Matt Wieters and David Price are regarded in most prospect circles as the two top prospects in baseball. Keith Law recently rated Wieters number one and Price number two in his top 100 prospect list. There’s no doubt that these guys are two really, really good prospects. We’ve already seen Price dominate major league hitters, albeit in a relief role. Wieters tore through the minors last year and PECOTA already projects him as the best catcher in baseball.
Now, let me pose to you a hypothetical question. Say you are in Andrew Friedman’s shoes and suddenly you get a phone call. It’s from Andy MacPhail, and he offers you a trade: Matt Wieters for David Price, take it or leave it. What would your answer be? Of course, these types of trades never get offered, and there are reasons why both teams would reject. But let’s just pretend for now this is a legitimate offer.
Now I’m guessing some people would say something about how the contexts of the teams matter. For example, the Rays already have a solid young catcher in Dioner Navarro so it might be best to hold onto Price. Others might give a reason about how it’s so difficult to acquire top pitching, and the best way for small-market teams to do so is by developing pitchers yourself.
My response to this is that yes, those are good reasons and definitely things to consider when making a trade. However, in this situation, the decision is easy. It’s a no brainer decision to take Wieters for Price. All existing data shows that Wieters has much more projected value than Price going into 2009, enough to make the trade an easy decision.
For example, let’s look at the prospect values for top 10 hitting and pitching prospects.
Prospect Value, Top 10 Hitting Prospects
Category/WAB per year/Chances
Bust: -.11 WAB/year, 9%
Contributor: .84, 48%
Everyday player: 2.48, 20%
All star: 3.24, 9%
Super star: 4.72, 13%
Net Present Value: $48.7 million
Prospect Value, Top 10 Pitching Prospects
Bust: -.03, 28%
Contributor: .51, 43%
Everyday player: 1.44, 21%
All star: 2.33, 4%
Super star: 3.67, 4%
Net Present Value: $22.12 million
Prospect Value, Top 11-25 Pitching Prospects
Bust: -.03, 31%
Contributor: .43, 36%
Everyday player: 1.31, 17%
All star: 2.48, 13%
Super star: 3.56, 3%
Net Present Value: $23.49 million
The category shows a breakdown of different player outcomes. They should be fairly self explanatory. A contributor is a good bench player or good middle reliever. WAB is equal to a player’s WSAB divided by three. Chances are the chance a player from his respective pool becomes a player for each category. The sample size for top 10 pitching prospects is relatively small so I included data for pitching prospects rated from 11-25.
The data from my prospect research shows that top 10 hitting prospects are much more valuable than top 10 pitching prospects. In fact, it would take two top 10 pitching prospects to approximate the value of a top 10 hitting prospect! Of course, you can say that Matt Wieters and David Price are not the average top 10 prospect. We can account for this by using Bayes’ Theorem. Bayes’ Theorem accounts for prior and posterior probabilities. We have prior probabilities with regards to Wieters’ and Price’s prospect status. We can account for posterior probability with their minor league performance. The exact process is outlined in this article here. Applying this to Wieters and Price, this is what we get:
Wieters’ Bayesian Valuation
Category/Chances of Occurring
Everyday player: 40%
All star: 28.4%
Super star: 25%
NPV: $86.27 million
Price’s Bayesian Valuation
Everyday player: 28.1%
All star: 26.6%
Super star: 6.8%
NPV: $42.84 million
Note—we do have some bias with the fact that the statistics in the past year for Wieters and Price affect their prospect rankings coming into 2009. Ideally we would like a prospect ranking independent from a player’s statistics. Normally I would say that it would affect the Bayesian analysis. However, Wieters and Price were so highly regarded as amateurs (just look at their signing bonuses) that I feel confident in saying they have prospect rankings in the top ten. For other types of players, it would be better to use some secondary information as a proxy (like signing bonus) for a player’s prospect rankings because his past performance will cause a bias with his prospect ranking.
While Wieters’ and Price’s valuation both increase via the Bayesian analysis, Wieters’ relative advantage remains the same. To put it simply, Wieters has about twice as much value as David Price. Yes, both players are regarded at about the same level by most prospect experts. So how can I say Wieters is so much more valuable? It has to do with the prior probabilities. The track record for pitching prospects is just so much worse when compared to hitters.
Could Price turn into one of the top players in baseball? Absolutely, that’s why he’s one of the top prospects in baseball. However, when we deal with prospects we are dealing with risk management. The risk in this case leans heavily towards Wieters’ side. What I’m proposing is that an arbitrage like opportunity exists when it comes to prospect valuation. Top hitting prospects have much greater value than that of pitching prospects of the same caliber. The key is that the hitting and pitching prospects have to be of the same caliber.
This edge starts to evaporate as we move down the prospect rankings. Hitting prospects maintain a substantial edge over pitching prospects in the top 50 rankings, but that edge almost disappears when we reach the bottom half of top 100 prospects. Once we start going beyond top 100 prospects and into B and C prospect pools (this is discussed in my THT Annual article), the edge shifts to pitching prospects.
In conclusion, conventional wisdom says to build a team through young pitching. However, data I have collected show that the safest and most productive way for a team to build itself is through top hitting prospects, and then stocking up on lower rated pitching prospects. The advantages can be seen by comparing Matt Wieters and David Price. We can never deal with certainties when it comes to prospects. Rather, we can only deal with probabilities. And when it comes to the elite prospects, the probabilities lie on the side of hitting prospects.
Vince Gennaro has also written about prospect valuation:
Finally, Rany Jazayerli and Philly have written about draft valuation here: