Zunino-Smith Trade Test

Yesterday I published an analysis of five potential trade surplus markets for the Brewers for the 2018-2019 offseason, in an effort to demonstrate the types of prospect and payroll costs that could be associated with Milwaukee meeting their roster needs outside of free agency. The Mariners and Rays obliged a laboratory for testing a surplus model, so let’s jump right in: what types of logical assumptions could serve as the foundation for this deal? How can this type of deal inform analysis of future Brewers trades?

Rays Receive
C Mike Zunino (entering age-28 season, two salary arbitration years remain)
LF Guillermo Heredia (28, four reserve years remain)
LHP Michael Plassmeyer (22, Class-A minors [Short])

Mariners Receive
CF Mallex Smith (entering age-26 season, four reserve years remain)
CF Jake Fraley (24, Class-A minors [Advanced])

Press reports emphasize that the Rays were looking for a catcher, and the Mariners are rumored to be entertaining a tear down. In this sense, the trade works as a “pure baseball move” for both teams: no pretenses, no “process” monikers, no excuses.

• The Rays get a bit older with this deal, and arguably opt for quantity after dealing Mallex Smith (who is probably the most valuable player in the deal based on performance and contract). Zunino is an uneven offensive catcher, but his glovework was worth approximately eight Adjusted Fielding Runs Above Average in 2018, which also fits with the defense-heavy profile of Guillermo Heredia. It seems as though the Rays are opting to attempt to enhance the Runs Prevention System that underlies their pitching staff, which was one of the best in 2018 (reports focused much too heavily on “the opener” strategy, and not enough on the basic overall quality of their pitching performance).

• If the Mariners are looking to rebuild, Smith helps their roster get younger in center field, and arguably improves upon Dee Gordon and Heredia even if Smith cannot fully build on his 2018 offensive breakout. Seattle may get worse defensively in the middle of the diamond with this deal, but it is difficult to blame their front office for looking for a young, MLB-level batting fix to improve their outfield. This is the type of high floor developmental play that mirrors some of the Brewers’ “rebuilding” moves, particularly the moves that helped Milwaukee redevelop their roster quickly and without much suffering in the win column.

• Michael Plassmeyer and Jake Fraley are both rated as organizational depth prospects at the moment, and it is safe to assume that both clubs are looking to exploit developmental changes of scenery for both players.

Using the same Surplus Assumptions yesterday (explained at the bottom of this article), here is how the trade grades if it is assumed that both front offices sought equilibrium in their prices. This model uses a basic “Raw” contractual surplus value, simply subtracting contract from the average depreciation on each player’s performance (prorated to the same length of the contract).

This trade is about as even as it gets, which is impressive even when one considers that the Rays sought multiple MLB players in return while Seattle gambled on one MLB player.

What if the assumption is that neither front office was seeking equilibrium in pricing, and instead sought to exploit some information asymmetry or developmental cycle? Here, let’s forget contractual assessments for a moment and simply focus on three-year ranges of performance to define value: teams can weigh a rolling average of performances in an equal manner (a “Blended” model of valuation), they can assess a player at their highest three-year value (a “Highest” model of valuation), or they can extrapolate future performance based on the player’s immediate performance. Each of these valuations have their strengths and weaknesses, and it’s almost certain that front offices weigh each time horizon. (Explained at the bottom of this article)

In the model below, the Rays and Mariners play a game in which each team seeks the highest possible assessment of the player they receive and the lowest possible assessment of the player they surrender:

Here, the landscape is much trickier, because both teams return greater talent than they surrender, should their assumptions hold. On their best assessments, each of the MLB players offer a solid return, with Smith demonstrating the most volatile range of performances and Heredia offering the most steady “highs” and “lows.” One could argue that the Rays got the best of the deal by landing Zunino, who has a much higher floor for his “lowest” performance than Smith, and is also as good as Smith at his best. Yet it’s too easy to proclaim one team winning the deal at this point, because it’s not clear that either team made a mistake if they were using uneven valuations to achieve the best possible gain in roster surplus. If both teams were rent-seeking with this trade, seeking to improve their roster by moving on from talent at a low price and acquiring talent that they justifiably assess at a higher rate, they both achieved their goals while filling real baseball needs.

This is one example of how to think about trades when GM David Stearns assembles his offseason plan. One can assume that the GM is looking to cooperate with his opposing trade mate, and that pricing will naturally find an equilibrium in transaction (one could extend laws of supply and demand, perhaps with a Law of Marginal Roster Benefit and Marginal Roster Cost to build this assumption). The equilibrium story is nice when it works (as it did in this trade), and it offers clear notification when a deal fails (if the parts have uneven prices, there was some market failure on this assumption). But equilibrium is not the only assumption that needs to hold, and it is worthwhile analyzing alternative transaction valuations in order to understand when and how GMs are seeking an uneven advantage from a trade.