The Risk/Reward of Trading for Prospects

The value of prospects is something that is very difficult to quantify, mainly because most prospect are unproven at the Big League level. While many top prospects enjoy success at various levels of the Minor Leagues, it is incredibly difficult to determine how they will transition to the Major Leagues. Most prospects, even the most heralded ones, take longer to develop than expected and they rarely fulfill the lofty expectations set upon them.

In 2011, Scott McKinney conducted a study for the Royals Review Blog, in which he analyzed the success and failure rates of prospects based on their ranking in Baseball America’s (BA) top 100 prospect lists from 1990-2003. McKinney declares a prospect a success if he averages above 1.5 fWAR per season during his cost controlled years, which are the player’s first 6 seasons in the Majors. He declares a prospect a bust if he averages below 1.5 fWAR per each cost controlled season. McKinney found that nearly 70% of BA’s Top 100 prospects fail. His study also shows that pitchers succeed just 22.6% of the time compared to the 37.1% success rate of position players. The large differential between pitchers and position players has a lot to do with the higher rate of injuries among pitchers. Many pitching prospects suffer arm injuries that can derail their career, unlike the injuries to position players that they are usually able to overcome. As you would expect, players rated higher in the rankings tend to have more success, as 55.1% of players ranked 1-10 have succeeded at the Big League level. However, having just over half the prospects ranked at or near the top of all prospects succeed shows how difficult it is to determine which Minor Leaguers will be successful in the Majors. Finally, McKinney’s study also shows that top prospects success rates have not increased much over time, which indicates that evaluating prospects has not become any more accurate than it used to be.
Even with the incredible amount of risk associated with prospects, many organizations trade established Major Leaguers for young Minor Leaguers. This may seem like an easy decision for rebuilding clubs, yet, just this past off-season, the Tampa Bay Rays traded their workhorse starter, James Shields, for the Royals’ top prospect, Wil Myers, and other prospects. The Rays are one of the few contending teams that would trade such a significant MLB player for a prospect. However, for a small market team like the Rays, young players can be more valuable than proven veterans.
So, why would a team coming off its 5th straight winning season trade a pitcher with 6 straight seasons of more than 200 IP for players with so much risk? The main reason is, despite the risk, prospects are usually relatively inexpensive and controllable. Once a player is first promoted, he must spend at least 6 seasons under club control. For the player’s first 3 seasons in the MLB, teams can pay players the MLB minimum salary of $480,000. For a small market team like the Rays, being able to pay a key player at or near the MLB minimum salary compared to the average MLB salary of $3.2 Million is a huge advantage. After 3 seasons, the player has the opportunity to go to arbitration for 3 seasons, which will almost always see the player’s salary rise from the previous season’s salary. Despite the rise in salary during arbitration, the player will still be paid less than he would if he hit the free agent market. Being able to retain players at or below market value for 6 seasons is what small-to-mid market clubs must do to remain competitive, especially when teams like the Yankees seem to have no payroll limitations.
The ability to control the player for his first 6 seasons in the Big Leagues is a large component to why rebuilding clubs target Minor Leaguers or young Major Leaguers. The rebuilding club will be able to give the young player the opportunity to develop, while the team is able to find other players that they can build around. A great example of this occurred in 2007, when the Texas Rangers traded Mark Teixeira to the Atlanta Braves for Jarrod Saltalamacchia, Elvis Andrus, Matt Harrison and Neftali Feliz. The Rangers dealt a great player, who was nearing Free Agency, in exchange for 4 controllable players, 3 of whom have made huge contributions to help the team become a perennial contender again.
The point of this article is not to suggest that trading for prospects is a bad idea. There are plenty of examples of teams acquiring top prospects and seeing them grow into stars at the MLB level. However, as the Trade Deadline approaches and rumors continue to swirl around top prospects, it is important to remember that even the most heralded prospects do not succeed in the Majors nearly 50% of the time. For those prospects that are successful, they can provide their team with incredible value, as well as the possibility to become a star. But even these prospects often take time to develop.

You can check out Scott McKinney’s study here: http://www.royalsreview.com/2011/2/14/1992424/success-and-failure-rates-of-top-mlb-prospects

Anthony Cacchione

Top Area of Need for each AL Contender

The All-Star break is behind us and now trade rumors are at full strength. So, as promised, here is the top area of need for each AL contender.

Texas Rangers: Starting Pitcher
The Texas Rangers’ DL currently holds 7 pitchers, and even when they get Yu Darvish back, the middle and back of the rotation is very weak. Due to all the injuries to the rotation, the Rangers have been forced to turn to youngsters like Justin Grimm, Martin Perez and Nick Tepesch. However, Grimm has struggled with a 6.37 ERA and Tepesch has compiled just a 4.85 ERA. The Rangers have the finances and the farm system to be able to acquire a top Starting Pitcher, and are said to be in on the Cubs’ Matt Garza.

Oakland Athletics: Second Base
The Oakland A’s don’t have many holes, but second base is a big one. The A’s starter at second base, Eric Sogard, has slashed just .255/.328/.346 with just 1 home run and 13 RBI. The second base market is not very strong, especially if the Phillies are not willing to deal Chase Utley, but the A’s have a deep enough farm system to acquire an upgrade at the position. The Mets’ Daniel Murphy would be a good offensive upgrade, while also fitting the A’s blueprint with great versatility.

Detroit Tigers: Left Fielder
Many experts have argued that the Tigers greatest need is a reliable closing pitcher. While the Tigers have certainly had issues in finishing games, it seems that Joaquin Benoit can handle the 9th inning for this talented club. Benoit has a 1.64 ERA and is 8/8 in save opportunities. Meanwhile, the Tigers are receiving little offensive production from Left Fielder Andy Dirks. Dirks has slashed .243/.305/.344 with just 6 HRs, but his struggles are even more severe against Left Handed pitchers, who have held Dirks to just a .205 batting average against. The Cubs Alfonso Soriano could fit nicely into this team’s lineup, but a cheaper alternative could be to just a Right-handed hitting LF to platoon with Dirks.

Cleveland Indians: Starting Pitcher
The Indians have numerous options to start games for them; however, none of these pitchers are Aces, and most are 4th or 5th starters at the present time. The Indians rotation ranks 22nd in the MLB in ERA and Innings Pitched. The Indians do not need to acquire an Ace to reach the Postseason, but the addition of a more reliable middle of the rotation starter, such as Bud Norris of the Astros, would certainly strengthen this team.

Boston Red Sox: Third Baseman
The Red Sox likely felt pretty comfortable with the Wil Middlebrooks coming into this season, especially after he slashed .288/.325/.509 with 15 HRs last season in just 75 games last season. However, Middlebrooks has been a huge disappointment so far this season, and is now in Triple-A to fix his contact issues. The Red Sox have turned to numerous players in an effort to solidify the position, but none of the options have been overly impressive. The Red Sox are heavily scouting Michael Young of the Phillies, but if the Phillies choose not sell then the Red Sox would have to trade Major League talent to acquire Young.

New York Yankees: Catcher
The Yankees really have too many holes to fill, but they have stayed in contention thus far, and there is no chance the Yankees choose to sell. Despite so many holes, their biggest need is at the catcher position, where the Yankees are receiving little production. The Yankees catchers are tied for the fewest HRs in the MLB, with just 6 long balls this season. At a few other positions the Yankees at least have the hope of receiving production from injured players who will return, such as Derek Jeter, Alex Rodriguez and Curtis Granderson. If the Phillies choose not to trade Carlos Ruiz, then the Cubs’ Dioner Navarro is the best available catcher.

Tampa Bay Rays: Catcher
The Rays may choose to just stand pat as they have done in the past. Nevertheless they still have needs, and their biggest need is at catcher, where the Rays have never really had a reliable backstop. The Rays are tied with the Yankees for the fewest home runs from their catchers at 6 HRs. The Twins’ Ryan Doumit may fit the Rays better than Navarro or Ruiz, because Doumit provides the Rays with more versatility, as he is able to play the corner outfield spots as well as first base.

Baltimore Orioles: Infield Depth
The Orioles addressed their biggest area on need when they acquired starting pitcher Scott Feldman from the Cubs. The Orioles now have no glaring needs, except acquiring a utility infielder that can produce more offensive value than their current backup infielders. It is not a major concern, but because second baseman Brian Roberts has so much trouble staying healthy, it may be wise to add another infielder that can play second base in the event that Roberts is injured. The Royals’ Miguel Tejada could fill in nicely as he has for the Royals.

Anthony Cacchione

Top Area of Need for Each NL Contender

With the All-Star Break upon us, more trades will begin to occur, so we now look at the top area of need for each NL contender. The top area of need for each AL contender will follow later.

Arizona Diamondbacks: Set-up Man/Closer

The Diamondbacks bullpen has been relatively strong this season with a 3.33 ERA, which ranks 6th in the NL. However, the Diamondbacks have had trouble late in games, especially when Heath Bell was the closer. The Diamondbacks have also blown the most saves in the MLB with 19 blown saves. Even though the Diamondbacks got their closer, JJ Putz, back from injury, they still need a late-inning reliever, as Putz is tied for the team lead with 5 BS’s. Unless the Mets make Bobby Parnell available, Kevin Gregg may be the best value of any late-inning relievers.

Los Angeles Dodgers: 2nd Base
The Dodgers have been hot of late and quickly climbed from the cellar of the NL West to being just 2.5 games back of the first place Diamondbacks. However, the Dodgers are still just a .500 team, and are 24th in the MLB in runs scored. One position really holding the Dodgers back is 2nd base, where their second basemen have slashed just .254/.315/.316. The best 2nd basemen that could be available is Chase Utley of the Phillies; however the Phillies have not yet decided whether to buy or sell, but are currently leaning towards buying.

Colorado Rockies: Starting Pitcher
The Rockies may choose not to buy, but the NL West is certainly up for grabs. Especially since the Rockies just got Tulowitzki back from the DL, they should consider acquiring a starting pitcher to help push them into the Postseason. The Rockies rotation ranks 12th in the NL in ERA with a 4.54 mark. It doesn’t seem that new addition Roy Oswalt will fulfill their expectations as he has pitched to a 7.64 ERA in his first 4 starts, and is now on the DL. If the Rockies are going to reach the playoffs, they must acquire another solid starter. While Matt Garza may be out of the Rockies’ price range, the Twins’ Kevin Correia may be more realistic.

St. Louis Cardinals: Shortstop
Shortstop has long been a position of need for the Cardinals, and this year is no different. They hoped that Pete Kozma would be able to step up this year and provide strong defense and adequate offense. Kozma has been able to provide value on the defensive side of the field, but his offense has not, as he has slashed just .232/.279/.293. The trade market for shortstops is pretty weak this season, which is why the Cardinals are hoping a platoon of Daniel Descalso and Pete Kozma can hold the lineup together. In the unlikely event that the Indians make Asdrubal Cabrera available, then the Cardinals could pursue him.

Pittsburgh Pirates: Right Fielder
The Pirates sit just 1 game behind the St. Louis Cardinals in the NL Central, but most of that success is owed to the pitching staff, which leads the MLB in ERA. One position that could especially use an offensive upgrade is Right Field, where the starter, Travis Snider, has produced an underwhelming .224/.294/.332 slash line. One trade possibility is the White Sox’s Alex Rios, who is also under contract beyond this season.

Cincinnati Reds: Left Field
Ever since Ryan Ludwick landed on the DL after the first game of the season, the Reds have been looking for his replacement. Internal options have failed to solve the problem, with Chris Heisey struggling to stay healthy and few other internal options coming through for the Reds. If the Cubs are willing to deal Alfonso Soriano within their division, then he could be a fit for the Reds.

Atlanta Braves: Center Field
The Braves have no glaring need, except in Center Field, where free-agent signing, BJ Upton, has struggled mightily. The Braves may not want to bench or platoon BJ for an extended period of time, especially since he is in the first year of a 5 year, $75 Million deal. However, a .177/.266/.300 slash line is not enough production for a team looking for a playoff berth. Justin Ruggiano of the Miami Marlins may be a good fit, as he is cheap financially and the Marlins are clear sellers.

Washington Nationals: Starting Pitcher
The Nationals have struggled in many areas this season, but the one position they must improve is their 5th starter spot. The Nationals starters as a whole have been very good, but that is in large part due to the excellence of Stephen Strasburg, Jordan Zimmermann and Gio Gonzalez. However, they are receiving horrible production from their 5th starter, Dan Haren, who was signed to a one year, $13 Million deal this past off-season. Haren is currently on the DL for the 2nd time, but even when healthy, Haren has compiled a 4-10 record with a 6.00 ERA. The Houston Astros’s Bud Norris may be a good fit for the Nationals, especially because he is controllable beyond this season.

Philadelphia Phillies: Right Fielder
The Phillies are right on the border between buying and selling, and in my last post I saw them more as sellers, but they have been hot of late and are currently leaning towards buying. If they do choose to buy, then many have speculated that they must shore up their middle and setup relief pitching, but their biggest area of need is in Right Field. Phillies Right Fielders have accumulated the 29th ranked WAR at -0.6. Free agent acquisition Delmon Young has failed to fulfill expectations, as he has slashed .268/.323/.419 with just 7 home runs. The Phillies do not have the prospects to acquire someone like Alex Rios, but a reunion with Raul Ibanez could be a possibility.

Anthony Cacchione

Top Trade Targets

Now that the July 31st Trade Deadline is drawing closer, we look at the top player at each position available on the market. When determining the best available players at each position, we have considered the player’s talent, chance of being traded and talent he would yield in return.

Starting Pitcher
Matt Garza, Chicago Cubs
Unless the Phillies change course and decide to trade Cliff Lee, Matt Garza is the most talented and consistent starting pitcher available. Despite his underwhelming 60-62 career record, Garza has compiled 6 straight seasons with a sub 4.00 ERA. The only concern surrounding Matt Garza is that he battled a triceps injury from late July last season until about May of this season. Although Garza is just a rental player, due to his impending free agency, many clubs will aggressively pursue him. Another strong starting pitcher, who is likely to be dealt is Ricky Nolasco, who appeals to many NL West clubs because of his success against the Giants and high chance of resigning, since he grew up on the West Coast.

Relief Pitcher
Jesse Crain, Chicago White Sox
The White Sox know they have no chance of reaching the postseason, so they no longer need a shut down late inning reliever. Crain is in the midst of the best season of his career with a 0.74 ERA and 11.29 K/9. He also has the track record to suggest he can sustain such production. His impending free agency makes him look like a rental player, but the White Sox will still command a solid prospect in return, as he is easily the best relief pitcher on the market. Even though the White Sox recently placed Crain on the 15-day DL, he should be healthy by the deadline and still a highly sought after pitcher. The Marlins have two other relievers that could be dealt in Mike Dunn and Ryan Webb; however, neither is the same caliber as Jesse Crain.

Closing Pitcher
Jonathon Papelbon, Philadelphia Phillies
The Phillies are on the border between buying and selling, but it seems more likely they will sell a few pieces in order to retool the farm system. In either case, the Phillies will likely attempt to deal Papelbon, who has fallen out of favor in Philadelphia after he called out his teammates. Papelbon’s 2.05 ERA and strong track record are appealing to many clubs in search of a reliable closer. The only hindrance in a deal is Ruben Amaro Jr.’s reluctance to eat any amount of Papelbon’s remaining contract. The only other closers on the market are pitchers with much lesser track records, such as Steve Cishek, Bobby Parnell, Kevin Gregg and Jose Veras. All but Cishek profile as relief pitchers on other teams.

Catcher
Carlos Ruiz, Philadelphia Phillies
Due to his impending free agency, Ruiz will likely be dealt if the Phillies choose to sell. After a breakout 2012 campaign, Ruiz has been unable to recapture that production thus far this season. After serving a 25-game suspension for a drug violation and spending time on the DL for a hamstring issue, Ruiz has accumulated just 102 PA’s while slashing just .264/.324/.297 with 0 HRs. Despite his poor offensive numbers, Ruiz is still well-regarded as a good leader for a pitching staff, and he is one of the few catchers on the market with a strong track record.

1st Base
Justin Morneau, Minnesota Twins
The Twins are not in the Postseason race this season, and will likely deal Morneau in an effort to strengthen their farm system. The Twins are even more likely to deal Morneau now that they lost one of their other trade chips to injury, when Josh Willingham needed knee surgery and will be out 4-6 weeks. The only concern for anyone acquiring Morneau is that his power has really diminished this season. He has just 4 HRs this season, but has still driven in 48 runs and slashed .284/.338/.401. Even if the White Sox choose to deal veteran Paul Konerko, Morneau is still the top first baseman available.

2nd Base
Chase Utley, Philadelphia Phillies
The Phillies may be reluctant to deal the long-time Phillie, but they may not be able to turn down a strong prospect. It seems possible that a team in need for a second baseman could give the Phillies a solid prospect in return because there are not many second baseman on the market, and none with as good of a track record. The most appealing thing for a team looking to acquire Utley is that he seems fully healthy and back to his old form, as he has slashed .278/.346/.510 with 11 HRs.

3rd Base
Michael Young, Philadelphia Phillies
Unlike Chase Utley, Young has only been with the Phillies for the 2013 season, therefore, he is almost a certainty to be dealt in the likely event that the Phillies sell. Young has exceeded expectations this season with a .290/.346/.410 slash line with 5 HRs and a 7.9 BB%. Similar to 2nd Basemen, there are few 3rd Basemen on the market, but there are multiple teams in search of a quality third baseman. The one area of weakness in Young’s game is his defense, where he has accumulated -6.4 runs above average based on UZR.

Short Stop
Brendan Ryan, Seattle Mariners
Even if the Mariners choose not to sell, Brendan Ryan will likely be available for trade because the Mariners continue to seek offensive upgrades at any position they can, and no longer value Ryan’s defense over more productive offense. They have moved Ryan to a utility role and place Brad Miller in his place as a starter. Even though Ryan has struggled to reach the Mendoza Line (.200 AVG.) each of the past two seasons, his defense will keep him on just about any MLB team. Since Ryan is widely regarded as one of the best defenders at any position, he should appeal to many teams looking for a defensive upgrade at Shortstop. Also, with few shortstops on the market, Ryan seems to be a likely target for many teams.

Left Field
Alfonso Soriano, Chicago Cubs
This spot goes to Soriano by default after Josh Willingham underwent arthroscopic knee surgery and will now miss the next 4-6 weeks. However, Soriano is still a player on the block and likely to draw more attention now that teams will not pursue Willingham. Despite what is a down year for Soriano, he has still slashed .257/.284/.436 with 10 HRs and 38 RBI. While Soriano is not a middle of the order bat, he is still capable of 25 HR power, and just last season he had 32 long balls with 108 RBI. If the Cubs choose to deal Soriano they will likely need to kick in some cash to cover his $18 Million salary for the 2014 season.

Center Field
Alex Rios, Chicago White Sox
While Rios is primarily a RF, he has the most experience in CF of any Outfielder on the block. After experiencing a few tough seasons from 2009-2011, Rios seems to have recaptured the success of his early days with the Blue Jays. In 2012, Rios hit a career-high 25 HRs with 23 steals. Thus far this season, Rios remained on that pace with 11 HRs and 14 steals, while also increasing his BB%. Rios will appeal to many contenders because he is signed through 2014 with a club option for 2015. While the White Sox may kick in some cash to cover a portion of the remainder of his contract, the contract is relatively team-friendly if he continues to play at this rate.

Right Field
Nori Aoki, Milwaukee Brewers
The Brewers currently sit in the cellar of the NL Central and are willing to deal Norichika Aoki, especially since he will become a free agent after 2014, not 2017 like previously thought. Beyond Aoki’s strong play, clubs will be interested in acquiring the Right Fielder because of his modest salary. Aoki is making just $1.25 Million this season and a club option worth $1.5 Million for 2014. In his short 2 year MLB career, Aoki has slashed .287/.357/.409 with 14 HRs and profiles as a strong leadoff hitter on most clubs.

Designated Hitter
Adam Dunn, Chicago White Sox
It seems unlikely that the White Sox will be able to find a taker for Dunn, especially since he seems to have fallen back to his awful 2011 numbers. On the bright side, Dunn has already doubled his HR total from 2011 when he hit 11. Dunn’s power is still outstanding, but his contact issues have grown worse the last few years. If the White Sox cover a portion of Dunn’s $15 Million salary for 2014, then there will likely be a few clubs interested in the veteran.