As a resident of Indiana, I have spent weeks listening to the incessant rumors surrounding a Paul George trade after he informed management that the 2017-2018 NBA season would be his last in an Indiana Pacers’ uniform. The President of Basketball Operations for the team called it a “gut punch,” but the reality is that the writing was on the wall even before last season’s trade deadline. Yet, the team chose to roll the dice and ultimately ended up succumbing to a panic move last week.
Now, regardless of whether you love or hate the NBA, the conundrum for the small market Pacers, who must strike a delicate balance between extending the competitive window and competing now, should not be lost on you as a Pittsburgh Pirate fan. After all, the Pirates remain in striking distance of the division leading Milwaukee Brewers, and with the trade deadline fast approaching, they are going to be forced to make some difficult decisions about how to navigate that balance with their tradeable assets.
Travis Sawchik of Fangraphs suggested a few weeks ago that the Pirates should “sell softly” in a similar manner to last season and wait until the offseason to trade Cole or McCutchen, allowing the latter’s continued rebound to drive up his value rather than part with their most valuable trade assets. Additionally, it wasn’t that long ago that Neal Huntington spoke about adding pieces, saying: “As we get closer to the deadline, that is the intent: to utilize the dollars that were created [by Hughes, Marte, and Kang situation]. … That money is sitting there, waiting to be used at the appropriate time.”
While it’s possible the Pirates will head in that direction unless they are made an overwhelming offer, it is truly difficult to predict what position the team will be in a month from now, especially with Starling Marte eligible to rejoin the team in the midst of a 14 game run over the 15 days leading up to the deadline.
Nevertheless it seems like an opportune time to discuss how to measure a player’s trade value, and to do so, we won’t be taking the common “trade package wishes” approach. On the contrary, we will be using surplus value and the market price to determine reasonable value as we survey last season’s deadline moves and this year’s trade candidates.
Determining Surplus Value
The notion of surplus value, which attempts to place a monetary value on a player’s expected or actual performance vs. contract, centers around Wins Above Replacement (WAR) and the average cost per WAR. Essentially, the cost per WAR is how much teams are paying on average for a single WAR on the free agent market. Recent projections have that number around $8.5-9.5 million per 1 WAR because of inflation, so we’ll split the difference and use $9 million as the cost of 1 WAR on the market.
To calculate a player’s Surplus Value, you take the Value of a player (Value= Total WAR x Cost per WAR) and you subtract the salary, which leaves you with (Value – Salary = Surplus Value).
For example, the Pirates nabbed Ivan Nova on a three-year, $26 million dollars deal (we won’t worry about the incentives). At $9 million per WAR, Nova would need only to put up three WAR over the entire contract to have a $26 million value.
With that low of a bar, the deal was viewed as an incredible steal for Pittsburgh by those who believed Nova’s breakout was more than a fluke. Now, to put a dollar amount on how much of a bargain he might be, let’s look at his surplus value numbers:
So perhaps the 5 year, $70 million deal he was reportedly looking for this offseason wasn’t all that outrageous.Since Nova is already at 1.6 WAR at the halfway point of this season, he doesn’t need to do a whole lot the rest of the way to be worth what the Pirates paid him. Yet, the Pirates, as a small market team, need players like Nova to be worth more than they are paid. This is why, even with some conservative projections, it is incredible that the Pirates nabbed a core piece of their rotation at what be more than $36 million less than he’s worth.
Surplus Value: The Role of Control
Now, that there is a baseline for surplus value, let’s take a look at how it functions according to years of control, which a quick review of the Chris Sale trade from this offseason and of the rumors that swirled around Jose Quintana (who was just traded) not long after should provide a brief demonstration.
Entering this season, Chris Sale was looking like a player worth $125 million in surplus value over the next three years. Considering he already has an unbelievable 5.1 WAR at the halfway point of this season, he’ll likely surpass this offseason WAR projection from Fangraphs, but no team counted on this type of dominance when they weighed forming a trade package.
Even with conservative projections, Quintana was considered to be worth slightly more than Chris Sale this past winter; and the White Sox had to wait until today’s deal with the Cubs to get the same type of value.
This emphasized something important that needs to be highlighted when determining trade value: players who are cheap and controllable can be worth more in a trade than a superior player at a year or two less. It may seem intuitive or even like a “no duh” kind of statement, but understanding that controllable talent is a must sought after commodity in trades is essential to projecting the value of one player relative to another.
Of course star power and paying for that star power, might tip the scales like did in the case above, but that is an exception to the rule.
We’ll keep this one brief, but the market value obviously plays a role. If there’s an abundance of shortstops at the deadline, it’s going to drive the acquiring price under the surplus value, and if there is a scarcity, then a team should expect to overpay. In the absence of those, the best indicator of future trade value is past trade value.
For instance, relievers used to be a cheap and undervalued commodity, but the market at last year’s deadline elevated the price for elites ones like Miller and Chapman, driving the prices way past the relievers’ surplus value.
The surplus value of some Pirates’ assets
Before we get to the chart, let me note that this is not by any means meant to convey that a player on this list is likely to be traded or should be traded, but rather, I have tried adding guys on expiring deals or who have been mentioned in rumors.
Additionally, there is some variance in project WAR because it all depends on what type of player you can convince other teams that you are trading. Note that the Projected WAR below reflects the WAR over the remainder of the contract, and not the WAR per year.
Gerrit Cole: As Tim Williams wrote earlier this year after a baseless rumor centered around the Evil Empire, Cole isn’t going anywhere unless the team is blown away by an offer, so I would put his projected surplus value in the eyes of the Pirates’ brass somewhere around top end of the projection.
Andrew McCutchen: In the light of McCutchen’s torrid resurgence, the question of his surplus value becomes not only a $30 million differential in projection but also a question of star power. Will the Pirates minimize risk and take what they can get or try and maximize a possible return by being patient in negotiation? My gut and the Pirates history has me inclined to say it’s the latter.
Josh Harrison: While there’s also some significant variance in Harrison’s projection, his stellar defense ensures that he’ll be worth well more than what he’s being paid. If he keeps outperforming his contract the way he has this year, there’s no pressure to rush to any deal, especially given his defensive versatility.
Juan Nicasio: Since the Pirates bullpen has been a weak spot this season, the inclusion of Nicasio is solely because he’s an unrestricted free agent next season, which could come into play should the Pirates flounder in July.
John Jaso: The reality is that a bench player, especially one with platoon splits like his, are not going to net much in terms of surplus value.
David Freese: Even though the Pirates re-signed Freese not long ago, the emergence of Josh Bell might make it easier for the team capitalize on Freese’s surplus value if other teams are open to the higher end of the evaluation, but the uncertainty of Jung Ho Kang complicates the matter on Pittsburgh’s end.
Tony Watson: Watson’s name was omitted from the surplus value because he’s currently playing below replacement for the second straight year, meaning he has no surplus value, but it isn’t out of the question that a bullpen needy team would take a chance on him with hopes of .5-1 WAR.
As they always do this time of year, rumors will swirl about players who are available and those who are not, but regardless of what happens, surplus value is the prominent trade value theory to help evaluate eventual trades, to know what to expect regarding a player’s value, and to understand why the team declined to make a deal. It’s not a perfect science, but it should provide a more reasonable foundation for the trade deadline.