Was the Piazza Trade Underrated?

This one will be a bit numbers heavy. I'm not pulling any of these numbers out of my backside - any projections are legitimately based on the numbers. That being said, all the attempts at quantifying defense are just fudges, and I chose to round out a lot of stuff for simplicity's sake (and uncertainty's sake). This is intended as an illustration, not a study.

Forget about what happened after the Dodgers-Marlins' 1998 trade, for the time being. Just look at the available info at the time of the decision. Piazza looked like an obvious future hall of famer, no doubt. He was a catcher coming off of an almost unparalleled two-year stretch of offensive brilliance. That being said, there can also be no doubt that he had already peaked. The Dodgers attempted to sign him to a long-term deal. I've got no clue what the finances involved were, but for whatever reason, the Dodgers and Piazza hadn't come very close to an agreement. This made Piazza a free agent at the end of the season. So they swapped him and a veteran 3B for a star signed long-term, a slightly better veteran 3B, a rising star at catcher, a salary dump throw-in, and a pretty good relief prospect. When you trade one year of a player for a gaggle of good players, you generally have to screw up the finances to come out worse for it.

What could LA have expected in terms of net gain? Piazza was a historically great offensive catcher, but on the flip side was a lousy defensive catcher. I'm just going to use quick and dirty numbers here, so let's say that his defense is bad enough that it essentially cancels out. A reasonable offensive projection for him at the time tops out at 5.5 wins above average or so, so lets call him 7.5 wins above replacement. The Dodgers would be replacing him with Charles Johnson, who had been an average hitter so far in his career with outstanding defense. A conservative projection for Johnson would be about 3 wins above replacement. At third base, the Dodgers would replace Todd Zeile with Bobby Bonilla. Both were mediocre fielders, and Bonilla had been a very good hitter his entire career but was two years older. Zeile was coming off of a good season, but a reasonable projection would put Bonilla at about 2.5 wins above replacement with Zeile at +2. Eisenreich was a good hitter, but he was old enough that the Dodgers couldn't expect him to be much better than their bench guys (Luke, Hubbard, etc.), so let's say he has no net effect. Finally, Sheffield takes over for the junk the Dodgers were playing in the outfield beyond Hollandsworth and Mondesi; the best of these players was, I guess, Roger Cedeno. Sheffield would project as about 4 wins above average as a hitter, whereas Cedeno would be about -1. Even if it had been reasonable for the Dodgers to like Cedeno's fielding at that point (it probably wouldn't have been), he's not going to make up much more than 1 win that way. So the Dodgers get +4 in the OF, +.5 in the IF, and - 4.5 at Catcher. Looks pretty even on the field for 1998.

Looking at the player salaries, the Dodgers lose out in '98 because Sheffield had already been signed to a front-loaded extension while Piazza was in his final arbitration year. However, looking at it longer term, Sheffield was signed cheaper for the rest of his deal than Piazza would be earning. So if we consider the haul that the Dodgers were taking in, then the Dodgers give up one $8m year of Piazza and two $3.2m years from Zeile for three arbitration years of Johnson, one $1.4m year of Eisenreich, two $5.9m years from Bonilla, and 6 years of Sheffield at $11m per. For the $14.4m they were taking off the books, the Dodgers could have expected about 11 wins above replacement. In return, they'd be paying a combined $82.5m guaranteed plus about $9m for Charles Johnson's remaining arbitration years. So if we allocate 3 WAR/year to Johnson, 4.5 total for Bonilla's two seasons, and an average of 4 WAR over the life of Sheffield's deal, we get 38 wins above replacement for $91.5m. That's a essentially an extra $77m to get just 27 wins. Let's subtract the cost of replacement salaries and add in about 2 wins of net value from Barrios, who looked like a pretty good prospect at the time. That's 29 marginal wins at $75m, but we need to adjust for inflation; if we assume a constant 10% salary inflation rate, we can take $13m off of that. So in 1998 dollars, the Dodgers would be adding 29 wins at $62m, or $2.1m per win. That was a decent number, but not very good. Using the rule of 70, that would be $4.3m per win in 2005, for comparison's sake, so it's fair to say the Dodgers couldn't expect a great return.

However, the assumption above is that Sheffield was a star, but not particularly good. But let's say his 1997 performance should have been adjusted for injury, and let's not lay on the decline so thick as I did. Moreover, that 3 WAR for Johnson is pretty conservative. Between the two, it'd be fair to add another 6 wins to the projection above, netting a rate of about $1.75m per win. There's no way that this can be spun as a great deal. But it's obvious that the FOX-run Dodgers had set the value of a marginal win at much higher than that at the time. So it's certainly defensible.

But if they were willing to spend so much, why not just re-sign Piazza? The Mets inked Piazza for 7 years at $91m, or $61m in 1998 dollars. An optimistic projection at the time would peg Piazza at about 37 wins above replacement over that period. In other words, Piazza would be paid at about $1.6m per marginal win. So, it's fair to say that LA could have had Piazza at the same rate they would be playing his replacements, assuming he would have agreed to what the Mets paid him to stay in LA. Perhaps there would also have been a "hometown discount", but I doubt it would be too substantial.

Then again, Piazza was a heavily worked catcher who wasn't particularly athletic. It wouldn't have been unreasonable to figure that he'd decline at a quicker rate. If he were to merely average an all-star level of 4 WAR per year, a reasonable if unsympathetic projection for seven years of catching, he'd be at $2.1m per year. It's not hard to understand the rationale of the Dodgers; or, rather, it wouldn't be hard if this had been their rationale.

As it turned out, Sheffield was the better bet. In 1998 dollars, he earned $53.5m over the length of his contract while being good for about 32 wins above replacement. From 1998-2005, Piazza earned an adjusted $68.9m for about 36 WAR. Sheffield was paid about $220,000 fewer per win (or half a mil per win on today's market). Adjusted for inflation, Sheffield was paid a little more per year, but he was around .8 wins per year better.

Then again, though Sheffield turned out well and the Dodgers' later trade of him went well, the Dodgers ended up on the short end of the rest of these sticks. While Zeile did a bit better than would have been expected, Bonilla hit a wall; after having been considerably above average his entire career, Bonilla was below replacement level for the entirety of his post-trade career. Eisenreich performed awfully as a Dodger and his career was over. Barrios fell apart.

Most painfully to the Dodgers, Charles Johnson had a terrible year in LA. The Dodgers traded him, and he rebounded with an average season in Baltimore before tearing the cover off the ball in 2000. Since Johnson's performance after getting a big deal in free agency was so mediocre, it's often overlooked that in his arbitration years combined - the period the Dodgers acquired in the Piazza deal - Johnson was an above average hitter and still a good defender, although his numbers behind the plate were way down from his earlier Marlin dominance. The Dodgers received Todd Hundley for Johnson, but they had to give up Roger Cedeno's "peak" to do so and Hundley was making more money than Johnson. Hundley himself had a good 2000, but he was a bad defensive catcher and missed a lot of time to injury; on the whole, the Dodgers would have been a lot better off had they not traded Johnson.

All in all, I don't think the Dodgers made that bad of a deal. However, judged in context, it should be considered a lot worse because of opportunity cost. Dealing with the Marlins in the midst of a fire-sale should have yielded a much better return. Had they made a similar deal with another team, it would look better; as it happened, they ostensibly could have acquired a lot more value. On the flip side, though, the price the Mets paid for Piazza tends to be understated; they traded two pitchers with first-round talent and a pretty good young outfielder Preston Wilson), none of whom had clocked any service time; had Piazza suffered an extra injury here or there (or had the Mets been unable to re-sign him) and Ed Yarnall or Geoff Goetz developed into aces, history would have viewed that trade quite differently. While the Mets were obviously the victors along this trade route, and while the Dodgers likely acted rashly in order to spite Piazza, none of the sides of the Piazza trades were the slam dunks they're often thought to be.

BP's Masterful Hindsight

Sorry, sorry... bashing Baseball Prospectus is probably overdone, and obviously not everyone at BP is of the same mind. My BP subscription ran out over the summer, so I had scarcely read the site until they started their unfiltered blog, which is pretty good but has yet to entice me back into the premium fold. But today's Unfiltered post by Neil deMause crossed the line from innocuous to clueless at the end. After having come across an old Christina Kahrl slam of the Pirates' ridiculous Kevin Young contract, Neil excerpted part of it and challenged his readers to identify the player in question.

Kahrl's criticism was that the Pirates were using past salary as a proxy for future talent. Of course, realistically, past salary IS a somewhat reliable guage of talent, but there's no reason for a major league team to use it since they have tons of much more reliable data. In the case of Derek Bell, the player named most by BP readers, I would think Kahrl's criticism appropriate; same goes for Jeromy Burnitz. (Curiously, though, many of the players the readers submitted had never been given multiyear contracts by the Bucs.) In the case of Kevin Young, however, I just don't get it; Young was still in his arbitration years and wasn't earning much; he had been a little overpaid the year previous, perhaps, but not much. The Pirates' extension was a lousy idea, but Young was obviously a decent player.

Where the wheels really fall off is in the suggestion that Jason Kendall fits these criteria. It's all well and good to say that the contract the Pirates gave Kendall didn't work out very well. But Kendall was clearly one of the best young players in baseball at the time he got his deal, and the primary reasons his contract looks poor now are that he was done in by a freak accident that made him below average for two seasons when he was at his peak age and also that salaries temporarily ceased growth shortly after his long extension. If you want to argue that the deal was too much risk for a catcher, etc., then fine (although, outside of his injury-plagued 2001-2, he's easily been the most durable catcher of his era). But there's no way that signing a legitimate five wins above replacement player like Kendall was at the time can be construed as throwing money at someone simply because they are famous/overpaid. (And I mean a real 5 WAR, not the 5 DT-WARP deMause refers to.) In the case of the others on deMause's list, the Pirates misevaluated talent and gave millions to get replacement level talent; that is not remotely the case with Kendall. And of course, to intimate that overspending on Kendall for six years is more egregious than paying Derek Bell $9m for just one year of Operation Shutdown is not exactly coherent under any useful definition of return on investment that I am aware of.

DirecTV Deal

I sort of want to preemptively apologize for my ignorance on the subject, but for the past few days I've been somewhat baffled by arguments in the overwhelmingly negative reaction to DirecTV's exclusive deal for MLB Extra Innings.

Perhaps it's because I really don't have that much emotionally invested - I grew up following baseball by reading about it and playing it, not watching it, and that tendency has remained - but I think a lot of the comments about the business decisions behind the deal don't make much sense. Few people in online outlets seem to think the deal makes much sense for either side, although I could simply be reading the wrong sites. Many believe DirecTV is overpaying for something that won't really cause people to switch services, while MLB seems to have taken another step toward alienating its fanbase and potential exposure for a quick buck. I buy neither of these arguments.

I agree that DirecTV likely won't gain that much from cable users switching to DirecTV just to get MLB EI and the new MLB only channel. To focus on people who will make such a brazen consumer choice is very myopic, however. People move, especially young males 18-35, the coveted target demographic. While switching the service you already have installed seems ridiculous, to a person getting a new place, the appeal of getting the only package with NFL and MLB games would seem pretty strong. Moreover, it should be remembered that DirecTV does not only compete with cable; it has other satellite companies to compete with. While I'm far from an economist and have no idea what any of the relevant numbers involved are, $700m for exclusive rights to out-of-market MLB broadcasts seems pretty reasonable considering the amount spent on Howard Stern. And of course, there's a ton of free advertising built into this deal, just as was the case with Stern.

From the MLB perspective, there are two large mitigating factors here. First, I think MLB is betting heavy on MLBAM and the internet-based viewing options. The main constituency being cut out is digital cable subscribers, but the number of digital cable subscribers who don't have high-speed internet isn't exactly about to grow. And I would be pretty amazed if MLB's profit margin from mlb.com viewing isn't much, much larger than its profit margin from EI on cable. They're mostly robbing Peter to pay Paul, but Peter's cost of living is Manhattan-esque while Paul's staying in South Dakota. And, you know, they're getting cash to do so. If there are only 750K current subscribers to MLBEI, it seems like they should expect to at least break even on the $1oom vs. subscriber loss, with a big payoff coming from switches to online viewing.

Second, I don't really buy the argument that the MLB has much to lose from alienating its fans in this regard. For one, MLB already alienates its fans who have these packages with the bizarre blackout rules; nobody really already thought that MLB was fan-friendly when it came to letting you see its games. Moreover, while it certainly is a raw deal for plenty of people, the MLB is not geared toward its hardcore fans. Ticket sales continue to drive the MLB economy, and most teams have spent the last 15 years attempting to maximize their profits from attendance by upgrading stadiums, installing luxury boxes, and re-evaluating concessions and marketing. Hardcore fans don't pack the stadia, and MLB's interests have always been more in attracting the dollars of frivolous consumers than in maintaining a happy base of fans. The hardcore fans at stake who will walk away aren't exactly the game's biggest financial contributors, for one, and aren't exactly that likely to walk away from the game. As apparently has happened in the past, fans who get alienated by MLB's machinations tend to heal those wounds once their teams start winning again, and MLB is obviously stressing parity to the extent that it can be reasonably expected that it can salve over most of its missteps.

Moreover, the MLB just witnessed the strong arm that cable gave to the NFL Network. I'm sure this point has been made in the news reports, but I've yet to see it (i.e., I'm lazy and haven't looked for it). I don't know why MLB should bother negotiating with the cable companies, especially since they're so heavily integrated with most of the content providers and are ostensibly a lot more focused on how to shift to new entertainment and advertising models with the rise of internet programming, DVR, etc. MLB is already addressing those questions on its own with MLBAM, and it seems like MLB has already come to a satisfying preliminary set of answers to the questions raised by the present and future shifts in media. Given that, it only seems sound to grab a little more control of the supply/demand curve. Moreover, the NFL parallel is worth noting: if baseball fans claim MLB has screwed them over, at least baseball makes its games available online; the NFL has always been more exclusive in its viewability than MLB currently is, and local NFL games are blacked out when they don't sell out. It's hard to say that MLB has alienated its fans in many ways that the NFL has not already, and the NFL is obviously not doing too poorly.

The fans who are or will be upset are the ones who love baseball, and MLB simply has such a large monopoly as a provider of high-quality baseball game entertainment that MLB alienating lovers of the game with its marginal business decisions is unlikely to have long-lasting effects, in my opinion. For the most part, people alienated by the decrease in broadcast options are not the type who will be able to start regularly attending college, HS, or minor or independent league games; we can probably reasonably assume that this group of people wants mostly to stay home, and the cost of watching a game on a computer is still a lot less than the cost of a minor league game in most relevant circumstances. And since MLB will remain dominant in terms of game data available to the public, it sure is unlikely that many statheads will be able to forget about the big leagues.

I'm sorry for having this read like an unresearched, contrarian op-ed piece; I just really don't buy the "MLB is screwing its fans over; doom will ensue" leitmotif. I'm not a student of business or economics, so who knows what I could be getting completely wrong? The only real argument I'm interested in here is that MLB is a business and will continue to act as such. Objections to the MLB's plan that read along the lines of "This is a bad business decision for MLB..." (or DirecTV) are quite unlikely to be correct unless thoroughly researched. I think it's lousy that people's access to something they genuinely love is governed by competition for profits, and that relationship is unlikely to change absent an overthrow of the now globally-governing episteme that misrepresents humans as homo oeconomicus.