The Blue Jays are a quarter of the way through the 2017 season and they’re in last place in the AL East. The team has gone 13-9 over their last 22 games while, at times, lacking their starting third baseman, shortstop, catcher, and three-fifths of their starting rotation. They won games on the backs of players who weren’t on major league rosters on opening day. But prior to that, they had nearly their entire roster and only managed to go 7-17. This current sequence of events and a momentous comeback two seasons ago leaves the Blue Jays in a confusing place.
The team had high playoff hopes in the preseason and it feels like they could buy at the deadline and succeed. But they’re also in a terrible situation, record wise, and have players that they could sell off to retool for 2018. After seeing two straight playoff berths over the last two seasons, the hunger is there to attempt to compete. However, we need to rethink how we see this Blue Jays team; they’re not in a good position and they seek to benefit greatly from selling, not buying.
If a team makes the playoffs, they can make money from revenue shares and in spillover value. This can include marketing for future seasons, additional ticket revenue in August and September, and the the intangible price of a division title or World Series win.
If a team doesn’t make the playoffs, however, and opts to sell instead, the added value comes in the form of prospects gained from trades, a higher pick in the MLB Draft, a larger MLB draft pool, and a larger international bonus pool. It’s hard to quantify precise values for some of those benefits, but we can quantify in approximate numbers the added value of additional prospects and a higher MLB draft pick.
Given that information, there are five main scenarios that the Blue Jays could find themselves in: buying and getting in to the playoffs, buying and missing the playoffs, standing pat and getting in to the playoffs, standing pat and missing the playoffs, and selling and missing the playoffs.
At present, Baseball Prospectus projects the Blue Jays for a 77-85 finish (22nd in baseball), while FanGraphs projects them for an even 81-81 finish (15th in baseball). To try to give the ‘buy’ argument the kindest chance at success here, we’ll use the FanGraphs projection for calculations.
Stand Pat and Miss the Playoffs
In this scenario we’ll assume that the Blue Jays finish 16th in the league and get the 14th overall draft pick. According to Matthew Murphy of the Hardball Times’ analysis on the value of MLB draft picks, the 14th overall pick was worth approximately $10.2 million in 2014, which includes an adjustment to account for future value. Accounting for future value means discounting the total based on the fact that teams value wins in the present compared to wins in the future. The Hardball Times uses a 10 percent per year discounted value rate based on dollar per WAR research done by Matt Swartz. We could further adjust that figure for baseball inflation since 2014, but again we’ll be kind to the ‘buy’ scenario and leave it as is. There would be no additional value gained from playoff revenue in this scenario, nor would there be any value gained or lost from the exchange of prospects.
Base Value: $10.2 million
Sell and Miss the Playoffs
In this scenario, lets assume that the Blue Jays only sell off the pieces that either aren’t under contract for 2018 or don’t need to factor in to the 2018 roster plan. That group includes Marco Estrada, Jason Grilli, Jose Bautista, Francisco Liriano, Joe Smith, and J.P. Howell. Of that group, only Estrada and Smith currently look like they’ll be overly desirable to contenders at the trade deadline. Given his elite first half performance, Joe Smith may have fetched a pretty penny had he been a left hander. As a right handed late innings reliever, however, his potential return isn’t guaranteed to be very high. Some right handed setup men have fetched good returns at the trade deadline, but it’s harder to draw precise comps as there’s too much potential supply in the relief market. For Marco Estrada on the other hand, there are two rental starting pitchers who stand out as being comparable: Matt Garza in 2013 and Rich Hill in 2016.
In Matt Garza’s case, he was inconsistent, but also regarded as one of baseball’s better starters prior to and during the 2013 season. During the first half of 2013, Garza pitched to a 3.17 ERA, 3.74 DRA, and 1.0 WARP with the Cubs. Garza was traded to the Texas Rangers for C.J. Edwards and Mike Olt. Olt was ranked 30th on Baseball Prospectus’ 2013 Top 101 prospect list, while Edwards was ranked 81st on the 2014 Top 101. In Rich Hill’s case, he wasn’t known for being a workhorse and he didn’t have a long track record of success, but he dominated baseball’s first half in 2016 posting a 2.25 ERA, 2.83 DRA, and 2.2 WARP. Even though he was out (blisters) he was traded along with Josh Reddick from the Athletics to the Dodgers for a package that included Grant Holmes and Jharel Cotton. Holmes was ranked 40th on Baseball Prospectus’ Top 101 prospect list prior to the 2016 season, while Cotton debuted on some Top 100 lists following the season.
Given the Hill and Garza trades, Marco Estrada is probably worth two prospects at the middle or back of a 2017 Top 100 prospect list. For 2017, valuations done by Kevin Creagh and Steve DiMecli published at FanGraphs estimated that a back end Top 100 hitting prospect is worth approximately $20 million while an equivalent pitching prospect is worth $14 million. That means that the prospect return for Marco Estrada is worth somewhere in the range of $34 million.
Meanwhile the loss of Marco Estrada and Joe Smith for two to three months of the season is worth anywhere from three to four wins above replacement. A loss of two wins takes the Blue Jays from 81-81 and the 15th overall draft pick to 78-84 and the 9th overall draft pick, based on FanGraphs’ projected standings. The Hardball Times estimates the 9th overall pick to be worth approximately $13.2 million.
Base Value: $47.2 million
Buy and Miss the Playoffs
Buying enough players at the MLB trade deadline to make up for injuries and a 5.0 game deficit in the AL Wildcard standings is no easy task. In 2015, when the team acquired David Price, Troy Tulowitzki, Ben Revere, and Mark Lowe, it required giving up eight legitimate prospects including Daniel Norris (34th on BP’s 2015 Top 101) and Jeff Hoffman (73rd on BP’s 2015 Top 101). A similar trade cost in 2017 would likely include Sean Reid-Foley (85th on BP’s 2015 Top 101), Anthony Alford (93rd on BP’s 2015 Top 101), and Rowdy Tellez (not in BP’s Top 101, but at the back end of the Top 100 on other lists). Using the same FanGraphs Top 100 prospect dollar valuation as above, has a combined value of $45 million. Missing the playoffs would mean no additional value gained from playoff revenue shares and little to no spillover revenue impact. It would also mean that the Blue Jays would be left with a pick in the late teens, which is worth approximately $8.4 million.
Base Value: -$36.6 million
Stand Pat and Make the Playoffs
On the off chance that the Blue Jays do make the playoffs, there is of course value in doing so. The most certain value is that which is obtained via playoff revenue shares. During the playoffs, all revenue is shared amongst teams, players, and the MLB Commissioners office based on a formula stipulated in the collective bargaining agreement. In 2012 at FanGraphs, Wendy Thurm broke down how the MLB postseason revenue pool is divided up. In her piece, she notes that her players pool projection of $82.1 million was probably overzealous. She was correct, given that the players pool of postseason revenue in 2015 was only $69.8 million, a record high at the time. Given that, it’s reasonable enough to assume that the rest of her projections hold up for 2017 totals, a year in which the players pool will probably eclipse $80 million for the first time. Thurm estimates that the range of playoff revenue for teams goes from $500,000 for the Wildcard Game loser to just over $20 million for the World Series winner. The average amongst all 10 playoff teams for revenue share is $7.94 million.
Base Value: $8.0 million
Buy and Make the Playoffs
The base value of the final scenario is accounted for in our previous explanations. We estimated the cost of buying at $45 million and the revenue share from making the playoffs at $8.0 million. As well, if the Blue Jays make the playoffs, their draft pick would be no higher than 21st overall, which has a value of $7.8 million.
Base Value: -$37.0 million
Overall, there is clearly a lot of relatively quantifiable value to the Blue Jays selling, especially given their current playoff odds of no higher than 15 percent. One can make the numbers work such that there’s more present value in attempting to make the playoffs rather than selling off the rental pieces, but it requires assuming that the spillover value from making the playoffs is very high. From the outside, calculating the spillover value of a playoff berth is nearly impossible, but we can surmise the components to be marketing for future seasons, additional ticket revenue in August and September, and the the intangible price of a of a division title or World Series win among other things. However, in order to make the numbers work to go for a playoff spot without buying, you have to believe that the Jays currently have a 40 percent chance at making the playoffs and that the spillover value of doing so is worth $85 million. Alternatively, for a playoff spot to be worth buying, you have to believe that the Jays would get to 90 percent playoff odds after buying and in the same $85 million spillover value.
You can play around with the numbers yourself in the spreadsheet below. Under “Insert Your Estimate Below” you can insert what you believe to be the playoff odds before buying and after buying to be, as well as your own estimate of the spillover value.
In the end, I’m not going to say that the Blue Jays have to sell. Whether or not you believe they should is up to how you value a playoff berth as well as your long term vs. short term orientation. However, you should be aware of just how much value selling can provide and how hard it is to make up for that value in going for the playoffs given the team’s current position. It’s worth remembering that even these calculations, whose results strongly favour selling, gave the buy scenario the best chance at success. But baseball’s a weird game. Anything can change and lightning did strike the Blue Jays and push them to the playoffs in 2015. Can lightning strike twice? Maybe. Just be careful on betting that it will do so.
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