Selling An Elite Keeper for More Keepers

Alternate Title: Publicly Reviewing My Boss’ Work

A couple days ago, Eno wrote about his decision to shop his $49 Mike Trout in an ottoneu experts league. Said Eno:

I bought Mike Trout for $10 in 2012. He brought me two top-three finishes in the ottoneu experts league. But I was not up to the challenge, and now he’s $49 and my team is 8th. I see no other option but to sell Mike Trout.

This post will mostly be about selling elite keepers for more keepers. It’s a topic that’s near and dear to my heart, and one I recently covered tangentially. My strategy has evolved over time, and my view of prospects has soured considerably as I’ve aged.  One thing I’m pretty sure I know – people vastly overvalue prospects in trade discussions.

Before we dive into the weeds, I did want to react to one thing Eno said in that quote. He sees no option but to sell Trout. I see options aplenty. I’m in a similar position to Eno in FanGraphs Staff 2, and I’ve been eyeballing a $51 Trout for months. I have all kinds of high quality prospects like Addison Russell and Corey Seager for under $5, but I’d much rather drop one-eighth of my budget on Trout. I haven’t spent much effort trying to acquire him simply because I’ve assumed his owner (Ben Duronio) would have a similar view to me. Maybe he’d rather have the top prospects.

Were I in Eno’s shoes, I’d be looking to acquire a player just like his $49 Trout. You don’t necessarily have to sell your top assets just because your team is struggling. Sometimes that’s exactly the sort of player you should be targeting. Take a deep breath and ask yourself “is my 2015 roster better off without INSERT PLAYER?”

If you’re still dead set on trading your stud, good news! I have a lot of advice to stuff through your eyeballs. Trout is an unusual subject for this sort of discussion because age related decline is almost a non-issue (aside from steals). You’re usually trying to acquire young up-and-comers when selling elite talents, but with Trout, most prospects are still older than him. This is a unique type of sale, it’s a veteran keeper for keepers trade. That complicates the math considerably.

In general, I’m looking for one thing when selling a player like Trout for more win-later talent – somebody who’s already almost as good and cheaper. Paul Goldschmidt or Andrew McCutchen work as examples. If I can get one of them plus a Kris Byrant-type prospect, I’m happy.

Is that a lot to ask for Trout? Maybe, but I’m in a position where I need to see a way to profit. Goldschmidt or McCutchen cover about five-sixths of Trout’s value. In this example, I’m assuming they have a cheaper keeper price than Trout on a rate basis (that’s probably not true in most non-ottoneu leagues, just go with it). I still need additional value, which is where Byrant comes in. He’s one of the guys who was offered to Eno as part of a larger package.

As Eno figured, there’s about an 80 percent chance Bryant won’t bust. A large portion of the remaining 80 percent accounts for performance close to fantasy average. Maybe there’s a 50 percent chance he really separates himself from the pack and a 10 percent chance he’s in the top 25 hitters someday. Whatever the exact rates, they deflate Bryant’s value to me now. I’m talking about trading the surest thing in baseball for uncertainty. I have to pay to develop him, then wait for him to start mashing. It could be days or years before he adjusts to major league pitching. Or never. Any time you trade certainty for uncertainty, there has to be room for you to profit. (I underlined that, it’s important).

Let me put it another way. A lot of fantasy analysts – and I’m talking about us so-called experts – feel like we need to be bold with our valuations. I think J.D. Martinez is a .250 ISO hitter (truly). What most analysts will then do is say “Martinez is one of my guys, I’m going to pay for him like he’s a .250 ISO hitter.” What we should do is say “Martinez is one of my guys, I’m going to pay 10 percent above his ZiPS projection.” We happen to know those projections are very good at a macro level. Unless you’re a scout or you maintain your own projection system, you should put some trust in the math. Sure, pay a little extra for your pet project, but don’t pay for his absolute upside just because he might get there.

I used Martinez as the example rather than a true prospect because I’ve been in prolonged talks to acquire him in one league. I did my analysis and came up with a fair offer by my numbers. Among the issues – Martinez comes with a very high bust rate. The owner said no to my initial proposals. I’ve sweetened my offer slightly, but I won’t do better. I could throw in a little more and overpay, but then I’ll need Martinez to be who I think he is. If he falls flat, which he very well may, then I’ve screwed myself.

This is the problem I witness with prospect valuation all the time. We see all roses and fail to notice the slugs. It’s easy for me to say “this is what I need, and I’m not taking less.” The hard part is educating my rivals of the logic behind my thought process. It doesn’t fit with their internalized values – the ones they’ve been using for years. The education process is one of the main reasons I prefer to deal veterans (keeper or otherwise) for other established talents. Everyone knows how to price those without heinously underestimating the downside. If I tried to deal Trout for just prospects, I would get laughed right out of the room.

“Yea, I’ll send you Trout for Bryant, Byron Buxton, Javier Baez, Oscar Taveras, Gregory Polanco, and Francisco Lindor. Hello? Hello??”

I’m not actually sure if that is an offer I would or wouldn’t make (it’s a lot of math for a throwaway point). It’s the point that matters – I can’t get fair value for only prospects without insulting my rival.

In summary, recognize the upside AND downside of all players in a trade. In Eno’s article, he does a good job of using bust rate research to support the deals he’s considering. In my opinion, he still isn’t leaving himself much room to profit. Remember, any time you trade certainty for uncertainty, there need to be a ways for you to come out ahead. We know there’s 100 ways for you to end up on the short end.