Wednesday, May 25, 2011

Cost Benefit Analysis of a Jose Reyes Trade

With the struggles of Miguel Tejada this season, many Giants fans are looking for an alternative at shortstop. I have to say that I am in the same place because a .220/.241/.280 line was not what people were expecting when he signed his one year deal. His current line is worse than what I expected even in my worst case scenario in my 2011 projection for him.

The ZIPS updated projections expects that things will get better, but not that much better. The rest of the way projection has him hitting .260/.287/.357, which would still be below average offensive projection from a shortstop and his defense doesn't help his value at all.

The player that is in everyone's dreams to replace Tejada is the Mets Jose Reyes. Reyes is having a very nice season and appears to be back to the level of production that made him one of the best young players in the league before the injury bug bit him. The Mets are not expected to be contending and should be sellers of some of their veterans as they attempt to rebuild. Reyes should be available to teams that are willing to pay the price.

The price, which is expected to be fairly high, is the only thing holding the Giants back from going hard after him. The starting point for any trade talks is a top prospect and maybe some lesser guys as well. For the Giants, that means Brandon Belt or Zach Wheeler would have to be included. For the following analysis, I will use Wheeler because I imagine that Belt is pretty much untouchable at the moment.

Cost Benefit Analysis

To break this down first we need to figure out how much Wheeler is worth. This will be a very rough, back of the envelope calculation, but it should work for this purpose.

First, lets assume that there is a 75% chance he makes the majors. Top 10 picks make the majors about 73% of the time and Wheeler has shown he has potential in the low minors, so I think this is pretty fair. Next, lets make some assumptions on his value if he gets to the majors.

His talent ceiling is a number one or two starter, which would be about five WAR a season. Lets say that has a 20% chance of becoming true if he makes the majors. Lets say there is a 40% chance that instead of becoming an ace, he is a number two or three starter that is worth three WAR a season. Finally, lets say there is a 40% chance he becomes a number four or five starter or maybe switches to the bullpen and is worth one WAR a season.

If we take all of these assumptions and say three years of accumulating WAR in the majors, that gives us an expected total WAR of 5.85 over three years. If we assume one WAR is worth $5.5 million and that we must discount that value because it takes him a couple years to make the big leagues, that gives him a present value to the Giants of around $25 million.

Now that we have an estimate of what Wheeler is worth, we should figure out what Reyes is worth. So far this season, he has produced 2.4 fWAR over 47 games for the Mets. If we do a straight extrapolation of these numbers over 155 games, that would give him a 7.9 WAR season and about 5.5 WAR the rest of the way. This is probably a high estimate but lets go with it.

Reyes' contract pays him $11 million this season and as of today, that leaves about $7.8 million remaining to be paid. If he does produce 5.5 WAR and it is valued at $5.5 million per year, that gives him a value of $30.25 for the rest of the season and a surplus value of $22.45 million.

As of right now, Wheeler is more valuable to the Giants than Reyes, but adding Reyes also has the value of increasing the Giants chances of winning and making the playoffs. Making the playoffs is a big payday; lets say that brings in an extra $30 million to the team. Right now, Baseball Prospectus gives the Giants a 87.5% chance of making the playoffs. Lets assume that with Reyes, they become a virtual lock at 95%.

The expected playoff revenue increases with Reyes from $26.25 million to $28.5 million, so if we add $2.25 million to Reyes, his value to the Giants is now $24.7 million or virtually the same as what Wheeler is worth to the Giants.


As of this moment with the above assumptions, the Giants going after Reyes is about an even trade value wise. I see a number of assumptions that could easily change that complicate this deal.

First is that Reyes doesn't keep up his current rate of production. Right now, he is on pace for a career year and I would say there is a good possibility he slows down some along the course of the season. That would make him less valuable to the Giants.

There is also the chance that Reyes could become a Type A free agent, which means if the Giants fail to sign him to a extension, it could net a couple of draft picks. The extra draft picks would be nice to help restock the farm system and could help offset some of the loss of Wheeler.

Another possibility is the Giants have a different expectation of the future talent of Wheeler than I do. If they expect more, that obviously makes him more valuable to the team. The other thing that isn't taken into account is Wheeler is the only high caliber pitching prospect in the system and with the current pitchers running out of team control, that could making having a cost controlled player even more valuable.

With all of this taken into account, I would have to say that it would only make sense for the Giants to make this trade if they can do it soon because waiting until the end of July, the numbers don't add up. Even if the Mets were willing to do the deal now, it just seems like the Giants would be giving up quite a bit and don't have a lot of depth at pitching in the minor leagues to fall back on.

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