We all have internal values
Everyone has internal values, and it’s not just limited to one thing in our lives. It determines how much we spend on a television, or whether we decide to purchase the movie channel packages from DirecTV. Our internal value comes in to play when deciding if a small box of Lucky Charms is worth $4 when you can get twice as much of the same thing in Marshmallow Matey’s for the same price. In fact, I’ve seen proof that a lot of Pirates fans factor in their internal value during discussions on whether they would pay for the new PG+ service offered by the Post-Gazette.
I find it funny that internal values play a role in every aspect of our lives, but at the same time we act as if it’s a horrible thing that the Pirates incorporate internal values in to every move they make. Dejan Kovacevic posted about this last week, looking at a few examples where the Pirates stuck to their value and got the player, as well as a few examples where the Pirates lost out by not budging from their internal values.
The problem with comparing the hits versus the misses is that the misses always stand out, while the hits get dismissed as regular moves. It’s rarely reported when, or if, the Pirates went over their internal value for the players they signed. Zach Von Rosenberg and Colton Cain both signed for about $1.2 M from the 2009 draft, yet we don’t know if that met the Pirates’ internal value, or if it exceeded the value. I also don’t think anyone really cares, just as long as the player is signed.
When the Pirates non-tender Matt Capps, or fail to sign an injured Tanner Scheppers over a few hundred thousand dollars, the issue of internal value gets brought up as the reason the Pirates didn’t sign the player. This is often met with a negative reaction from the fan base, and I totally understand where this reaction is coming from. Fans usually base their values pretty close to what the player signs for, and not what their team was offering. It’s sort of a hindsight view. Right now I’m not sure anyone could accurately say what Matt Capps’ true value is, but once he signs, everyone will point to that signing amount and compare it to the range the Pirates were offering.
The problem here is that the signing value only represents one team’s internal value. For example, the Pirates failed to sign Miguel Angel Sano, although that situation can’t totally be blamed on money. Still, many suggest the Pirates should have offered more than their initial $2 M, and suggested that the Pirates’ internal value was off when they only went up to $2.6 M. What this fails to take in to consideration is that several other teams refused to go over the $2.6 M price range, and a lot of teams didn’t even pursue Sano (although every report has said the Pirates would have topped the Twins offer if given the chance).
The same situation exists with Matt Capps. We don’t know who Capps will sign with, or what he will sign for, but we do know that there are 16 teams who expressed interest in him, 15 when you don’t count the Pirates. Right away we know that 14 teams have decided that Capps doesn’t fit their internal value for whatever role they’d look for him to fill. I’m also going to assume that several teams in that group of 16 interested teams don’t want to spend up to the $3.4 M Capps was reportedly seeking.
There’s also the viewpoint that players represent an individual set of talents that can’t be found elsewhere. So when the Pirates trade Freddy Sanchez because he didn’t accept a $5 M a year offer, people assume that they won’t land a similar player for the same price. The Pirates received some criticism for “low-balling” Sanchez by $1 M a year, but they ended up signing Akinori Iwamura for what seems to be their internal value price of $5 M a year (actually $4.85 M for Iwamura).
Sanchez has a combined 6.3 WAR over the last three seasons. Akinori Iwamura has a combined 6.2 WAR over the last three seasons. The Pirates stuck to their internal value, and ended up getting a good replacement for Sanchez, at $1.15 M less than it would have cost to keep Sanchez. As for the fans that felt the Pirates low-balled Sanchez, I can’t imagine anyone would follow a different practice with purchases in their every day life. When you’ve got two products that are the same quality, odds are you’re going to buy the least expensive of the two.
Internal value is a concept that exists with every team. It’s why the Boston Red Sox refused to offer more money to Jason Bay this off-season. It’s why the Milwaukee Brewers only offered C.C. Sabathia around $100 M, even though he was getting $161 M from the New York Yankees. It’s why Matt Capps was joined on the non-tender list by people like Kelly Johnson and Garrett Atkins, who were also in demand, but not at the price they would have cost their former teams.
The Pirates will often have an internal value that is lower than other teams. That’s because the Pirates also have a lower revenue stream than other teams. The lower revenue means the Pirates have to look for cheaper options than what other teams can afford. They need to find the Akinori Iwamura’s, rather than shell out an extra million for the same production from the Freddy Sanchez’s. That may be a little harder, but with baseball’s current economic system, it’s the only option a team like the Pirates have.