Everybody’s Doing It

The normal Wednesday evening doldrums of painting and SVU were interrupted last night by the bombshell trade of Prince Fielder for Ian Kinsler and some dough. There have been many solid takes on this already, but I figured it wouldn’t hurt to throw one more out there. We can use my contract calculator, updated for this exercise, natch, to gauge the surplus value going each way.

First a few assumptions. We assume that the inflation rate of $/WAR on the free agent market will escalate at a 7% rate starting at $6M/WAR for 2014. We will also assume that the discount rate, used to find Present Value, will inflate at 7%. We will use Steamer projections for 2014, because they’re the best free resource at hand, and each player will decline by half a win per year going forward. We know that the $30M dollars will be going from Detroit to Texas from 2016-20, but we do not know the exacts so we will assume $6M/year for each of those years. We will add this dollar figure to Kinsler’s contract and take it away from Prince’s. Lastly, we will compare the Present Value to the Provided Value to calculate any/all Surplus Value:

You can see that I’ve added the dollars to Kinsler’s contract which extend even beyond when he would be under team control and you’ll notice the big, wet bite that inflation takes out of those future dollars. Even with the money going over we see that Kinsler is still going to provide close to $18M of Surplus Value over the life of this contract even though they’re paying close to $7.5M for a player they do not expect to take the field. How does Fielder look in comparison:

Fielder’s princely sum is reduced substantially over the final five years of the deal with the extra money coming over. This is enough to basically make this a break-even contract for him going forward. This looks like a pretty good deal for Texas over the long haul with no real large Surplus loss until the final season.

You have to give Detroit the edge here because they’re probably looking at around $18M in surplus value, but it’s not quite the ridiculous overpay that we first thought once you account for the dollars changing hands. The Rangers could afford to take a small hit because they’ve got scads of revenue and both teams now allow a more natural filling of the order around each player without necessitating a trade of a different color. Good job on both teams to add value, but I think Detroit is the slim favorite here.


About Jason Hanselman

Rays fan.
This entry was posted in Batter Analysis. Bookmark the permalink.

Leave a Reply

Please log in using one of these methods to post your comment:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s