The New York Yankees were far and away the busiest team at the August 1st trade deadline, and their decision to “sell” surprised many. As detailed here by MLBTradeRumors, the Yankees traded away 4 active players and a prospect, and received back 10 prospects, 2 major leaguers, and 2 players-to-be-named-later (PTBNL). While the Bronx Bombers are only 5.5 games back of the second wild card spot as of August 3, their decision to sell off aging players and retool for the future is a tried and true strategy that they hope will pay off.
How to Estimate What a Prospect is Worth in a Trade
The best way to analyze these trades is to look at them from the aspect of the surplus value the prospects deliver. Surplus value is heavily dependent on the idea of WAR, which you can (re)familiarize yourself with here. As for prospect surplus value, The Point of Pittsburgh originally established this idea, and have a very good explanation here. The main concept is that a young, cost-controlled player would be worth a certain amount to a team on the open market. Because a team is able to get the player far below market value (~$8MM/WAR), the team derives surplus value, or excess value for which they do not have to pay. For this article, all calculations will be done using fWAR.
The calculations are shown below. For prospects with a ranking outside the top 100, an exponential curve was extracted to gauge roughly what the value might be.
To use this concept in evaluating a trade, we will calculate the surplus value of the prospects involved in a trade, and the surplus value of the major-leaguers involved. To accomplish the latter, we will make a WAR projection for the remainder of their 2016 contract, and calculate the premium/discount of this value to the value of the contract, assuming $8MM/WAR.
By listing all of the Yankees “assets”, both acquired and dispersed, we will be able to calculate the total value gained by New York at the Trade Deadline:
Estimating the Value the Yankees Gave Up at the 2016 Deadline
Looking at the breakdown, the Yankees parted way with Andrew Miller, Aroldis Chapman, Carlos Beltran, Ivan Nova, and Vincente Campos. The four major-leaguers had posted a cumulative 6.1 WAR amongst themselves, while the Yankees paid approximately $25.7MM across the group for this production. At the going rate of $8MM/WAR, New York received $48.8MM worth of production for a little over half the cost! Even if they had let these players go for nothing, in theory, they would have come out ahead. As such, New York net $23.2MM in surplus value from the contracts of the players that departed.
Using ZiPS rest-of-season projections at Fangraphs, the group was projected for 1.9 WAR the rest of the season, at a cost of $11.7MM to their new teams. This projection is worth only $4.6MM in surplus value, so the Yankees “sold high” on the players they parted ways with, maximizing their value appropriately. Of note here, Vincente Campos is estimated to be a top 250 overall prospect. Consulting the table above under the “Pitcher” column, this is worth approximately $1.1MM in future surplus value. As such, it is budgeted into the surplus value “forfeited” by the Yankees.
Ranking the Top Prospects the Yankees Received in Return at the 2016 Deadline
In return for these 5 players, New York received quite a haul. In particular, this includes top 25 prospects outfielder Clint Frazier (#22) and shortstop Gleyber Torres (#24), as well as top 100 prospect, pitcher Justus Sheffield (#93). Additionally, pitching prospect Dillon Tate ranks all over the top 100, so his positions were averaged, coming in solidly in the 60-70 range. Lastly, outfield prospect Billy McKinney is a former top 100 prospect, and is generally among the first left off of midseason lists. He is estimated as being a top 125 prospect. The remainder of the prospects are either too young or too uncertain to project surplus value going forward.
Consulting again our chart above, the two top 25 position players project for $62MM in surplus value each, while the top 100 pitcher Sheffield sits at $15.6MM in surplus value. Averaging Tate’s rankings, he is expected to net the Yankees approximately $16MM in surplus value, and lastly McKinney is expected to bring about $11.4MM in surplus value.
In addition to the prospects, the Yankees also received major-leaguers Adam Warren and Tyler Clippard. Both are fairly unnotable relief pitchers, and they project for 0.5 WAR going forward at a cost of $2.8MM. This leads to a surplus value calculation of a little over $1MM, and so their acquisition profiles more as filling out the bullpen spots than anything.
How the New York Yankees Won the 2016 Trading Deadline
All told, the Yankees can expect approximately $168.2MM (!!) in surplus value from their acquisitions. When added to the $23.2MM that they had already received in surplus value from the traded players’ below-market contracts, and subtracting the $4.6MM in future surplus value they forfeited, the Yankees ended up netting $186.7MM in surplus value from the deadline.
Put another way, this means that the Yankees sacrificed $4.6MM in value they didn’t pay for this year, for almost $190MM in future years for which they will not have to pay. This figure does not even include the potential value of the PTBNLs, as their status is still unknown.
When framing it this way, New York’s decision to sell at the deadline looks absolutely inspired, and puts them in prime position to compete as soon as next year. With the prospects they acquired, in addition to their own homegrown ones including Gary Sanchez, Aaron Judge, and Jorge Mateo among others, they will become the latest great, young Yankee team to take the field.
While prospects are far from a sure thing, the fact that New York had already come out ahead on the contracts they unloaded makes this a sure-fire win for them. With a very competitive AL this year, they were smart to take advantage of the high demand for relievers and hope to field an even more competitive team next year.
Readers, what do you think? Were the Yankees smart to sell off their veterans for prospects? What other teams did extremely well at the 2016 MLB Trade Deadline? Which teams will be able to turn this into MLB Postseason success? Leave your thoughts in the comments below or on Twitter @SaberBallBlog. Don’t forget to subscribe to SaberBallBlog by clicking the green “Follow” button in the menu, and follow on Twitter for all of the latest updates on the MLB!