A Holliday Surprise

by
August 17, 2009

“It takes a big man to admit he was wrong, but takes an even bigger man to make fun of that man”.

-Unknown, but I’d guess that it would have to be Jack Handey.

I was wrong. I said the price – Brett Wallace – was too much for the Cardinals to pay for a two month rental of Matt Holliday. Factoring salary and production I reckoned Holliday was worth about $8 million of surplus value. According to studies, a top fifty hitting prospect is worth on average $25 million dollars in surplus value. Including Wallace, the Cardinals also gave up two solid prospects (Clayton Mortensen, Shane Peterson) for an additional $3 million worth of surplus value. The math, I figured was simple enough: $28 million is better than $8 million.

I underestimated how much Matt Holliday would enjoy his return to the National League. I mean, he is really, really enjoying it. Holliday is hitting like a man possessed, to the tune of a .459/.490/.776 line in 85 at-bats, something I don’t think anyone could have predicted. Coincidentally, the Cardinals have distanced themselves from the Cubs and are sitting atop the NL Central with a 5 game lead. According to coolstandings.com, their playoff odds have more than doubled from 40% on July 24th (the day they acquired Holliday) to 83% today, and the Cardinals are now on pace to win 91 games. Holliday can’t be credited for doing this single-handedly, obviously, but his performance has been worth +2.01 in win probability added; quite a boost. Obviously he’s been playing over his head, and I still feel good about my expected value figures, but I think I neglected to see how much the deals increased the Cardinals’ playoff odds.

The Cardinals paid a high cost for all their wheeling and dealing, trading six of their top prospects to get Holliday and Mark DeRosa, but the cost looks to be worth the reward, as the difference between an 87 win team to a 91 win team can mean a lot. In the book Baseball Between the Numbers, Nate Silver calculated that reaching the playoffs is worth about an extra $30 million dollars to a club’s bottom line. Flags fly forever, and thanks to Mozeliak’s dealings, the Cardinals are in line for their 23rd postseason appearance in franchise history, barring an unforeseen meltdown.





 

Erik Manning is the founder of Future Redbirds and covers the Cardinals for Heater Magazine. You can get more of his analysis and rantings in bite-sized bits by following him on twitter.

34 Comments
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someguy132
14 years ago

but from an expected value standpoint, werent you right? i suppose you didnt include the EV of a playoff spot, but to make up the 20MM you would have to say holliday increased their playoff odds by ~67%, which seems ridiculous. isnt this effectively the same thing as saying the raul ibanez signing was a good one?

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Erik Manning
14 years ago
Reply to  someguy132

From the expected value, I was right. In a sense. Holliday probably increased their odds of reaching the playoffs by up to 10% (if you look at PECOTA’s adjusted odds, I think that’s right).

Figure another 4-6% from DeRosa in expected (not in actual) and that’s another $5 million worth in value coming to St. Louis from both deals. Neither deal made it a slam dunk that the Cardinals were going to beat out the Cubs, and it’s still not with several weeks to go. It was a gamble, but it’s proven to be a worthy one.

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Sam
14 years ago
Reply to  Erik Manning

Erik, I believe I mentioned this before, but the expected value criterion does not appropriately adjust for risk involved in a prospect. In fact, the author himself (Victor Wang) said that issues about risk aversion leading to risk premium calculations are absent in the prospect evaluation. That alone should go a long way towards making a relatively sure thing like Holliday a much more attractive proposition than the study claims he is.

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B
14 years ago
Reply to  Erik Manning

Other things can be factored in too – getting into the playoffs certainly has value, after all what good does $25M in value do you if you get it in years you aren’t competetive, whereas the Cardinals are competetive this year and Holliday may be a huge factor to get them into the playoffs. How much does it factor in? I don’t have the slightest clue…

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WY
14 years ago
Reply to  someguy132

“but from an expected value standpoint, werent you right? i suppose you didnt include the EV of a playoff spot, but to make up the 20MM you would have to say holliday increased their playoff odds by ~67%, which seems ridiculous. isnt this effectively the same thing as saying the raul ibanez signing was a good one?”

Maybe it’s just me, but I think it’s perfectly fine to wait and see what happens before making these sorts of declarations. A lot of people seem to want to jump in and declare such and such trade or signing as a win, a loss, a success, a failure, etc. Yes, hindsight is 20/20, but so what? Why the rush to judgment?

If Ibanez winds up having three great seasons, who is to say the signing was a bad one just because many people (myself included) thought it was a bad idea at the time?

Likewise, if Holliday helps the Cardinals win a World Series and the three prospects that Oakland got all flop and are out of baseball by 2012 (not that I’m not saying this is likely), then why call it a bad trade for the Cardinals? Can’t we admit that our projections are sometimes inaccurate? “The proof is in the pudding” — that’s the cliche that I think applies here.

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