21 January 2010

Minor League Rankings (thoughts on the Wang Methodology)

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I was emailed at the Sun Board about this post by dougdirt over at Minor League Ball (John Sickels' blog - rankings: AL, NL). The numbers seems a bit screwy to me even when taking into consideration how Wang's methodology views pitching prospects. To clarify, I think Wang's methodology undervalues pitchers because of their injury incidence. You see Wang's values are a product of how well a positional or pitching prospect, ranked at a certain level, does after that point in time. There is more variation in pitchers than hitters in large part as a result of a higher incidence of performance affecting injury. That could lead to the erroneous (in my opinion) conclusion that hitters are worth more than pitchers. I disagree with that because it forgets the other end of the equation.

You see, pitching performance is a volatile commodity. It means that a pitching prospect is quite a risky venture. It also means that a free agent pitcher is also a risky venture. By focusing on pitching prospects, your cost efficiency (cost per run given/earned) will be less than if you ignored pitching prospects and focused on drafting or acquiring hitting prospects. In that regard, I think Wang undervalues the cost savings of pitching prospects. If the system was closed and free agency had no relationship to payroll, then I would say these numbers would be valuable.

Regardless, I decided to take Wang's numbers and run them my own way using the spreadsheet dougdirt came up with (click here to see post with table). All of that after the jump.

I figured the best way to compare different teams was to only look on their top 20 prospects. Dougdirt did not do this. He focused instead on C+ prospects and above. This means that some teams did not receive credit for having C level prospects. I think this unfairly devalues the system and ruins the spectrum for comparison. C level prospects do have value as Wang himself noted. I did not feel like going back through my database, so I assumed that summed prospect totals less than 20 prospects would be filled with C level guys worth 1MM, which is roughly the middle point between hitting and pitching prospects at the C grade.

Here are the rankings I came up with using the modified Wang method:
1. Cleveland Indians 127.1MM
2. Oakland Athletics 124.1MM
3. Tampa Bay Rays 122.7MM
4. Atlanta Braves 117.6MM
5. Texas Rangers 111.3MM
6. San Francisco Giants 111.1MM
7. Los Angeles Angels of Anaheim 107MM
8. Chicago Cubs 106.8MM
9. Milwaukee Brewers 103.6MM
10. New York Mets 100.6MM
11. Boston Red Sox 99.7MM
12. Cincinatti Reds 96.4MM
13. San Diego Padres 95.4MM
14. Kansas City Royals 93.7MM
15. Los Angeles Dodgers 92.3MM
16. Detroit Tigers 91.1MM
17. Pittsburgh Pirates 90.7MM
18. Baltimore Orioles 86.2MM
19. Florida Marlins 83.5MM
20. Toronto Blue Jays 81.6MM
21. New York Yankees 81MM
22. Washington Nationals 80.3MM
23. Colorado Rockies 78.5MM
24. Houston Astros 77.3MM
25. Seattle Mariners 72.6MM
26. Minnesota Twins 69.8MM
27. Chicago White Sox 54.5MM
28. Philadelphia Phillies 54.3MM
--. St. Louis Cardinals 54.3MM
30. Arizona Diamondbacks 48.5MM

The rankings somewhat pass the smell test, but I do think Wang's method undervalues the true worth of developing your own pitching. Taking that into consideration, I decided that we should make hitting and pitching prospects worth the same. This assumption is defined as saying that the loss of production in terms of performance volatility is canceled out by the benefit in not having to rely on the free market cost of pitching. Under these guidelines the list would be:

1. Texas Rangers 146.5MM
2. Tampa Bay Rays 144.2MM
3. Cleveland Indians 125.8MM
4. Atlanta Braves 121.9MM
5. San Francisco Giants 117.5MM
6. Oakland Athletics 116.4MM
7. Baltimore Orioles 111.8MM
8. Chicago Cubs 108.7MM
9. Cincinnati Reds 107MM
10. New York Mets 106.8MM
11. Boston Red Sox 106.4MM
12. Washington Nationals 106MM
13. San Diego Padres 104.8MM
--. Detroit Tigers 104.8MM
15. Kansas City Royals 104.4MM
16. Los Angeles Angels of Anaheim 104.1MM
17. Los Angeles Dodgers 102.5MM
18. Milwaukee Brewers 100.2MM
19. Colorado Rockies 94.4MM
20. Toronto Blue Jays 92.8MM
21. Florida Marlins 91MM
22. Pittsburgh Pirates 93.4MM
23. Houston Astros 78.4MM
24. New York Yankees 77.2MM
25. Seattle Mariners 72MM
26. Minnesota Twins 64MM
27. Chicago White Sox 62.4MM
28. St. Louis Cardinals 53.5MM
29. Philadelphia Phillies 50MM
30. Arizona Diamondbacks 47.3MM

These rankings actually look more accurate to me. It would be nice to see something a little more quantitative than just assuming that the market has figured itself out, but I have no time for that right now. An interesting note here, if Brian Matusz did not qualify for prospect status, the Orioles would have sunk to the 24th ranked system in baseball. This is pretty similar to the argument last year with Matt Wieters.

The Orioles have been pretty lucky to basically make up for the underlying talent. Next year will be another big test on the organizational pipeline. Potential A talent could come in the form of Josh Bell, Zach Britton . . . maybe Snyder, but I doubt it. I imagine the team will have several B and B+ players next year, but no As.


Nick J Faleris said...

Good thoughts. I think Wang's methodology may work for estimating total future value, when all is said and done, since (as you point out) pitching is a less certain commodity.

That said, I think you are correct in raising the idea that the volatility in pitching makes successful pitchers that much more valuable (particularly because free agent investment in pitching is more likely to fail as an investment, due to injury).

Jon Shepherd said...

That certainly is the argument. Tomorrow, I'll have the next article up actually going into cost efficiency of pitching vs positional players.

It seems to me that by having a large group of pitching prospects, you minimize the need to invest in free agent pitching. Free agent pitching is considerably more volatile and less efficient than free agent hitting.

The idea rolls back to your eloquent fruit salad farm analogy. If it costs $1 to grow your own strawberries and 50 cents to grow your own bananas while on the market strawberries go for $4 and bananas $2. It makes sense for grow your own strawberries and buy the bananas even though strawberries are a more resource intensive crop. You'll pay $3 instead of $4.50 to make the fruit salad.

Nick J Faleris said...

I had forgotten about my fruit farm analogy -- always thought that should have gotten more critical acclaim.

Jon Shepherd said...

You can make a t-shirt on Zazzle with the slogan . . . Grow your own Strawberries!

Nick J Faleris said...

I'll put it on the list, along with my "" shirt...

Nick J Faleris said...

Should have been "FISK"-smiley shirt...

Jon Shepherd said...

It is funny how "FISK" smiley is literally the opposite of the term fisking, but fisking very much describes what JoePo did to Carlton.