Tuesday, February 07, 2012

How Fans Confuse Trade Value

One of the favorite trades for Twins fans to complain about was the deal that sent Johan Santana to the the New York Mets for a handful of prospects. The question is how could trading a Cy Young award winner have such a paltry return. The answer is in understanding that the value traded is only partly related to the value of the player on the field.

In the case of Santana the Twins got Carlos Gomez, Phil Humber, Kevin Mulvey and Delios Guerra in return for Santana. Mulvey was effectively traded for Jon Rauch, Gomez was traded for JJ Hardy and Humber left as a free agent after clearing waivers. Rauch left in turn as a free agent and Hardy was traded, along with Brendan Harris, for two pitchers. Brett Jacobsen, who is still in the Twins system, and Jim Hoey who left after he was claimed on waivers this winter. So the Twins have Guerra and Jacobsen, plus the past contributions of Gomez, Rauch and Hardy, to show for Santana.

That doesn't seem like much. But what did the Mets get in return? They got one very good season from Johan Santana in 2008, but didn't make the playoffs. After 2008, Santana was going to be a free agent and the Mets also got the exclusive right to negotiate a new long term contract with him which they did prior to the 2008 season. That contract is looking less and less like it will pan out as Santana has struggled with injuries.

The Twins, of course, only gave up Santana after failing to agree on a long term contract. The alternative was to keep Santana for one season and then take whatever draft choices they got as compensation. This would have included a sandwich pick and either a low first round or high second round choice.

It would appear that keeping Santana for a year would have got the Twins to the playoffs in 2008. Although, we don't know what the impact of keeping Santana and his big contract would have been on other player decisions. Of the players the Twins got, Rauch was a significant contributor to division championships in 2009 and 2010. Gomez contributed to the 2009 championship and Hardy to the 2010. What Guerra and/or Jacobsen will contribute in the future is an open question.

For the Twins, you can argue the value of this trade either way. They have Guerra and Jacobsen, but gave up the two draft choices. They have the 2009 and 2010 division championships, but may have given up the 2008 championship.

From the Mets perspective it was Santana's contract, not the trade, that looks like a mistake. So far none of the prospects they gave up have turned into stars. But Santana was not enough in 2008 and who knows what they might have gotten in return for those same prospects if they had traded them themselves.

So the Twins traded a Cy Young award winner and got no true stars in return. That was a disappointment from the expectations raised when the trade was made. But they really only gave up one season of a player who was getting extremely expensive. On the Mets side, they were getting a Cy Young quality pitcher, but again only for one season. Keeping him required a costly investment.

On both sides, it was expectations, not the trade that created the disappointment. Even though only one season was on the table, fans on both sides had expectations that went way beyond that. That is not untypical of trades.

Another example is the JD Hardy trade by the Twins last year. For the Twins, the trade was a salary dump that also got Brendan Harris off the books. But Hardy was free agent after last season. Like the Mets with Santana, Baltimore only got one year in return for a couple prospects. They signed Hardy to a long term contract, but like Santana's contract, that was a separate decision. We will have to wait to see how that plays out, but in any case the Twins have Jacobsen.


Anonymous said...

Who is JD Hardy?

Anonymous said...

Also I think you meant Jon Rauch? Phil Rauch???

TT said...

The brother of Jon Humber and cousin of Phil Rauch. I fixed them.

John said...

Good points, particularly that the Twins really only lost one season of Santana, and that's all the Mets really gained. Actually, one can make an argument that the Twins could add what they spent that $13.25M on in 2008. It might be enlightening to look back at that draft class.

But I still think I'd rather have Santana's 2008 & the 2 draft picks.

Anonymous said...

The trade was contingent on Santana signing that contract, so not sure how it was a "separate decision".

TT said...

"not sure how it was a "separate decision"."

It was separate decision because it was deal between Santana and Mets, not the Twins and the Mets. The Mets got the right to negotiate the deal from the Twins and made the trade contingent on being able to sign Santana to a longer deal.

If you include the contract in evaluating the trade, then you have to evaluate it as a three way deal involving Santana.

There is no doubt, given his injuries, that Santana came out ahead. Although, given his 2008 season, he may have got an even better contract if he had become a free agent. The value of the contract had nothing to do with the trade. Its a separate issue.

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