Yesterday, the Tampa Bay Rays traded Akinori Iwamura to the Pittsburgh Pirates for relief pitcher Jesse Chavez. The Rays were motivated by the fact that they would have to pay a $650,000 buyout if they did not pick up Iwamura’s $4.25 million option.
Iwamura missed much of last season with an injury, but returned to form at the end of the year. Based on his 2007 and 2008 performances, I anticipate him being worth a little more than $7 million in 2009. Thus, even if the injury offers some risk, Iwamura appears to be worth a bit more than his salary. Why would the Rays trade him? They have Ben Zobrist at second and Evan Longoria at third, so there isn’t any room. It’s better to capture some of the value the team would be giving up by having him ride the bench.
In return, the Rays get Jesse Chavez, a young and decent-but-not-spectacular reliever. He’s difficult to value because he doesn’t have a long record of performance, and as a reliever his career sample size is small. As an average reliever who pitches 80ish innings, he’s worth around $2 million/year. He’s got two more years before he hits arbitration when he’ll be making a little over $400K a season. Thus, he provides about $3 million in total surplus (marginal revenue product — salary) over the next two years. This doesn’t even take into account his arbitration years, when he’ll make a little less than half of what he’s generating in revenue (He’ll also be improving and league revenues will be growing). Though, I’m reluctant to put much value on this time period given the difficulty in predicting what he’ll become from his short career. There is a lot of uncertainty here.
In summary, it looks like a pretty even deal; but, definitely mutually beneficial.