Dollars and sense on the Santana deal
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- January
- 19
Wanted to bring this story on Yahoo Sports to your attention.
It’s a financial breakdown of a possible Santana deal by Vince Gennaro. Vince is a Westchester resident (and a reader here) who wrote “Diamond Dollars: The Economics Of Winning Baseball.”
Vince has worked with Major League teams on how best to include economics in trade and free-agent decisions. His work is fascinating.
His breakdown reveals that a trade for Santana does not make financial sense for the Yankees. It’s an interesting read.
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on Saturday, January 19th, 2008 at 2:41 pm by Peter Abraham.
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Peter Abraham
Vince = Bobcat?
As I thought.
Save the Big Three.
Can someone summarize that article in 3 sentences or less?
Great stuff, thanks for the link Pete. It is nice to see someone scientifically/logically confirm what pretty much all of us already believed anyway. Actually, I think I’m going to use this article for an assignment in my statistics class. See, who says the Yankees can’t be educational too!
The problem (and he admits it) is it’s very difficult to predict the impact Santana would have in the playoffs. Though recent (post-strike) history dispells the notion that a WS winner must have an established “true ace” who pitches like one in the postseason, the fact remains that a hot starter can dominate a postseason series like no other player.
Gennaro estimates (completely unscientifically) the chances of Santana increasing the chances of progressing one round further in the postseason by 50%. Furthermore, he assigns a value of $15M to progressing one round further. These numbers came out of thin air.
Can we do better?
Faketeams.com talks about an interesting 3 team deal to land Johan in pinstripes. It seems to make sense all around though SD would be adding some salary and have left handed 3 OFs all 33+ years old.
The Twins deal Johan Santana for Hideki Matsui, Phil Hughes and Kevin Whelan. The team flips Matsui for Matt Antonelli and Scott Hairston.
Can’t imagine the Padres giving up Antonelli, let alone him + Hairston for Matsui, unless A LOT of money were coming their way.
That would also be the best offer the Twins have received to date, I think.
Pete, are you going to the game tomorrow?
In other — admittedly not very pleasant — news, “Name of Possible Witness Emerges in an Audiotape” in a report in the NY Times today.
The audiotape mentioned is the one Clemens maybe never should have participated in, the one Jan. 4th surreptitiously taped in that conversation he had with Brian McNamee.
I wonder if the reason the Hendricks brothers have been practically invisible lately is because of proof of their employee’s apparent involvement. They were probably appalled when apprised of the Jan. 4th tape.
Pete, great posting.
Vince has a better take on this $$$ set-up than most of do, except for Jon.
Agree with Rebecca, save the big 3.
Now if we can keep Joba out of the BP I’ll be a happy man. Will the real(GOOD) BP please stand up?
Thanks for the link to the Gennaro article. The graph in Figure 2 is quite striking.
I’m confused about the Twins’ actual demands, though. Gennaro states Hughes, Melky, & one or two minor leaguers.
Others say the Twins are demanding Hughes and Kennedy. That’s one that no one in their right mind would do, even Hank.
good post interesting article
LETS GO G-MEN!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
I wonder if Cashman shoves this article in Hank’s and says nah nah nan nahnah.
Yeah Roger Clemens was a good contract.WE can get Santana to give us a Cy Young year for $13 million.Then next year we get rid od HGH Pettitte for $16 million to be a #3 guy.
McLovin, don’t hate Andy cause you ain’t Andy. Better get used to him now because he is going to pitch for the Yankees for the next 10 years, and he will do it effectively!
Can Mchating get off it already. We get it you hate Andy. Enough is enough already!
Interesting read…good article Peter. Perhaps someone can show it to Little Stein.
Brian
So Cal Yankee Fan
The Yanks pitching has me hoping and smiling alot like I used to in the late ’90’s.
Pete,
Thanks for the post but, to be honest, it seems a little “grabbed out of thin air” to me. Admittedly, I wouldn’t want to sit through a long explanation as to the equations he used for his analysis, but it always seems dicey to me when people say “let’s say Santana’s value is this for wins and loses.” Those kinds of stats never, ever seem to take a lot of information into account like: a.) the Yankees have a tremendous amount of money coming off the books in the next two years, b.) if Melky’s value is $10 million (again, kinda hard to show where that adds up) maybe the Yanks replace him with a better version (Austin Jackson?) that more than makes up for that, c.) how can anyone assign a value to two no-name minor leaguers to be included in the deal that may NEVER see the majors? just absurd if you ask me, d.) how does he calculate the overall effect a player like Santana has on an entire team and an entire staff as opposed to a less than dominant, three hole pitcher in Hughes (something he, again, hypothosized about in his column) and the negative effect that would have on a pitching staff, and e.) what the economics of baseball, and the Yankees, will look like in the next six years. To me, the fact that, even with his “logic” he concludes that Santana would actually be a net gain for the Yanks is reason enough to go ahead with such a deal. The Yanks won’t be losing money on HIM, and certainly will be making money as a whole. Plus, trying to calculate what his “star power” will mean to the Yanks is absurd. He could end up becoming a fan favorite, well outdistancing players like Cano. On the flip side, Hughes, as a home grown player, could be even more popular and thereby more valuable to the Yanks.
What that article showed me was, even taking a bunch of numbers and TRYING to make them prove Santana isn’t worth it, it just proves what a risk the Yanks are taking by not getting him.
Can someone summarize that article in 3 sentences or less?
———————————————————-
How about three WORDS?
SAVE PHIL HUGHES.
While his conclusion verifies what I have said all along, I’m not sure of how he gets there. Furthermore, I can’t see Santana having the ‘Marquee’ value he projects. Maybe on the Twins or Rays, but on the Yankees? Who already have Derek Jeter, ARod and a host of young talent? In a stadium that is close to sold out most games? Does he believe the great Santana will bring in more fans then Phil? Sell more sweatshirts then Phil? (and Melky and propects)
Is you want a simpler analysis of the Santana trade, do this.
Forgetting about injury, or either player facing on their face…
Calculate is by Winshares.
How many more Winshares or Wins is Santana worth over Phil?
Now calculate the cost of those Winshaes.
$20m+/- + Replace Melky costs.
Now take that money as see how many Winshares it buys of any positionm in the FA Market.
This wouldn’t even include the loss of the other 1 or 2 prospects, Just Phil and Melky.
It’s really a no-brainer.
Unfortunately, there are people who believe that there are stats called:
“But he’s JOHAN SANTANA” and
“We need a dominant Ace” and
“You can’t win in the PS without an Ace”
Because it’s only if you believe that those three stats are real that you would even go anywhere near this deal.
And the Sox and the Mets aren’t going to do it either.
McLovin – It’s not bad enough that you are obnoxious beyond words, but you can’t even get your facts correct. Santana gets $13 in his current contract. If he moves, he will negotiate a new contract for $20m+. You think this guy will get a new contract but only take $13m for next year?
Dude… please GO AWAY. We will take up a collection here. What’s it gonna cost to never hear from you again?
“…. opposed to a less than dominant, three hole pitcher in Hughes (something he, again, hypothosized about in his column) and the negative effect that would have on a pitching staff”
People… Are you going to let this guy get away with calling Phil a ‘3 hole pitcher’ who has a ‘negative effect’ on our ptching staff?
Well, at least I’m glad to read it’s not only me that gets a bit confused by Gennaro’s numbers and conclusions. They come at you (me) in such a way that I feel like I need a paper and pencil while I’m reading to follow the line of thought. (I’ve tried to read the book, and some of it makes a lot of sense, but some of it is based on hypotheticals and predictions that no one has any idea about.)
Anyway, I thought the bottom line of the stuff on Santana was that it would be a net gain for the Yankees. There was nothing in the article that suggested it would be utterly insane for the Yankees to get him.
I also think he should have done his numbers with Ian Kennedy in the mix, as well, since that is what the Twins are asking for from the Yankees, in addition to Cabrera and Hughes.
If the Trio is as good as everyone is hoping they’ll be, they will more than make up for the wins that Santana would be projected to bring to the Yankees.
I guess the clearest thing he showed was that on a team the caliber of the Yankees, Santana doesn’t add a whole lot in wins. And as someone above pointed out, they already have marquee players, and if Phil, Joba and Ian succeed, it’s conceivably worth more because of their home-grown-ness.
if pettitte starts to stink this season i will be very skeptical. maybe hes been doing HGH for years now…
Old Yanks Fan- you’re telling mcloving to leave cause you dont agree with him? grow up man. hes entitled to his opinion.
Doreen – I am with you. I found Gennaro’s article confusing. He says that Santana would be a value added signing for the Yankees even at a steep price. Yet he showed they’d be ok without him. He didn’t change my thinking at all.
Adding more regular season wins with Santana on the staff ???… probably. Not that significant a deal considering our ‘normal projected’ 162 games without him (and with Hughes’ expected contributions).
Melky – not a factor in any way. Cute name, but easily improved upon if he were traded. Would still try to get someone else to push him to be the’4th outfielder’ at best.
Where the vast improvement would project to be is in those few critical playoff games where Santana could/would be a ‘lights-out’ pitcher that we unfortunately do not have at this time.
That would be the real importance of adding Santana.
Marquee value – no.
Assassin – I think so. / I’d hope so.
Here is a page listing WinShares.
http://www.thehardballtimes.com/thtstats/main/index.php?view=winshares
Granted, Santana had a bad year, so give him a few extra.
Simply because a pitcher only plays 20% of games, they can’t have the impact of everyday players.
Look at how many players contribute more to WINNING.
Santana would cost (including replacing Melky) about $30m.
So, of the FAs available over the next year or 2, how many Winshares can you buy for $30m?
Jeter, with an average 2007, had 24 WS to Santana’s 12.
As an FA, $20m is still steep, but to a wealthy Yankees team, worth it. But to lose Phil and Melky too? It’s not even really close.
“from Captain Clutch to Derek Choker” – Nice handle Dude!
You and McLovin should do lunch.
“if pettitte starts to stink this season i will be very skeptical. maybe hes been doing HGH for years now…”
If what you say is true, why would he stop now?
An article worth reading but yet another one that proves any player deals come with a built-in [IF] attachment. No guarantees, just hope.
Has Julieani forfeited, when’s the last time this dude show his face on TV?
““from Captain Clutch to Derek Choker†– Nice handle Dude!
You and McLovin should do lunch.”
they do. every day.
i’d bet a large sum that Pete could confirm they are the same person.
Cap Clutch
You don’t know what you are talking about. HGH doesn’t do anything…by itself. It may (not proven yet) help you to heal or recover faster but, by itself, won’t do anything else. In other words, in your case, the less you know…the less you are.
I doubt the deals for Posada and Mo made financial sense for the Yankees either. Strange that many fans still support those deals yet they don’t support a deal that would finally bring a legit top of the rotaiton ace to the Yankees and allow them to compete with the Red Sox.
Many of the moves the Yankees make don’t make sense for them financially. That’s what makes them the Yankees.
I agree Doreen.
Furthermore, I think Santana is a lot more valuable to a team that does NOT score a lot of runs. The Twins, A’s, SF, etc. With the Yankee’s averaging almost 6 runs a game, to some extent, it could be ‘overkill’. As opposed to a killer Ace, I am more concerned with a solid, above average 1-4, or even better, 1-5.
I think the only advantage to get Santana is for the PS, where of late, we have not been scoring. Of all the polls I’ve seen on various sites, totally thousands of votes, only 25% definitely want Santana.
The last line from Professor Gennaro in the Santana trade analysis that appeared in Yahoo: “Any team who makes this trade will likely set its farm system back while placing a tremendous investment – and therefore risk – in one player. But if Santana ends up taking the hill in Game 1 of the World Series, the deal will [sic] considered a good one.”
So, the trade does make sense, as long as the Yankees get to the WS?
Murph -
It makes sense only if the exact desired result plays out. Anything short of it invites a heap of criticism from naysayers and “I told you sos”.
Bring Minnesota to their knees. Hold off on Santana and re-visit in July. Boston and the Mets won’t blink.
Old Yanks Fan,
I wasn’t saying Phil IS a three hole pitcher that would have a negative impact on the rotation. I was saying that, in the guy’s column, he basically hypothesized what Hughes value would be IF he was a third starter. That’s what I was talking about. The column’s point is basically that, even if Hughes isn’t all that great, his dollar worth is still dramatically higher than Santana’s. My point was, if Hughes is only as good as a number 3 starter, there are other factors in that. Santana is an ACE. He is a shutdown pitcher, meaning he lenghthens your rotation. It takes pressure off of other guys. It’s like putting a big slugger in the middle of a weak lineup. It takes pressure off of other guys and, a lot of times what you find is those guys do better because of it. The opposite can be true. If Hughes is simply average, it will not take pressure off the Wangs and the Pettites, but it will put more pressure on them. His calculations about wins, and what those wins translate into interms of money, don’t take things like that into account. Sanatana being an ace, being a shut down pitcher, doesn’t just effect his “value”, it effects everyone elses, and that wasn’t talked about in the column. I think hughes can be a big pitcher, but there is no guarantee of that. If he only ends up being an okay pitcher, a #3 quality pitcher (which basically means he’s average at best), it effects the entire rotation in a negative way, which also effects value.
Weakest place in Vince’s analysis:
Calculating PH’s value vs. market value replacement. The Yanks happen to have a number of other young low-cost arms that may do as well or nearly as well as Phil Hughes. It’s likely Horne or others could fill PH’s role without paying free agent prices.
It may be worth giving up a tad more than someone’s worth if:
a) you give up a commodity you have in surplus, and
b) you get something extra special.
Overall though, I think Vince’s is a smart way to look at it. I still favor trying to trade IPK + 2-3 other top prospects for Santana, or just stay the course.
One more left handed relief pitcher is off the list of possibles. Jeremy Affeldt signed with Cinncy for 1 year, 3 mil.
Gennaro’s analysis is a good example of how most businesses go about making rational cost-benefit decisions.
I’d guess this is how Cash and Hal have approached the situation. It also illustrates how valuable young pitching is.
People might not like the yankees taking money into consideration but they are a business and more importantly in the past they’ve been hurt time and time again when they’ve abandoned rational thinking to make “win at all costs” moves.
And remember, this all depends on the assumptions Gennaro made on Hughes – he assumes over the next 6 years that Hughes will be a #3 starter. If Hughes becomes a number two starter over that time the deal becomes precipitously worse.
Same thing for Melky – if Melky does go onto be even a slightly above average centerfielder the deal again becomes much worse financially.
I do agree with Yazman’s comments. Gennaro’s big assumption is that both Hughes and Melky would be replaced by costly free agents. That’s not unreasonable to assume but its more likely that Hughes would be replaced by another cost controlled arm (Kennedy, Horne, Sanchez, etc.). Same for Melky – Damon would slide over or Damon/ Gardner. This doesn’t make his analysis wrong. He probably left this stuff out to simplify his article.
To get the true value proposition Santana represents for the yankees he should have done a sensitivity analysis to take into account different scenarios for how players are replaced.
Overall, one of the things his article does strongly imply is that trading Hughes and Kennedy would make the deal astronimically expensive. That deal really doesn’t make sense. That’s what the Twins have been asking for (supposedly they never moved off kennedy) and a number of people on the board have supported including Hughes and Kennedy to get Santana no matter the cost.
The other thing the article really shows is how little acquiring Santana makes sense for the Red Sox. They are generally a very by the book organization. Even the way they approached Matsuzaka turned out to be based on very sound cost-benefit thinking.
John – OK, I get ya.
“If Hughes is simply average, it will not take pressure off the Wangs and the Pettites”
Well, I would agree with that. However, if the Yankees though Phil was going to be average, Santana would already be wearing pinstripes.
Last year, called up a year early, thrown into a desparate wild card chase, and with 2 different injuries, Phil posted:
4.46 ERA (slightly better then average)
1.28 WHIP (Sabathia=1.27, Beckett=1.23)
.698 OPS (basicall, everyone was Tony Womack)
And the kid is just 21.
Considering the circumstances, these are pretty good numbers.
You never know with a prospect, but Phil is close to as good as you can get. If he turns out to be average, then we blew it. However, I don’t think that will be the case.
Andy and Roger not BFF?
At least according to a friend who is presumably helping Andy distance himself from Roger by giving the story to Ken Davidoff.
http://www.newsday.com/sports/baseball/yankees/ny-spken0120,0,1123522.column
Davidoff takes the story and runs with it, pointing out all the differences between the two, and stating that Roger didn’t display any “affection” for Andy during the 60 Minutes interview. However, Davidoff doesn’t display any sketicism about this story, or point out the obvious motive Andy (or his friends) might have for claiming they’re not that close –”Why no, Congressman, I have no knowledge of whether Roger did steroids, we were never as close as the media portrayed us to be”. Davidoff didn’t even point out the most glaring hole in the story – what about Roger coming out of retirement to join Andy in Houston?
Obviously I have no idea how close the two of them are or were in the past. However, I just think Davidoff might have been a tad more skeptical.
Old Yanks fan- youve got a point there. the Yanks must think they have something special in Hughes. im not in the camp that thinks he’ll be an ace (he has a low nineties fastball and cant control his curve), but if he becomes a good #2-3 in the AL he’s vastly more useful than Santana for $150 mil. hughes carries more injury risk than santana just because he’s young and we dont know if he can handle 200 IPs, but Johan has logged a ton of innings over the last 4 years.
Some people seem insulted when one suggests hughes and kennedy could be less than #1s and 2s respectively, but young pitchers who perform at league average for 200 innings are immensely valuable. it makes our bullpen better and takes the pressure off the offense. if we had had 5 relatively healthy pitchers last year, we wouldve won the division. With Chamberlain, Hughes, Kennedy, Horne/Pettitte and Wang, the Yankees could have 5 pitchers in ‘09 who are better than league average. Depending on Pettitte’s status, they could all be under 30. 2008 is a rebuilding year because it’s unrealistic to expect 3 young pitchers to eat up a bunch of innings and be effective, but the future is bright.
2008 is a rebuilding year because it’s unrealistic to expect 3 young pitchers to eat up a bunch of innings and be effective, but the future is bright.
—————————————————————-
I don’t consider this a rebuilding year at all, in fact I believe their pitching is better than it was last year & that team won 94 games. Having 6 starters will ease the need to eat all the innings. Moose will be a big part of that.
There are many Aces who throw 92-94, Beckett being one. Maddux and many others have less. Most pitching gurus put command at the top of the list, and Hughes has shown excellent command his entire career. He is mature beyond his years, 6′-5″ but not overweight. His curve was rated 60-70 out of 80, so you are underestimating it. He was rated the #1 or #2 pitching prospect (with Buchholz) by just about everyone.
His has Ace potential, but plenty before him have also, and gone nowhere. He should be at least a #2, and propbably better then Wang. Eiland said recently he feels Hughes will be more successful then Joba.
Should we make the PS, or God forbid the WS with these kids, it will be a fantastic year for us fans. It’s always more fun to root for the ‘underdogs’.
Kenedy has typically been rated as a #3-#4. I don’t think anyone expects him to be a #2.
Clare- I’ve heard it before that Andy and Roger are not nearly as close as they used to be, and I think it was getting to Andy after their second year in Houston that he was always in Roger’s shadow, hence Andy’s comments such as “Roy (Oswalt) and I were always the aces on this team” before Roger resigned in 2006, and then when Andy signed with the Yankees again, making comments along the lines of, “I’m a man and I make my own decisions without asking Roger first.”
I do agree with you, however, that it would be silly to take the word of the always unreliable anonymous source because Davidoff says to.
Buddy Biancalana – agreed. People forget we played .650 ball the 2nd half last year, and the 2008 SP should be better. Phil won’t be injured (hopefully) and Joba and IPK and a little experience, and get to start the year fresh, as opposed to be being thrown in the middle of a pennant race.
I think we’re good for 95 wins. A lot will depend on the offense. We can expect less from ARod and Posada, but we should get more from Giambi, Melky, JD and Matsui.
I think that ARod and the entire team will be more relaxed and having some fun. It could be a gtreat year.
Amen OYF!!! I really look forward to seeing what Girardi will do day in, day out.
After Pettitte was kicked off the Yankees, I hoped every minute that Clemens would follow him. Steinbrenner and Cashman needed to be shown how badly they treated Andy. It was a logical move for Clemens in every way, and a great one for a teammate who was on any kind of friendly terms with Andy and who had half an idea of how he deserved to be supported. Clemens of course always got the media’s and Steinbrenner’s attention, which was all I was hoping for in the whole fiasco.
It’s not a glaring hole in their story except for those who don’t know the whole story and choose to selectively focus on negativity.
Say it ain’t so,
It would be completely understandable if Andy was tired of being in Roger’s shadow. And I also heard that Andy enjoyed being one of, if not the, senior leader of the pitching staff before Roger came back. But Davidoff wasn’t saying that they were no longer as close as they used to be, he was saying they were never very close — it was all a media creation.
I wasn’t saying that I didn’t believe that – I’ve certainly commented often enough about media fabrications. I just thought the tone of Davidoff’s article was a little too credulous, and that he neglected to ask some obvious questions.
Clare- I agree about your Davidoff comments. I was only saying that if Roger and Andy aren’t/weren’t ever so close, it shouldn’t come as much of a surprise.
It doesn’t really matter in the scheme of things whether they’re bff’s or if secretly they despise each other, and I do agree that this is going to end up being some kind of ploy to pull the “I don’t know if he did steroids because we weren’t that close anyhow” card.
I guess we’ll find out next month for sure.
“Let’s look at the financial implications to the Yankees of making Santana their staff ace, by breaking it down into two separate analyses – the free-agent value of Santana and the financial value of the Yankees players who reportedly would go to the Twins – promising starting pitcher Phil Hughes, center fielder Miguel Cabrera, and one or two minor leaguers.”
Haha who proof-read his article? Miguel Cabrera? C’monnnnnn!
Old Yanks Fan,
I agree. There is no doubt in my mind that the Yanks, especially Cashman, believe Hughes is going to be number one starter quality. As a Yankee fan, I would like nothing more than that. If you told me right now I could sign on for one of two scenarios, either a.) Hughes stays and becomes a big pitchers or b.) Santana comes and remains a dominant pitcher throughout his career, I would choose A irregardless of the money involved because I would always rather see young, homegrown kids succeed. But the problem I had with the column was that he was talking about Hughes values as an average pitcher as opposed to Santana’s value as a top end pitcher. My point was that, IF Hughes ends up being just average, it effects the rotation in a negative way, just as Santana being that ACE quality starter would effect the rotation in a positive way, which would means something in terms of dollar figures. I was commenting off of his premise. If Hughes is great, everything is wonderful. If Hughes is average or below average, as you stayed, the Yanks messed up (which I completely agree with), and that would seem to be in conflict with what he was saying.
Personally, as long as Santana doesn’t end up on the Sox I am okay with not getting him and staying the course with Hughes. If the Sox get him, boy, it really puts the Yanks in a hole.
JW,
I have to disagree on a couple of points. First, I think Hughes CAN be a dominant starter, but he needs to develop a third pitch (that became evident through last year). His curve is tremendous, but his fastball isn’t good enough to truly scare hitters. It seemed at times that they were just sitting back and waiting for the big, looping curve because they knew they could foul off (catch up) to his fastball. If you add in a change to that mix, something that looks like a fastball coming out of his hands, but ends up 10 MPH lower, that will make every one of his other pitches significantly better. But that is the point. I think he NEEDS that third good pitch, that good changeup, to live up to expectations.
As far as him being worth it even if he isn’t a top line starter, I have to completely disagree. First, the Yanks are not just hesitating on this deal because of the money, and as a fan, I don’t care about the money. The column even admitted that Santana would MAKE the Yanks money. So, are we as fans now worried about HOW MUCH they make as a team? I’m not. As long as contracts don’t effect the team’s ability to compete and to sign needed free agents, I don’t care if they make a little less with Santana than they would with Hughes and his non-existent contract.
Hughes has a slider.
This is why Santana is worth $25 million. Brett Tomko is getting $3 million after having a 5.55 Era in the NL and after seeing it in the rotoworld website he has not had one good year in the last 10 years.But Santana isn’t worth it.