Evaluating the Cliff Lee trade

On July 10 the Texas Rangers traded prospects Justin Smoak, Blake Beavan, Josh LuekeMatthew Lawson to the Seattle Mariners for ace left-hander Cliff Lee and reliever Mark Lowe. Also changing hands in the deal is $2.25 million Seattle will send to Texas to off-set the remaining $4.2M owed to Lee.

The trade has certainly been met with mixed reaction, but what I’ve read most, especially in the saber-driven analysis community, is that the Rangers gave up too much for a half-year rental. This stance is not hard to fathom, given that they did trade, potentially, multiple years of cost-controlled performance for not even three months of Lee. Let’s take a closer look.

The reason many have been a bit harsh on the trade from the Rangers’ perspective is the group of prospects they are giving up, led by first basemen Smoak and RHP Beavan.

Drafted 11th overall in the 2008, Smoak, a South Carolina product, debuted in Single-A Clinton with a solid .304/.355/.518 performance in 14 games. In 2009, splitting time mostly in Double-A and Triple-A, Smoak had a solid if not spectacular season, hitting .290/.410/.443 in 471 plate appearances. This season in the minors he hit .300/.470/.540 in 66 Triple-A PAs before being called up to the big club.

Smoak has struggled mightily so far in the majors, hitting .206/.311/.346 in 283 PAs for Texas. On the positive side, his walk rate is decent (13.4 percent) and his BABiP of .237 (with a line drive percentage of almost 24 percent) should rise in the second half. However, his power has not been there, especially considering the Rangers’ friendly hitting environment. Plus, his strikeout rate of nearly 25 percent is not helping matters. That said, Smoak is a highly regarded prospect, rated by Baseball America as the 13th best prospect in all of baseball before the season.

Blake Beavan, a 6-7, 250 pound right-handed starter, is the second most intriguing piece in the deal. Also a first-round selection (17th overall) in the 2007 draft, Beavan has a solid track record of minor league performance. In nearly 400 minor league innings, Beavan’s put up a 3.22 ERA behind a miniscule 1.4 walks per nine, while only surrendering 28 home runs. Beavan’s strikeout per nine rate of 5.2 is worrisome, but his size, projectability, and early command of the strike zone make him a valuable enough commodity (rated a C+ prospect by John Sickels).

Lueke, a 6-5 right-handed reliever, has also put up some solid minor league numbers, including a career strikeout-to-walk ratio of nearly five (thanks to a K/9 rate of 11.4 and solid control) and a home run per nine rate of .7. His age (25) and level (Double-A) lead you to believe that (1) he has some issues holding him back from progressing to the majors and/or Triple-A and (2) he is feasting on younger, less-experienced hitters to help put up the dominant numbers. Still, he is not a complete throw-away.

Matthew Lawson, a second base prospect who was in Double-A Frisco at the time of the trade, has progressed nicely enough through the minor leagues, but his career .279/.349/.403 line does not inspire a ton of optimism, especially considering his age at each level. If he continues to improve, he may contribute to a major league team, but it appears that he is more of an organizational-filler type.

OK, so how much are these guys worth? Obviously, that is a tough, near-impossible question and any answer is going to be high on variance. Thankfully, Victor Wang has researched the surplus value of prospects in these very pages and his results give us a handy chart to reference.

Prospect	Status	Surplus Value
Justin Smoak	Top 11-25 hitting prospect	$25.1M
Blake Beavan	Grade C pitcher, under 22	$2.1M
Josh Lueke	unranked	$.5M
Matt Lawson	unranked	$.5M
Total	–	$28M

I estimated Lueke and Lawson to be worth $1M combined.

This chart says that, for instance, over his first six seasons under team-control Smoak will be worth $25.1M in surplus value, based on the performance of all 11-25 hitting prospects (by Baseball America) from 1990-1999. It’s not an end-all-be-all number, but it gives us an approximation of what a prospect of Smoak’s stature may be worth.

Can Lee and Lowe possibly be worth that much?

First, let’s look at Lee, the centerpiece of the deal. After being a very solid pitcher through 2007 with the Cleveland Indians, Lee has morphed into one of the best pitchers in the game since. His numbers tell the story:

Year	Innings	K/9	BB/9	HR/9	ERA	FIP	fWAR
2008	223.1	6.85	1.37	.48	2.54	2.83	7.2
2009	231.2	7.03	1.67	.66	3.22	3.11	6.6
2010	112.2	7.27	.48	.64	2.64	2.58	3.8

Lee does not blow anyone away with his low-90s fastball, but he also doesn’t walk anybody and he rarely surrenders the long ball; a pretty good combination. Lee is on a pace to roll in with another 6.5 fWAR (FanGraphs WAR) season, following 7.2 and 6.6 fWARs over the past two seasons. That’s just tremendous performance, worth near $30 million a year on the free-agent market.

While Lee should continue to excel down the stretch for the Rangers, we cannot quite expect him to put up this pace, simply because great performance will regress back toward average in the long run. Using a 5-4-3-2 weighting system for his last four years, and adding in two years of average performance, gives us an off-the-cuff projection of 5.3 fWAR for a full season. Still great value, but a bit down from his current 6-7 fWAR level.

Lee is only guaranteed to be with the Rangers through the end of the season, and over that time he is expected to contribute about 2.2 fWAR. Further, our own Oliver projections here at THT peg Lee to be worth 2.1 WAR the rest of the way.

The current going rate for a marginal win on the free agent market is around $4 million, so that makes Lee’s production worth about $8.8 million from here on out. Since the Mariners are sending over money in the deal, the Rangers will only pay Lee about $2 million for his services. Taking the $8.8 million and subtracting the $2 million the Rangers will pay Lee gives us about $7 million, or Lee’s surplus value to the Rangers.

Not so fast, though, we have more to consider. After the season, assuming the Rangers don’t resign Lee, he will likely become a type-A free agent. The value of the draft picks collected from a type-A free agent is estimated around $6 million. We will add that figure to Lee’s total surplus value, which now puts us at $13 million ($7 million + $6 million).

We’re not done yet, however. The Rangers acquired Lee not only because he is an excellent pitcher that any team would want, they also picked him up because of their position in the playoff race. The Rangers sit atop the American League West with a 51-38 record, five games ahead of the second place Los Angeles Angels. Acquiring Lee helps them to ensure a playoff spot, which would mark the first time the Rangers have played postseason baseball since 1999.

With that in mind, though, the Rangers don’t necessarily sit in a perfect position to add talent, the position Nate Sliver, in his research for Baseball Between the Numbers and Baseball Prospectus online, dubbed the “sweet spot.” This is the zone on the win-curve where a team has the most to gain (in terms of increased playoff chances), typically a projected high-eighties win team. The Rangers probably sit a bit higher than that, even before adding Lee, and more than that they are playing in a weak division and will likely receive little threat from the Angels or A’s.

Baseball Prospectus’ PECOTA-adjusted playoff odds give the Rangers an 82 percent chance of making the playoffs. According to Silver’s research, adding 2.2 wins (Lee, for the remainder of the season) to a team with ~82 percent playoff odds will increase said team’s playoff chances by about 12 percent. Therefore, we will give the Lee acquisition an added playoff bonus.

A playoff appearance is worth about $35 million, again according to Silver. Multiplying $35 million by 12 percent gives us $4.2 million, or the Cliff Lee playoff bonus. If anything, the number is probably conservative, considering Lee, as a top-flight starting pitcher, can be leveraged in the playoffs, increasing the Rangers’ chance of advancing in the playoffs quite dramatically. Further, the Rangers haven’t reached the playoffs in so long, they have an extra incentive to get there and succeed, and if that happens they may see more added revenues than expected.

So, as an approximation of Lee’s total surplus value, we have:

Cliff Lee: $7M
Comp. picks: $6M
Playoff bonus: $4.2M
Total: $17.2M

Not surprisingly lost in the transaction is reliever Lowe, who did in fact join Lee in the deal. Lowe, a right handed reliever, is out for the rest of the season with an injury. He is under contract through 2012, however, and projecting him reasonably at about .5 WAR per season, he should be worth a couple million dollars in surplus value.

Adding Lowe into the deal means the Rangers are approaching $20M in surplus value. Meanwhile, we have the estimated value on the Mariners side of the deal at $28 million. The deal, in total, is a lot closer than the general consensus, I think. Sure, the Mariners may have acquired a bit more surplus value, in our estimation, but the Rangers are going all out in their pursuit of a rare playoff birth and success upon reaching October baseball.

It is tough enough to estimate the value of all of these pieces in average conditions. It’s even harder to peg Lee’s value to the Rangers right now, especially if he is able to carry them to a World Series appearance. That’s what they are going for and, as the saying goes, flags fly forever.

It isn’t too hard to criticize this approach because it puts too much emphasis on the Rangers postseason success in a league that features teams such as the Yankees, Red Sox and Rays. However, the Mariners are also taking on a lot of risk. If Smoak flames out and doesn’t produce at all (certainly not inconceivable), there’s a good chance that they will have surrendered the rights to an ace pitcher for peanuts (depending, of course, on how Beavan and the other prospects acquired pan out).

In the end, like many trades, this one appears to make a lot of sense for both sides. The Rangers get a piece that may put them over the top, at least vaulting them into rarified playoff air, and at best paying off in an American League Pennant or World Series Championship. On the other hand, the floundering Mariners deal a free-agent-to-be for a first basemen who could become a mainstay in the middle of their lineup, and a couple of other prospects with potential to contribute in the future.

References & Resources
The invaluable Baseball Reference for minor league stats

Victor Wang for his research on the value of prospects, both online and in the 2009 Hardball Times Annual