Market Value Contracts

I have the pleasure of running a team in a long-established (~9 years) and well-ran 28-team dynasty league that mimics the real-life requirements of being a GM better than any league I have seen; this includes salary caps of varying size for teams (i.e., ranging from small-market teams to teams that would make Mark Ilitch –and Scott Boras — proud; ~$106 million average). I also recently joined a startup 15-team league where every team has a $170,000,000 salary cap and inherits players from their home teams (e.g., I am the Seattle Dodgers and had the opportunity to keep up to 15 players from each team). In each league, teams have an 25-man active roster that accumulates stats.

Over the course of two days, league members in both have engaged in discussion (i.e., disagreed) over the trade value of players with market-value contracts. In the startup league, Giancarlo Stanton, with his $25 million annual salary through 2028 (14.7% of salary cap), is the player in question; in the other, Troy Tulowitzki with a maximum length contract (4 years with player option) signed for $15,000,000 (~14% of an average team’s cap).

The question is: How much value do these players have? Each is clearly elite at his respective position. In a standard re-draft league, expectations would be high for both. But, how does that change when considering their contracts. Should we only look at the quality of the player? How much should owners be concerned with whether a player’s contract provides excess value? Owners in each league seem to have divergent views with not much middle ground.

Since there is an argument to be made that Stanton is below market value since MLB teams have a lower average cap than $170M, I am going to focus the remaining conversation on Tulowitzki while also pulling in the recent David Price signing — in, you know, the real stuff.

One year ago, Tulo re-signed with his prior team for $15M for 4-5 years. This may not have been his true maximum market value (we have a rule that players who finish near the top at their respective positions are protected; unless a team signs the player above a certain percentage of the prior owner’s contract offer, the team loses a 1st round pick), so there may be some excess value. However, that excess value could very well be consumed once you consider Tulo’s 2015 season: Coors to Rogers Centre probably outweighs NL to AL move; again, Tulo played only 75% of total games.

So, after that prologue, back to the dilemma: what is Tulo’s trade value? Teams trading for him are gaining the rights to pay a slightly below Tulo’s market value last year. Thinking in the context of MLB, what would David Price’s value be 1 year into his contract with the assumption that he pitches equal to or only slightly less than his prior performance? Boston would have presumably received the best, or at least safest, year of the contract. It’s too simple to say teams could have just signed Price this year (perhaps financial restrictions or team’s expected ability to compete in 2015 prevented the signing), but it is not too simple to say that both contracts — Price in MLB and Tulo in dynasty league — are less attractive in their second year than their first.

In my league, Tulo was traded for four minor prospects (using John Sickels’ ratings, they ranged from C to C+) headlined by Hunter Green and Isael Soto. In re-draft leagues or leagues without salary caps, this would be a terrible, ridiculous trade that would result in pitchfork-wielding mobs clamoring collusion. But, considering contracts and considering the contract’s value in the league market, I would find it hard to justify parting with much more than that. Perhaps the 4 assets could have been consolidated into 1 better prospect, but the team trading for Tulo may just walk away.

Next offseason, what would MLB teams be willing to offer to acquire David Price? Or, what is Jon Lester’s trade value considering his almost $26M annual salary contract signed last year. There is a reason why teams often trade for players  with short contractual commitments or who are cost-controlled.

I don’t know the answer, but I think it’s an important question for us in contract dynasty leagues to consider.


Warning: count(): Parameter must be an array or an object that implements Countable in /home/fakebase/public_html/wp-includes/class-wp-comment-query.php on line 405

2 Trackbacks & Pingbacks

  1. Exploring Market Value Contracts More | Fake Baseball GM
  2. Exploring Market Value Contracts More | Fake Baseball GM

Leave a Reply

Your email address will not be published.


*