for the valuation, and given expected $/WAR for the first 6 years of control for 2014 first rounders is probably north of $6M, my guess is $15M is a more reasonable floor.
   29. KT's Pot Arb Posted: May 21, 2014 at 02:44 AM (#4710585)
But it's pretty clear this WASN'T the case for Drew. If the draft pick was the major hold-up to a long-term contract then, in three weeks when the draft pick disappeared, he'd have signed a long-term contract. Drew/Boras clearly did not think a long-term contract (to their standards) was awaiting them in three weeks.


This is probably not true. What is true is the market in 3 weeks is going to be far more constrained than the off-season market. Teams out of contention aren't going to bid for Drew mid-season, but may in the off-season. Teams recently investing in their shortstop position aren't going to bid mid-season, but if their starting shortstop disappoints this year may be interested in Drew in the off-season.

Why choose free agency in 3 weeks with significantly fewer bidders when the Red Sox are going to allow you to enter full free agency with the maximum possible bidders? The supply of Stephen Drew is fixed, the demand for Stephen Drew is not.

I see no reason to believe this. Scenario 1: team has control over a SS for 2015 and beyond but Drew is better. If you want Drew for 2015 and beyond, get him in June 2014.


Your scenarios all ignore the fact that that the remaining cost of every SS under contract declines after 2014 as one more year of their contract completes. Teams that become disappointed in their starting SS are now that much more able to move/dump their starter and replace him with Drew. And now without the cost of losing that valuable pick.

I can see an argument the Yanks are in the hunt for a SS in 2015 and that can only work to Drew's favor.


Really? I mean this point alone ends the argument. If Boras jumped through all these hoops to position Drew for Jeter's retirement, it's reasonable on it's face. The Yankees are going to spend to replace Jeter, if they don't sign Drew, they'll drive up the market for shortstops and Drew will be a beneficiary.

Maybe it's strictly a money thing ... like Drew was asking for Peralta/Granderson type money and teams don't think he's worth it. But if that's true then there was little risk in accepting the QO -- he'd get a year at $14 and if the Sox offered the QO again then that's still a higher AAV than he can get.


Clearly they were asking for too much, esp. with the cost of the pick included. My guess is he had some $40M/4 year offers and wanted more. But there was huge risk in the QO, Drew could have been kept on the QO treadmill for another year if teams keep discounting their offers by $15M or so for their internal valuation of that draft pick. And if Drew has another serious injury, he'll never get another long term contract opportunity.

I'm pretty sure Drew never would have signed a multiyear deal in June. Boras knows the market best and he would have waited to offseason and let the Yankees drive the market. Signing with Boston is just a similar deal to what they would have taken in June as a placeholder. This strategy cost Drew another year to wait for the security of a long term contract, but signing a QO would have cost him much more.

Drew will clearly get a Peralta deal or better this offseason, unless he implodes during the season. And the extra utility of a $55M/4 year deal far exceeds the utility of going year to year at a higher AAV. The real question is was the risk worth passing up a 4 year $40M deal this offseason?
   30. Bhaakon Posted: May 21, 2014 at 04:31 AM (#4710588)
That implies an average output for a late first rounder of 1 WAR, when it is actually more than double that. So $10M should be the floor for the valuation, and given expected $/WAR for the first 6 years of control for 2014 first rounders is probably north of $6M, my guess is $15M is a more reasonable floor.


They do have to pay the pick, though. Both in initial signing bonus and whatever pay the player earns in his first six seasons in the majors. It's likely to be a fraction of the pick's value, but not negligible.
   31. Jim Furtado Posted: May 21, 2014 at 07:01 AM (#4710592)
I don't like the deal because it's short-term thinking. Bogaerts clearly needs to play short. Although he'll be passable there because of his bat, his range hasn't been particularly good. Having said that, I'm surprised they were able to get Drew for what he settled for. I can't see how Boras can spin this as anything but a mistake.
   32. Fancy Pants Handles lap changes with class Posted: May 21, 2014 at 07:40 AM (#4710594)
This is probably not true. What is true is the market in 3 weeks is going to be far more constrained than the off-season market. Teams out of contention aren't going to bid for Drew mid-season, but may in the off-season. Teams recently investing in their shortstop position aren't going to bid mid-season, but if their starting shortstop disappoints this year may be interested in Drew in the off-season.

Also worth noting that many teams will simply be maxed out on salary (or almost maxed), and simply won't have the ability to absorb an extra 10m+ midseason.
   33. bobm Posted: May 21, 2014 at 07:55 AM (#4710596)
If Drew wanted a multiyear deal, perhaps Boras should not have insisted on a player opt-out back in February, according to multiple non-Heyman news reports.
   34. Harveys Wallbangers Posted: May 21, 2014 at 08:08 AM (#4710597)
fundamentally players want to play. it's very possible that drew told his agent 'look, get me a f8cking job'
   35. Nasty Nate Posted: May 21, 2014 at 08:13 AM (#4710598)
KT's, I think you are WAY overestimating how much teams value the pick.
   36. Nasty Nate Posted: May 21, 2014 at 08:35 AM (#4710602)
Why do you ask such a misleading question when clearly his value in those two free agent years was severely compromised?


I wasn't trying to be misleading. While we should consider the situations of each, the 2 free agencies absolutely do provide information about Drew's market value around the league.
   37. PreservedFish Posted: May 21, 2014 at 09:43 AM (#4710619)
KT's, I think you are WAY overestimating how much teams value the pick.


Yeah, I think the analysis is just all wrong.

Suppose Ervin Santana only wanted a one-year contract - would he have earned $29 million if he wasn't going to cost a draft pick? I sure doubt that.

2 WAR over six years, six years that will probably start in 2017 or later - that is worth very little to the average GM. That's a third of a win, per season, in a timeframe so far off as to be no help at all in keeping one's self employed.

I kind of doubt that teams really care too much about the expected WAR per pick numbers. The number is so hypothetical (and so small) as to be almost meaningless. They care more about the chance that they hit on a pick and find a star.

   38. jmurph Posted: May 21, 2014 at 09:49 AM (#4710623)
I kind of doubt that teams really care too much about the expected WAR per pick numbers. The number is so hypothetical (and so small) as to be almost meaningless. They care more about the chance that they hit on a pick and find a star.


And I would think the state of the farm and of the big league club would factor heavily into it. The Braves, for instance, have a secret lab where they develop can't miss prospects to plug in on a regular basis, so taking the one year hit of losing a late first round pick isn't going to set them back a great deal, especially when they're currently contenders at the big league level. Whereas someone like Houston or the Cubs should probably not be forfeiting picks right now for a 1 or 2 year fix.
   39. villageidiom Posted: May 21, 2014 at 10:00 AM (#4710631)
I think its a bit of an issue if a player keeps having to sign one-year tenders and can not reach free agency because he's too good to not get a QO, but not good enough to get a long-term deal from a team willing to forfeit a draft pick.
This is less of an issue than a player being too good for AAA but not good enough for MLB. At least Drew has choices that involve getting paid lots of money to play a game.

Let's pretend for a minute that there were no draft pick consequences. Would a team be interested in a multiyear deal for:

- A 31 year old SS
- Who has spent significant time injured in each of the last 3 seasons
- With possibly declining defense
- And a bat that might no longer carry him at another position unless he is platooned
- And is the brother of a former MLBer not known for his durability*

The best case answer to that is "possibly". Surely if the answer was "yes", then Drew would have held out to the draft, sacrificing the $1.5 million he'd make between now and then for the extra year(s) he'd get in such a deal. His signing with the Red Sox - to date, the only team on record as offering him even a single-year contract - at this time suggests he doesn't expect to have a multiyear suitor after the draft. In reality the answer is "probably not".

Drew wanted a multiyear guaranteed deal. He wanted a decent AAV. He wanted to be a starter for that duration. He wanted to play SS. Nobody wanted him for all four. Not everyone gets what they want.

And all that was true before 2013 as well. But he knew then that he needed a year to establish he was either not a risk, or worth the risk. He didn't do that enough in 2013.

* One can argue that this perception is unfair to JD, and one can state with certainty that this perception is unfair to apply to Stephen. I'm just saying it will probably be applied.
   40. Barry`s_Lazy_Boy Posted: May 21, 2014 at 10:48 AM (#4710672)
The worst you can say about Boras is that he made a mistake. His percentage of mistakes is very low, which is why he is as famous as he is, but still is not a guarantee.

IMNSHO, Boras makes plenty of mistakes that cost a player happiness, in return for some more money on top of the millions they already have.
   41. Davo Dozier Posted: May 21, 2014 at 11:04 AM (#4710688)
We're still living in the same universe where Joe Smith, Jarrod Saltalamacchia, Marlon Byrd, Rajai Davis, James Loney, Boone Logan, Jason Vargas, Omar Infante, and Scott Feldman all signed multi-year deals as free agents last winter, right? That wasn't just an OOTP simulation?
   42. villageidiom Posted: May 21, 2014 at 11:20 AM (#4710704)
We're still living in the same universe where Joe Smith, Jarrod Saltalamacchia, Marlon Byrd, Rajai Davis, James Loney, Boone Logan, Jason Vargas, Omar Infante, and Scott Feldman all signed multi-year deals as free agents last winter, right? That wasn't just an OOTP simulation?
Different people are different. Bravo.
   43. Nasty Nate Posted: May 21, 2014 at 12:14 PM (#4710750)
We're still living in the same universe where Joe Smith, Jarrod Saltalamacchia, Marlon Byrd, Rajai Davis, James Loney, Boone Logan, Jason Vargas, Omar Infante, and Scott Feldman all signed multi-year deals as free agents last winter, right?


If Drew wanted a cheapo multi-year deal, he could have had one. But if he turned down 1/$14m, he obviously wanted more than something like 3/$17m.

All multi-year deals are not better for players than all single-year deals.
   44. dave h Posted: May 21, 2014 at 01:49 PM (#4710803)
VI, you set the parameters so specifically that I think even Stephen Drew doesn't fit them. (Since when is his defense declining? By far his best impact in the World Series was his defense, including that incredible popup catch.) The question is whether these differences are important. I think it's pretty clear that, absent draft pick compensation, Stephen Drew is worth a decent multi-year deal. It is quite possible that, regardless of draft pick compensation, his skill set is undervalued by all the teams that might have a use for him. It is also quite possible that draft pick compensation is costing him significantly (especially since teams might be wary of going too many years on him, which means that the compensation is more significant on a per year basis). In fact I would say it's almost certainly true that both of these are going on.
   45. Nasty Nate Posted: May 21, 2014 at 02:05 PM (#4710826)
VI, you set the parameters so specifically that I think even Stephen Drew doesn't fit them. (Since when is his defense declining? By far his best impact in the World Series was his defense, including that incredible popup catch.)


The other descriptors are accurate, but I agree that the "With possibly declining defense" is unfair.

Everyone's defense is "possibly" declining. And also "possibly" improving.
   46. KT's Pot Arb Posted: May 21, 2014 at 02:19 PM (#4710836)
KT's, I think you are WAY overestimating how much teams value the pick.


Possibly, but probably not. IIRC only top 10 picks are protected, and one study found an 11-20th pick averages as much as 6 WAR in first 6 years of control. That seems high, but a study pegged the 10th pick at 10 WAR on average.

If that is true teams in the 11-20 range should value those picks in the $20M -$40M range.

Picks 21-30 average around 2 WAR (again IIRC) so should range around $8-$12M.

Of course it's not what I think that picks should be valued at, it's what teams actually value them at. Discount these numbers by 35% and you can still see the problem for Drew if he's a restricted free agent. Any team in the 11-20 pick range should demand a huge discount, it's only the teams at the end of the round that would have minimal discounts. And the key player there is the Yankees, who actually already forfeited their pick, but had payroll and Jeter constraints.

Oh, excuse me. HAD payroll and Jeter constraints. Somehow Boras has created a full Stephen Drew bidding war for all teams 11-30 at the same time Jeter is off the books.
   47. SoSHially Unacceptable Posted: May 21, 2014 at 02:25 PM (#4710841)
The other descriptors are accurate, but I agree that the "With possibly declining defense" is unfair.


How about probably declining, which is likely more accurate? (By the numbers, it is, however modestly). And most shortstops tend to decline defensively when they hit the other side of 30. I don't know why a 31-year-old guy with a "destroyed ankle" in his past would be expected to defy the general defensive slippage that occurs in ballplayers.


   48. Nasty Nate Posted: May 21, 2014 at 02:27 PM (#4710844)
and one study found an 11-20th pick averages as much as 6 WAR in first 6 years of control. That seems high, but a study pegged the 10th pick at 10 WAR on average.

If that is true teams in the 11-20 range should value those picks in the $20M -$40M range.


The 11-20 picks may produce $20-$40m of value on average, but that is not how much the picks themselves are worth because teams have to pay the signing bonus plus salaries during the years of team control.
   49. Nasty Nate Posted: May 21, 2014 at 02:29 PM (#4710850)
How about probably declining, which is likely more accurate? (By the numbers, it is, however modestly). And most shortstops tend to decline defensively when they hit the other side of 30. I don't know why a 31-year-old guy with a "destroyed ankle" in his past would be expected to defy the general defensive slippage that occurs in ballplayers.


Until his defense declines, the other factors (age/injury) are already listed so it would be unfairly redundant to do so again in different form.
   50. PreservedFish Posted: May 21, 2014 at 02:59 PM (#4710881)
I've said it before. Using the free agent $/WAR going rate to evaluate something like draft picks seems wrong to me. The free agent market is small, strange and highly distorted, and as such it doesn't reflect the real value of a Win to teams.

This type of statement:

The 11-20 picks may produce $20-$40m of value on average

is not correct. They do not produce that much value. Yes, it would cost that much to find as many wins on the free agent market, but that doesn't mean that they produce that much value. The free agent market $/WAR number shouldn't be used as a benchmark for all transactions. If all players were declared free agents at once, the $/WAR number would go way way way south and you'd get a real understanding of how much teams value each win.

I'm not smart enough about economics to really finish this thought and figure out what the right benchmark is, but I feel like I'm headed in the right direction with this argument.
   51. villageidiom Posted: May 21, 2014 at 03:00 PM (#4710883)
(Since when is his defense declining? By far his best impact in the World Series was his defense, including that incredible popup catch.)
I'm not going to get into dueling anecdotes, especially since I'm stating a trend over the years and you're not even engaging on that basis.

And even then I'm not stating it emphatically. It's possibly declining. His defense has been worse since his injuries than it was before, and I didn't think that was in dispute. The question is whether his worse defense is entirely because of his injuries - in which case he should be great defensively if healthy - or if he should be projected to decline. I don't think it's easy to tease that out of the numbers. His 2012 is not a projectable season. His 2013 numbers, which are not great, are influenced X% by injury, where X is unknown.

If one wants to argue he's healthy, that 2013 was a year of health, then part of that is that his defense got worse from established healthy levels. (IOW possibly declining.) If one wants to argue his 2013 defense declined because of health, then he's a bigger injury risk. Either way it doesn't bode well for giving him $14m AAV on a multiyear deal, and the fact that we can't pin it to one or the other produces even greater uncertainty, which also cuts the likelihood of getting the multiyear deal he wants.
The question is whether these differences are important.
To teams considering whether to sign him to a multiyear deal between November 2013 and now, I don't see why they wouldn't be important. They seem vital.

To walk it back a little, was Stephen Drew worth signing to a multi-year deal in the 2012 offseason? Given what was known at the time, almost certainly not. He was coming off a major injury that basically ruined two seasons. There were legitimate questions about whether he would be productive if healthy, and bigger questions of whether he would be healthy.

What did we learn in 2013 that would change people's minds? He's a year older. He missed a month of the season. His hitting improved overall, but he has cratered against LHP. Is he less of a health risk? Maybe. Is he going to hit when healthy? Yes, against RHP. If the opinion going into 2013 was that he wasn't worth risking a multiyear deal for, 2013 doesn't seem like the kind of year that would undo that opinion.

It wouldn't surprise me if draft compensation had an impact. It would surprise me if it didn't. But that was known going into the 2013 offseason. Drew/Boras thought it wouldn't eliminate his chances at getting a multiyear deal. They were wrong. People have been assuming it's because the draft penalty mattered more than expected; I'm thinking it's because Drew/Boras assumed 2013 meant more to front offices than it actually did.
   52. snapper (history's 42nd greatest monster) Posted: May 21, 2014 at 03:19 PM (#4710917)
The 11-20 picks may produce $20-$40m of value on average, but that is not how much the picks themselves are worth because teams have to pay the signing bonus plus salaries during the years of team control.

Correct. Most of that value will come from very good to great players in arb years, where they're getting paid 50-80% of their market value.
   53. dave h Posted: May 21, 2014 at 04:50 PM (#4711045)
#51: As Nate said, you're double counting if you say both his age (#1) and his (possibly) declining defense (#3) and offense (#4) are demerits. I don't see anything in either the statistical record or qualitative observations to believe that there are declines over and above age and injury history. The defensive stats on both bbref and fangraphs seem to be (unsurprisingly) pretty scattered and I don't see an obvious trend.

Teams may be viewing Drew as a lesser player than I would, and presumably Boras misread the market. Drew obviously didn't get a long term deal before 2013 because he was coming off an injury. If he had played 150 games last year I think he would have been okay. Since he established a good performance but played well under 150 games, I think that hurt his ability to get a 4 year deal, and as the deal gets shorter the draft pick compensation gets relatively more onerous. That's how he ends up unsigned to start the season.
   54. KT's Pot Arb Posted: May 21, 2014 at 06:48 PM (#4711139)
Correct. Most of that value will come from very good to great players in arb years, where they're getting paid 50-80% of their market value.


This is likely true. But I also suspect the effect is not strong enough to change the value greatly. For example, Mike Trout will likely end up producing 50 WAR over 6 control years. The Angels were likely to pay $60M in his arb years according to most estimates, but were able to sign him to a deal that only pays $42M total for his 6 years of control. So the guy who will account for the most of the excess draft pick value in history, and will likely be worth $200M-$300M over that span, is getting paid less than 20% of it.

It's possible the typical draftee might generate little of their value before their arb years, and most of it in arb years but they are almost never getting 50-80% in those years. First isn't the first year 20%? But more importantly is arb contracts are 1 year deals, those percentages are based off of mostly long term contracts, and players are worth much more on a 1 year deal due to the significantly lower risk.

Finally there is a lag. A player who stinks until year 5 only has 1 arbitration year left to cash in. Players who Max out arb awards have to be already great the year before their first arbitration hearing, which means the team already got a ton of surplus value.

Lastly is another important point Trout (and Longoria) prove. 6 years of control is a long time that pushes the risk squarely on the player. Economic utility heavily incents them to sign team friendly long term deals. So it's never just 6 years of control, the Angels got 3 years more control under market value. Not as valuable as what Tampa got, but the Angels added at least $30m in expected value beyond the 6 years.

That excess value is real and frequent and I never incorporated it in my estimates.
   55. KT's Pot Arb Posted: May 21, 2014 at 07:09 PM (#4711149)
is not correct. They do not produce that much value. Yes, it would cost that much to find as many wins on the free agent market, but that doesn't mean that they produce that much value


This is not true.Teams can only win games by acquiring players. You can do it only by drafting or signing, or trading for players. The draft is likely the most inexpensive route, but you can't draft more players, you are restricted, so you have to maximize the wins produced by the picks you have. You can sign as many players as you want, but if they are any good the cost is high.

When giving up a pick you gave to make a value assessment, is the excess value of the player you are signing more than the pick you will lose? To find out you have to translate money and wins. If you think your pick is will eventually be worth 6 wins at an average cost of $20M in arb awards (plus additional long term control benefits), how else do you determine if its reasonable to give that up for 5 years of a 3 WAR shortstop that will cost $75M in sakary?

Can you separately buy 9 wins for less than $55M? Are wins with today's team more important (more likely to produce playoff/championship teams) than wins 5 years from now?

These are all questions that must be answered, you cannot ignore them and make intelligent decisions. So even though your system gets a continuous trickle of inexpensive talent through the draft, you cannot ignore their market value, ie the free market cost of replacing them, if you surrender them.

See Yankees, NY, for excellent example of farm system where team decided to forgo keeping or accumulating first round picks.

The free agent market $/WAR number shouldn't be used as a benchmark for all transactions. If all players were declared free agents at once, the $/WAR number would go way way way south and you'd get a real understanding of how much teams value each win.


If Charles Finley was resurrected and made commissioner, you would be right. But players aren't declared free agents until 6 years off MLB service, so you aren't. A 30 HR first baseman doesn't suddenly create more wins because he's relabeled a free agent, and the wins he creates don't change in value with the size of his paycheck.
   56. shoewizard Posted: May 21, 2014 at 08:11 PM (#4711168)
The biggest caveat with Drew right now is how good a start he gets off to. The time off may result in a slow start for him, and with 1/3 of the season gone, he can't afford a slow start.

If he doesn't start slowly and puts up his usual numbers then he will get at least 3/33, but I doubt 4/40 or 4/50 or anything quite that large.

I can understand the peralta comp/argument for why Drew might get more than that, but there are perceptions with Drew that won't go away and that will continue to limit his market value.

   57. the Hugh Jorgan returns Posted: May 22, 2014 at 12:54 AM (#4711302)
The biggest caveat with Drew right now is how good a start he gets off to.


Well hopefully he starts off unbelievably well and the Sox can trade him for pitching because by the time he comes back the Sox will be 8 games under .500....
   58. Nasty Nate Posted: May 22, 2014 at 10:08 AM (#4711377)
FWIW, the Hardball Times is running a multi-part series this week about the value of the draft picks.
   59. villageidiom Posted: May 22, 2014 at 10:16 AM (#4711380)
#51: As Nate said, you're double counting if you say both his age (#1) and his (possibly) declining defense (#3) and offense (#4) are demerits.
I'm not counting. I'm listing what we know.

If you see one piece of evidence that points you in a particular direction, but that's the only evidence that points that way, it might be easy to dismiss. If last year was his best year defensively, and if he had narrowed his platoon splits, then his age might not be as big an issue. If all the pieces point in the same direction they don't double-count; they reinforce. What they reinforce is the notion that a multiyear deal for Drew - at least one near the AAV Drew wanted - was not a wise call, even before you factor in the draft penalty. All I'm saying is that Drew and/or Boras overestimated their ability to get everything Drew wanted, and it's not a problem with the QO system that it happened.

What it eventually comes down to is that a guy named Drew with an agent named Boras decided to sit out rather than sign a deal that was far less than they wanted. It's not like we haven't seen this story before the current system. The Phillies are familiar with this.
   60. Nasty Nate Posted: May 22, 2014 at 10:45 AM (#4711396)
If you see one piece of evidence that points you in a particular direction, but that's the only evidence that points that way, it might be easy to dismiss. If last year was his best year defensively, and if he had narrowed his platoon splits, then his age might not be as big an issue. If all the pieces point in the same direction they don't double-count; they reinforce.


I feel foolish for pursuing this nit-picky side diversion, but I was talking about double-counting from the point-of-view that Drew's defense had not declined on the field and that the reasons to think that it would in the next few years were simply age-related.

I was under the (possibly incorrect) impression that the general perception was that his D last year was just as good as his D was in prior years.
   61. dave h Posted: May 22, 2014 at 12:15 PM (#4711436)
As for his defense, I'm not 100% confident on reading the stats so correct me if I'm wrong but here are what I see for his career (all relative to average SS, right?):
Defensive Runs Saved: 2, -1, -2, 9, 0, 3, -7, -2
Fans Scouting Report: -, -, -, 1, 2, 5, -1, 3
UZR/150: -13, -14, -18, 3, 10, 8, -14, 7

I don't know what's going on with UZR in his first three years. 2012 was injury - but even if you pull that out I don't see any sort of trend. There is, to my knowledge, no indication that his defense "is possibly declining" other than that he's 31.

Beyond that, there are several questions here, and I'm not sure what ones we agree or disagree on.

1. How much is Stephen Drew actually worth?
2. How much do MLB GMs with openings at SS think Drew is worth?
3. How much do GMs value the draft pick?

I'm not sure if the points you're making are your answer for 1, 2, or both. I certainly hope "He's JD Drew's brother" is in 2 and not 1.

For 1 - He's projected for 1.5-1.8 WAR next year. Discounting for aging that should be good for at least 3/27 and probably higher, and I think that is underselling him since it weights his injured time very heavily. I think 3/32 or 4/40 is a completely reasonable contract for him.

For 2 - If he had put up 3.4 fWAR in 150 games (which would be no more valuable - especially for the Red Sox - but would allay injury concerns) then I think GMs would be willing to give that 4 year deal or better (at that point he looks better than (31 year old) Peralta in my opinion, although offense probably still plays better with GMs). Because he didn't play 150, I think they would want the 3 year deal, or maybe even 2.

For 3 - Now if you account for the compensation in a shorter deal, you're looking at what - 3/26, or 2/18? At that point it's entirely reasonable for Drew to sit to the start of the season and try again next year with no compensation attached. I'm not saying that was the Boras plan (or even fallback) from the start, but in the end the downside is $4 million, he takes on a year of risk, and he's one year older. On the plus side he should recoup the cost of draft pick compensation and could establish another year post-injury. It's not a horrible move. I think it's a great one for the Sox in the end, but I would have been happy with him taking the QO.
   62. Greg Pope thinks the Cubs are reeking havoc Posted: May 22, 2014 at 12:57 PM (#4711466)
What I don't understand is that draft pick compensation is not new. It's not like this is the first year of teams giving up picks to sign players. It's been part of free agency for quite a while now. Why are we assuming that the pick is the reason Drew wasn't signed?

Are the draft pick compensations that much more valuable under the new system? They could be, based on:

1. Fewer FA had compensation attached to them under this system so there were more draft-pick-free players out there. Which would mean that the free players were the ones getting snapped up by teams. This means that there still would have been one SS and one DH unsigned, just not Drew or Morales.

2. With fewer compensation players out there, teams weren't picking up draft picks when their own players signed elsewhere. So in the past they may have figured "screw thinking about it, it all works out", but now many teams got zero compensation picks, so they're protecting their own.

3. Even with the compensation players, the lost pick doesn't go to the team, they only get a compensation pick. So, similar to #2, teams may before have gotten a few extra picks because their own guys signed somewhere else, so they cared a bit less about losing their own pick.
   63. dave h Posted: May 22, 2014 at 01:31 PM (#4711502)
Draft slotting also has an impact. The teams that had money for FA also probably had money to spend on the draft, so they could make up for a lack of high picks by going for signability players later. That's basically gone now.
   64. Joyful Calculus Instructor Posted: May 22, 2014 at 02:09 PM (#4711550)
Bam! [63] said exactly what I was going to say in response to [62]. The slotting system for draft picks has lowered the cost of first round picks making them more valuable.
   65. KT's Pot Arb Posted: May 22, 2014 at 02:59 PM (#4711599)
For 1 - He's projected for 1.5-1.8 WAR next year. Discounting for aging that should be good for at least 3/27 and probably higher, and I think that is underselling him since it weights his injured time very heavily. I think 3/32 or 4/40 is a completely reasonable contract for him.


I suspect the project is significantly over-weighting his missed playing time. As I wrote, with DBacks he was fairly durable, and 90% of the playing time he's missed was due to a single flukish injury, and it seems like he's fully recovered from it.

Age Games bWAR fWAR
25  152  3.0  1.6
26  135  2.9  2.0
27  151  4.0  4.7
28  86   1.9  1.7
29  79  
-0.3  -0.3
30  124  3.1  3.4 


I think his age 29 season should be thrown out given the horrific injury he was recovering from and the inordinate public pressure he was put under to come back before he was fully ready.*

Last year tells you he is pretty much fully recovered, but maybe also says he's getting older and more subject to losing time to minor injuries.

Excluding the injury recovery season, Drew has been worth 9-9.8 WAR over his last 361 games, or a smidge under 4 WAR/150 games. I think a reasonable projection for next year Drew is that he can put up 85% of that pro-rated over 130 games. Take that year and reduce by 10% a year for aging gets you to

Year WAR
2.9
2.7
2.4
2.1
1.9 


12 WAR total, which is 5/$60M if your team values WAR at $5M over that period, 5/$72M if you value it at $6M. Stephen Drew, even next offseason at age 31, should be more valuable than Jhonny Peralta (just by age for one).

The main reasons he might not be are the games he missed last year and his last name. A Drew missing time for ticky tacky injuries resonates with baseball people in a very bad way. Suitors may discount more heavily due to this bias/fear.

But Jhonny never had the Yankees in the market, and to me the presence of the biggest bidder will far outweigh the negative concerns, if Stephen demonstrates reasonable performance, and durability this season. If he has more ticky tacky injuries and misses time, or plays poorly, he'll miss his last window. Boras pulled a neat trick getting him to be an unrestricted free agent, but they aren't out of the woods yet.

* if you disagree with throwing out his age 29 season, including it reduces his WAR/150 rate to 3, a 33% decline. Which starts Drew at 2 WAR, gives him 8 WAR and his value in a 5 year contract to a $40M-$48M range.

But then you have to ask, how reasonable is it to only expect 2 WAR (or less) at age 32 from a guy who put up over 3.1 bWAR/3.4 fWAR at age 30 in only 124 games (3.7-4 WAR/150 rate that he's done pretty much since age 27 when healthy)? He should still have the ability to put up a 3 WAR/150 games rate at age 32, a below 2 WAR forecast implies the system believes he will only average playing 90 games. Again this is evidence the forecast is heavily biased towards his recent injury.
   66. Nasty Nate Posted: May 23, 2014 at 12:38 PM (#4712107)
The Hardball Times has posted their conclusion piece about the value of draft picks.

They post estimates based on 2 different models. For picks 11-20, the average values are $10.9m and $8.4m. For picks 21-30, the average values are $8.5m and $6.4m.
   67. KT's Pot Arb Posted: May 23, 2014 at 02:26 PM (#4712174)

I think its valuations are way low. One is it appears to make the mistake of conflating "market value" with AAV of long term contracts, when

arbitration awards are essentially 1 year contracts (slightly worse given team options to cancel in spring training) they are not directly comparable to average annual values of long term contracts, which are clearly discounted for team risk/player security value.


If they are using long term contracts for market value, they are provably undervaluing by 20% or so.

Second is study may be over discounting future wins.

Typical discount rates are the "risk free" returns easily available in other investments, essentially the "replacement level" investments. Baseball teams don't typically have other players easily available at "market cost", so that's a reason MLB discount rates should be higher than investment discount rates. Another reason they are likely far higher (but shouldn't be) is that GMs typically have relatively short tenures. They are heavily incented/biased to over-discount future wins now, especially wins that would occur after their current contract, and overvalue current season wins, especially if near a contract extension.


Discount rates are tricky, and small rate changes can lead to huge valuation changes for long term investments. A team owner should have a much lower discount rate than a GM. I'd expect real world GMs to use rates higher than 10%, but that the actual correct rate for long term team planning to be less than 10%.
   68. KT's Pot Arb Posted: May 23, 2014 at 02:48 PM (#4712179)
Here is a simple example WAR forecast that shows how widely present day valuations of future WAR can be based discount rate changes.

Discount Rates     
Year
/WAR 5%   WAR   10%   WAR  15%   WAR
       
1   0   95
%   0.0   90%   0.0   85%   0.0
2   0   90
%   0.0   81%   0.0   72%   0.0
3   1   86
%   0.9   73%   0.7   61%   0.6
4   1   81
%   0.8   66%   0.7   52%   0.5
5   2   77
%   1.5   59%   1.2   44%   0.9
6   2   74
%   1.5   53%   1.1   38%   0.8
7   2   70
%   1.4   48%   1.0   32%   0.6
8   2   66
%   1.3   43%   0.9   27%   0.5
       
Totals 
    10        7.4         5.4         4.0 


Unless there is a way of pinning down the "correct" discount rate fairly closely, calculating present value on discount rates is basically GIGO, or worse, PINGYWO, "Put In what you Need to get what You Want Out". It's such a significant problem it can make the entire discussion futile.

One approach is to essentially ignore discount rate and assume that increasing $/WAR will be roughly the right amount to compensate for it, so just use todays $/WAR and total WAR without discount. Doing that is problematic, but reminds me I didn't see if they modeled an increasing cost of WAR in their study, if they didn't, that will cause them to undervalue picks.

And lastly the study doesn't seem to value the team's enormous leverage to extend control beyond 6 years at below market rates.
   69. Nasty Nate Posted: May 23, 2014 at 03:05 PM (#4712189)
I think its valuations are way low.


I haven't read the study closely enough to agree or disagree, but doesn't it seem like its estimates are closer to how the actual teams are valuing the picks than your estimates, based on the behavior of the teams?

E.G. The study's 2 models estimate, respectively, that the Braves expended $20.5m and $22.7m of value for 1 year of Ervin Santana. Doesn't that seem more reasonable than them thinking they were expending $25-30m?
   70. snapper (history's 42nd greatest monster) Posted: May 23, 2014 at 03:48 PM (#4712229)
I haven't read the study closely enough to agree or disagree, but doesn't it seem like its estimates are closer to how the actual teams are valuing the picks than your estimates, based on the behavior of the teams?

E.G. The study's 2 models estimate, respectively, that the Braves expended $20.5m and $22.7m of value for 1 year of Ervin Santana. Doesn't that seem more reasonable than them thinking they were expending $25-30m?


Agree totally.

I think that if teams could sell the 21-30th picks in the draft for $20M a pop in hard cash, every single team would sell its pick.
   71. jmurph Posted: May 23, 2014 at 03:55 PM (#4712234)
I think that if teams could sell the 21-30th picks in the draft for $20M a pop in hard cash, every single team would sell its pick.


Agree. I would totally be in favor of that rule change, too. Or at least allowing trades.
   72. snapper (history's 42nd greatest monster) Posted: May 23, 2014 at 03:58 PM (#4712237)
Agree. I would totally be in favor of that rule change, too. Or at least allowing trades.

You couldn't allow sales unless there was an enforced salary floor.

Otherwise, Loria would sell the Marlin's entire draft every year and pocket the money.
   73. Tom Nawrocki Posted: May 23, 2014 at 04:01 PM (#4712241)
Excluding the injury recovery season, Drew has been worth 9-9.8 WAR over his last 361 games, or a smidge under 4 WAR/150 games.


By leaving out one year and going back 361 games, you're including Drew's career year from four years ago. Since that was also the last time he played anything close to a full season, more than 40 percent of your calculation of Drew's worth is four years old, and prior to a catastrophic injury.
   74. jmurph Posted: May 23, 2014 at 04:02 PM (#4712242)
Otherwise, Loria would sell the Marlin's entire draft every year and pocket the money.


Good point. The NBA has some workable rules about these kinds of things- can't trade your 1st round pick in consecutive drafts, and I believe there is a $ limit, too, but I may be mistaken. The non-consecutive draft thing was in response to bad owners/GMs constantly trading their 1st rounders and destroying the futures of their franchises. Would be especially important in MLB, I think.
   75. KT's Pot Arb Posted: May 23, 2014 at 06:50 PM (#4712356)
By leaving out one year and going back 361 games, you're including Drew's career year from four years ago. Since that was also the last time he played anything close to a full season, more than 40 percent of your calculation of Drew's worth is four years old, and prior to a catastrophic injury.


Typically projection systems focus on prior three years, and weight the most recent years heaviest. So his Sox year should get extra weight, and while he missed more games in it than any of his other "healthy" seasons, it's also very close to his best season by WAR/150 rate,


If you go back further Drew was worth 2.9 & 3.0 bWAR in his age 25, 26 seasons, and averaged 143 games in those years. That WAR rate is a bit lower, but not far from the later years, and it's reasonable he may have improved (gotten stronger) in his late 20s.
   76. KT's Pot Arb Posted: May 23, 2014 at 07:08 PM (#4712367)
I haven't read the study closely enough to agree or disagree, but doesn't it seem like its estimates are closer to how the actual teams are valuing the picks than your estimates, based on the behavior of the teams?

E.G. The study's 2 models estimate, respectively, that the Braves expended $20.5m and $22.7m of value for 1 year of Ervin Santana. Doesn't that seem more reasonable than them thinking they were expending $25-30m?

Agree totally.

I think that if teams could sell the 21-30th picks in the draft for $20M a pop in hard cash, every single team would sell its pick.


These are good points, and clearly I'm focused on the minutia of how the picks are valued than whether the valuations make sense in the existing market. But it's not unusual for markets to be way off in price vs. value, esp. when value is difficult to estimate with good accuracy.

Teams may just not realize how valuable picks are, or may not yet realize how valuable the new rules have made them.

But there are other factors that could diminish the calculated value, one that comments touched on is that the historical WAR of later first round picks is likely overstated because pre-slotting lots of talent slid to later picks because of sign-ability issues, which should almost never happen now. If that's true it also means top 5 pick value is up historically understated.

Drew himself is the best example of this phenomenon. He was top rated position player in draft, but Padres didn't want to meet Boras' demands, so they made a huge reach and took Matt Bush, who I remember as a mid-first rounder ranked guy, and Drew slid to the DBacks at 15th. Add Drew's 16 career WAR to the 1st pick slot and move Matt's 0 the 15th, and you have quite the swing.

Funny how it was the DBacks GM who got fired over that pick, while Towers kept his job for a few more years.

You must be Registered and Logged In to post comments.

 

 

<< Back to main

BBTF Partner

Support BBTF

donate

Thanks to
The Ghost's Tryin' to Reason with Hurricane Season
for his generous support.

Bookmarks

You must be logged in to view your Bookmarks.

Hot Topics

SABR - BBTF ChapterWho's going to SABR??
(101 - 8:34am, Jul 28)
Last: Foghorn Leghorn

NewsblogSchoenfield: Why didn't the Braves win more titles?
(55 - 8:31am, Jul 28)
Last: Lassus

NewsblogNoble: Tom Seaver expects Derek Jeter to become first unanimous Hall of Fame inductee
(94 - 8:16am, Jul 28)
Last: They paved Misirlou, put up a parking lot

NewsblogFull Count » Mike Carp, Felix Doubront and the challenges of player discontent on a struggling team
(9 - 8:10am, Jul 28)
Last: Steve Balboni's Personal Trainer

NewsblogPrimer Dugout (and link of the day) 7-28-2014
(2 - 7:59am, Jul 28)
Last: Greasy Neale Heaton (Dan Lee)

NewsblogGossage on Bonds, McGwire Hall hopes: ‘Are you f–king kidding?’
(107 - 7:55am, Jul 28)
Last: Jeltzandini

NewsblogDodgers and Diamondbacks Triple-A teams involved in wild brawl
(13 - 7:06am, Jul 28)
Last: Shooty Survived the Shutdown of '14!

NewsblogTigers Display Focus on 2014; acquire Joakim Soria
(5 - 6:54am, Jul 28)
Last: Cooper Nielson

NewsblogHall of Fame Announces Changes to Voting Process for Recently Retired Players, Effective Immediately
(84 - 6:38am, Jul 28)
Last: Sunday silence

NewsblogOTP - July 2014: Republicans Lose To Democrats For Sixth Straight Year In Congressional Baseball Game
(3292 - 6:14am, Jul 28)
Last: Jolly Old St. Nick Still Gags in October

NewsblogDJ Short: Maximum stay on Hall of Fame ballot changed from 15 to 10 years
(57 - 6:05am, Jul 28)
Last: Sunday silence

NewsblogFull Count » Mike Carp explains why he requested a trade from Red Sox
(18 - 3:18am, Jul 28)
Last: ellsbury my heart at wounded knee

NewsblogRoger Angell goes into the Hall of Fame
(28 - 12:49am, Jul 28)
Last: bobm

NewsblogOT: Monthly NBA Thread- July 2014
(967 - 12:31am, Jul 28)
Last: clowns to the left of me; STEAGLES to the right

NewsblogGiants purchase contract of 2B Uggla
(8 - 12:09am, Jul 28)
Last: Rickey! On a blog from 1998. With the candlestick.

Page rendered in 0.6632 seconds
53 querie(s) executed