A Look At The Distribution Of Prospect Values

Over the past few years, there’s been a movement to grade prospects by not only overall rank and organization rank, but also by future value. Future Value is not very well defined, but per MLB is a 20-80 scale in which a ranking of 20-30 is well below average, 40 is below average, 50 is average, 60 is above average and 70-80 is well above average. A player with a 65 FV is someone who could develop into a future impact Major Leaguer, perhaps an All-Star-caliber standout. Fangraphs defines future value, using a similar grading model and provides a chart showing how future value can be defined using WAR.

In general, I’m not a fan of using such definitions as Top #2-3 player or #2/#3 starter because it’s subjective and can’t be easily determined and prefer using WAR values because that at least is easily definable and somewhat objective. WAR may undervalue a strong player that is hurt for a few years, but any clear definition will have its limitations.

In order to learn about future value, I decided to build a metric called actual value. Future value attempts to predict how much production a prospect will produce using WAR, and actual value attempts to measure how much production a prospect actually did produce. In essence, I defined actual value in such a way that future value attempts to predict actual value. 

To do this, I looked at players from 1990-2016 and measured each prospects’ production while they were under team control or until they had six or more years of service time. Once players have six or more years of service time, they are eligible for free agency. Then, I determined their rookie year and measured their average value per year or actual value using the following scale.

With this distribution of actual value illustrating how prospects performed, we can understand what a reasonable distribution for future value might look like for the future. I looked at the performance of prospects over two time periods, 1990-2016 and 2004-2013 defined by a prospects rookie year. Here were the valuations this process returned from 1990-2016.

Each year from 1990-2016, there were roughly 18.5 prospects that had an actual value per year of 2 WAR or more. This may seem surprising at first glance, but one should consider that from 2000-2017, there were roughly 130 offensive players and 90 pitchers that were worth more than 2 wins or above average. This includes players that were one year wonders like 2009 Jason Kubel (2.5 fWAR) or 2016 Michael A Taylor (3.2 fWAR). They may have been worth 2 fWAR in a single season, but weren’t above average players over an extended period of time. When looking at players that have staying power, there are significantly fewer than 220 at any given time – maybe around 150 total. If there are few average and above average players in the league, then there can be few prospects each year to replace them. If 20 prospects each year are above average, and there are 150 players total above average, then the replacement period would be about 7.5 years. This seems to suggest that 20 average prospects per year is within reason.

There were significantly more prospects each year that ended up being below average and the vast majority were either 25s or 30s. This makes a lot of sense because teams have injuries and need to call up their prospects to make it through the season. In addition, teams would prefer to give their prospects chances to be successful because they’re cheaper than free agents. However, the vast majority of prospects either fail or struggle to be better than replacement level.

The story is reasonably similar when looking at prospects that became rookies from 2004-2013. There were about 20 rookies per year that because average or better players in the majors. Another 22.5 per year were below average, but still worth over 1 WAR per season. The vast majority of rookies, or roughly 184 per year, ended up being worth less than 1 WAR per season or clearly below average. Both sets of data tell the same story: being successful in major league baseball is difficult.

If only twenty players per year have above average actual value, than prospects ranked outside of the top 100 should not be expected to have a high future value. After all, future value is trying to predict and should have similar behavior to actual value. Prospect lists are tricky because they grade all prospects and not just those that should be expected to enter the league each year. So, I would argue that it’s reasonable to presume that all prospects considered to be at least average should be in the top 100, and likely all prospects with a future value of 45. I would say that all prospects with a future value of 40 should be at least in the top 125 prospects and all prospects with a future value of 35 should be in the top 200 prospects. Players ranked worse than 200 should be seen as slightly better than replacement players at best and ideally will be either bench players, middle relief or minor league depth pieces.

Fangraphs provides a board with its top 850 prospects as ranked at the beginning of the season with both future value grades and estimated time of arrival. We can use this board to determine the time period that their prospect list measures as well as see whether their distribution seems reasonable.

If they still use the future value definitions defined by McDaniel, than their distribution is difficult to comprehend. In their defense, it appears that they consider their FV to be their peak level rather than their average level. In addition, they deserve some leeway for injuries. Still, it is highly unlikely that there were will be 54 prospects in the 2018 rookie class that end up being average or better or 110 prospects that are worth 1 fWAR or more. It seems that a 55 in the Fangraphs distribution is the same as a 50-55 in the historical distribution, a 50 in Fangraphs is the same as a 35-45 in the historical distribution, a 45 in Fangraphs is the same as a 30 in the historical distribution and a 40 in Fangraphs matching a 25 in the historical dataset. Perhaps this is why Fangraphs only gives valuations for players that are ranked up to 45?

Even prospects graded as a 30 have a surprisingly high amount of value using a WAR linear model. These players typically produce about .2 fWAR per year and last for about 4.5 years. Using our predicted arbitration rates would suggest that these players produce $9M in value (at $10M per win) and cost $2.5M for a total surplus value of $6.5M. This seems surprising at first glance, but consider that players like Caleb Joseph and Ryan Flaherty rate as having an actual value of 30. These players aren’t great, but Joseph is certainly a decent backup catcher option while Flaherty was a decent utility player. Despite the fact that these players are valuable, it is impossible to build an average team with players just like those two, explaining why teams are willing to trade them away for marginal improvements. Treating WAR as a linear model does have its limitations.

Players ranking 35, 40 and 45 in actual value have a preposterous amount of value using this metric. 35 actual value level players produce roughly 4.2 WAR of production over their six years of team control or produce $42M in value (at $10M per WAR) but only cost about $10.6M putting their value at $30M. 40 level players produce roughly 7.2 WAR of production over their six years of team control or $72M in value but only cost $15.6M putting their value at $56M. 45 level players produce roughly 10 WAR of production over their six years of team control, but cost roughly $24M putting their value at $76M. Presumably, Orioles fans would not have been happy if the Orioles received just one 45 level player (top 60-90 prospect) in return for Machado.

Part of the reason why these players have such high values is that non-arbitration player salaries are unfairly low. If a win is valued at $10M, and the salary for a non-arb player is $550k, then it is relatively easy for a non-arb player to be underpaid. A reasonable minimum salary of $1.5M would rectify the situation where near replacement players have significant value. Part of the reason is that having a slightly above replacement player play instead of a below replacement player can have significant value. The fact is that teams are willing to pay a premium to avoid having to use a player like David Hess for 65 innings.

Future value may be the attempt to determine actual value, but that doesn’t mean they are the same. There’s a significant amount of uncertainty when predicting future value, and the distribution of prospect performances suggest that it is far easier to overestimate a prospect than underestimate a prospect. Most prospects that make it to the majors aren’t successful, and all prospects that don’t make it to the majors aren’t successful by definition. This uncertainty will mean that a player with an actual value of 40 (as determined in hindsight) is far more valuable than a prospect with a future value of 40. In a player with an actual value of 40 is worth $56M, than a prospect with a future value of 40 is worth significantly less. This is one reason why prospects aren’t valued as actual value suggests. In contrast, measuring the value of top 100 prospects take failed prospects into account and therefore provide a reasonable baseline for value.

In addition, a team filled with 35 AV players that are under team control, may be fiscally successful, but will also be terrible. In some roles, a 30 or 35 AV player can be acceptable, but in other roles (starters) they’re not particularly ideal. Obviously, it’s important to be fiscally responsible, but teams are in the business of maximizing their win total and not their excess value total. Others believe that teams would rather win now rather than later, and therefore future wins should be discounted.

Going forward, looking at how many prospects historically fit into each category of actual value should help analysts build future lists using future value. It doesn’t make sense to predict that hundreds of prospects will have a future value of 45 if few players ultimately have an actual value of 45. Using historical data to accurately assess the value of prospects will lower these rankings and make it more difficult to excite casual fans about their teams’ future. Still, even if it’s bad press, it makes sense to admit the reality of prospect value. Having a better idea how prospects historically perform can help teams plan for their future, and ultimately fans don’t really want to see how their prospects develop but rather watch their team be successful at the major league level.

The Value Of #4/#5 Starters Has Skyrocketed

Most fans hope for the best for their team. They hope that their major league players will show improvement from their past performance and that their top prospects (regardless of overall rank) will end up being successful in the majors. This divide between optimism and reality becomes clearer when looking at starting pitching. People hope that their top pitching prospects can become successful in the majors at the same time that starting pitching is becoming hard to find. As a result, fans undervalue legitimate backend starters and overvalue unranked pitching prospects. This came to light last week when Jon talked about the value of Kevin Gausman.

For starters, the performance of starting pitching has changed significantly recently. This chart shows the count of qualified pitchers, their average ERA (not waited by innings pitched), their average FIP and their average WAR.

It’s pretty simple, there are 30 teams in the majors and each team historically has five starters in the rotation, meaning there are 150 starters that have a shot to be qualified. From 2010-2014, roughly 90 starters threw over 160 innings, or on average each team had three qualified starters. In 2017 that dropped to 56 starters, or on average each team had only two qualified starters. However, despite the drop in qualified starting pitchers, their performance hasn’t improved. The average ERA and FIP have gotten worse over time, suggesting that finding qualified pitchers is harder in this new age. That’s one reason why only 25% of qualified starters were worth 2 WAR or less in 2017. Starters that can give their team 160 innings with a decent ERA and FIP have become much more valuable than they were even two years ago.

Unsurprisingly, the number of starters used in a year has gone from 273 in 2010 to 315 in 2017. Part of this is because teams received on average 970 innings from their starters in 2010 but only 890 innings from their starters in 2017. But part of it is that the average starter has gone from throwing 106 innings in 2010 to only 85 in 2017. As a result, teams have gone from using 9 starters on average to using 10.5 starters on average. As more starters are used, the average ERA and FIP has also gotten worse. Things are somewhat better this year, but not by much. According to TruMedia, there are 79 qualified starters in 2018 compared to 73 at this point in 2017. Expect a small increase of qualified pitchers from last year, but probably not a large one. Here's how the numbers look for all starters.

The value of backend starters that can give you a large amount of innings without having terrible results has skyrocketed due to their scarcity. Teams only have so much starting pitching depth. The more starters that they’re forced to use, the more likely that they’re going to get an atrocious performance from somebody. The teams with the best starting pitching are those like the Indians who made it through 2017 using just seven starting pitchers. Having guys like Bundy and Gausman on your roster helps keep the bullpen fresh and ensure teams don’t need to use their AAAA guys as starters.

It’s possible to use FIP to rank starting pitchers from 2010-2017. For each year, we know how many starters each team used on average, so it makes sense to put starters in groups based on the average number of starters used by a team. For example, in 2010, teams used 9.1 starters per year, so we can rank starters from 1 (best) to 10 (worst) based on their FIP. In 2017, teams used 10.5 starters per year, so we can rank starters from 1 (best) to 11 (worst).

When using this method, it becomes pretty clear that there’s a big difference between aces (average FIP of 2.59) and #2 starters (average FIP of 3.28), the second worst starters (average FIP of 5.27) and the worst starters (average FIP of 8.12) and the third worst starters (average FIP of 4.72) and the second worst starters. Aside from those groups there’s roughly a .2 or .3 FIP difference between ranks. Over 180 innings, this is equivalent to roughly 5 runs or half a win. A decent-sized distinction, but not a huge one. Here's how the groupings look.

Using this method, Kevin Gausman consistently (2015-2017) appears to be a #5-6 starter while Dylan Bundy looks to be an outright #6 or even worse. That stated, FIP probably isn’t particularly fair to Orioles starters. FIP presumes that pitchers are fully responsible for all home runs that they allow, but it’s a lot easier to hit a home run in Camden Yards than in the Oakland Coliseum. Fangraphs WAR uses a park factor to take this into account, but FIP does not. So, it probably makes sense to consider Gausman a #4-5 starter. Likewise, Sonny Gray was a 3-4 starter in 2014 and 2015 using this metric, while he dropped to a #8 starter in 2016. But due to pitching in a pitcher friendly stadium, it’s likely he should also have been treated as a #4-5 starter. In other words, these two pitchers are probably closer in value than just looking at their FIPs or ERAs would indicate.

At any given time, there are typically around 40 pitching prospects on top 100 prospect lists. Not all of these pitchers graduate in a given year, but if top prospects had a high success rate, then there would be a lot more than 60 qualified starters. The fact is that the likelihood of a top prospect being successful isn’t great, and therefore the value of a prospect that is successful is high. If top pitching prospects that are ranked struggle to be successful, then pitching prospects that aren’t ranked struggle even more often. It’s highly unlikely that unranked pitching prospects will be successful in the majors. They’ll get a shot because teams need to rely on their minor league system for starters, but they’re probably not going to succeed. Unfortunately, fans don’t remember failed prospects.

Kevin Gausman and Dylan Bundy are likely going to be nothing more than #4-5 starters on the Orioles. It’s possible that another team could successfully develop them and turn them into top of the rotation pitchers. But even #4-5 starters that can pitch a full season have significant value. Their performance may not be great, but these guys can solidify a rotation, ensure that teams don’t need to rely on minor league pitchers with minimal talent and preserve a bullpen. The value of that has skyrocketed over the past few years.

The Orioles Should Trade Gausman To The Rockies

It’s nearly the trade deadline, so of course there are rumors about the Rockies interest in trading for Kevin Gausman. The Rockies have had an interest for Kevin Gausman for a long time, at one point even requesting him for a trade for De La Rosa. However, at this point, there may be a real chance for a deal.  It’s safe to say that Gausman has failed to have the breakout season that Orioles fans were hoping to get from him, and the Orioles only control his rights for two more years. The Orioles need to ask themselves whether it makes sense to offer him an extension. If they don’t, his value is only going to decrease as time goes on. What would a potential trade to the Rockies look like?

Jon has suggested that Gausman is worth $40-50 million, almost as much as Machado was worth. If one thinks that Gausman will continue performing like a 3-4 starter then this valuation makes reasonable sense. It would make sense to value him at 5-6 WAR over his remaining 2+ years as an Orioles and presume he’ll cost roughly $20M. If you value a win at $10M, then we’re talking $30-40M but teams usually pay a premium for talent at the trade deadline. In addition, teams probably remember Jake Arrieta and may be willing to pay a slight premium to see if they can fix another Orioles pitcher with great talent who couldn’t figure it out in Baltimore.

The Rockies rotation has been atrocious. Kyle Freeland and Tyler Anderson have been solid for the Rockies, but have FIPs in the low 4 range. Jon Gray has had an excellent 3.05 FIP but also has a 5.44 ERA and was sent to the minors earlier this year. Their other starters have struggled. The Rockies could use at least two starting pitchers if they want to challenge for the playoffs and there aren’t very many available avenues for them to get it.

The Orioles could try to get prospects for Gausman. The Orioles wouldn’t be able to get the Rockies top prospect, but could reasonably hope to get one of their top prospects. It wouldn’t be terrible to build a deal around Lambert or Welker. But in this case, it makes sense for the Orioles to consider a challenge trade.

That’s why the Orioles should ask for Jon Gray. Jon Gray had what was thought to be a breakout 2017, but has had a tough 2018 season with an excellent FIP but a terrible ERA. If you believe the advanced statistics, then Jon Gray is probably an ace. If you believe your lying eyes, then he’s legitimately struggling.

According to TruMedia, Jon Gray boasts a tough fastball, curveball and slider repertoire that makes him tough against opposing batters and allows him to pick up strikeouts. The problem is that he has a bad case of Porcello-itis. Opposing batters have a .306 wOBA against him when the bases are empty, but a .386 wOBA when a runner is on base. It appears that opposing batters are more aggressive with men on base, and put more balls into play. Betrayed by a poor defense, opposing batters have an OPS of over 1 and a BABIP over .370 when they put the ball into play against him, regardless of whether men are on base or not. Like most pitchers, Gray would benefit from leaving Colorado.

It’s rumored that the Rockies are beginning to lose patience with him and are discussing moving him to the bullpen. If this is true, then it’s very reasonable that they’d be willing to part with Gray to get Gausman. The problem is that Gray is one of those players that’s hard to value. As a bullpen piece, he’s probably worth $10-$20M and the Os could ask for a C+ prospect in addition. If Gray is seen as a starter, then he could well be worth considerably more than Gausman. Like Gausman, Gray is another pitcher that hasn’t met his potential. Unlike Gausman, he’s shown more signs of being able to turn the corner. With a strong 2019, the Orioles could probably flip Gray to another team in return for elite talent or alternatively he’d be an interesting piece to offer an extension.

A Gausman for Gray trade would make sense in and of itself, but the teams could possibly expand a potential trade. The Rockies haven’t gotten much production from first base. Ian Desmond has been a failure on the Rockies. He has a decent bat for a middle infielder or center fielder, but the Rockies already have players blocking him at these positions. Instead, he plays first base, and he simply doesn’t have a good enough bat to be successful there. It turns out that signing a middle infielder/center fielder to play first base for an exorbitant amount of money isn’t a good strategy. Nor have the Rockies had much success with their top former prospect Ryan McMahon. McMahon has struggled in the majors, combining an inability to hit for power or average with a tendency of striking out frequently. With 3 yrs remaining on his deal after this one at $40M, plus another $9M on the books for the remainder of 2018, the Rockies should have interest in trading him elsewhere.

Yet, Ian Desmond was a decent center fielder for the Rangers in 2016, and his Statcast sprint speed of 27.8 ft/s suggests he is fast enough to play second base or center field. He’s a player that’s more valuable to another team than he is to the Rockies. And he isn’t so valuable that the Rockies would have much leverage in a trade. I mean, he has more value to another team than the Rockies, but with such a large contract he still likely has negative value. The Rockies would almost certainly have to give back another $30 million in value in order to include him in the trade.

On the other hand, Trumbo has proven to be a terrible DH, but has had a decent offensive 2018 season when playing either 1B or RF with a line of .309/.347/.559. Put him full time at 1B in Colorado, and they should have a pretty good bat. Trumbo is definitely a player that could benefit from a change of scenery.  When taking his contract into account, his value should probably be somewhere in the 0 to -$5M range.

Adding Trumbo and Desmond to the deal would mean that the Rockies would have to part with one of their better prospects. It’s questionable whether they would. A pitcher like Lambert or a hitter like Wilker would interest the Orioles, but it depends on how the Rockies view him. If they think of him as a top fifty prospect, as does Keith Law, then he’s not to be considered. On the other hand, if he’s a fringe top hundred prospect as ranked per MLB pipeline then perhaps he could be included. It also depends on how much value Gray still has. The thing is that the Rockies have a number of interesting 2B/SS/3B and pitching prospects and could afford to trade two or three in a deal. If the Orioles could get a package of Gray, Lambert, Hampson and Desmond in return for Gausman and Trumbo, then that would be a deal they'd have to take. 

If the Orioles do decide it’s time to trade Gausman, then the Rockies would definitely have some interesting pieces to trade in return. 

Is Bundy The Next Bedard?

I normally believe that it’s hard to judge a baseball team until about 100 games have been played. At that point, teams have had enough time to show whether their record is due to a lucky or unlucky start, and they’ve added players via the trade deadline. The one exception to this rule is teams that do terrible to start the season. It’s safe to say that those teams are likely not going to make the playoffs. At 8-20, the Orioles aren’t going to make the playoffs and are a threat to lose 100 games this season.

Baseball Reference’s “AL Wins Above Avg By Position” tool tells the story.

AL Wins Above Avg By Position Table

Rk	Total	All P	SP	RP	Non-P	C	1B	2B	3B	SS	LF	CF	RF	OF (All)	DH	PH
1	BOS 6.2	BOS 5.2	BOS 3.9	TOR 1.7	NYY 3.4	HOU 0.6	OAK 0.5	OAK 1.5	OAK 1.4	NYY 2.0	TOR 0.7	LAA 1.7	BOS 1.2	NYY 1.9	BOS 0.4	TBR 0.2
2	HOU 5.4	HOU 3.5	HOU 2.8	BOS 1.4	OAK 2.6	TOR 0.4	BOS 0.2	TBR 1.2	CLE 1.1	BAL 1.2	LAA 0.4	TOR 0.9	NYY 1.2	LAA 1.4	NYY 0.3	NYY 0.1
3	NYY 3.4	CLE 2.7	CLE 2.6	TEX 0.9	HOU 1.9	TBR 0.4	TOR 0.2	SEA 0.9	DET 0.5	LAA 1.2	OAK 0.3	NYY 0.5	SEA 1.1	BOS 1.1	LAA 0.2	LAA 0.1
4	OAK 2.6	TEX 1.6	MIN 1.3	HOU 0.7	LAA 1.9	DET 0.1	MIN 0.1	CHW 0.8	CHW 0.4	HOU 0.9	BOS 0.2	DET 0.1	KCR 0.5	TOR 1.1	CHW 0.1	OAK 0.0
5	CLE 2.1	TOR 0.9	TEX 0.8	SEA 0.5	BOS 1.0	CHW 0.0	CHW 0.1	HOU 0.8	TOR 0.2	CLE 0.8	NYY 0.2	MIN 0.0	HOU 0.4	SEA 0.4	OAK 0.0	KCR 0.0
6	LAA 1.4	OAK 0.0	DET 0.4	CLE 0.2	TBR 1.0	CLE 0.0	DET 0.1	MIN 0.2	NYY 0.1	BOS 0.6	TBR 0.1	OAK -0.2	DET 0.2	HOU 0.2	TBR 0.0	HOU 0.0
7	TOR 1.1	NYY 0.0	KCR 0.4	LAA 0.2	TOR 0.2	NYY -0.1	LAA 0.0	KCR -0.2	TEX 0.1	OAK 0.5	HOU 0.0	CLE -0.2	MIN 0.1	DET 0.0	HOU -0.1	DET 0.0
8	SEA -0.6	MIN 0.0	NYY 0.4	BAL 0.2	SEA 0.0	SEA -0.2	CLE -0.1	LAA -0.4	KCR 0.1	SEA 0.4	CLE -0.2	HOU -0.2	TBR -0.2	MIN -0.1	TEX -0.1	MIN 0.0
9	DET -0.6	DET -0.2	OAK 0.3	CHW -0.1	DET -0.4	OAK -0.3	TEX -0.1	BOS -0.4	BOS 0.1	TEX 0.2	CHW -0.2	KCR -0.3	TEX -0.2	KCR -0.3	SEA -0.2	TOR -0.1
10	TEX -1.0	LAA -0.5	TBR -0.5	OAK -0.3	CLE -0.6	LAA -0.3	NYY -0.3	DET -0.5	TBR 0.1	CHW 0.2	MIN -0.2	BOS -0.3	CLE -0.4	TBR -0.7	TOR -0.2	CHW -0.1
11	TBR -1.1	BAL -0.5	BAL -0.7	NYY -0.4	CHW -0.9	KCR -0.4	HOU -0.4	TEX -0.5	HOU -0.1	TBR 0.2	SEA -0.3	TEX -0.4	TOR -0.5	CLE -0.8	BAL -0.3	BOS -0.1
12	MIN -1.1	SEA -0.6	LAA -0.8	DET -0.5	MIN -1.1	MIN -0.4	TBR -0.4	BAL -0.5	SEA -0.3	DET -0.2	BAL -0.3	SEA -0.4	BAL -0.6	OAK -1.0	MIN -0.4	TEX -0.2
13	CHW -1.9	CHW -1.0	CHW -0.9	MIN -1.4	KCR -2.2	BAL -0.6	KCR -0.7	NYY -0.6	MIN -0.3	MIN -0.2	DET -0.3	TBR -0.6	LAA -0.7	TEX -1.3	KCR -0.4	SEA -0.2
14	KCR -4.2	KCR -2.0	TOR -0.9	TBR -1.6	TEX -2.6	TEX -0.7	SEA -0.8	CLE -0.7	LAA -0.3	KCR -0.3	KCR -0.5	BAL -0.7	OAK -1.1	BAL -1.6	DET -0.4	BAL -0.2
15	BAL -4.2	TBR -2.1	SEA -1.0	KCR -2.4	BAL -3.7	BOS -0.9	BAL -1.0	TOR -0.9	BAL -0.7	TOR -0.5	TEX -0.7	CHW -1.1	CHW -1.1	CHW -2.4	CLE -0.6	CLE -0.3
AVG	0.5	0.5	0.5	-0.1	0.0	-0.2	-0.2	0.0	0.2	0.5	-0.1	-0.1	-0.0	-0.1	-0.1	-0.1

Provided by Baseball-Reference.com: View Original Table
Generated 4/29/2018.

As you can see (if I got this tool to work right), it ranks the Orioles the worst in the AL at 4.2 wins below average. The Orioles pitching ranks 11th at .5 wins below average, with the starters contributing .7 wins below average (good for 11th out of 15th) and the relievers at .2 wins above average (good for 8th).  But the problem is offense, where they are 3.7 wins below average and are the worst in the AL. They’re ranked second in total shortstop production with 1.2 wins above average. Their next best showing is at DH where they’re ranked 11th with .3 wins below average. They’re ranked worst in 1B and 3B production, second worst at CF and PH, third worst at C and forth worst at 2B, LF and RF. Basically, if the Orioles can find another six starters on offense, they’ll be ready to turn things around. Otherwise, it’s time to think about 2019. As Matt K wrote, it’s time to make a plan.

2019 is looking like it could be worse than 2018. The Orioles are set to lose team leader Adam Jones, long time closer Zach Britton, long time setup man Brad Brach, and of course potential hall of famer Manny Machado. Machado has been one of the two bright spots of the Orioles season so far. According to Fangraphs, Machado has been worth 1.8 fWAR so far this season. He has a legit shot to earn 10 fWAR over the entire year. How many teams that have lost 100 games have had a ten fWAR player?

The Orioles have $56M allotted in guaranteed contracts to Chris Davis ($17M), Alex Cobb ($9.5M), Mark Trumbo ($12M), Darren O’Day ($8M) and Andrew Cashner ($9.5M) in 2019. None of these five players are particularly good at this point, and it’s likely the Orioles would drop each of these contracts if given the opportunity. Some of these deals, like Trumbo, O’Day and Cashner’s will potentially end after 2019. But the Cobb and Davis signing are going to haunt this club for roughly the next twenty years. Sure, they may end in 2021 and 2022 respectively, but the Orioles are likely to be paying deferred money to these players until 2035 and 2037. That $56M is likely to be at least a third of the Orioles payroll in 2019 and could be more. After all, how much should the Orioles invest in a team that has minimal talent, tanking cable ratings, and attendance that is on pace to drop by 7,500 fans per game (a loss of roughly $25M in revenue)?

The Orioles do have some young talent that could lead a future contender. Presuming that Machado isn’t in an Orioles jersey in 2019, the Orioles still have some talent on the roster. Schoop was good in 2017 although he’s a free agent in 2020, and Mancini promises to be a league average LF/RF for the next few years. Chance Sisco looks decent until you realize that he has a 40% strikeout rate, a .458 BABIP, a wRC+ of 110 and almost certainly a trip back to Norfolk in his future. The Orioles rotation is in better shape with a potential top of the rotation pitcher in Bundy, and a few legit back of the rotation starters in Gausman and Cashner. They also have Alex Cobb. Without a decent rotation or starting lineup, the Orioles bullpen is completely irrelevant.

Keeping Machado would go a long way to rebuilding this Orioles franchise, but there’s no reason for him to sign a long-term deal to play with a team that’s a threat to lose one hundred games even with him putting up awesome numbers. Instead, the Orioles will have to reload by trading him at the trade deadline, along with Adam Jones, Brad Brach and any other potential free agents with value. Jonathan Schoop, a free agent in 2020, should be traded at the offseason if he bounces back from his poor start.

But there’s only so much the Orioles are going to get in exchange for rentals. Machado may be the prize of the trade deadline if he keeps this performance up, but teams are only going to offer so much to get half a season of his services. And while players like Gausman, Mancini and Givens will still have multiple years of control remaining, there’s only so much teams will give up to get players that aren’t particularly special. If the Orioles are going to add a lot of young talent, they’ll need to trade Bundy.

Dylan Bundy will enter his first year of arbitration in 2019, and will be under team control until the end of 2021. At the same time, Bundy showed an ability to pitch most of a season in 2017 when he threw nearly 170 innings and is looking like he might have an excellent 2018. If so, he’ll compare reasonably similar to Erik Bedard. Bedard had a decent 2006 campaign in which he threw nearly 200 innings, before having a dominant 2007 where he was a Cy Young candidate. With two years of control remaining, the Orioles traded Bedard after 2007 to the Mariners in return for Adam Jones, Chris Tillman and a few other pieces that helped the Os have a successful run from 2012-2016. If Bundy can continue to have a strong 2018, perhaps he can net a similar return.

The Orioles do have decent pieces in their farm system, but there’s a reason why it was ranked 23rd out of 30 teams by Keith Law this offseason. It isn’t going to help that top prospects Sisco and Hays aren’t having good starts to the season, while Mountcastle has been injured. Bottom line, the Orioles don’t have enough in the minors to support their major league team in the near future.

The Orioles are looking at a pretty bad 2018. They’re looking at an even worse 2019. And they’re likely in a situation where they’ll require a long rebuild that will cost them considerably in fan interest and attendance. Still, they are where they are, and denying the facts will only lengthen the time it will take for them to build a new winner.

It’s almost certain that the Orioles won’t be able to build a winner in 2019 to take advantage of having Schoop under control. It’s pretty likely that they won’t be able to rebuild by 2021 to take advantage of having Bundy and Gausman under control. It’s questionable whether Mancini and Givens will still be effective in a few years. In short, the only sane plan at this point is to treat all their players on the current MLB roster as expendable and rebuild. A few years of high draft picks (which they’ll get whether or not they commit to a full rebuild) is what they’ll need to try and build a winner.

Which means that it’s fun to watch Bundy and see if he’ll turn into an ace. But the real question is whether he can become the Orioles’ next Bedard and bring back enough in a trade to help the Orioles rebuild.

Chris Davis Is In Trouble

Orioles fans were hoping that Chris Davis would bounce back from a lackluster 2017. Once an elite bat, Chris Davis now has just a .164/.274/.274 line good for a wOBA of .252. According to TruMedia, this means he ranks 165th out of 180 qualified batters. Unsurprisingly, Davis’ contract has been ranked the worst in the majors by Joel Sherman. Naturally, Orioles fans are wondering if Chris Davis is finished with 4+ years remaining on his contract.

It doesn’t appear that his ability to control the strike zone is his issue. Davis has always had an issue with strikeouts, but it seems he’s improved slightly in that aspect this season. Davis’s 31% strikeout rate is within norms. His 3 to 1 strikeout to walk ratio is roughly in line with other seasons, so it doesn’t appear as if walks and strikeouts are causing him issues. In addition, his called ball and in play rates from this season are in the same range as they were from 2013-2017. It doesn’t appear that his issue is plate discipline.

That stated, he’s had 19 plate appearances against left handed pitchers and has struck out 12 times. His BABIP of 0 is not a good sign, but he’s only put the ball into play four times (one home run). He does have a high foul percentage, but he also has three times more swinging strikes against lefties than pitches put into play. It’s early, but this type of performance potentially shouts either terrible slump or platoon bat and that his days as an effective player in MLB are nearly finished.

Aside from his complete futility against lefties, his other issue is that he’s been able to put pitches into play, but hasn’t hit them hard. Matt K noticed that his exit velocity has gone from 90 mph in 2016/2017 to 82.4 mph in 2018. Pitches really need to be hit with at least an exit velocity of 95 mph for them to likely be hits, so a seven mph drop in exit velocity is terrible news for a batter. In 2018, he’s hit 13 out of 44 balls in play (29.5%) with an exit velocity of over 95 mph. From 2015-2017, roughly 45% of pitches he put into play had an exit velocity of over 95 mph. His drop in exit velocity has had a bad impact on him.

Of the forty-four pitches that Davis has put into play, fourteen have been less than .5 feet from the center of the plate and another fifteen have been between .5 feet and .95 feet. On the one hand, those are the types of pitches that batters want to put into play. The closer the ball is to the center of the plate, the easier it is to hit them hard. On the other hand, Davis only has a .180 wOBA against pitches that are between .5 feet and .95 feet, with an estimated wOBA of .360. A power hitter needs to be able to crush pitches in that range. Davis has been successful against pitches that are within .5 feet of the center of the plate (.504 actual wOBA vs .585 expected wOBA), but that by itself isn’t enough to be successful.

On the other hand, through 4/14, there have been 10,998 pitches put into play in 2018 and 3,978 of them have an exit velocity of at least 95 mph. That’s a 36% rate and suggests that while Chris Davis has gone from above average to below average in this metric, it doesn’t explain why he’s completely fallen apart. There’s a difference between below average and terrible.

Furthermore, other Statcast metrics are kinder to Chris Davis. Statcast (as of 4/14) thinks that the average pitch put into play in 2018 has a 33.5% chance of being a hit, an expected wOBA of .391 and an actual wOBA of .370. When Statcast rates Davis’s performance, it expects that he would have a .326 batting average on pitches put into play and an expected wOBA of .427. Meanwhile, Davis only has an actual wOBA of .311 on pitches put into play. If he had his expected results instead of his actual results on pitches put into play, he’d have a wOBA of .323 instead of .252. The average wOBA this season for qualified players is .337, so he’d still be below average. But he wouldn’t be one of the worst players in the majors. That's pretty much the realistic optimistic case for Davis at this point.

As Jon has mentioned a number of times, Chris Davis is slow. With a sprint speed of 25 ft/second, he ranks 285th out of 324 qualified players. It isn’t clear that this is impacting him at bat, but it certainly means that he’s not fit to play any position aside from 1B and DH. That’s not what one wants to see from a player that’s struggling to contribute offensively.

Going forward, it seems likely that he’ll improve against right handed pitching. It seems probable that he’s not going to be completely useless especially if he’s benched against lefties. Indeed, both Zips and Steamer think he’s going to bounce back with league-average offense and contribute about 1 WAR over the remainder of this season.

Still, he’s getting to the point where he’s not a fulltime player. Unless he makes drastic improvements against left-handed pitching, the Orioles will have to concede that point this season despite all of the money he’s owed. A platoon 1B/DH is worth at most $10M per year. Given that Davis still has nearly five years and nearly $115M remaining on his contract, that’s not what Orioles fans want to hear. The fact that his effective range is decreasing is also bad news. If he can’t do damage to pitches that aren’t in the center of the strike zone, it will be easy for opposing pitchers to strike him out.

It’s very likely that the albatross of Chris Davis’s contract is going to haunt the Orioles for years to come and make it even more difficult for them to compete in the future. It’s looking almost inevitable that he’ll be released before his contract ends.

The Rays' New Media Deal Won't Help Them Compete With The O's

According to the Sports Business Journal, the Rays are in discussions to sign a long-term extension with Fox Sports Sun. Fox is expected to offer roughly $50M in 2019, and offer an average of $82M per year. If this is accurate, and presuming a linear rate of increase, this would result in an increase of 6.5% per year.

Such a large annual increase would be odd. Normally, baseball media rights deals result in a yearly increase between 3% and 4%. It’s worth noting that a 3.5% linear yearly increase of a 15 year deal starting at $50M would result in the Rays receiving $82M in the last year. This makes me wonder if the deal doesn’t offer $82M per year, but rather $82M in its final year. If this is in fact the case, the Rays would receive $980 million for 15 years as opposed to the $1.2 billion over 15 years they’d receive if they did get an annual increase of 6.5%. Then again, the Rays received $15M in 2012 but the Sports Business Journal claims they received $35M in 2017.

In recent years, both the Diamondbacks and Cardinals have signed new media rights deals and details of these deals have made it into the media (the Reds also extended their media rights deals, but no one has been able to report the terms). Here’s how the Rays' deal (using both 3.5% annual increases and 6.5% annual increases) compare to the Cardinals' and Diamondbacks' deals.

Depending on which annual increase is used, the Rays' deal is either slightly better than the Cardinals' and Diamondbacks' deal or slightly worse, but either are in a similar category. In either case, the Rays would start out earning slightly less than the Diamondbacks or Cardinals, but could end up receiving slightly more depending on the final terms.

While it has been reported that the Rays aren’t allowed to broadcast their games in the Miami DMA, both MASN and the RSDC stated in the MASN case that the Rays media territory includes the Miami DMA. Presuming this is accurate, then the Rays' media territory has roughly 7.2 million cable and satellite subscribers, of which 1.7 million are in its core market of the St Petersburg DMA. Note that all of these subscribers may not have access to Fox Sports Sun. This is significantly larger than the Cardinals' media territory which has 5.1 million subscribers and a core market of 1.2 million as well as the Diamondbacks' territory which has 4.1 million subscribers and a core market of 1.6 million subscribers. However, the Cardinals always have high ratings and had an average of 94,000 viewers per game in their core media market in 2017. The Diamondbacks had above average ratings and on average 66,000 viewers per game. The Rays have below average ratings and only 52,000 viewers per game in their core market. Unlike the Cardinals and Diamondbacks, the Rays don’t have particularly good attendance, suggesting limited interest in the Rays. The Rays may have a stronger market than either the Diamondbacks or Cardinals, but both those teams have stronger fan interest.

The Orioles/Nationals shared media market is far larger than the Rays, Cardinals or Diamondbacks media market but includes two teams instead of just one. MASN's core DMAs of Washington and Baltimore are roughly the same size as Miami and Tampa Bay combined and has 9.5 million total cable and satellite subscribers as well as 3.2 million subscribers in its inner core. However, MASN has roughly 5.9 million subscribers compared to the Rays 5.6 million subscribers in part due to MASN's failure to gain carriage in North Carolina. Based on solely a market size analysis, it would be reasonable to expect the Nationals and Orioles combined to receive slightly higher media fees than the Rays and Marlins combined. That stated, the Nationals and Orioles have higher ratings than the Rays and Marlins and are in more valuable markets making them clearly more valuable properties.
It is hard to determine how much MASN will pay the Nationals and Orioles in media rights fees because the rates are set to change every five years based on network revenue. In addition, Allen and Co, MASN, the RSDC and the Nationals each have their own drastic ideas of how fair media rights should be determined.

Allen and Co, on behalf of Comcast, offered a deal in which Comcast would offer both teams starting in 2012 a media rights fee of $42.5M and increasing by 4% annually until 2032. This would result in both teams earning roughly $1 billion each over the fourteen years from 2019-2032, or roughly the same as what the other teams in this sample are receiving. Given that the Nationals and Orioles are in a stronger market than all of these teams, this offer would be disappointing. Unsurprisingly, MASN didn’t accept Allen and Co’s offer.

Instead, MASN proposed their own rights fee for 2012-2016, as did the Nationals. In addition, the RSDC made a decision about the appropriate rights fee for 2012-2016 that was ultimately overturned. Any attempt at guessing what any of these parties might request over 2019-2032 requires a lot of conjecture.

That stated, MASN offered $45.7M in 2016 with a 7.7% annual increase. That rate of increase projects to roughly $57M in 2019 -- or more than any other team in the sample received. This doesn’t take into account that MASN was likely to receive an increase in revenue as a result of renegotiating its contract deals with other cable providers.

The RSDC felt that $66.7M was fair value for 2016. This is significantly higher than what any other team in the sample received in 2019 -- and presumably the teams’ rights fees would go up from 2017-2019. It’s likely that such an amount would only be reasonable if the Nationals/Orioles shared media territory is significantly more valuable than any of the other teams in the sample.

Meanwhile, the Nationals requested $127.4 million in 2016. Such an amount would be larger than any of the teams in the sample received in 2032. It’s likely that the Nationals request for 2019 would be roughly the same as what the Cardinals, Rays and Diamondbacks receive all together. This seems to be an awfully optimistic request.

Based on my understanding of the economics, I project that MASN's offer was on pace to be worth $1.45 billion over the fourteen year period, the RSDC's offer was on pace to be worth $2.1 billion over the fourteen year period and the Nationals' offer to be worth $3.7 billion over the fourteen year period. If so, the deals look like this.

These graphs always look a bit weird when I include the Nationals' request. Here's how the chart looks without them.

It appears that the Rays' media deal appears to be fair value compared to what the Diamondbacks and Cardinals received. It is likely that the Rays will receive less in media rights fees than what the Nationals and Orioles will receive in rights fees from MASN, but that is because the Nationals'/Orioles' media territory is more valuable. This media deal isn’t going to change the Rays' financial situation and likely means they’re going to struggle to maintain a competitive payroll going forward.