The Lessons of the J.D. Martinez Trade

Last night, the Diamondbacks acquired J.D. Martinez, one of the very best hitters in baseball. In order to land the best power hitter available, they surrendered… well, three people who play baseball for a living. As Carson likes to remind me regularly, everyone we talk about here is an elite baseball player, relative to the human population. Compared to you and me, these guys are awesome. The Tigers have two more world-class baseball players today than they did yesterday.

But, relative to other professional baseball players, well, these guys aren’t exactly the ’27 Yankees. Dawel Lugo, the main piece in the deal by the Tigers’ own admission, was graded as a 40 Future Value guy and ranked as the Diamondbacks’ 10th-best prospect over the winter. Sergio Alcantara is a glove-first shortstop whose upside is probably Nick Ahmed, or something along those lines. Jose King is an 18-year-old in Rookie ball and signed for $75,000 not that long ago.

Based on what other players have gotten traded for, this return feels very light. And that’s not exactly a controversial opinion.

There are always going to be disagreements in the valuation of players, and projecting young players is really hard. The last time the Tigers got universally crushed for trading a good big leaguer for some questionably valuable prospects, they received Robbie Ray in return. And then they gave him away a year later. But maybe Lugo turns out to be the hitting version of Ray, developing into a far better big leaguer than expected as a minor leaguer. It happens. It happened to the very guy these guys all got traded for!

But when we see trades like this, where pretty much everyone in the public sphere agrees that one team got the better end of the deal, we can either choose to believe that a major-league organization made a very public mistake in valuing the players involved in the deal, or we can try to figure out why an apparently lopsided deal happened in the first place.

As teams have become a bit more sophisticated in how they look at player valuation, it has gotten a bit harder for me to regularly conclude that a team just completely bungled a trade. We’re mostly past the days of a GM making decisions by himself, eyeballing a guy he likes and some prospects who won’t be ready while he’s still in charge, then making a self-interested decision to improve the club without much regard for the future. Everyone now wants value above all else, and the ways in which teams value players have never been more similar.

And it’s not like it was a secret that J.D. Martinez was available. The Tigers have been publicly talking about trading present value for future value since the offseason, and as a pending free agent who wouldn’t fit in the club’s reduce-the-payroll plan, Martinez was their most obvious trade chip. This wasn’t a case of the Tigers moving a guy without surveying the league to find out his value. Everyone who wanted to upgrade their offense knew that Martinez was going to get traded in the next couple of weeks and had ample opportunity to make their interest known.

So, why didn’t anyone else bid more? Unless we think the Tigers’ front office is grossly incompetent and took a dramatically lesser offer than what another contender bid two weeks before the deadline to trade him, it’s at least worth considering that this was J.D. Martinez’s market value right now. Maybe it shouldn’t be. Maybe it seems absurd that it is. But we should at least think about whether this trade tells us anything about what teams are paying for rental corner outfielders in 2017.

Among the most basic tenets of pricing theory is the need for multiple interested bidders to create enough demand to force the eventual buyer to pay something close to a market-rate price. Unfortunately for the Tigers, there aren’t a lot of contenders with obvious needs for a short-term upgrade in the corner-outfield spots.

Prior to acquiring Martinez, the Diamondbacks had the worst projected left-field situation in baseball; their interest made plenty of sense. But the other teams with big holes in left field?

Well, the Nationals rank 27th in projected left-field production, but Brian Goodwin is currently playing pretty well, they expect Jayson Werth to return, and they’ve a double-digit lead in the NL East. That reduces the need incentive to buy a rental, as the club in question would only be acquiring a postseason upgrade for a tournament that is still mostly defined by randomness.

The Rockies reportedly inquired about Martinez, but they already have more outfielders than they know what to do with, and while Martinez is better than their internal options, giving up future value to push their big free-agent acquisition (Ian Desmond) or one of their most recognizable players (Carlos Gonzalez) out of a job probably doesn’t make sense, especially with other internal options that cost nothing to acquire.

The Astros could probably use an upgrade in left field, but they have something of a history with Martinez and trying to get that band back together probably wouldn’t have been a great idea. Plus, like the Nationals, their huge divisional lead lessens the incentive to give up a significant package for a rental. Moreover, if they add a bat, it should be a left-handed one to balance out their already overly right-handed lineup.

The Dodgers were speculated as a potential landing spot, but again, massive division lead, and Martinez would be displacing someone like Chris Taylor, who the teams probably wants to keep playing somewhat regularly. And even if they wanted to replace Taylor, they have Alex Verdugo playing well in Triple-A. Or they could just acquire a first baseman on the cheap and move Cody Bellinger back to the outfield. Martinez would have made them better, but they didn’t really need him.

You can basically go through every contender in baseball and not really find another team like the Diamondbacks. They’re the only team who had the obvious corner-outfield need and the incentive to upgrade for the rest of 2017. Other teams were probably interested, but likely not interested enough to really push that hard for Martinez.

The other side of pricing is, of course, supply. And while there don’t seem to be that many teams buying corner-outfield rentals, there are a bunch of teams selling them. The Mets have Jay Bruce and Curtis Granderson hanging around. The Orioles are shopping Seth Smith. The White Sox would move Melky Cabrera for someone with a pulse.

And those guys are trumped by the potentially available corner outfielders who aren’t just 2017 acquisitions. That group could potentially include guys like Andrew McCutchen and Marcell Ozuna, so even if one of the teams that could have been interested in Martinez was indeed looking for an outfield upgrade, they may have preferred a player who would help them next year, as well, and are hoping to pay a higher price for a guy they won’t lose this winter.

Toss in Martinez, and this certainly looks like a high-supply, low-demand market. I’m sure we’ll see a few of these guys traded before July 31st, but given the buyers and sellers, I wouldn’t be surprised if the other rentals all ended up being August salary dumps instead of moves for meaningful prospects.

With Arizona having solved their left-field issue, it’s not clear who else is going to be aggressively bidding for short-term corner outfield upgrades now, and with the Martinez deal having set a very low bar for the current market rate on rent-a-corner-bat types, I can’t imagine other buyers are going to be lining up to give up real value for significantly lesser players.

Sure, at this kind of price, it’s pretty easy to say that every potential contender in baseball should have been involved. But there are real frictional costs involved with making a deal just because it’s a good value addition, especially for a team displacing a player who’s performing well or is considered a significant part of that team’s future. Even if, as a GM, you thought this Martinez price was so cheap that you should just outbid the Diamondbacks and then figure out what to do with your new surplus later, the same market forces that caused you to get Martinez on the cheap would likely make it difficult to make a reasonable second move to resolve your newly created logjam.

In reality, this just looks like the Tigers ended up in a bad situation, trying to sell something of real value to a bunch of buyers who didn’t necessarily need the thing they were selling. If Washington, LA, and Houston didn’t already have monstrous division leads, it very easily could have been a different story. Or if most of the American League wasn’t a puddle of mediocrity, maybe some of the Wild Card contenders from that group would have been more aggressive. But there’s a reason I identified only nine definite buyers a few days ago, and the Tigers may have realized that if Arizona went another direction, they weren’t going to have much of a market left.

Again, I’m not trying to play devil’s advocate here. I think you can make a decent case that, if this was the best offer for Martinez, maybe you just keep him and make him a qualifying offer instead. Is this package of prospects clearly better than a draft pick — of undetermined location, since your compensation now depends on your market-size calculation — next summer? I don’t think it definitely is, and perhaps in the next two weeks, some contender would lose their starting right or left fielder and demand would increase. If Bryce Harper blows out his knee tomorrow, the Tigers are probably going to be frustrated they moved Martinez early for what looks like an underwhelming return.

But without just appealing to authority on every trade — teams absolutely still do make valuation mistakes — it seems like the fact that Martinez got moved for so little might suggest that this is just a pretty lousy time to be selling a corner outfielder. Everyone knows Martinez is good. Everyone knew he was available. And yet, this is what he brought back.

After years of watching valuable players get swapped for short-term upgrades, no one really seems to want rentals anymore. And because one of the best players available happened to also play the position that few teams were looking to upgrade, the Diamondbacks got a star for a pittance. Good for them. Sucks for Detroit.