The Most Valuable Prospects in Baseball

As I sat down to write about a certain infielder from the orange-and-black-colored avian squadron found near the Chesapeake Bay, I very quickly encountered a problem. In trying to analyze a potential Cardinals trade for one Manny Machado, I had no tangible way to quantify prospect value.

I am not a betting man, but even after Paul DeJong’s injury I would still wager my money against the Cardinals landing Machado. I just don’t see Baltimore’s asking price ever dipping to where St. Louis would part with what likely amounts to a half-season rental in return, especially if the Orioles can initiate a bidding war among buyers. But that’s beside the point. Be it Machado or Josh Donaldson or whichever middle reliever the Cardinals ultimately acquire, it would be beneficial to determine the worth of each proverbial chess piece with a little more precision.

From what I can gather as an outsider, at least some MLB front offices now utilize in-house computer simulations to enhance their decision-making process. A team might run, say, 10 million simulations in which they trade Player X for Player Y and 10 million in which they don’t, then compare the projected outcomes. My laptop couldn’t handle the programming behind a homemade simulation–sure, we’ll go with that as the chief reason I’m not a computer savant who has perfected his own player projection model–so we’ll have to settle for a less sophisticated concept that teams use to quantify assets: surplus value, a term that readers well-acquainted with the baseball blogosphere have probably heard before. Surplus value is essentially the difference between a player’s contributions to their team and the salary they cost the team. A player whose salary equals the expected production for that cost would have zero surplus value while a positive surplus value reflects a player paid below his market value. In other words, the greater the surplus value, the greater the bargain a contract is for the team. Calculating the surplus value of established big leaguers is a lot simpler than it sounds, but crunching the numbers for prospects adds its own wrinkles to the equation.

Fortunately, people much smarter than I have already done the mathematical heavy lifting. If this style of prospect valuation seems familiar to you, that’s because I modeled my methodology off what Ben Markham did at this very website last year. Combining rankings from MLB Pipeline, Baseball America, Baseball Prospectus, Prospect 361, FanGraphs, and Minor League Ball, I compiled an aggregate list of the 202 most valuable prospects in the game. For the first four lists I mentioned that use a traditional top 100–or 101 in the case of Baseball Prospectus–rankings system, I deferred to an updated study by the Point of Pittsburgh on the surplus value of prospects as it relates to their ranking.

Rather than solely evaluate prospects relative to their current peers, Kiley McDaniel and Eric Longenhagen include 20-80 scouting grades in addition to ranking them at FanGraphs. Here are Dave Cameron’s findings when correlating FanGraphs grades with surplus value.

John Sickels of Minor League Ball attaches letter grades to each prospect, which Ben translated to the following values.

From here, I could convert a prospect’s industry-consensus pedigree into his quantifiable value. I provide the disclaimer that these numbers should be viewed as general estimates more than definitive conclusions, but here is a sortable table containing the 202 prospects with the highest aggregate surplus value.

But first…a few technical notes:

• Regarding Shohei Ohtani, I made the executive decision to omit him from this list for the same reasons Baseball Prospectus excluded him from their rankings.

We discuss this in the Angels list, but for a variety of reasons, we don’t consider Ohtani a prospect. The league he’s been in for multiple season’s main purpose is not development, and he’s not going to spend time in the minors unless he’s rehabbing an injury. These are, of course, arbitrary factors, as is a player with 131 at-bats not being a prospect while a player with 129 at-bats is a prospect. You draw the line somewhere, and we drew it here.

• Speaking of two-way players, one who did appear on this list was Brendan McKay. He would have cracked the top 202 either way, but I decided to classify him as a position player for the sake of calculating his surplus value. I have heard arguments from scouts on both sides as to whether McKay is a better hitter or pitcher, but I didn’t want to penalize him for his utility by categorizing him as a pitcher. (As the above tables illustrate, pitching prospects are valued less than their position player counterparts.) Besides, it appears the Rays are going to give him the opportunity to receive at least semi-regular at-bats anyways.
• Because MLB Pipeline has updated their rankings since the season began, 10 players (one being Carson Kelly) were removed from the top 100 after exhausting their prospect eligibility. I resolved this by simply inserting their preseason rank into their aggregate value.
• The majority of the 202 players were not included on all six prospect lists. I (somewhat arbitrarily) substituted any non-rankings with the equivalent of a B-/C+ grade from Minor League Ball, which is $5 million for hitters and $5.3 million for pitchers. For example, here is the aggregate surplus value calculation for Tyler O’Neill, who was not ranked by Baseball Prospectus or Prospect 361.

And now for all 202 prospects.

You will find 12 Cardinals prospects named in the top 202, ranging from Alex Reyes at 19th to Ryan Helsley at 193rd.

This table confirms what we already knew about St. Louis’ farm system: its greatest strength is its depth and plethora of C+ to fringe B+ prospects. I wouldn’t get caught up on the specific rankings so much as the actual dollar amounts behind those rankings, especially as you move further down the list when the order becomes even more fickle. The linearity, or lack thereof, of surplus value by prospect rank points towards the elite prospects being disproportionately valuable for their rank. In layman’s terms, the gap between numbers 1 and 10 on the list is far greater than the gap between 191 and 200.

This basic logarithmic regression shows a 97% correlation, which helps to explain how the Cardinals can tie the Braves for the most prospects in the top 202 yet rank just 11th in total surplus value.

Needless to say, these 202 players are not the only prospects in baseball that have value to their respective organizations. Case in point: Austin Gomber (B/B-), Max Schrock (B/B-), and Oscar Mercado (B-) alone have a combined surplus value of $27.6 million according to John Sickels’ grades. A club like the Cardinals would presumably stand to gain from a more comprehensive look into the deeper fathoms of each team’s farm system, but that would be a much more time-consuming task for another day.

I will be the first to admit that there was a lot of educated guesswork that went into these rankings. But if nothing else, I hope these prospect valuations can serve as a reliable tool to take stock in the near future as we approach an intriguing summer of trade talks.