Pricing Failed Tanks

Among Brewers fans, there might be approximately four groups:

  • (1) Casual fans that will tune out rebuilding
  • (2) Everyday fans that vocally oppose rebuilding
  • (3) Everyday fans that support rebuilding “as is”
  • (4) Everyday fans that support tanking

These distinctions might seem useless, or trivial at best, but nearly every future value decision for the organization will find vocalized groups across the internet. #BrewersTwitter is quite a divided place, a perfect environment to find this type of debate. For the purposes of this feature, the most interesting difference will be between (3) and (4). Given David Stearns’s rebuilding trades (such as the Khris Davis or Jonathan Lucroy deals) and counterbuilding trades (such as the Cy Sneed or Trevor Seidenberger deals), it is easy to anoint the rebuild a smashing success. Stearns has added to Doug Melvin’s previous rebuilding deadline deals with future values across the organization.

Yet, glancing at the standings after play finished on Sunday, one might be disappointed with the Brewers’ relative lack of futility. Or, perhaps, shocked at the futility across MLB as a whole. Alongside other stated rebuilds in Philadelphia, Cincinnati, and Atlanta, teams like Arizona, the White Sox, and Minnesota utterly failed at building competitive rosters, and the Padres, Rockies, Athletics, Rays, and Angels are in some kind of limbo. Struggling contenders in the Bronx and Kansas City might also fall into the “tank standings,” depending on how their battered ranks play out the string as well.

Tank Standings WPCT Pythagoras PECOTA Post Deadline Pace Median / Lowest 2
Braves 60 60 63 68 61.5 / 60
Angels 68 76 70 56 69.5 / 62
Diamondbacks 66 65 69 69 67.5 / 65.5
Twins 64 70 68 69 68.5 / 66
Reds 67 66 68 69 67.5 / 66.5
Rays 66 75 71 67 69 / 66.5
Athletics 71 67 72 67 69 / 67
Padres 69 75 70 67 69.5 / 68
Brewers 73 71 73 70 72 / 70.5
Phillies 76 67 74 85 75 / 70.5
Rockies 77 82 77 68 77 / 72.5
White Sox 78 75 79 75 76.5 / 75
Royals 79 73 77 86 78.5 / 75
Yankees 83 76 82 89 82.5 / 79

By almost any rank, the Brewers are quite likely to draft Ninth in the 2017 Rule 4 draft. If the bottom falls out on the second half, the club could make a valiant effort at the Seventh seed, but at least five other clubs face roughly the same prognosis.

Why does this matter? One suspects that the reason some fans support pure tanking — where the front office fields a largely replacement level team in order to lose as many games as possible (thereby maximizing draft placement) — is that the highest possible draft position yields an extreme draft slot bonus advantage, not to mention the best shot at superior talent. Indeed, by the fifth pick, the median MLB draftee is basically a replacement level player; fans might not expect it, but if a club drafts sixth and merely gets that player to the MLB, that’s quite a solid pick in terms of history. In this case, however, one might focus solely on the draft slot bonuses, since larger draft slots give a team the chance to sign “above slot” / “difficult signability” players later in the draft (see the Brewers with Chad McClanahan and several other picks in 2016; or, more famously, the 2015 Houston Astros maximal first round).

Pricing out the first ten draft picks should show the benefit of tanking, as well as the dangers of failing to tank: if a front office wishes to tank, they ought to really go for it, for if they miss and draft third or even fourth, they have lost significant value without necessarily adding future values elsewhere in the roster. For this exercise, I priced out bWAR (drawing draft figures from Baseball Reference) by placing WAR in the context of a 90-win, $150 million club fighting for roughly $20 million in playoff revenue (a rough estimate), which is arguably a scenario in which each additional win is most important (and therefore priced accordingly).

Top 10 Draft 2016 Slot ($ M) Median bWAR Lowest Market Value ($ M)
Pick 1 $9.015 12.3 $49.9
Pick 2 $7.7629 7.1 $29.2
Pick 3 $6.5108 2.1 $9.9
Pick 4 $5.2587 1.4 $6.4
Pick 5 $4.3822 -1.25 $0.875
Picks 6 $4.0692 -0.05 $0.800
Pick 7 $3.7563 -0.1 $0.670
Pick 8 $3.6309 -0.75 $0.670
Pick 9 $3.5058 -0.65 $0.670
Pick 10 $3.3806 0.6 $2.4
KEY: $3.953 M(approx. value of 43 bWAR for $150 million club + $20M playoff revenue)

On the whole, the draft is extremely overrated as a means of acquiring talent. It is one tool for acquisition. Nevertheless, one might see that a successful tanking effort yields a chance to acquire approximately $50 million in future value.

Pricing Brewers Future Values

BrewersDiscoveries 2016 TAv or DRA 2016 WARP Note
IF Jonathan Villar .294 3.4 Extreme speed & moderate power profile
RHP Zach Davies 3.97 2.0 Valuable rotational depth profile
RHP Junior Guerra 3.86 1.9 Singular RHP rookie profile
UTIL Hernan Perez .281 1.6 Valuable “true utility” option
RHP Jacob Barnes 3.55 0.3 Valuable relief depth profile
OF Keon Broxton .259 0.3 Surging power & speed potential OF depth

Comparing additional means of acquiring talent, one can also find that a potentially tanking club could be mistaken in placing such importance on using the draft for acquiring talent. For the 2016 Brewers, David Stearns exhibited one of the benefits of not tanking: Stearns added MLB future values in Jonathan Villar, Keon Broxton, Rymer Liriano, Junior Guerra, and Hernan Perez through a variety of means (trade, waiver, and minor league contract). Taking one example, the Brewers have played .647 ball in Guerra’s starts, and while that pace takes at least four losses away from a Brewers “tank effort,” establishing Guerra’s future value is much more significant (and much more valuable than four losses in the the tank standings).

While each of these players may not earn a roster spot on the next contender, they each have defined a role that can help the Brewers reach a more competitive status faster than expected. Some of these players may start on a rebuilding club, while establishing their benefits as potential bench or depth options for a contender. In this sense, MLB roster roles are demonstrably flexible, which should give a rebuilding club all the incentive in the world for acquiring MLB ready future values.

The six players on this roster demonstrate the value of rebuilding: on a contending club, one might not have expected the Brewers to provide roles for each of these players. Their valuable performances as a group provide a great lesson for the next contending Brewers club, which will need to maximize low cost talent acquisitions. In this case, Jacob Barnes is a “future value discovery” since he graduated to the MLB and established a role during the rebuild; someone like Corey Knebel is not counted because Knebel established his basic role last season. So, this group does not even exhaust the Brewers’ future values (which still includes Orlando Arcia, Jorge Lopez, Michael Reed, and others on the 40-Man Roster).

Brewers Trade Value 2016 TAv or DRA 2016 WARP Return
C Jonathan Lucroy .295 3.2 Two 60 grade prospects & PTBNL
IF Aaron Hill .286 1.8 Infield and RHP organizational depth
RHP Jeremy Jeffress 4.26 0.4 Combination trade with Lucroy
LHP Will Smith 3.68 0.3 Starting C prospect & RHP depth

A rebuilding effort can also be enhanced by shedding contracts and currently valuable MLB players, in order to add to the future depth and potential production for the organization. The 2016 Brewers also excelled in this regard: imagine a Brewers club that won even fewer games than their current outlook. Would such a club have featured a successful return by Jonathan Lucroy? Would Jeremy Jeffress have become a successful closer? Would Aaron Hill have reestablished his value as a trusty veteran? These are not trivial questions: along with southpaw Will Smith, this gang of players produced 5.7 WARP for Milwaukee, which provided a great opportunity to trade them for more future values (including top prospects, organizational depth, wild cards, and even another MLB level “second chance” prospect).

Comparing the Ninth Pick to the First Pick above, one might complain that the Brewers failed during their 2016 campaign, since they left at least than $40 million in talent acquisition value on the table (by failing to reach a top pick). Even failing to reach the Fourth Pick arguably costs the organization millions. However, one must weigh that gamble against the cost of failing to discover roles for Villar or Guerra, to say nothing of Zach Davies solidifying a rotational role, Barnes coming on in a depth role, and even Perez and Broxton making excellent cases for good bench roles or organizational depth roles (at the very least). Another 10 WARP from these players, at minimum, roughly breaks the club even with a First Pick value, and the Brewers will still likely draft within the Top Ten, while also reserving the players acquired in midseason trades.

Even accounting for discrepancies in valuing established MLB roles versus prospect value versus draft value, the Milwaukee front office came away with a veritable haul in 2016. Together, the six players above, along with Lewis Brinson, Luis Ortiz, Andrew Susac, Phil Bickford, Wendell Rijo, and Aaron Wilkerson are worth significantly more than $50 million in future value. This scenario does not even need rosy predictions; some of these players may indeed fluctuate in value, or even see a trade result from their 2016 performance. These scenarios do not categorically reduce the future values of their established 2016 roles.

With this in mind, it is worth comparing the Brewers 2016 future value discoveries to the teams that are likely to draft ahead of Milwaukee next June. For, one can find that in many cases, these clubs produced brutal 2016 campaigns without necessarily discovering new future roles throughout their rosters (or without making grand asset-shedding trades, as the Brewers did). The Twins and Diamondbacks arguably had the best campaigns in recovering or developing future values in 2016, while the Braves, Angels, Athletics, and Rays did not necessarily uncover new future roles at the MLB level. That scenario may not be problematic for a club like Atlanta, which has the inside track on the First Pick in June 2017, but it could be extremely disappointing for a team like the Angels or Athletics, who basically have the pressure of extracting their full future values from the 2017 draft to account for their 2016 campaign.

Tank Teams (# 2016 Future Players) Future Value Discoveries
Diamondbacks (6) 2B Jean Segura / IF Jake Lamb / RHP Archie Bradley / RHP Jake Barrett / RHP Braden Shipley / RHP Enrique Burgos
Twins (5) UTIL Miguel Sano / OF Max Kepler / OF Robbie Grossman / RHP Tyler Duffy / RHP Taylor Rogers
Reds (4) OF Adam Duvall / RHP Michael Lorenzen / RHP Keyvius Sampson / RHP Cody Reed
Padres (4) OF Travis Jankowski / OF Alex Dickerson / RHP Brad Hand / RHP Luis Perdomo
Braves (3) IF Jace Peterson / OF Mallex Smith / RHP Mauricio Cabrera
Angels (2) IF Jefrey Marte / RHP Cam Bedrosian
Athletics (2) 3B Ryon Healy / RHP Sean Manaea / RHP Ryan Dull
Rays (1) RHP Matt Andriese

This is quite a gamble for these clubs, and one must bet that if Brewers fans are watching the “Tank Standings,” fans in Tampa or Anaheim are watching their respective team’s draft positions even more carefully. For example, the Rays could reasonably draft anywhere from Third to Sixth, depending on how August and September plays for the bottom of the league. That fall could be worth more than $9 million in talent acquisition for Tampa Bay, which they may not have recouped in their deadline deals and 2016 future value discoveries.

Hindsight is 20 / 20, but even heading into 2016, one could have reasonably argued against a tank effort for Milwaukee. First and foremost, given the rebuilding efforts in Philadelphia, Atlanta, and Cincinnati, the Brewers front office would have to have been fairly certain that their bottom feeding roster would be more futile than four other clubs (before considering injuries and ineffectiveness that define other failed 2016 clubs, such as the Twins or the Angels). Tanking is an incredibly risky strategy, arguably more risky than making organizational depth trades for “second chance” players like Jonathan Villar, or providing roster space to waiver claims like Junior Guerra. Judged against the First Pick, the Brewers need to return more than $40 million in future value for their failed tank, but judged against the Fourth Pick, they only need to recoup $6 million. In this light, Milwaukee’s gamble for second chances and counterbuilding appears to be markedly successful.

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