• Revisiting The Recent Question: Are Yanks Being Smart?

    Posted by on December 17th, 2007 · Comments (27)

    The other day, I took a beating from some WasWatching.com readers when I suggested that the proper model for building a baseball franchise would be to draft, sign, and develop position players and trade for, or sign free agent, pitchers.

    Today, I found this excellent study entitled “How Much is a Top Prospect Worth?” by Victor Wang in “By the Numbers, Volume 17, No. 3” that backs up what I was suggesting the other day. I recommend reading the study (via the link provided herein). In summary, this is what Wang shared:

    With salaries for major league free agents skyrocketing, teams are more reluctant than ever to trade their top prospects. These prospects are so valuable because if they reach their upside, a major league team has a star caliber player under their control for six full seasons while paying that player much less than what he would earn on the open market. Teams are even reluctant to trade these types of prospects for established major league stars, who may provide more certainty but cost more and may soon be free agents. I was curious to see whether teams were making the right choice by holding on to these prospects. In essence, I wanted to determine what type of value a team could get back from a top prospect during the first six years the team had that prospect under its control.

    On average, the hitting prospects have given about 24 WARP, or the results of an everyday player. When that player can be controlled for a very cheap price, it gives great value to the controlling team given the current open market. However, when we take a closer look, the chances of a team getting an everyday player is one out of three. They also have a higher chance of having their prospect become a bust than getting a star player in return. A bust happens for one out of every five prospects while a team gets a star player in return for one out of every six hitting prospects. For every Vladimir Guerrero, there are even more Eric Anthonys. The large standard deviations also reflect the large risk prospects carry. While hitting prospects provide a pretty decent return, top pitching prospects have given a terrible one. Out of the 26 different pitchers to rate as a top ten prospect, only one (Pedro Martinez) gave a star return in his first six years. A team only gets a solid starting pitcher for about one out of every ten pitching prospects. Maybe even worse, over half of the pitching prospects became busts. Given the high rate of failed pitching prospects, it could definitely be worth giving a top pitching prospect for an established player, even considering the high price that pitchers fetch in the free-agent market.

    It appears that teams are doing the right thing in hanging on to top hitting prospects. Trading a top hitting prospect demands a lot in return in order to ensure fair value in a trade. It also appears that teams are usually doing the right thing by not trading away top pitching prospects for a short term acquisition. There could be value to be made if a team can acquire a more certain asset it can control for over one year for a top pitching prospect, especially given the fact that even top pitching prospects are a bust over half the time.

    Like I said the other day, the Yankees have focused their “draft” strategy around drafting, signing, and trying to develop pitching prospects. As Wang notes “top pitching prospects are a bust over half the time.” Note we’re not talking about “prospects” here but “top prospects.” And, note we’re not talking about them being “less than great” here but about them being “busts.” So, again, I have to ask the question: Is Brian Cashman making the smart move by going with older and expensive position players, with no one to force them out of the picture for less money, and going very heavy with pitching prospects where it’s risky to project performance and health at the big league level?

    Comments on Revisiting The Recent Question: Are Yanks Being Smart?

    1. Rich
      December 17th, 2007 | 10:55 am

      On balance, I prefer that teams draft the best player available. It tends to lead to more hits and fewer misses. If, however, one departs from that strategy, the non-pitching prospect should have a grade that is clearly better than the pitching prospect.

      As I said on the other thread, the Yankees are stocking up on position players through their Latin American free agent signings.

      I think the older, expensive position players are largely a vestige of a previous era. Those players are helping the Yankees transition to a new model that typifies Cash’s vision, with the caveat that Hank could interfere with this process at any time. He is likely the reason that Posada and Rivera each got an additional year on their new contracts.

    2. Raf
      December 17th, 2007 | 11:02 am

      So, again, I have to ask the question: Is Brian Cashman making the smart move by going with older and expensive position players, with no one to force them out of the picture for less money, and going very heavy with pitching prospects where it’s risky to project performance and health at the big league level?
      =====================
      Time will tell, but the Yanks have done both over the years; they have developed, kept, and traded away young talent; both pitchers and position players.

      The shift in draft strategy may be in response to the failure (for whatever reason) of veterans who have been acquired.

      I have nothing to back this up, but I think draft strategy is cyclical; some teams become heavy with pitching prospects, others with OF prospects, others with catching prospects, etc, etc, etc. Then it becomes a case of players moving around within the system to fill a need, then they get the call or they’re traded to a team that could better utilize their services.

      Will try to read the study over lunch, it seems like an interesting read.

    3. MJ
      December 17th, 2007 | 11:04 am

      “Is Brian Cashman making the smart move by going with older and expensive position players…”
      =============================================
      Older and expensive is your pejorative way of saying experienced and veteran. On balance, given the ridiculous baseball economy where a Carl Pavano/Gil Meche/Kyle Loshe can get between $10-$12M to be an average to poor pitcher, I’d rather pay that money to Johnny Damon/Hideki Matsui.

      Now, I’m not saying the Yanks have employed a wise strategy to get to this point. There are several redundancies on the roster (too many DH’s, too many 1st basemen (to make matters worse, none of whom are actually 1st basemen)) but in the ideal situation, I’d rather control cheap young pitching via the draft, sign a guy like Johan/Peavy in free agency (not always a guarantee that they’ll make it that far) and spend the big bucks on established bats that you know will produce.

      Drafting hitters and spending on pitchers puts you at the mercy of a market like the one we’re in now, where a pitching staff could eat up $100M and get you nowhere. Moreover, pitching (in my opinion) is unpredictable at every level, not just among prospects. Pitchers seem to be more fragile.

    4. Andrew
      December 17th, 2007 | 11:23 am

      Count me in with the crowd that thinks free agent money is always better-spent on hitting. The Yankees have spent humongous amounts on hitting, and it’s gotten them the top offense in the game. They’ve also spent humongous amounts on pitching, and it’s gotten them a middling pitching staff.

    5. SteveB
      December 17th, 2007 | 11:25 am

      There is one economic principle and one accounting principle not being considered here.

      The economic principle is supply and demand: I believe it is easier to find league average hitters than league average pitchers.

      Second offense is a game of amortization. In a single game, 9 different guys fet 3.6 opportunities to influence the outcome. Starting pitchers have to be good because you don’t have 9 different pitchers taking turns throughout the game.

    6. December 17th, 2007 | 11:26 am

      ~~~They’ve also spent humongous amounts on pitching, and it’s gotten them a middling pitching staff.~~~

      But, can’t that just be the result of making poor choices?

      Picking hitters is easy. Picking pitchers requires skill.

    7. Raf
      December 17th, 2007 | 11:43 am

      But, can’t that just be the result of making poor choices? Picking hitters is easy. Picking pitchers requires skill.
      ==============
      Poor choices are a possibility. There are other factors at work too.

      The Contreras example you posted a couple of days ago in the Hardball Times thread is a good example. Same when you posted RJ’s splits with bases empty & runners on, indicating that his bad back may have been the reason for his poor performance in 2006.

    8. Andrew
      December 17th, 2007 | 11:50 am

      “But, can’t that just be the result of making poor choices?”

      More like a result of the state of free agent pitching, which is exactly why you want to grow your own and have absolute control as to what types of pitchers they are and what you have in them. Again, and you’ve been asked this several times, go back to when Pavano was available, and Wright was available, and make better choices than the Yankees did. Hindsight included. Easy, right? Go ahead. Make a post about it.

    9. December 17th, 2007 | 11:56 am

      ~~Again, and you’ve been asked this several times, go back to when Pavano was available, and Wright was available, and make better choices than the Yankees did. ~~

      Not signing Pavano was the better choice, period. Can’t that be enough? Why does someone else have to be signed in his place to prove that it was a bad sign?

    10. MJ
      December 17th, 2007 | 12:01 pm

      Not signing Pavano was the better choice, period.
      ==========================================
      Agreed. But since the Yanks had huge holes in their rotation because they weren’t replacing pitchers from within, they got stuck with a lemon. If nothing else, that experience made me want to see the Yanks revert back to minor league development.

      I guess my feeling is that while Wang’s theory might make sense in a vaccum or even in real life a number of years ago, I don’t know that it would work now. Teams are keeping their own pitchers. It makes it hard to spend money on bigtime free agent aces if they’re not being made available anyway.

    11. YankeeMonkey
      December 17th, 2007 | 12:11 pm

      Steve, you’re choosing to ignore an important point in case of Pavano. As MJ points out, Yankees had to fill in the holes in their rotation and Pavano was among the best of a bad crop of free agents. That doesn’t speak to failure to evaluate talent, it speaks to a lack of talent to be evaluated! That’s exactly why it’s always better to develop your own pitching rather than having to hope that a Santana-type lands on the market.

      It’s clear that teams are more and more trying to retain their ace pitchers. Why would that be if signing free agents makes so much more sense, hmm?

    12. jonm
      December 17th, 2007 | 12:20 pm

      Everyone agrees now that signing Pavano was a terrible decision. At the time, however, signing Pavano was a debatable decision. As others have noted, the Yankees had holes in their rotation that needed to be filled.

      You presumably think that there were better veterans than Pavano available at the time (and available every year). With the advantage of hindsight, who were they? Your consistent refusal to answer this question suggests that you know that the evidence does not support what you want to believe. Who’s wearing the blinders now?

    13. December 17th, 2007 | 12:28 pm

      ~~~Steve, you’re choosing to ignore an important point in case of Pavano. As MJ points out, Yankees had to fill in the holes in their rotation and Pavano was among the best of a bad crop of free agents~~~

      ~~~You presumably think that there were better veterans than Pavano available at the time (and available every year). With the advantage of hindsight, who were they?~~~

      Again, the answer was not to sign someone else, other than Pavano – given how much you got from Pavano. They Yankees could have kept Brad Halsey and used him in place of Pavano and got more IP in the last three years.

    14. December 17th, 2007 | 12:31 pm

      I still think you have it backward. The fact that there are only two pitchers in the past 10-15 years that the Yanks signed as a free agent that was as good as he was after coming to the Yanks as he was before (Mussina ans Wells), and there are countless examples of pitchers that were very highly regarded when signed or acquired that became busts (Pavano/Weaver/Contrares/Vazquez/Johnson) backs me up.

      For most teams with a normal payroll I might agree with you. But the fact that the Yanks can spend as much as they do and in the process bury any mistakes, makes developing pitching FAR more important.

      A good/great hitter typically remains a good/great hitter after coming to the Yanks; unless the pitcher is home-grown, however, history has taught us that coming to the Yanks results in a significant discount to that pitcher’s typical non-Yankee performance. It has happened so often my brother and I have a term for it – “The Yankee Discount”. Heck, it even happened to Clemens.

      Read more here:
      http://yankeegm.blogspot.com/2007/11/just-say-no-to-hughes-for-johan-yankee.html

    15. MJ
      December 17th, 2007 | 12:35 pm

      They Yankees could have kept Brad Halsey and used him in place of Pavano and got more IP in the last three years.
      =========================================
      That would represent keeping homegrown talent instead of signing expensive free agent pitching. Is that not counter to what you (or Wang) are espousing here?

    16. jonm
      December 17th, 2007 | 1:00 pm

      They Yankees could have kept Brad Halsey and used him in place of Pavano and got more IP in the last three years.
      ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

      You seem to have created a phantom opponent who is still defending the Pavano signing. The question is would the Yankees have done any better in the last three post-seasons with Halsey in their rotation? My answer is no.

    17. December 17th, 2007 | 1:12 pm

      ~~The fact that there are only two pitchers in the past 10-15 years that the Yanks signed as a free agent that was as good as he was after coming to the Yanks as he was before (Mussina ans Wells), and there are countless examples of pitchers that were very highly regarded when signed or acquired that became busts (Pavano/Weaver/Contrares/Vazquez/Johnson) backs me up.~~

      You mean “Cashman” signed – as he signed “Pavano/Weaver/Contrares/Vazquez/Johnson” – prior to Cashman, the Yankees brought in guys like McDowell, Cone, Key, Gooden, Abbott, etc. who did fine.

      ~~~For most teams with a normal payroll I might agree with you. But the fact that the Yanks can spend as much as they do and in the process bury any mistakes, makes developing pitching FAR more important. ~~~

      If the Yankees were able to “bury” these mistakes, why has their pitching been so bad the last four years?

    18. December 17th, 2007 | 1:18 pm

      ~~~That would represent keeping homegrown talent instead of signing expensive free agent pitching. ~~~

      No, I would keep homegrown talent instead of signing expensive AND TERRIBLE free agent pitching. But, if my G.M. had the smarts to be able to tell good pitching from bad pitching, then I would be OK with trading homegrown pitching talent for acquired GOOD TO GREAT pitching.

    19. jonm
      December 17th, 2007 | 1:33 pm

      Getting back to the Pavano thing. Here’s what Cashman should have done in the off-season after 2005:
      1. Not make the Randy Johnson deal.
      2. Use the money saved on Johnson to sign Carlos Beltran.
      3. The rotation would be Mussina, Vazquez, and Brown with Wang and Halsey in reserve. Two more veterans need to be signed to fill that out.
      a. Keep Lieber (don’t sign Wright).
      b. Sign Paul Byrd or Matt Morris for less money than Pavano.

      The Johnson deal was a terrible deal. Worse was thinking that Bernie could play CF for one more year, giving up a chance to get Beltran, and then being forced to sign Damon for money in the Beltran ballpark.

    20. December 17th, 2007 | 1:53 pm

      “McDowell, Cone, Key, Gooden, Abbott, etc. who did fine.”

      Cone and Key were good, the rest were decent, that’s all. and despite getting those pitchers, they managed to hold on to their best prospects (e.g. DJ, Pettitte, Bernie, Posada, Mo), which is something GMs should get credit for.

      remember when Cash didn’t trade Cano and Wang, even though he was tempted. they’ve been the most valuable Yankees the last 2.5 years (going by production/cost). i trust Cash. he seems to know when prospects will or wont fail. the only good prospects he traded away are Lilly, Lowell, Westbrook and maybe Juan Rivera (who btw none are superstars, just good players). Cano and Wang are better than any of them. as i think Joba, Hughes and Kennedy will be someday too.

    21. December 17th, 2007 | 2:06 pm

      ~~remember when Cash didn’t trade Cano and Wang, even though he was tempted. ~~

      Funny, IIRC, prior to 2005, no one wanted Cano or Wang – when they were offered in deals.

    22. Raf
      December 17th, 2007 | 2:22 pm

      Everyone agrees now that signing Pavano was a terrible decision. At the time, however, signing Pavano was a debatable decision. As others have noted, the Yankees had holes in their rotation that needed to be filled.
      ————————-
      There were quite a few reports published that the contract Pavano signed was a bad one.

      Anyway, David Wells, Esteban Loaiza (if you were going to sign Wright, may as well have kept him), Matt Clement, Orlando Hernandez (coming off shoulder surgery?), Jon Lieber (Yanks had an option they declined; I think they tried to sign him for less), Pedro Martinez, among others were available.

    23. Raf
      December 17th, 2007 | 2:32 pm

      As for what I would’ve done; WRT I would’ve made the Johnson deal, or signed Pedro. Or acquired both. I would’ve kept Lofton, and made him the CF, or I would’ve spoken to Jeter about moving him to CF. I think Nomar to CF was being floated around then too.

      There are too many variables to say for sure; IIRC, Beltran was willing to take less $$ to play for the Yanks, but that may be memory playing tricks on me. Same with the Lieber situation; I think he wanted a multiyear deal, or the Phillies offered a better deal, I don’t quite remember.

      I wouldn’t have touched Wright, Pavano or Womack with a 10′ pole.

    24. Rich
      December 17th, 2007 | 2:46 pm

      Getting back to the Pavano thing. Here’s what Cashman should have done in the off-season after 2005:
      1. Not make the Randy Johnson deal.
      2. Use the money saved on Johnson to sign Carlos Beltran.
      ___

      It has been widely reported that that is what Cash wanted to do, but he lacked the decision making authority.

      He didn’t even negotiate the RJ trade, Randy Levine did.

    25. Raf
      December 17th, 2007 | 2:55 pm

      Something else that should be noted, in the wake of the 2004 collapse, I wouldn’t be surprised if people in Yankeeland were in full panic mode.

      Can’t otherwise explain the stupidity of the thought process that netted Wright, Womack, and Pavano… :)

    26. jonm
      December 17th, 2007 | 3:02 pm

      It has been widely reported that that is what Cash wanted to do, but he lacked the decision making authority.

      He didn’t even negotiate the RJ trade, Randy Levine did.~~~~~~

      Really? I had not heard that Levine did that. How did he manage to gain that power?

      I just hate that deal; I feel they gave up on Vazquez too soon and they gave up a guy who would have been a useful backup catcher.

      Also, it was just such a stupid, UNIMAGINATIVE, reactionary move. The Yankees had just seen Schilling contribute to beating them — so what’s their response? They go out and trade Vazquez and prospects for Schilling’s 41-year-old ex-teammate. Then, they give that guy a huge contract extension making it impossible to sign a good young player like Beltran.

    27. Rich
      December 17th, 2007 | 5:45 pm

      “Really? I had not heard that Levine did that. How did he manage to gain that power?”
      ___

      The RJ trade may have been the last move that George personally ordered. He had been obsessed with obtaining him for years.

      It was Cash’s decision to trade for Vazquez instead of Schilling (a move that Schilling himself acknowledged was the correct one, given their respective ages, in a post at NYYFANS.com).

      But since the Schilling turned out to be such a big factor in Boston winning the 2004 WS, George got pissed, and Cash lost power as a result.

      Trading for RJ involved big bucks, so my guess is that George believed that Levine, a key financial advisor, was the right man to handle it.

      The Yankees were willing to include both Cano and Wang in the deal for RJ. We are all very fortunate that the D’backs declined to take them.

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