Yesterday, Toronto GM J.P. Ricciardi created quite the stir when he told several reporters that he was going to start listening to offers for Blue Jays ace Roy Halladay. He talked with Halladay about potentially waiving his no-trade clause, and both have made public statements about this possibly being the right time for a deal. Certainly, Ricciardi knows how heavy the demand is for starting pitching right now, and with the lack of availability of premium arms, the bidding for Halladay could get fierce. That is what J.P. is counting on, I’m sure.
So, if you’re a contending team in need of a starting pitcher, and the best pitcher in the game just became available, how much should you offer? What is Roy Halladay worth?
First off, the basics. Halladay is under contract through 2010. He will make about $7 million over the remainder of 2009, and is due $15.75 million next year. He will then be eligible for free agency. We know he’s worth more than his current salary, of course. $23 million for nine months of Roy Halladay is a pretty big bargain, even in today’s economic market.
To figure out Halladay’s market value, we have to answer the question of what Halladay would get if he were declared a free agent tomorrow, but then only allowed to sign a deal taking him through 2010.
First off, let’s look at Halladay’s win values over the years. Since 2002, he’s been worth about 46 wins in 1,585 innings, or right around an average of six wins per year. He’s on pace for about a seven win season this year, and he shows no signs of slowing down. Going forward, ZIPS projects a 3.21 FIP and 106 innings in his remaining 15 starts this year, which would be worth another 3.5 wins. Halladay is a +6 to +7 win pitcher, easily the best in baseball.
The market value for wins took a tumble on the low end last year, but at the high end, teams were still willing to pay around $5 million per win for premium free agents. Based on that, we’d say that Halladay’s fair market value is something like $30 to $35 million per season. However, those $5 million per win contracts were all long term deals, which carry extra risk to the organization and therefore pull down the annual average value that teams are willing to pay. With only a 15 month commitment, the long term risk with Halladay is substantially lower, and teams should (and will) pay a premium for that risk avoidance.
So, for a Cy Young contender only under contract through 2010, $5.5 million per win is probably a more accurate number to use. That puts Halladay’s market value between $33 and $38 million per year.
If we settle on $35 million as a middle ground, which puts him around a +6.5 win pitcher, we then Halladay’s value through the end of his current contract is about $52 million – a full year of 2010 plus a half year of 2009. But, you can’t forget about the fact that he’s very likely to be a Type A free agent at the end of 2010, and the acquiring team would be able to recoup two quality draft choices if they didn’t re-sign him as a free agent. Thanks to some good work by Victor Wang, we can see that the value of Halladay’s Type A status is around $8 million or so.
$52 million for Halladay’s performance + $8 million for the draft picks = $60 million in total value. He will be paid $22 million over that time frame, so 60-22 = $38 million.
To acquire the Jays ace, teams should be expected to surrender something like $40 million in value.
What does $40 million in value look like? Something like three terrific prospects who are not that far from the majors. No one’s giving up players from the Matt Wieters/David Price mold, but it’s going to take several players from that second prospect tier, the top 25-50 type guys.
You get the idea. If the Blue Jays trade Roy Halladay, they’re going to ask for the moon. And they should. He’s worth it.
Dave is the Managing Editor of FanGraphs.