Blake Murphy Sports Writing

Title: Three Methods for Evaluating a Halladay Trade
Date: July 23, 2009
Original Source: The On Deck Circle
Synopsis: With speculation running wild that Roy Halladay may get dealt, I took a look at three different ways of evaluating any possible trade.

For several weeks now, speculation has been running rampant about a possible Roy Halladay trade. After J.P. Ricciardi announced that the team would listen to offers for the perma-ace, the internet and radio waves exploded with possible trade scenarios, outcry, and salivation.

There have been two very clear sides to the rumors and speculation that have followed; fans who clearly don’t want it to happen, and experts wondering just what kind of package it would take to pry him away. I am more in the former than the latter, but as the July 31 trade deadline approaches (which happens to be three days later than Ricciardi’s self-imposed deadline), I find myself asking questions about just what kind of package the Jays could expect to get in return.

With that question in mind, I looked at three methods to try and find out what a star like Halladay may bring in via a trade.

Method 1: The Fan Model
This one is the easiest. This method concludes that there is no chance the Jays should trade Doc. Forget for a moment that the franchise tried to sell 2009 to the fan base as a “bridge to 2010,” Halladay’s deal doesn’t expire until the end of next season. If trading him is the right move, history has dictated that it’s not necessary to trade him early to maximize your returns. Additionally, if fans are to be resigned to losing Halladay, they would at least like to get every last inning out of him under one of two scenarios – letting him walk after another season and a half and receiving a first and compensation pick for the loss (Halladay would be the number one Type A free agent, I’ll assume), or holding him until next season’s deadline and getting a package close to, if not just as good as the one they could receive this year. The fans don’t want Halladay to go and as the franchise’s lone superstar in some time, it is a necessary factor for the club to consider.

Method 2: Recent Market History
Under this method, I simply looked at recently traded comparable players. Based on an article by ESPN’s Baseball Prospectus Daily, I looked at players recently dealt near the deadline with similar Wins Above Replacement (WAR). Halladay’s WAR for the rest of the year is estimated at roughly 3.0, leaving us with one very close comparable (C.C. Sabathia), and three fairly close ones (Bobby Abreu and Mark Teixeira twice). The comparison is complicated by the fact that Halladay has an entire year left on his contract, giving him extra value in a trade that is sometimes neglected.

Quickly, those players garnered the following in deals:
Bobby Abreu 2006: Traded by the Philadelphia Phillies with Cory Lidle to the New York Yankees for C.J. Henry (minors), Carlos Monastrios (minors), Jesus Sanchez (minors) and Matt Smith.
Mark Texeira 2007: Traded by the Texas Rangers with Ron Mahay to the Atlanta Braves for Beau Jones (minors), Elvis Andrus (minors), Neftali Feliz (minors), Matt Harrison and Jarrod Saltalamacchia.
Mark Texeira 2008: Traded by the Atlanta Braves to the Los Angeles Angels of Anaheim for Steve Marek (minors) and Casey Kotchman.
CC Sabathia 2008: Traded by the Cleveland Indians to the Milwaukee Brewers for Matt LaPorta (minors), Rob Bryson (minors) and Zach Jackson. The Milwaukee Brewers sent Michael Brantley (minors) (October 3, 2008) to the Cleveland Indians to complete the trade.

There is no clear conclusion here. The Yankees gave up very little, in hindsight, for Abreu, as did the Angels for Teixeira. This, after the Braves gave up a boatload of prospects for Tex the year before, three of which have seen time in the majors and have looked serviceable and one more who projects as a great bullpen arm. The Indians essentially got Matt LaPorta, a man who is considered one of the best power hitting prospects in baseball but who has yet to make a major league impact, and Rob Bryson, a high-upside pitcher who has missed all of 2009 after labrum surgery. So basically, depending on team needs, the market is volatile for top players. With no rush to trade Halladay, the Jays should find themselves in the Cleveland/Atlanta territory of asking price, and by all accounts the Jays are asking for that much or more.

Method 3: The Guttridge-Wang Trade Model
This analysis is based largely on an article by Sky Kalkman at Beyond the Boxscore and The Guttridge-Wang Trade Model as published by The Hardball Times. Basically, the model puts a dollar value on a player’s contributions and determines his surplus value, creating a ‘market value’ that should be expected in a trade.

The first thing to acknowledge is that Halladay is owed roughly $22.75M between now and the end of 2010, which is a real dollar cost. His WAR over the end of 2009 and all of 2010 is 9.0 wins above replacement, give or take a few points. The market value of WAR is assumed to be $4.5M per WAR, making his actual value $41M. Because his contract expires after 2010 and he would be a Type-A free agent, we add an additional $5M in value because of the compensation picks a team would get if they lost him (if they re-signed him, this opportunity cost, we assume, would be accounted for in his new contract). So Halladay’s value is $46M while the cost of employing him is roughly $23M, giving him a surplus value of $23M.

Using the projected value of prospects, we curiously find that one top-level hitting prospect should be enough to pry Halladay away. Based on these values, the Jays should be looking for one top-tier hitting prospect, two top-100 hitting prospects, a top-10 pitching prospect and a B-level hitting prospect, two top-75 pitching prospects, or four B-level prospects.

Any of these scenarios appear to be less than the Jays are looking for, and it’s possible (though I believe it is at least partially-accounted for) that the riskiness of prospects is not accounted for to a large enough degree. This would be especially true in a trade for Halladay, who is as consistent a pitcher as there is, which holds some value itself. An additional factor is that the valuation of Halladay doesn’t include any playoff performance, which obviously increases his value to a contender. This may be accounted for in the dollar value of WAR, but it is something that appears undervalued using this model because of the static $/WAR. Finally, there is no set list of prospect rankings to go by (Baseball America is the standard), so what the model sees as a top-10 hitter may, in Ricciardi’s eyes, only be a top-50 hitter. The valuation of Halladay, too, is fluid based on expectations.

Ricciardi’s initial statement was simply that the Jays would listen to offers for Halladay. The media storm blew it to a foregone conclusion, but it now appears that Ricciardi won’t move his ace unless a deal blows him away. With over a week to go, it’s certainly possible, but my stance from the beginning hasn’t changed – Halladay is unlikely to move this season, and Ricciardi may have just welcomed criticism on himself prematurely.

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