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MLB: What IS Trade Value?

Updated: Jul 19, 2023

Listen or read any baseball media this month and your head is going to be filled with crazy trade ideas. I even started my possible trade articles with one I labeled wild. Here are most of the trade articles we have done already.



It is time to get serious now. I wanted to take a step back today because it is completely clear to me that some don't understand a few things:

  1. Who is and who isn't really available and viable for the Astros to trade.

  2. Of those that aren't really available, who COULD be available if the other team blew them away with a trade offer.

  3. What fair trade values are and why no well-run team is going to value players THAT differently.

In this two-part series, I covered the first two of these here:

In this article we will cover the third item because there seems to be some real misunderstandings about MLB trade value.


First, almost EVERY MLB team takes this approach to setting trade values for players. The process is correct.


Second, in 2023, the projections teams are using about players are generally fairly uniform.


Third, teams MAY value performance differently at different positions. For example, a top hitting/ fielding catcher is probably more valuable than a corner outfielder.


Fourth, what IS different is how much of a PREMIUM a team will apply to what is a fairly standard trade value. Teams with a single need would likely be willing to pay an excessive price to trade for a difference maker at that position.


Lastly, teams are paying for the projected performance forward and NOT what a player has done in the past. Sure, past results are the primary input in the projection models to predict future results. This is why advanced metrics and expected stats are so important. If a player has been lucky, teams are not going to assume he is going to be lucky going forward.


We have already jumped ahead too far. Let's start the discussion with the concept of surplus value.


If you were an MLB owner, what would you want? Well, at its extreme you would want to win the World Series with a bunch of players you were playing the minimum salary. You would have a team full of EXTREMELY popular and talented first- and second-year players. You would win the championship and make the most money possible. The Astros in this era are probably the closest thing we have ever had to this.


My definition of Surplus Value is the value of the WAR (Wins Above Replacement - Fangraph's definition here) minus the salary the team has to pay for that performance. As discussed above I don't believe there is a single dollar multiplier (probably 8X-10X) to the WAR to get the value of the WAR.


It is probably easier to illustrate than it is to describe. Let's take four examples from the 2022 season. The full table is on the right.

  1. Jose Altuve

    1. 2022 Payroll (what he actually got paid)- $29M- the highest payroll player in 2022

    2. 2022 WAR- 6.6 - he had an incredible season

    3. Value of the WAR- Let's assume $9M/ WAR- 6.6 * 9 = $59.4M

    4. Surplus Value- $59.4 - $29 = $30.4M

  2. Chas McCormick

    1. 2022 Payroll (what he actually got paid)- $730,800- pre-Arb

    2. 2022 WAR- 2.0 - good season in part-time role

    3. Value of the WAR- Let's assume $9M/ WAR- 2.0 * 9 = $18M

    4. Surplus Value- $18 - $0.73 = $17.3M

  3. Ryan Pressly

    1. 2022 Payroll (what he actually got paid)- $10M- well paid RP

    2. 2022 WAR- 1.4- good RP season

    3. Value of the WAR- I will assume $9M/ WAR but I think RP may have a higher ratio- 1.4 * 9 = $12.6M

    4. Surplus Value- $12.6 - $10 = $2.6M

  4. Yuli Gurriel

    1. 2022 Payroll (what he actually got paid)- $8M- Not a huge cost for a starter

    2. 2022 WAR- (-0.9) - he had a terrible season

    3. Value of the WAR- Let's assume $9M/ WAR- -0.9 * 9 = -$8.1M

    4. Surplus Value- -$8.1 - $8 = -$16.1M- worst surplus value on 2022 team

You may be curious where the Astros are so far in 2023. I have prorated the 2023 salary and 2023 WAR to the first 91 games.


It should be no shock that Valdez, Brown, Tucker, and Alvarez lead the 2023 team in surplus value.


Similarly, Abreu, Maldonado, Montero, McCullers, and Brantley have the worst surplus values.



Please consider this before scrolling down.


 

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From Surplus Value to Trade Value


The previous tables show the surplus value in a single season. To get a player's TRADE VALUE, one needs to add the surplus values for all of the current and future seasons that a team has that player under contract/ control- until they are a free agent. Obviously, a player with a reasonable long-term contract or a player still in his pre-arb years is far more valuable than a player that is a rental.


Here are some current Astros examples.

Sites like fangraphs.com usually show when a player is eligible to be a free agent on that player's profile page or in the roster resource payroll section. So many of the bogus trade proposals VASTLY overpay for a player available for two months with players available for 3-5 years.


For players currently under contract that is an easier exercise. For players that are in pre-arbitration, one would need to project the arbitration salaries. For players with option years and or opt outs, one would need to project the status of those options.


The total surplus value is simply the sum of the controllable year's surplus values, and this leads directly to a player's MLB trade value.


How the baseballtradevalues.com website translates that surplus value to what they call their trade value could incorporate:

  1. Positional scarcity

  2. Historical Injury risk

  3. Age

  4. Player reputation.

Luhnow once explained 6-7 years ago that THIS WAS the way they were evaluating players for trades. Today, all MLB teams have a similar algorithm.


I THINK when people say they don't trust the baseballtradevalues.com values, they are REALLY saying that a player has a premium position and that there are likely multiple teams that will compete with each other to drive up the price. This is possible but does not account for some of the media's click bait attempts to push completely bogus trade options.

Understanding surplus value is the key to understanding what players are TRULY worth in trades. Hopefully this will help you spot bogus trades.


You can see the Astros trade values in the tables below or understand more context here.

Let me know if this helped you.


Trade Value Tables


By Last Name- Updated 7/20/23

By Trade Value




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