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?