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Update: Cashing Out OFP 2

Earlier this week, I examined the surplus added by Brewers GM David Stearns, which is undoubtedly one of the reasons the club is performing quite well. Stearns, in stark contrast to recently famous rebuilds in Chicago and his previous front office (Houston), is building competitive clubs at the MLB level by cashing in on short-term value trades that return production in surprising places. Jonathan Villar , for all his shortcomings in 2017, remains the poster boy for this type of trade (yes, he’s still one of the most valuable players in the organization), but others remain: Keon Broxton and Jett Bandy came out of nowhere, as did Junior Guerra and Manny Pina, among others. Following this line, and celebrating the completion of the Tyler Thornburg trade with the Player To Be Named Later arriving, I am returning to the Brewers’ trade surplus to see how trades are progressing across the organization.

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Bandy-Maldonado

Here, following the offseason treatment, I am including major deals from July 2015 (the arguable start of “Rebuilding”) through the present day, meaning that these moves are not entirely Stearns’s trades. Indeed, the Zach Davies / Gerardo Parra trade and the Carlos Gomez & Mike Fiers return remain two reasons that the Brewers did not need to “tank” and design a “scorched earth” rebuild that completely reconstructed the organization. Coupled with draft signings by the late Bruce Seid (such as Jacob Barnes and [soon] Brandon Woodruff), as well as graduated top prospects like Orlando Arcia, and superstar Ryan Braun, the “rebuilding” Brewers have remained competitive due to several different talent streams entering, remaining, and graduating through the system.


 

Trade Surplus Depreciated WARP & OFP Summary:

Trades DayOf 16-17Offseason Current
2015July $77.0M $107.4M $117.9M
1516Offseason $129.5M $182.4M $183.5M
2016July $109.5M $123.1M $116.4M
1617Offseason $32.7M - $54.4M
Total $348.7M $445.6M $472.2M

As a reminder, I will be following the historical model of Overall Future Potential (OFP) production drawn from the history of MLB performances. Scaled for prospect risk, here’s how those prospect levels can be valuated, with 50 OFP being an “average” MLB player:

OFP Value Percentile Depreciated Value
40 OFP $0.5M 7th to 8th $0.1M
45 OFP $7.0M 66th $1.4M
50 OFP $97.3M 88th to 91st $19.5M
55 OFP $170.8M Approx. 94th $34.2M
60 OFP $244.3M 97th to 98th $48.9M
65 OFP $359.8M 99th $72.0M
70-75 OFP $499.8M $100.0M
80 OFP $845.6M $169.1M

 

Last check-in, here’s how the Brewers’ trades looked. Given Zach Davies’s quick ascent to the MLB, I forgot to add him in this list, so his trade will be featured below.

What Happened? (Traded) Total Surplus What Happened? (Received) Total Surplus Balance
Sneed to 45 $1.4M J. Villar 4.8 WARP $78.1M +$76.7M
Lucroy & Jeffress 2017 / J. Lucroy & J. Jeffress 1.3 WARP $63.2M Brinson to 55-70 OFP / Ortiz & Cordell no change $114.1M +$50.9M
Fiers 2017 / C. Gomez & M. Fiers 0.1 WARP $23.2M Santana 0.9 WARP / Hader to 55-60 / Phillips 45-55 / Houser 40 $73.8M +$50.6M
J. Rogers DFA / J. Rogers -0.2 WARP $0.5M K. Broxton 1.4 WARP / Supak no change $21.2M +$20.7M
J. Segura & T. Wagner 6.3 WARP / Segura trade & T. Wagner lost (-$3.2M) $40.9 C. Anderson & A. Hill 1.2 WARP / I. Diaz to 60 OFP solid / A. Hill trade (-$1.5M) $55.8M +$14.9M
Lind -0.8 WARP -$7.5M No change (yet!) $2.9M +$10.4M
F. Rodriguez 2017 / F. Rodriguez 1.1 WARP $13.0M Pina 0.1 WARP / Pina to 45 / Betancourt no change $3.5M -$9.5M
J. Broxton 2017 / J. Broxton 1.1 WARP $10.2M M. Collymore no change $0.8M -$11.0M
W. Smith 2017 / W. Smith 0.4 WARP $22.0M Susac 0.0 WARP / Bickford no change $9.0M -$13.0M
K. Davis 2017 / K. Davis 2.3 WARP $47.0M J. Nottingham to 50 OFP / B. Derby no change $20.9M -$26.1M

Following this set of deals, it should be interesting to note that while the Brewers system prospects have had ups and downs, the players traded away have exhibited true depreciation within one year. This should demonstrate one benefit of using a depreciation model to assess future player value, which is the model I have been working with throughout the offseason; players do depreciate in terms of production. Jonathan Lucroy, Jeremy Jeffress, Gerardo Parra, Carlos Gomez, Mike Fiers, Adam Lind, and Jason Rogers all demonstrate this, and it should be noted they demonstrate this without completely crashing their value in the meantime (especially in the case of Lucroy). Khris Davis is perhaps the worst counterexample, as Stearns almost certainly sold low on the slugger, who also deserves credit for making adjustments and shifting his approach in Oakland.

What Happened? (Traded) Total Surplus ($M) What Happened? (Received) Total Surplus ($M) Balance ($M)
Lucroy & Jeffress 0.2 WARP /Lucroy 2017 & Jeffress 2Arb 26.6 Brinson / Ortiz / Cordell no change 114.1 87.5
Gomez & Fiers -0.9 WARP / Fiers 2018-2019 4.1 Santana 2.4 WARP / Hader & Phillips & Houser no change 89.2 85.1
Sneed no change 1.4 J. Villar 4.8 WARP 70.3 68.9
G. Parra no change -6.0 Z. Davies 2.4 WARP 28.6 34.6
Rogers no change -0.5 Broxton 1.8 WARP / Supak no change 29.3 28.8
Segura & Wagner 6.3 WARP / Segura trade & Wagner lost (-$3.2M) 40.9 C. Anderson / I. Diaz / A. Hill no change 55.8 14.9
F. Rodriguez 0.9 WARP 5.2 Pina 1.1 WARP / Betancourt no change 16.7 11.5
Lind -0.8 WARP / free agent -7.5 Peralta / Herrera / Missaki no change 2.9 10.4
J. Broxton 2017 / Broxton 1.1 WARP 3.7 M. Collymore released -0.8 -4.5
W. Smith no change 22.0 Susac to 45 OFP / Bickford 40-45 2.3 -19.7
K. Davis 3.3 WARP / 2Arb Control 53.0 J. Nottingham to 40-50 OFP / B. Derby no change 8.5 -44.5

A few quick notes:

  • The Lucroy-Jeffress and Gomez-Fiers deals shifted value for completely different reasons. The former relies fully (thus far) on problematic performances by the players the Brewers traded away, while the latter is improving in value both due to struggles by Gomez and Fiers and improvements by Domingo Santana. The Gomez-Fiers deal remains one of the strongest deals to build the Brewers system, even with Josh Hader’s recent struggles, and Brett Phillips’s graduation solidifies at least the 45 OFP grade (which is not nothing), while the ceiling remains to be seen.
  • Hidden in the middle of this table is the Francisco Rodriguez trade, which was one of Stearns’s worst trades on the day it occurred. But thankfully, trades are not solely graded on the day-of, and post hoc analysis loves Manny Pina’s development into (at least) a split time catcher at the MLB level. K-Rod has not been terrible, for what it’s worth, but when that contract winds down to its last year the surplus value really depends on short-term production rather than longterm outlook. This hurts the K-Rod score as much as it hurts Lucroy’s assessment in Texas.
  • Let it be stated that the Khris Davis trade return was solid (if not spectacular) on the day-of. But it’s great to be reminded that prospect stock can depreciate, too. Fortunately, scouting reports suggest that Jacob Nottingham can remain behind the plate, answering one previous question. But if that power (and bat) does not come around, it may not matter as much; it is getting more appropriate to highlight, say, the 40-45 end of Nottingham’s grade (still means he reaches the MLB) than the 55 end that helped him reach Oakland’s Top 10. Of course, remember that Manny Pina was probably a 40-45 grade minor leaguer when Milwaukee acquired him, so…you know the rest.
  • I believe there could be some reason to reassess prospects like Freddy Peralta or Ryan Cordell, who I would rate as valuable depth options for the system. However, for the purposes of this exercise, there is not necessarily enough non-statistical information to fully develop a new scouting grade. So perhaps a few prospects in this table deserve an asterisk next to their grade.

Turning from the “earlier” trades to the 2017 offseason, one can see how Stearns developed the surprising 2017 contender. It is interesting to note that for the offseason coverage of the club, so many of us (myself included) completely failed to properly price the GM’s immediate value for these trades.

What Happened? (Traded) Total Surplus ($M) What Happened? (Received) Total Surplus ($M) Balance ($M)
T. Thornburg 3.4 T. Shaw / M. Dubon (45-50 OFP) / Pennington / cash or PTBNL 27 23.6
M. Maldonado / D. Gagnon 9.6 J. Bandy 5.7 -3.9

For example, Mauricio Dubon was never (and probably will not be) the prime value of the Thornburg deal. What makes the Thornburg deal so amazing is that, given Thornburg’s career development, a straight-up Dubon-for-Thornburg deal would have been solid. Yet, Stearns did not stop there; the GM managed to return not just Dubon, but also a legitimate MLB asset in Travis Shaw, as well as two total lottery tickets (exemplified in Yusion Coca, the Player-To-Be-Named-Later who completed this deal). This trade should continue to “give” to the organization, whether it is in the form of Josh Pennington or Coco being included in a future trade (they are sufficiently far from the MLB to be traded once more), or Dubon working in a utility role or second-tier MLB starting role.

What Happened? (Traded) Total Surplus ($M) What Happened? (Received) Total Surplus ($M) Balance ($M)
T. Thornburg no change 3.4 T. Shaw 1.4 WARP / Dubon & Pennington no change / Y. Coca (40-45) 38.1 23.6
Maldonado 1.0 WARP / Maldonado 2018 / Gagnon no change 14.9 J. Bandy 0.7 WARP 16.3 1.4

A quick word: These numbers are indeed abstract! The Brewers claim approximately $472.2 million in depreciated surplus value from these trades, which roughly translates to 67 WARP (Wins Above Replacement Player) within the system. These 67 WARP could be maximized and turned into 87 market-rate WARP, they could remain steady over time, or they could further depreciate to 49 WARP. These figures are abstract, of course, because they incorporate risk into the system, and can be cashed out any which way; if Stearns cashes out 87 WARP within the next two years, the Brewers will have quite a competitive team; if these players remain merely competitive or decline further, it will be questioned whether more trades were necessary. The players could continue to depreciate, and many could fail to reach the MLB (if they are prospects). Stearns can cash out surplus through trades or development. So these numbers should not necessarily be interpreted to apply to any timeframe; that’s up to the GM to determine.

Since I’ve already focused specifically on the Jett Bandy-Martin Maldonado deal recently, I will not dive deeper into that deal except to emphasize the importance of post hoc trade analysis. Returning to a trade after the fact, with the proper tools, is not simply “using hindsight,” but rather healthy Benefit-Cost Analysis. Moreover, returning to a trade after the fact, with the proper tools, is an opportunity to potentially sharpen those analytical tools in order to provide better day-of trade analysis. But of course, the Bandy trade is not yet complete, nor are most of these deals, really. So, by returning to these trades with analytical methods over time, one can come to understand organizational value as a malleable entity that is never truly solidified at one point in time. This is arguably yet another reason to oppose “rebuilding,” or to opposing “winning now,” or any extreme organizational strategy; it is also possible to never build an organization, or to build an organization through contrarian means (as Stearns is doing). There should be no reason for an MLB club to fail to simultaneously build for the present and future, save for a lack of creativity.

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