Comments on: The Economics of Trading Teixeira

By: Marc Schneider

Marc Schneider — Wed, 16 Jul 2008 15:15:56 +0000

JC,

I may be incorrect, but it seems to me that you are talking about the concept of sunk costs. Those prospects the Braves gave up are gone whether or not the Braves resign Teixera and should not influence what the Braves do about Teixera. Whether or not the deal made sense at the time, those prospects have nothing to do now with whether it makes sense to pay what would be necessary to sign Teixera.

By: kirknga

kirknga — Wed, 16 Jul 2008 00:18:14 +0000

If we keep working through the logic of Stephenson, if minor league players are better quantities than prospects who haven’t played, then wouldn’t the best possibility be trading for major league talent?

Also, in regards to draft picks, I would like think that the organization would have faith in their ability to scout and develop a players.

By: Greyson

Greyson — Mon, 14 Jul 2008 23:45:08 +0000

We got Tim Hudson for two flashes in the pan and a dud of a prospect, so I can’t imagine ever calling that one a bad deal.

I think what I mean when I express a similar appraisal of the Tex deal is that the deal was only worth it if he lifts the team into the playoffs in either of the years we knew he’d play. Now, unless he’s able to lift us up to the playoffs in the second half, which if he equals what he did last year he easily could, I’d say the deal could be called a bust.

Unless, of course, the relationships that were built give us the opportunity to sign him, perhaps even at a discount, then I would say it was well worth it. Especially with Boras involved, I tend to agree with you on how little the relationships mean, but the Braves might just need that little bit if they are really going to make a run at him.

By: JC

JC — Mon, 14 Jul 2008 23:26:23 +0000

fixed

By: Michael Rawdon

Michael Rawdon — Mon, 14 Jul 2008 22:01:50 +0000

Frank Stephenson at Division of Labour explains the economics of trading Mark Teixeira to Peter Gammons.

I dunno, does Gammons have the prospects to be able to acquire Teixeira?

By: Kyle S

Kyle S — Mon, 14 Jul 2008 21:08:57 +0000

I clicked through to the post to make the same point Paul makes. JC, I respectfully believe you are undervaluing the option value of holding a player’s rights. Look at the paucity of actual star free agents who have hit the market in the last few years – ALL of the best players have been kept off the market by the team who controlled their rights. Peavy, Halladay, Pujols, etc. The big deal pitching free agent of the past 5 years is Barry Freaking Zito, for chrissakes! This year, with Sabathia and Sheets hitting the market, will be somewhat different. But just because it didn’t work out for the Braves with Tex or Drew doesn’t mean that the option isn’t worth something (IMHO).

By: Mac

Mac — Mon, 14 Jul 2008 20:16:49 +0000

I don’t know about Boras, but the right certainly isn’t worth much when the team has a stated policy of not negotiating during the season. It’s absurd, but they keep saying that they won’t discuss deals during the season because it’s “a distraction”, as if wondering about the future of your first baseman is not.

By: JC

JC — Mon, 14 Jul 2008 14:21:14 +0000

Paul, I mentioned that added benefit in the discussion of Tex. I don’t feel these rewards are especially large, especially when the player is so close to free agency.

By: Paul Cohen

Paul Cohen — Mon, 14 Jul 2008 14:13:08 +0000

JC, you’re technically correct that the Braves only traded for one year — not five years — of Tim Hudson back in the December 2004 deal with Oakland. But they also got something else in the deal: They received the right to start negotiating with Hudson as early as December 2004, rather than having to wait until November 2005 (when Huddy would have filed for FA) like every other team in baseball. And in the case of Hudson, Schuerholz was able to exercise this right and negotiate a below-market contract one year in advance (since players are more risk-averse than teams, etc., etc.) So that was probably worth a couple more million in savings for Schueholz.

Now obviously Schuerholz received the same right when he traded for Teixeira. But arguably, the right to negotiate early with a future FA isn’t worth very much when that player is represented by Scott Boras. But it is worthy something.

So the point is that the value of the Teixeira and Hudson (and JD Drew, Sheffield, etc) trades goes beyond the 1 year (or 1.5 years) remaining on the player’s contract. The Braves also receive the exclusive right to negotiate with a FA, which can potentially be worth a couple million. And when you don’t successfully exercise that right (as the Braves obviously won’t with Tex), then you are squandering the window of opportunity that you traded for.