I really liked Gennaro's book, but I think he takes a short cut on the analysis by only looking at Hughes value. It's not comprehensive and ignores the risk involved with prospects (not to mention falling into the "Sox are only bidding it up for the Yankees" and "best player makes the best deal" arguments), but I think it does serve as a simple way to see why the Sox and Yankees aren't moving off of their offers, and why the Mets may be motivated to overpay.

That and the idea of Miguel Cabrera in CF for the Yankees (even if it is a typo)...

Cabrera playing CF isn't so unrealistic if you factor in the additional gravitational force he'd be exerting on batted balls. He wouldn't need nearly the range of a Coco Crisp or Andruw Jones.

The Santana trade will go down as one of the worst of all time.

The Santana trade will go down as one of the worst of all time.

How do you mean?

MC in CF raises the issue of how defense is really worth. If it was possible to field a team with .900 - 1.000 OPS players at every position, would that be worth it if it meant playing David Ortiz at SS...

If it was possible to field a team with .900 - 1.000 OPS players at every position, would that be worth it if it meant playing David Ortiz at SS...

Aren't the weakest defensive regulars worth roughly -20 runs a year? If that figure describes Derek Jeter, or Carlos Lee, then wouldn't David Ortiz be closer to -50? How many runs would a team with a .950 OPS score? Could it possibly be enough to make up for a -300 defense?

In the case of the Yankees, maintaining their unbroken string of playoff appearances is worth an estimated $39 million in future revenues coming in the form of merchandise sales, retention of season-ticket holders, maintaining the high level of demand from their corporate sponsors, and continued top ratings on the YES Network, in which they own a stake.

There's a few problems with this model

1) Merchandise sales are centralized -- dispersed evenly to all 30 clubs;
2) The value of YES revenues is locked in, for the most part. The player with drawing power would not come via YES until the contract expires (ad space, the exception).

Also, I'm surprised Vince didn't mention the brand draw of the Yankees by themselves. If a player has star power, then so do the Yankees.

Now, Vince could not have known that Clemens would be injured this year, but when this analysis model he have hits reality... looking back, the model is not quite correct, based one and two above (From Fortune:

Gennaro's estimate of the revenue impact from signing Clemens is $24.1 million, factoring in things like ticket sales, concessions, television ratings, sponsorships and postseason revenue. This doesn't necessarily mean that an extra $24 million will flow in to the Yankees coffers from Clemens taking the mound, but Gennaro said, "the Yankees do stand to lose this much if they don't make the postseason."

So Gennaro's estimated revenue boost is $2 million less than the cost of Clemens. But what this analysis does not consider is the added importance to the Yankees of making the postseason this year and next, as they prepare to open a new ballpark in 2009. How the team does now will impact how much the team can jack up ticket prices in the new stadium, Gennaro says, a factor that could add millions to the payoff for signing Clemens.

1. I believe that the Yankees get to keep 100% of merchandise sales at the ballpark. It's only outside sales that are shared.

2. I believe Vince is considering the change in market value of YES as well as revenues.

1. I believe that the Yankees get to keep 100% of merchandise sales at the ballpark. It's only outside sales that are shared.

And, upon further review, I am incorrect, and this is correct, and then some.

The source on this (very good, by the way) was 99% sure that this was the method by which merchandise sales are calculated...

Merchandise sold in the park, or in a team store within X miles from the park is local revenue (and subject to the Revenue Sharing Plan). Merchandise that is sold through BAM or team websites is BAM revenue.
Licensed merchandise sold by a retailer is the retailer's revenue but generates licensing revenue for MLB Properties, which is then centrally distributed.

On the BAM revenue... it is a centralized source, as well. But, as mentioned, I said the ballpark revenues as centralized, which is incorrect.

As to #2, the Yankees would have to be able to feel confident that they could weather the loss of key prospects, which would in turn allow them to be competitive over time. Santana, by himself, is a nearly futile endeavor in calculating viewership. Santana is simply a cog over time. He can draw at a certain level, but there is the cumulative impact of players cycling up and down over time. The market value of YES has risen, as has nearly all the others, not due to star draw, but other factors. Brand has far more relevance, as does the other programming made available on RSNs.

I think the issue lies less with revenues, and is more correctly placed with whether or not the team will win more games after making the move; this is a baseball decision, not a business one. Even if the marginal wins are not necessarily cost effective, both the Yankees and Red Sox have shown that they are willing to spend over that threshold given their competition (ie each other).

Just looking at how he calculates the prospective values of the players, the graph he presents with Santana's value keeps going up, which is in direct contrast to his PECOTA and MORP projections. I think if the acquiring team had something close to a guarantee that Santana would maintain his current performance/value they would be much more inclined to meet the Twins demands.

He addresses the inherent risk in all of the players, but doesn't quantify it with a dollar value. Simply assuming that Hughes will be as good as Matt Cain for 3 years seems simple enough, but the error bars on a projection for a young pitcher should be wide enough to be accounted for in the dollar evaluation.

Maury,

On your second point, I think you underestimate the importance of star players in maintaining the Yankees brand (or in economics-speak "goodwill"). I would maintain that most of the reason the Yankees are worth more than other clubs has to do with the players and the success those players have brought. Obviously having a large market is important as well, but if they had sucked for the last thirty years it wouldn't matter that much (see Marlins and Rays). Santana may just be a cog, but if they stopped getting cogs, the value of the Yankees would fall. As Cblau points out, the value of YES matters along with the contract. If the Yankees are very successful over the next few years, YES will be worth more and the next contract will be worth more.

Santana tariff? Is this a reaction to pitching being outsourced to Latin American countries?

If it was possible to field a team with .900 - 1.000 OPS players at every position, would that be worth it if it meant playing David Ortiz at SS...

I can't possibly estimate how bad Ortiz would be at SS. Would it be -50 runs? -150 runs? I have no idea. I am absolutely sure he would not hit like the Ortiz we know if he had to try playing SS for a full season. I think Rosenheck was saying recently on some thread that there is no evidence players lose any offensive ability when at a tougher position. I cannot imagine how Ortiz would not lose anything playing SS, unless he simply made no effort except on balls hit directly at him.

I can't possibly estimate how bad Ortiz would be at SS.

Slightly worse than Renteria in 2005?

The flip side would be a team of Ozzie Smith clones at every position except maybe catcher. You do have to get the 1985-88 offensive version so as to get a good OBP to go with the baserunning and bunting. But you're going to have to score with almost no HR.

I don't know if this means anything, but using Tango's quick and dirty runs estimator and the Wiz's best season (raw stats division -- 1987, 303/393/383), you get a team that scores more than six runs a game, and that's before taking baserunning into account. Which means, with decent pitching and by far the best defense in history, they would win roughly one billion games a season.

Using Ozzie's career line (262/336/328) you get a team that scores almost exactly four runs a game. That's, uh . . . 648 in a season? That's math in my head. Is that right?

These are all of course unadjusted, not taking into account baserunning, and just for fun. What was Oz worth in a good year? 25 runs with the glove? More? Eight times twenty-five is 200. So a team with average pitching, eight guys conservatively as good as Ozzie Smith, would give up 594 runs in the 2007 AL. I think that runs scored number assumes nine Ozzies, so that team would out-score its opponents by about fifty runs. That's a winning team.

I think Ozzie may be too good a hitter to make this example work. You may want Rey Ordonez to approximate Papi.

I can't possibly estimate how bad Ortiz would be at SS. Would it be -50 runs? -150 runs? I have no idea.

How many runs would having no SS at all cost? There has to be some limit. Is that limit higher or lower than having a hitter who does nothing but make outs every time he's up?

Are a significant number major league hitters good enough to hit the ball right at the hole created by having no SS?

Even if the marginal wins are not necessarily cost effective, both the Yankees and Red Sox have shown that they are willing to spend over that threshold given their competition (ie each other).

Are you sure about this? The Red Sox decided not to pursue Alex Rodriguez this winter, and he most certainly would have improved the team. There is a definite limit to what they are willing to pay for those marginal wins.

How many runs would having no SS at all cost?

Roughly 700 total chances over the course of 162 games? Even if those 700 outs are all turned to singles, that's a whole bunch of runs... I wouldn't be at all surprised if David Ortiz were -100 runs defensively as a shortstop.

Roughly 700 total chances over the course of 162 games? Even if those 700 outs are all turned to singles, that's a whole bunch of runs... I wouldn't be at all surprised if David Ortiz were -100 runs defensively as a shortstop.

You'd have to think at least some of those chances would be covered by the 3B or 2B or even the LF/CF. The SS tends to take control of a certain percentage of plays that other players on the field defer to.

I'm not denying that Ortiz would be a terrible, terrible SS. I don't know if -100 runs bad is realistic becausea pretty significant portion of the plays made by any SS are pretty routine and I think almost any ML player could make those plays. I think David Ortiz the SS would have little trouble throwing out, say, David Ortiz the runner, on a slow roller to short.

I think Ozzie may be too good a hitter to make this example work. You may want Rey Ordonez to approximate Papi.

Rey had a mark of 2.8 RC/g per BBREF "good" for an OWP of .260


So a team of all St Rey's would score 458 runs
Let's say he saved 25 runs per year with his glove, a team of all ST Reys would save 200 runs, and give up 565

The Pythag for an all Rey team would be: 64-98

BBREF had St Rey at +65 fielding runs for his career- about +11.75 per year
If Rey is only +11.75 then an all Rey team is only +94 on defense- meaning it gives up 671 runs while scoring 458
and it's pythag is : 51-111

As every Mets fans knows, Ordonez blew chunks

700 would be putouts + assists. Most of the putouts will still be outs even with an unskilled shortstop. I'm assuming Ortiz could catch a popup, at least a normal one. The bloopers in the outfield will fall in. If he can't get to the bag to catch a forceout from the 2B, it doesn't cost you an out, just a base, as the 2B could just throw to first instead. A shortstop probably gets about 450 groundballs a year that are turned into outs. If Ortiz makes only half of those plays, he's costing you 170 runs. If he only makes 1/4 of the plays, he costs you more like 250.

Actually a team made up of terrible fielders would be worse than the sum of its parts. On popups to the shallow OF, if Ortiz was playing SS then the 2b, 3b, and outfielders would know they have to do some extra work, and they could catch many of the ones that a shortstop normally handles, but if everyone on the team was a a terrible defender, then nobody is going to catch those.

BBREF had St Rey at +65 fielding runs for his career- about +11.75 per year

Where do you find fielding runs on BB-REF?

Where do you find fielding runs on BB-REF?

You don't I screwed up, that's BPro's fielding runs

Okay, at least I'm not going blind.

BPro had St Rey at +65 fielding runs for his career- about +11.75 per year

Let's assume Rey was +11.75 over the average SS (per 162 9 inning games),
and that he created 2.8 runs per 27 outs (as per BBREF)

His run context was about 4.7 per game
SS's create on average about 0.5 runs per game less than the average player

So an Average SS would create 4.2 runs/game
Rey "loses" 1.4 runs per every 27 outs he made

2558 outs- average SS would create 398 runs, he created 268

130 runs below average
23 runs below average per 162 9 inning games (459 batting outs)

that made him 11 runs below average per season.

Essentially he would have to have fielded like peak Ozzie- each and every season- to simply break even on his career.

Rey would have had value as a defensive sub. (as a starter he was probably right at replacement level)- but he refused to be used that way, and in fact retired because no team would promise him a starting job- good riddance.