Another look at the Johan Santana trade

You bored of the Santana sweepstakes yet? I thought so. Every website worth its salt has penned an article or six on the biggest trade of the Hot Stove (and this Hot Stove has had a couple of mega-deals: Miguel Cabrera and Dontrelle Willis; Dan Haren; and potentially Eric Bedard).

We at the Hardball Times have already discussed the deal twice. We published a round table the day after the deal was announced where the general view was that the Mets had pulled off a masterstroke. Indeed, my own succinct, yet wonderfully insightful perspective was:

Everyone has said everything—the Mets are clear winners. They have addressed their biggest weakness coming into the new season, and how. A sneak peak at the THT projections without Santana suggests they were marginal favorites. With this deal there is no doubt.

The following day Victor Wang became the voice of reason with a very well argued analysis suggesting that the Twins didn’t do too badly.

Victor’s column got me thinking … is this deal really a slam dunk for the Mets? The more I thought about it the less convinced I became. Perhaps the Twins didn’t do too badly after all.

Mr. Gleeman

Before outlining my argument I want to take a look at what Twins fans think of this deal. Let’s see what THT founder Aaron Gleeman had to say on the trade:

Trading the best pitcher in baseball without getting the Mets’ top prospect in return is disappointing and without Martinez the package falls short of the deals that were rumored to have been offered from the Yankees and Red Sox. A month ago the Twins were said to be deciding between packages headed by Phil Hughes, Jacoby Ellsbury, and Jon Lester, and earlier this month they were reportedly pushing the Mets to include Martinez. Instead, they end up with none of those four players …

…The end result of a bad situation handled poorly is a mediocre package of players that has no one excited, but even acquiring Hughes or Ellsbury wouldn’t have made losing Santana easy to live with. Trading away one of the best players in franchise history while he’s still at the top of his game is a horrible thing and doing so without getting the best possible return for him is extremely disappointing, but the Santana trade still has a chance to work out in the Twins’ favor. It just could have been better.

You know what … that is a darn good summary. I agree 100%.

The Twins

The Twins side of the deal is the most analyzed. For the Mets it is straight forward: they are obtaining the services of Johan Santana—a known quantity; an ace. First, we’ll look at the trade from the Twins’ side of the fence.

For GM, Bill Smith, it was a simple equation. One more year of Santana … and then what? Nothing. Nada. Well two draft picks. Casual fans (and many analysts) vastly over rate the value of draft picks. A first round position player has less than a 30% chance of being a regular or better; that falls to 20% for a pitcher.

In other words the most likely outcome for the Twins would have been to secure one regular and a duffer. The deal on the table was a year of Santana for a perpetual .260/.330/.400 hitter. Would you make the trade? Didn’t think so.

Actually that isn’t quite right. Most trade analysis is done sans context (Victor’s analysis, though excellent, is a case in point). By that I mean the analyst will calculate that player A contributes 5 wins while players B, C and D, coming the other way together, equate to 6 wins. But what is critical is the distribution of those wins.

In a super competitive AL Central, where the Tigers have strengthened considerably and the Indians have a great, young, improving team the odds of the Twins winning their division is low. In fact a quick glance the THT projections (to be released with our Season Preview book) shows that the Twins only have a 4.5% chance of winning their division—and that is with Santana! In sum the Twins ain’t going to do much next year.

The dilemma facing Smith was spending $14m on Santana in 2008 (his salary) when the odds were the team win nothing or shop him around for a gaggle of semi-proven prospects that may helped the franchise compete in a few years time. There was no choice. Santana had to be traded.

Twins fans grumble with the haul of prospects they got. But is it really that bad? Victor showed that the Twins are getting about 13 WAB of talent (free-agent salary adjusted) and giving up only 6 WAB. The question (and gripe) is whether the Twins could have snared a better package. Surely Melky Cabrera and Philip Hughes is better than the deal they got? Well if you count Hughes as a top pitching prospect (and to be fair he has largely arrived) he is worth 6 WAB according to Victor’s chart.

Now that is definitely on the low side as Hughes isn’t really a prospect any more. Melky, too, is established and worth a couple of WAB a year. You know what … you’re certainly not putting clear daylight between the deals, unless you feel that Hughes is going to be an ace (which isn’t a terrible assertion). The Jacoby Ellsbury package would probably have been better. Victor shows that hitters have more long term value (WAB) than pitchers do and the total WAB for that deal would have been higher than either the Mets’ deal or the Yankees’ proposal.

Anyway, the speculation is moot. Who know what deal from whom was on the table. Perhaps the Yankees weren’t really that interested in dealing Hughes. Also there is something to be said from the Twins’ perspective of wanting to deal Santana to the NL—he be a hurdle to a wild card slot for his old team.

The Twins did the right thing by trading Santana. They have increased their odds of winning a playoff spot over the next five year and have saved a bit of cash in the process. Perhaps they could have got a better haul of talent. But then again perhaps not.

The Mets

As I said at the start of this article Victor’s piece got me wondering about whether this deal made sense from the Mets’ perspective. Fans are elated. And rightly so—their team has acquired the finest hurler in the game. But at what price?

Over the weekend the Mets inked Santana to a six year $137.5m deal, with a club option for a seventh. The southpaw gets gets $19 million this year, $20 million in 2009, $21 million in 2010, $22.5 million in 2011, $24 million in 2012 and $25.5 million in 2013. That is a lot of money. That is free agent money.

In essence the Mets swapped four prospects just for the right to negotiate with Santana alone. It’s not as though they managed to sign him on the cheap. The rationale for doing this deal was (a) to get Santana a year early and, (b) it was perceived to be cheaper to sign him this year than wait for a bidding war next year. Was it money well spent?

First, let’s look at the Santana extension. He is averaging about $22m a year. Victor shows that he’s good for 4.2 WAB this year. At $4.8m per WAB that is a shade over $20m, which is in line with the money he is getting in 2008. A peek at Tango’s salary chart suggest that for Santana to be “worth it” we’d expect him to be 5.7 WAB. The Mets are paying a premium for his services.

Moreover many allege that giving a pitcher a long term contract is fraught because of the potential injury risk. However, as Dave Studeman showed on these pixels a month back that isn’t always true. Sure some long term deals can be a disaster (Mike Hampton) but others can be okay provided the player is young enough. At the time Dave advocated giving Santana a five year contract—a six year deal isn’t the end of the world from the Mets’ perspectives.

An advantage for the Mets is that Santana pitches for them this year. Had they waited he’d have been a year older, a year less effective and even more likely to get hurt. In an average NL East, where all the leading protagonists have question marks, Santana could be the difference maker. Without Santana the THT projections had the Mets at 50% odds of making the post season—that will now be much higher. The money accruing to a team making the postseason is significant (up to $30m over 10 years)—and were the Mets to win the World Series the Santana deal would suddenly seem cheap.

Santana got a free-agent deal. In all likelihood he would have got the exact same package next year (inflation adjusted). The question is were the Mets right to give up four prospects (about 13 WAB—free-agent salary adjusted; about 8 WAB salary unadjusted) for a player they may well have signed 12 months down the line?

It depends. Had the Twins been determined to trade Santana then there was a price to pay on top of the free-agent contract that Santana demanded. However, had the Twins been resolute in their determination to keep Santana in Minnesota if a good offer was not forthcoming then the Mets should have waited and secured Santana’s services for 2009.

To put it another way, in free agent dollars the 13 WAB equivalent in prospects given up have set the Mets back some $50m! For a $200m investment the New York Metropolitans need to win some serious silverware. However, when you a franchise with deep pockets giving up semi-valuable talent isn’t a killer. Mets fans will be gleeful that Pelfrey and Martinez—their best pitcher and hitter respectively—will remain Mets.

Final thoughts

There is an old axiom that the winner of any trade is the team that acquires the best player. On that basis the Mets come out streets ahead. However, this deal has come at a significant cost. And while the Mets can afford it, especially with an imminent move to Citifield, the front office, fans and New York media will demand immediate success.

Good luck Omar Minaya.

References & Resources
Thanks to Victor Wang for his great analysis of the Satana trade last week. It meant I didn’t have to crunch any numbers, which is a blessing!

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