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Leveraging Future Surplus for Present Wins

I know a lot of you aren't happy with this trade. I'm not here to tell you it's a blockbuster that John Mozeliak knocked out of the park. I think it's a very defensible trade in which the Cardinals leveraged future surplus for a shot at the division title this season. If you characterize the trade in that fashion, and I'll lay it all out for you, the trade is defensible. You can still not like the trade but I hope you'll come around to the idea that it was a rational move.

I wish Mozeliak would have thrown me a scrap to work with in his comments to the media. Mozeliak is walking a fine line here and it leaves us with terribly delivered rationale for the trade:

Why we did the deal? We felt like we had to change something up.

There's a handful of quotes from scribes and articles that Ludwick was a great clubhouse guy so I don't think that this was a "chemistry" deal. But gosh that quote sounds like moving deck chairs on the Titanic so that you've done something. I don't think that's the case but to make a rational argument for this trade, you've got to throw two players on your team under the bus (Hawksworth and Suppan). Mozeliak can't really do that, not should he. Fortunately, I've no such inhibitions.

Let's set the stage here. We need to first identify the value of Ryan Ludwick. Ludwick was owed $1.8M* over the rest of the season. He was probably going to earn around $9M in his final year of arbitration. Over the next 225ABs (the remainder of the season) he's likely to be worth 8.5 runs on offense, 2 runs on defense, 7 runs for being a warm body and -2.5 for his position. So all told he's a 1.5 WAR player for the rest of the year. That's about a $4M dollar surplus in 2010. Based on his current ZiPS projection (.358 wOBA), I've got him as about 3 WAR moving foward. This includes a 80% playing time adjustment since he hasn't reached 600 PA since 2008 and has missed significant time in 2010. You could argue he's more of a 3.5 WAR in 2011 but then you'd have to start your own blog post. If he gets $9M and produces 3 WAR that's a $3M surplus.

Currently, Ludwick would be a type A free agent. I'm not going to get into a protracted guessing game as to what he'll be after another 15 months of life and baseball but there's some potential value in offering him arbitration that the Cardinals are losing out on. I'm going to be conservative here (remember Ludwick has a long injury track record that could derail his free agent status) and assume that he'll be a type B free agent which is $2.6M in compensation. So we're trading $4M in surplus in 2010 and $5.6M in surplus from 2011. About $10M in surplus total. This is in a vacuum.

Jake Westbrook is owed about $3.6M over the rest of the season but, from what I can tell, the Cardinals are on the hook for something equivalent to Ludwick's salary so $1.8M. Westbrook projects as a 4.51 FIP player moving forward. He's likely to get 11 starts over the rest of the season, let's say that's 66 innings. Pitcher's in the AL get dinged for facing stiffer opponents. We're going to use 4.25 FIP moving forward for Westbrook to compensate for this. So a 4.25 FIP puts his WAR at 1.0 for the rest of the season or about a $2M dollar surplus.

In 2010, the Cardinals come out $1M in the red. In a vacuum for this season, the Cardinals held par with the trade.

Of course, that ignores the value that Ludwick provides in 2011. This is where things get messy because there's a host of complicating factors that are very difficult to quantify.

  1. The Cardinals are in a pennant race and their marginal wins are more valuable in 2010 than in 2011. An extra win to the Cardinals in 2010 should count for more than a extra win in 2011. How much more? I have no idea how to put a number on that. If the Cardinals make the playoffs they get additional ticket gate sales so you could argue that the addition of a single marginal win could be critical and worth millions.
  2. Opportunity cost. We complain about this alot when a crappy veteran is talking away at bats from a prospect in the minors. You lose the chance to see what that player can do. It's doubly damning if that player is on the 40-man roster and you're burning an option year. This year we've been confronted by something different. The Cardinals have a productive player in Ryan Ludwick as well as Matt Holliday, Allen Craig and Jon Jay. The Cardinals are losing service time control on these players (and I'm primarily lookin at Rasmus here) without maximizing their contributions. There's value in giving these players more playing time that we otherwise would not have gotten. I can't stress how important it is to consider that for the same price we might get an extra 5 runs out of Rasmus & Jay than we otherwise would have gotten. More on this later.
  3. The offense has underperformed on paper all season. Count me among the group that wanted to add offense at the trade deadline. That type of Kelly Johnson/Dan Uggla deal never materialized. The reality, however, is that our offense has been underperforming ALL season. Albert is having a down year. Skip and Boog have hit into a ton of bad luck. On paper, we have a good offense and it should have better results than what we've seen. We can't say this about the rotation. There's been no truly bad luck from the rotation other than some injuries. We're running out replacement level players (or worse) in Jeff Suppan and Blake Hawksworth 2 out of every 5 days.

There's one primary counter argument to this trade: We should have gotten more for Ludwick. Several commenters have said this and, admittedly, I agree with them to some extent. We could have waited for the offseason and possibly gotten more. The problem I have with this is that the market for Ludwick didn't seem to materialize. I think I've succinctly laid out Ludwick's $$$ so please don't tell me I don't understand that valuation. My argument is that regardless of what we perceive or calculate his value to be, the market did not consider him worth that much.

Remember that the very first mention of Ludwick being involved came from a NL club -- likely it wasn't the Padres or the Cardinals. You'd hear something like that as coming from a "padres source". It was not a secret that Moz was trying to move Ludwick. The argument that we should have gotten more relies on Mozeliak not doing his due diligence with other teams AND other teams being dumb. Both of those premises are extremely suspect. Indeed, we've looked at this as the Cardinals being the primary movers in this trade. More likely, it looks like it was the Padres greasing the wheels.

So if the Cardinals weren't able to capitalize on Ludwick's total value, the argument then proceeds that they should have kept him. That's risky business. Who knows what the offseason market winds up producing for you. You've also then passed up the chance to upgrade for the 2010 run. It's unrealistic to think that the Cardinals could have kept Ludwick at $9M in 2011. It was never going to happen with their payroll constraints. They traded him now for a) a certain return and b) the marginal 2010 wins.

Walt Jocketty was often criticized for leveraging the future of the club for the present value. Mozeliak is doing that now but on a very small scale. I like the decision calculus here but I'll readily admit that the team seems to be leaving some future surplus on the table -- probably something on the order of $5M.

*All figures are best guesses gleaned from yesterday's reporting.

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So, now that I've done my part as the team's salesperson, I've got a bone to pick. I made the argument yesterday that Jon Jay/Allen Craig help to mitigate the trade of Ryan Ludwick. I stand behind that. I may have been overly optimistic with my numbers for Jon Jay. I threw out a .340 wOBA but it's probably closer to .330 wOBA. I've never been high on Jay as a player. I'm on the record numerous times as Jay as a fourth outfielder. Still, a .330 wOBA is average and that changes the decision calculus further if you remove the trade from the vacuum.

It also takes a decision out of the hands of Tony LaRussa. TLR has said that Jay was "earning his at bats". The problem has been he's earning them at the expense of the better player in Colby Rasmus. John Mozeliak has effectively taken this decision out of the hands of TLR. That's a good thing. Time and again this season, TLR has made baseball decisions based on faulty evaluation that relies too much on his personal relationship with a player and too little on their on the field abilities.

Equally damning has been the roster decisions and that falls on the shoulders of the front office to a large degree. Putting players like Aaron Miles, Nick Stavinoha and Mike MacDougal on the roster over players like Tyler Greene, Allen Craig and Fernando Salas is inexcusable. In each case, the latter player is definitively more talented and definitively more probable to produce than the former. TLR only compounds the folly by giving those players time on the field.

This club is in a tight pennant race. The club has some touch decisions coming up. When Allen Craig is available in 5 days, he should be recalled and Stavinoha should be demoted. There is not an excuse for this not taking place. When Kyle Lohse returns, Jeff Suppan should be DFA'd. Moving him to the bullpen is a failure. Getting him off the team is the decision that should be made. Mike MacDougal should be sent down for Fernando Salas. When David Freese returns, Aaron Miles should be DFA'd.

These are, imo, obvious talent based decisions. If the club isn't making them, someone isn't doing their job. They've made a good move for 2010 in acquiring Westbrook. They need to show equally good judgment regarding their other players on the 2010 roster. The organization cannot afford to be giving away runs at the margins in the 2010 NL Central race.

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There's a lot of other things going on here that I'd like to talk about but having written a ton already I'm going to cut short:

  • This means bad things about Brad Penny, imo. I don't think the club expects him back this season.
  • Westbrook's fastball has been "worse" this season per the linear weights. First of all, remember that pitch type linear weights leave out important things like sequencing so I wouldn't get too worked up over them. Still to address Flim's question from yesterday, the reason the fastball is down in value is almost certainly due to command. His first pitch strikes are way down. He's probably struggling to put the sinker in the bottom of the zone rather than out of the zone. It also could be random fluctuation. I wouldn't read much into it.
  • I'm not sure if we'll pick up another player of the waiver wire. If we do, it's likely possible because the Cardinals kept this as a cash neutral deal. If they had spent the extra $2M to get Westbrook and keep Ludwick, they'd have dealt some flexibility in the process.

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