Adam Eaton’s excess value helped White Sox get bundle in trade
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Whenever White Sox fans watch Yoan Moncada, Lucas Giolito and Reynaldo Lopez this season — and many other prospects as coming attractions — they can thank metrics and the concept of excess value on contracts.
Pitchers Chris Sale and Jose Quintana and outfielder Adam Eaton all had excess value on their remaining contracts before the Sox traded them. That led to big returns.
A player whose projected wins above replacement are worth more than he’s paid brings a premium return on the trade market.
Let’s look at Eaton as an example. He had big excess value when the Sox traded him to the Nationals after the 2016 season.
He had three years left on his contract, plus an additional two years as club options. For the first three years, his salaries were set at $4 million, $6 million and $8.4 million. The option years were worth $9.5 million and $10.5 million.
That meant the Nationals’ three-year commitment was $18.4 million, with a total of $38.4 million if they exercised all five years of club control.
That’s a low price for a player who has put up big WAR numbers. In 2016, Fangraphs.com measured Eaton at 5.8 WAR, the eighth-best position player in the American League. That was after 3.7 in 2014 and 3.8 in 2015.
There are variations among projection systems and ballclubs have their own metrics, but assume a projected 2017 WAR of 4.5 for Eaton before the injury that sidelined him last season. The projection is less than his big year of 2016 but more than his previously established level.
Next, build in a decline of about a half-win a season for aging. That would leave projected WARs of 4.5. 4.0 and 3.5 for three years, then 3.0 and 2.5 in the option years. That yields total projected WAR of 12 for three years or 17.5 for five.
The going rate for free agents at the time was about $8 million per win above replacement. Even with no increases in the going rate, Eaton’s value on the open market could be calculated at about $96 million for three years or $130 million for five.
Eaton’s salary was $77.6 million less than his projected value for three years or $91.6 million less for five. Those figures represent his excess value.
If the Sox spent that money on the free-agent market, it would have been enough to keep Eaton and buy players worth between 8 and 9 WAR over three years or about 16 WAR over five. Instead, they extracted a high price from the Nationals in Giolito, Lopez and highly regarded pitching prospect Dane Dunning.
Pre-metrics, returns are unlikely to have been quite so high. A team looking at Eaton’s .284 batting average and modest 14 home runs in 2016 wouldn’t have been quite as impressed as a modern front office seeing his 5.8 fWAR.
But metrics are a major part of the game now, and excess value makes an impact on the balance of trade.