By now reality has begun to set in that Troy Tulowitzki is a Toronto Blue Jay, and while it came as a complete shock in how quickly it came together without many rumors, it makes a ton of sense with an eye for the future. With Trevor Story, Cristhian Adames and Brendan Rodgers both at Shortstop in the minors, a more than worthy replacement is ready to step in down the line. The Rockies were obviously looking for a very hefty return for Tulo, and the Blue Jays made an offer that fulfilled their demands. Using the same methodology that I used prior for Carlos Gonzalez, Wilin Rosario and John Axford, and Cole Hamels long before that, I calculated whether the return for the Rockies was fair, by first determining Tulowitzki’s surplus value.
Tulo is amidst yet another All-Star campaign and further cementing himself as one of if not the best offensive shortstop in the majors today.
Theres no question that Tulowitzki puts up huge numbers when he is on the field but he has only eclipsed 500 at bats once in the past four seasons. He is now 30 and as is the case with many shortstops that usually signals the beginning of a decline due to the rigor of playing shortstop for so many years. To begin calculating his trade value I needed to project out his WAR over the remaining six years of his contract. For 60% of this equation I used comparable players from Baseball Reference which helps to project how a player similar to Tulo will age. Four players that were statistically similar to Tulowitzki were Miguel Tejada, Nomar Garciaparra, Michael Young and Ernie Banks in that order. Because Tejada and Nomar posted number much closer to Tulowitzki’s over his career they were weighted at 30% while Young and Banks were at 20% as they were not as close as comps to Tulo, but still quite similar. In this graph below the values on the graph are the weighted average of the projected WAR for Tulo based solely off of these comps.
While all four of these players were some of the best during their time they all didnt age all too well and by the time they were 36 all but Banks had negative WAR seasons. As you can see in the graph the weighted average Tulo is expected to drop off significantly towards the end of his contract. Also, from this graph and projection it is clear that the best years for Tulo are behind him. This projection is only 60% of the equation for the future WAR for Tulo however and because he has been able to put up big numbers even when missing significant time during a year, Tulo is different that these other four outstanding players.
The other 40% of the equation comes from past success of Tulowitzki by weighting the year most prior at 50%, 30% the year before that and 20% the year before that to account for any anomalies or devastating injuries. By combining this projection for Tulo along with the weighted average of his comparable players we a starting WAR of 3.56 for next season and slowly going down to 1.77 in the final year of his contract.
The upper and lower limits seen in this graph make up a 95% confidence interval that his WAR will fall within those limits. However, should Tulo have a major injury that affects him for a year or two or even change the path of his career all of these projections will look much different. Given his injury history many teams will be scared away from taking the risk on Tulo and paying him for six more years. I will move forward with these quite favorable projections for Troy Tulowitzki, but due to his exorbitant contract still owed to him his trade value will take a hit.
Over the rest of his contract Tulo is owed $119 million, which would be a good deal in today’s day and age if Tulo were 25 but instead he is 30 and his best days are most likely behind him. To determine if the trade with the Jays was a good return for the Rockies, I calculated his value over the next six plus years and then subtracted his contract to get his surplus (trade) value.
As you can see here in the screenshot, Tulo has a positive surplus value of roughly $22 million dollars, meaning that he will bring a team that much more value above and beyond what they are paying him. This is given that teams continue to value each win above replacement at $7 million dollars, with that figure ramping up 5% each year moving forward. A surplus value of $22 million is much higher than many other players due in part because a team has control of Tulo for six plus years rather than just the rest of the year, a rental player such as Johnny Cueto or Yoenis Cespedes.
While Tulowitzki himself carries a surplus of $22 million, the Blue Jays chances at reaching the postseason will jump up from the difference in WAR that Tulo has over Jose Reyes. This bump in playoff odds will result in an increase in revenue for the ball club that can be attributed solely to this trade. Fangraphs had predicted the Blue Jays at 81 wins before the trade for Troy and now that he will bring 1.1 more wins than Reyes, the odds for the Blue Jays to make the playoffs will increase by roughly 5%.
Research across many platforms over the past 3 seasons has concluded that teams on average experience a bump of 10% of their revenue if they make the playoffs. This is not only because of additional home games for a team but also the significantly heightened interest for a team resulting in higher TV viewership and merchandise for the club. The addition of Troy Tulowitzki bumps their chances to make said playoffs by 5%, he brings them an additional revenue of 2,700,000. This is solely for the 2015 season but if the Blue Jays were to remain in the playoff chase in upcoming seasons they can expect a further bump in playoff chances, playoff revenue, and ticket revenue due to Tulo being a superior player to Reyes.
The bigger kick to revenue from any given trade is actually through the bump in attendance, due to fans wanting to see a winning team out on the field competing for a spot in the playoffs. Back in March I calculated a linear regression to see how a bump in projected wins increased attendance, based off the attendances for each team the past 5 seasons.
As seen in the graph, an increase from 81 wins to 82 wins increases attendance on average by 63,500 fans over the course of a full season. Because this is a deadline deal however the Jays attendance will only spike for the remaining 40% of the season. The Blue Jays average ticket price is $104.54 USD, thus bumping their attendance revenue by $2,655,316 for the rest of this 2015 season. Combining these two factors brings Tulo’s value up to roughly $27,000,000. Troy is controllable for the Blue Jays for an additional six seasons and given his projected WAR over those seasons it is very reasonable to assume he will bring in another $20 million in revenue for the Blue Jays bumping his value up yet again to $47,000,000.
Also included in the deal for the Blue Jays is LaTroy Hawkins, the steady 42 year old righty who will help to bring a veteran and established arm to the Jays pen. Because his WAR is only 0.1 for the rest of the year and he is owed $800,000 the rest of the year he possesses a negative $100,000 trade value. This is seemingly non-existent so the return due in part to Hawkins is minimal but it makes sense for the Rockies to move the 42 year old veteran for whatever they could and to begin developing their younger relievers.
Now to value the Rockies haul in the deal and determine whether they were able to get a good deal for Troy Tulowitzki.
The only full time major league player in the deal, Jose Reyes, is actually the least valuable by a longshot for the Rockies because he is owed $22,000,000 in each of the next two seasons. This year Reyes is on pace for a 2 WAR season, giving him a negative value of $8 million for this year. To quickly project out his surplus value over the remainder of his contract I gave Reyes a WAR of two again in 2016 and then 1.5 in 2017, based off of his previous years and predicted decline due to age.
Reyes based off of these somewhat optimistic WAR predictions, due to his high injury risk has a NPV surplus value of -$20,726,076.07. The Rockies are on pace for 72 wins and looking back at the playoff odds non-linear regression line we can see that they were on the flat bottom left portion meaning losing a projected win will not hurt their playoff chances, as they already did not have a chance. However, if the prospects that the Rockies brought in pan out then the Rockies can expect a jump in their playoff odds when they are actually in contention. This jump should in effect produce more revenue as the MLB has been growing constantly over the years and ticket prices are only set to increase. This may be more of a longer term investment but seeing as we don’t lose much revenue potential at all from the playoffs this year it makes a great deal of sense for the Rockies to be sellers.
Because the Rockies were willing to eat Reyes’ contract from the Blue Jays, they were able to bring back better pitching prospects to compensate for the negative surplus value of Reyes.
The headliner of the deal was Jeff Hoffman, the 9th overall pick in the 2014 draft and has posted a sub 3 ERA in double A this season. He is 22 years old, meaning that he should be ready to be in the big leagues next year for the Rockies. Once in the big leagues he will be controllable for the Rockies for six seasons, giving him a surplus value of approximately $22 million dollars due to his prospect ranking of #58, his age relative to his league, the average WAR by position and his strong performances this season. A full writeup of the prospect valuation methodology can be seen here on the SB Nation D Rays Bay Blog. Prospects.
The next player in the deal is Miguel Castro who had a brief cup of coffee for the Jays this season, while only 20 years old. He struggled a bit, but that was to be expected for someone so young in the big leagues. He went back down to Triple A and has been pretty lights out with his near 100 mph fastball and has help batters to a .188 batting average. With a more developed feel more pitching, he has the ability to be a mid-rotation starter or lights out closer in the not too distant future. Based upon his prospect rankings, Castro has a surplus value of $14 million dollars.
The final piece of the deal was Jesus Tinoco, another 20 year old right handed pitcher. He has received high praise for his fastball that has great sinking action, that could play very well at Coors Field. He was a lower end prospect but has very high potential and already has a plus pitch. He becomes the Rockies 18th overall prospect in a deep farm system and carries a surplus value of $8 million.
While this trade broke so many of our hearts, looking at it from a business perspective it turns out to be very good for us. The Rockies have Story, Adames, and Rogers awaiting to fill the shortstop position in the future and we brought in three much needed top end pitching prospects. The kicker in the trade is Reyes, whom has a negative trade value but is still a productive player that can either help the Rockies out to lessen the blow of losing Tulo. Or the Rockies can look to shop him to other teams to potentially bring back even more prospects and further save money on the payroll.
The most likely scenario for Reyes is that he is either acquired by a team before the trade deadline for next to nothing due to his -$20 million dollar surplus or he will be placed on waivers in August in hope that a team will pick him up. Even if the Rockies are able to unload him for nothing in return they will be saving $52 million dollars, the amount still owed to Reyes and will be able to start giving playing time to their young guns at shortstop. While Reyes has an extremely bad surplus value, due in part to his contract, he is still a valuable player and could greatly help a team in need for a shortstop down the stretch.
Three teams that jump out as having slightly sub par shortstops are the Yankees, Dodgers and Twins. If any of these teams saw Reyes as a clear upgrade they should have no problem in claiming him off waivers to step in and elevate their playoff chances by roughly half a win in each case.
1. Yankees: They are a team that could have been an amazing fit before the season started and they traded for a young shortstop in Didi Gregorius. He hasn’t been anything amazing to start this season but he has been picking it up of late and has been good defensively. However, he is projected as a 0.6 WAR player the rest of the season. However, at second base they are running out Stephen Drew, a 0.1 WAR player the rest of the way. If they brought in Reyes they could expect roughly a 3% boost in playoff odds if Reyes played second for them. Also, their attendance revenue would increase by $5 million the rest of the way due in part to the Yankees high ticket prices. They seem to be a logical place for Reyes to land now that he will be much easier to acquire as the Rockies could simply just want the salary relief.
2. Dodgers: They are another big budget team that would have no problem paying for Reyes’ salary. They also are in the thick of the playoff race and increasing by even just half a win would greatly help their chances. Jimmy Rollins has been nothing special for the Dodger this year and is set to post 0.4 wins the rest of the way out. The Dodgers like the Yankees are slated at 91 wins according to Fangraps so for them adding Reyes would boost them about 2% to make the playoffs. However for a team like the Dodgers who have been without a World Series for 27 years they could very well be willing to overpay for any additional wins to end the streak.
3. Twins: The Twins have been a huge surprise this season and far ahead of schedule of their predicted window to compete with their prospects but they have a chance to be a wild card team with a few changes. One of which would be at shortstop but they have never known as a team with a massive budget. I see them as having two options, have the Rockies eat some of Reyes’ contract and then give back a prospect from their deep system or saying now is the time to boost the salary and go for it while they are so close to contention. Danny Santana has been very poor for them at shortstop this year at 0.1 WAR. Reyes would step right in to add another win, boosting their playoff chances by 8%. Reyes would also bring another veteran leader to a very young team to help the development of young studs such as Nick Gordon in a year or so.
While Reyes doesn’t possess much trade value at all, he would still be very enticing to three win-now contending teams in particular. It would be in the Rockies best interest to dump him and his salary as they are nowhere near the playoff hunt this year. If they are able to find a partner willing to take on his contract the Tulowitzki trade looks that much better as the -$20 million surplus attached to Jose Reyes disappears bringing the surplus in up to more than $40 million for a beloved star in Troy. Still very difficult to swallow seeing Tulowitzki in a Blue Jays uni, but I feel the Rockies did the right thing in moving the aging injury prone star for some much needed pitching. Now begins the look to the future, lets just hope it isn’t too far away.