Tuesday, May 31, 2011

More Jose Reyes Trade Thoughts


Last week, I wrote about the cost benefit analysis of the possible trade of Jose Reyes and my rough calculation was that Reyes is worth about $25 million to the Giants and the Giants top pitching prospect was worth about the same.

After I wrote that, Julian from Splashing Pumpkins left a link to some tools to help analyze trades and value of prospects. I wanted to try to use these tools to get a better idea of what this trade would mean for the Giants.

First up; what the Giants would get. Jose Reyes has already accumulated 2.9 WAR and the first go round I simply extrapolated that for the rest of the season. This probably overstated his value so this time I used the ZIPS rest of the season projections as the baseline for determining his rest of the season WAR.

This gave us a 3.9 WAR for a value of $18 million. The remainder on his contract is about $7.8 million and I assumed that he will be a Type A Free Agent so that is added in at the bottom as well. In addition, I also gave him a bonus for the bump in expected revenue for making the playoffs with him on the team.

Jose Reyes
Year
Sal (M)
WAR
Val (M)
Net (M)
2011
$7.8
3.9
$18.0
$10.2
FA Picks
$5.0
Playoff Revenue
$2.3
Total
$7.8
3.9
$25.2
$17.4

The final net value for Reyes ended up at $17.4 million for the rest of the season.

I did the something similar for Zach Wheeler but with a number of assumptions. First, I assumed that he would make the majors in 2013 and once he made the majors, he would have an expected WAR of 1.575. I came to that number by assuming the following probabilities for his future performance:

WAR
Probability
xWAR
0
0.25
0
5
0.0375
0.1875
4
0.075
0.3
3
0.1125
0.3375
2
0.225
0.45
1
0.3
0.3
1.575

Then, I took this number and plugged it into the same calculator as the one used in the Reyes analysis. For his team controlled years, I put in a league minimum salary of $400k and estimated his arbitration salary at 40%, 60%, and 80% of FA value in their 1st, 2nd, and 3rd years, respectively.

After that, I also put everything into present value terms using a discount rate of 10%, which is seen in the column NPV.

Zach Wheeler
Year
Sal (M)
xWAR
Val (M)
Net (M)
NPV
2011
$0.0
0.0
$0.0
$0.0
$0.0
2012
$0.0
0.0
$0.0
$0.0
$0.0
2013
$0.4
1.6
$7.5
$7.1
$5.3
2014
$0.4
1.6
$7.5
$7.1
$4.9
2015
$0.4
1.6
$7.5
$7.1
$4.4
2016
$3.0
1.6
$7.5
$4.5
$2.5
2017
$4.5
1.6
$7.5
$3.0
$1.5
2018
$6.0
1.6
$7.6
$1.6
$0.8
FA Picks
$0.0
Total
$4.2
9.5
$45.0
$40.8
$19.4


With this tool, Wheeler's net present value to the Giants is $19.4 million, which is still $2 million more than what Reyes would be worth to the team.

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