Trade value

[Weirdos19]

I don't understand the idea of people getting all worked up about getting the right value in trades when a free agent signing would be imminent afterward.

Example:

Say the Brewers traded Cameron for Melky Cabrera, as was rumored. That wouldn't be the complete deal. The complete deal would be Cameron for Cabrera and say Adam Dunn, Bobby Abreu, or even Oliver Perez.

 

Another example would be if the Brewers traded Prince for Bucholz and Ellsbury. It would actually be Prince and Cameron for Bucholz, Ellsbury, and Swisher, because there is no way that deal is done without a backup plan.

 

Better teams have been doing this for years. We've just never been on this side of a deal like that.

[monty57]

In all of the threads where these trades have been discussed, the monetary saving has been hashed through in great detail.

 

The only reason to do a Cabrera for Cameron deal was the cost savings. It looked like the deal was done until New York wanted the Brewers to pay some of Cameron's salary or take Igawa and his expensive contract on in return, not leaving nearly enough to sing Dunn, Abreau or Perez. The deal fell through when the cost savings for the Brewers wsan't enough to cover the substantial downgrade from Cameron to Cabrera. Remember, Igawa had another couple of expensive years on his contract, leaving the Brewers with less money in the future.

 

I didn't follow the second example too closely, as it was pure fan speculation, and to the best of my knowledge was never anything that was considered by either the Red Sox or the Brewers.

 

You always have to worry about what value you are receiving in any deal you do. The most important factors in any deal are price and value. Opportunity costs must of course be considered as part of the value involved.

 

For example, let's say you have a new $1,000 flat-screen TV. Would you accept it if I said I'd give you $5 for your TV set? If I did this, you would no longer have to worry about paying for cable / dish and would save electricity, so now you'd have another $100/month or so to afford something else you'd like. In this case, the savings don't measure up to the fact that you'd be getting the raw end of the deal on me giving you $5 for a $1,000 TV. Now, if I were to give you $900 and you really had something else you wanted for that $100/mo, you may make the deal. You lose a little on the TV, but can now afford something you want more.

 

I hate to re-hash the Cameron for Cabrera debate, as it had a long thread specifically for it, but Cameron is a valuable commodity. It can be argued whether he's worth $10MM, although it seems that he's at least worth something close to that. Cabrera seems to be little more than someone to fill the vacancy in CF, and Igawa would likely pitch in AAA, so the Brewers would take a significant step downward in order to save around $5MM this year and still owe Igawa (I believe) $8MM over the next two years. Cameron can help us win this year, and his entire $10MM will be off the books next year, allowing us to pay for a better FA next year instead of being stuck paying Igawa and Cabrera to be below average players. It just doesn't seem like the price equals the value in that deal.

 

Now, if you're talking about Hall, he is not nearly worth the money he's being paid, so he is the type of player you give away for nothing simply to save salary. There are numerous contracts in MLB like this, including the aforementioned Igawa who had negative value for the Yankees in the trade. When someone is getting paid far more than they're worth, it's a good idea to try to dump him off on someone else. Cameron is not in this category.

[Oldcity]

Example:

Say the Brewers traded Cameron for Melky Cabrera, as was rumored. That wouldn't be the complete deal. The complete deal would be Cameron for Cabrera and say Adam Dunn, Bobby Abreu, or even Oliver Perez.

Few problems with that. You should still want to get equal value in a trade, even if you're using monetary savings afterwards. Melky + 9.5 mil was still likely not equal value for Cameron. Second players like Dunn, Abreu or Perez will have to agree to sign here. You can try to sign one of them, but it's no guarantee. Third, your example of the complete deal isn't totally complete. The complete deal would be Cabrera and Dunn/Abreu/Perez for Cameron plus the rest of the free agent's salary. Dunn is going to cost more than ten million, so you need to factor in the remainder of his contract as well.

[TooLiveBrew]

In the OP's scenario, to the Crew there's certainly more value implied than just Cameron if part of the reason for the trade is to free up payroll room. However, in the trade itself it's just wasting resources to deal away a player for less than he is worth... especially when he plays a premium defensive position well.

 

The Brewers don't have to trade Cameron. The only ways I can think of where a guy's trade value is suppressed like the OP describes is something like when Terrell Owens was mouthing off & demanding trades out of SF & Philly, or when a guy is nearing a contract deadline (end of arbitration seasons/contract). Even in those situations, though, if the player's talented enough there should be multiple suitors to help drive up the value.

[GAME05]

i don't see how there'd be any guarantee that a FA signing would automatically follow a trade such as Cameron for Melky. maybe MA just wants to cut payroll for next year, or maybe Melvin was thinking about the trade because it would have brought us a long-term solution to CF.

[monty57]

Game05, didn't Melvin state that after the Cameron trade fell through the Brewers weren't going to have enough extra cash to sign a starter and a closer? I think Melvin was looking to do this deal so that he could fill the holes at starter and closer.

 

The deal fell through and he immediately went to the table with the agents for Wood, Hoffman and Fuentes. None looked like they were going to sign, so he started to pursue Looper. That didn't work out, and they "aggressively went after" Hoffman, who signed, leaving us with a closer and no serviceable starter that won't begin the year in the rotation. I really think the primary reason they were looking to make that deal was that they could use the money on pitching. Once NY said they needed money back or Igawa thrown into the deal, it fell through. If Melvin thought Cabrera was a good long term solution, he would have made the deal for Cabrera and Igawa, as we would have saved money and got a long term solution at CF.

 

It seems to me that in Melvin's mind, Cabrera + $9.5MM had equal value to Cameron @ $10MM, but Cabrera, Igawa and roughly $5MM has less value than Cameron @ $10MM

[Weirdos19]

i don't see how there'd be any guarantee that a FA signing would automatically follow a trade such as Cameron for Melky. maybe MA just wants to cut payroll for next year, or maybe Melvin was thinking about the trade because it would have brought us a long-term solution to CF.

My point is that you don't make that trade without at least a verbal commitment from a free agent.

 

Plus, the $1000 TV debate. Let's make it a car instead. I would guess you would have to know how much you owe on that car and how much the payments on the new one would be. And, is that car in the rich neighbor's driveway after you pay it off??? If I had a $10000 car I had to make payments on and a guy offered me $2000 for it when I knew it would be gone next year and I'd have to replace it? I may sell it and turn the profit into a down payment on a new car.

[monty57]

Weirdos, that's exactly the point I was trying to go for. It's all about value and price. If you are getting the correct value in return, you would be willing to make the trade. If not, you don't do it. What you can do with the extra money is what economists call your opportunity cost, and, as you stated in the original post, that has to be considered in the value of the deal. While you are correct that some posters fail to recognize opportunity costs, I think there was a lot of discussion on what we would do with the savings in the earlier discussion threads, and as I mentioned earlier, I think Melvin was only looking to do the Cameron deal for the savings.

 

You car example is probably better than my TV, as there is a future stream of payments involved. In the Cameron deal, we were willing to trade NY a well-running older sports car we still owed a big one-year lease agreement on for a more economical compact car that would still get us from point A to point B for a cheaper price. Some people would laugh at us for driving this compact vehicle, but hey, at least we're able to drive it for a couple of years, and it would allow us to buy the work truck that would help our business. Then, the Yankees insisted that we also take a broken down Yugo that they were conned into paying Porsche prices for. Since paying for the Yugo while driving the compact would keep us from buying our work truck, we decided to keep our well-running sports car through it's one-year rental agreement.

 

Confusing enough?