Trade Proposal Fail

Read this article by Ken Rosenthal at FOX Sports. Let it sink in. Experience his ideas. When you’ve done that, move down to the next paragraph.

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Rosenthal proposes a multi-team trade involving the Toronto Blue Jays, the Philadelphia Phillies, and a third team:

So, here’s the deal: Lee goes somewhere for prospects. The Phillies include the prospects in their package for Halladay, maybe keep one or two for themselves. Halladay gets his extension, the Jays get a bounty of young players and some lucky team gets Lee for one year at his bargain salary of $9 million.

That’s right: Ken proposes that the budget-constrained Phillies send away a 6-7.5 WAR pitcher (Lee) making $8 million in 2010 in an effort to acquire a a 6-7.5 WAR pitcher (Halladay) making nearly $16 million. He suggests that the Blue Jays — desperate to recoup value on the sure-to-depart pitcher — would pay for part of his salary. Unless the Jays cover at least $10 million, there’s absolutely no reason why this trade proposal even begins to make sense.

That is the biggest offense in Rosenthal’s article, but he leads off with the following:

I have no proof that the Phillies are trying to move left-hander Cliff Lee as part of a three- or four-team trade for Blue Jays right-hander Roy Halladay.

But I’ve got a hunch.

“I have no proof; I’ve got a hunch.” The mark of true professional journalism, folks.

Trading Lee, on the other hand, would help the Phillies save an additional $2 million or so in salary. 

This doesn’t make sense. Lee is earning half as much as Halladay in 2010. In order for the Phillies to “save an additional $2 million or so,” the Blue Jays would have to send $10 million to the Phillies along with Halladay, which would be an outrageous gesture on the part of the Jays.

Trading Lee also would bring the Phillies better prospects, enabling them to send fewer of their own top young players to the Jays.

The Phillies would not get as strong a package for Lee as they would give for Halladay.

There was no editing in the above quote — that’s how it is printed in the article. So not only would the Phillies add on more salary (unless the Jays inexplicably include what represents 12% of their 2009 payroll), they would also be losing prospect value for a break-even exchange or, at the most generous, a very slim upgrade of 0.3 WAR or so in the starting rotation.

Of course, this entire proposal assumes that the Blue Jays have leverage, which they don’t. Halladay has said that he wants to be traded by spring training or he will not waive his no-trade clause. So the Jays have about two months to make a move. If they don’t trade him, they risk only recouping two draft picks (a first-rounder and a sandwich pick) and that’s only if they offer him arbitration. There’s a realistic possibility that they don’t depending on how their payroll shapes out over the next 11 months.

The Jays could still trade Halladay by July 31, but that would require A) convincing Halladay between the start of spring training and July 31 to waive his no-trade clause and B) getting back even less for Halladay than in a trade prior to spring training.

Toronto has absolutely no leverage. The Phillies can offer them a modest package that includes J.A. Happ and Michael Taylor and a lower-tier prospect like Anthony Gose. That should be enough to entice the Jays to relinquish Halladay (if new GM Alex Anthopoulos is interested in not repeating the errors of his predecessor J.P. Ricciardi).

Instead of having only one premier pitcher, the Phillies will have two — so long as they are willing to surpass the $140 million budget limit they seem to have set for themselves. The Jays actually get some return on Halladay instead of settling for two compensatory draft picks — silhouettes of players at this point — in the draft.

Neither the Jays nor the Phillies should have any interest in involving a third team directly in a Roy Halladay trade. The Phillies can subsequently attempt to unload Joe Blanton, who will likely make $6 million in arbitration, to clear some salary. Involving a third (or even fourth, as Rosenthal suggests) only cuts into the return value for both the Phillies and the Jays.

UPDATE: Rosenthal was right. See apology here.

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22 comments

  1. André

    December 12, 2009 03:08 PM

    I don’t agree that Toronto doesn’t have leverage. I’m sure that they would love to trade Halladay if it makes sense for them, but the suggestion that they don’t have “leverage” implies that they have to trade him by spring training, which they don’t (no one is holding a gun to their heads) or that there is only one team willing to deal with them (apparently not true).

    Halladay is a limited commodity (there is only one of him), and any time you have a limited commodity that others want (more than you have of the commodity) you, by definition, have leverage, especially if you could use that commodity yourself.

    But if the Phillies were the only team willing to deal, and Halladay refused to play at all next year, the Blue Jays literally could not pay him, or Brandy Halladay was threatening to murder AA’s kidnapped baby if her husband didn’t get traded, then sure, they would not have any leverage. Saying they don’t have any is lazy and entitled thinking.

  2. Bill Baer

    December 12, 2009 03:22 PM

    Andre, I hope you don’t mind but I’m going to respond to specific parts of your comments for clarification.

    the suggestion that they don’t have “leverage” implies that they have to trade him by spring training, which they don’t

    Right, they don’t have to trade him by spring training. They can carry him on their roster into 2010 and then attempt to unload him by July 31.

    Teams know this, however. The Jays will get much less on July 31 for Halladay than they will get between now and the start of spring training. This is the Jays’ last shot at really recouping value on their star pitcher. Otherwise, they’ll have to settle for a mediocre package before August or the compensatory picks after the season.

    If I’m Anthopoulos, I am dead set on trading Halladay soon. Other teams know this, and thus the Jays have no leverage. They don’t have to throw in another good prospect because they know Anthopoulos is in a hurry to trade Halladay.

    or that there is only one team willing to deal with them

    When you boil it down, there are only five teams that really make sense for Halladay. When you add in different pieces of information, you can deduce the Phillies as the only reasonable landing spot.

    He wants to play for a team with a spring training facility in Florida so he can spend more time with his family.

    Bye-bye, Mariners and Angels.

    The Blue Jays won’t want to deal Halladay within the division.

    Bye-bye, Red Sox and Yankees.

    Or, if that logic doesn’t fly, the Red Sox and Yankees won’t want to give up significant pieces of their Minor League system they can simply pay money for after the 2010 season via free agency.

    Bye-bye, Red Sox and Yankees.

    Hello, Phillies.

    Halladay is a limited commodity (there is only one of him), and any time you have a limited commodity that others want (more than you have of the commodity) you, by definition, have leverage, especially if you could use that commodity yourself.

    You’re leaving out a critical factor though, and that is the Jays’ insistence on capitalizing on Halladay’s value before it’s depleted.

    Look at what the Phillies gave up for Cliff Lee last summer: next-to-nothing. The Jays don’t have a chance on a cold day in hell of getting Happ + Taylor + Gose, or anything similar, for Halladay at the trading deadline.

    The Jays would have some leverage if there was no pressure on them to move Halladay; if there were no consequences.

  3. Matthew

    December 12, 2009 04:13 PM

    Most of this article I disagree with but accept that it’s just a different interpretation of the situation than I have, so I’ll leave it be. You’ve made your point in the comments for why Philly is the only horse in the race, and although I consider them specious logic (Halladay’s agent has already said that the Arizona training camp isn’t a sticking point, the Jays aren’t going to be competitive in a short enough window for his being in the East to really hurt their rebuild, etc.), it’s not necessarily wrong. One point though that is absurd and I have to call you on is the suggestion that the Jays might not offer Halladay arbitration based on their payroll situation heading into 2011. This would mean that they would be unable to recoup the two picks inside the top 35 the following year.

    Erm, what?

    If you’d followed the situation with even passing interest you’d know that Halladay has told the Jays point blank that he intends to test the free agent market. He wants to go to a winner, which the Jays are unlikely to be in 2011. This isn’t Rafael Soriano, it’s the best pitcher in the American League over the past 5 years. Why would a 33 year old pitcher approaching the tail end of his prime even consider an arbitration offer from a non-contending team for a one year contract offer when he can go to any number of contenders on a more lucrative, long term contract? That the Jays will offer Halladay arbitration is not a likelihood. It’s a certainty. Any suggestion otherwise is just wrong.

  4. Bill Baer

    December 12, 2009 04:29 PM

    Halladay’s agent has already said that the Arizona training camp isn’t a sticking point

    His agent, or “one Major League source“?

    West Coast teams will be less likely to engage in a bidding war with the Phillies because they will have little hope of re-signing Halladay after the season. The Phillies, in trading for Halladay, would hope to re-sign him with the expectation that Cliff Lee tests free agency as he has indicated.

    the Jays aren’t going to be competitive in a short enough window for his being in the East to really hurt their rebuild

    Last year was the first season since 2004 in which they won fewer than 80 games. Their Pythagorean record was 84-78. They can certainly be competitive in the AL East even without Halladay.

    Fair point on the arbitration offer.

  5. 85

    December 12, 2009 04:39 PM

    I think the idea that the Phillies are the most obvious landing place for Halladay has been pretty well-corroborated by every additional piece of information that comes out about the guy. And I don’t think you can put much stock in what his agent says about the Arizona spring training not being an issue. We’ve been hearing for months now that he wants to be near his home, but it makes the most sense for his agent to downplay that to try to keep other teams involved. If he says there’s no way he’d accept a trade to the Angels, there’s that much less incentive for another team to come to Toronto with the kind of package they want. For Halladay and his agent, it would benefit them to have the most teams possible trying to knock the Jays’ socks off because it makes it that much more likely that the trade will actually get done.

    Halladay, above any other interested party, has the leverage here. The Jays have already botched this deal once, and they know doing it again will set them back years. Whether to the Phils or someone else, this deal is getting done.

  6. Matthew

    December 12, 2009 04:48 PM

    “West Coast teams will be less likely to engage in a bidding war with the Phillies because they will have little hope of re-signing Halladay after the season. The Phillies, in trading for Halladay, would hope to re-sign him with the expectation that Cliff Lee tests free agency as he has indicated.”

    I’d be more than willing to agree with that, mainly because the idea of the legacy of the Halladay being Aybar, Bourjos and JOE SAUNDERS is just deressing.

    “Last year was the first season since 2004 in which they won fewer than 80 games. Their Pythagorean record was 84-78. They can certainly be competitive in the AL East even without Halladay.”

    That’s a valid point. Maybe a better phrasing would be to say that if the Jays are doing a full rebuild and stockpiling prospects, those pieces won’t be ready until Halladay is between 36-38. Not to say he won’t still be a very good pitcher, but maybe not the dominant player he is now.

  7. André

    December 13, 2009 01:10 AM

    I still say the only situations where the Blue Jays don’t have leverage are the ones I’ve outlined above. Are you familiar with game theory? Just because it’s “in the best interests” of the other party, that doesn’t mean they have to deal with you at the price you set. It’s like offering an obscene amount of money for something that has little economic but much sentimental value–even though the deal is in their favour, and maybe they need that money desperately, that still doesn’t mean that they do the deal. Because the Jays don’t have to trade him (at all–they don’t) they have leverage. The Phillies’s core is not going to stay this strong forever (or, if it miraculously does, certainly not with the same players…).

    I also think you’re ignoring a lot of factors here, most you’re probably aware of but willfully ignoring (like the fact that the Jays are open to trading within the division; if AA was set on trading Roy “quickly”, why haven’t they traded him yet?; the Indians did not handle the Cliff Lee situation well; Halladay has economic/entertainment value in Toronto; and the Red Sox and Yankees could be playing coy, which is an often-used tactic in negotiations). Just because you feel like the Jays don’t have options and Philadelphia is a no-brainer doesn’t mean that’s actually so.

  8. André

    December 13, 2009 01:15 AM

    Just to be clear, that doesn’t mean that all the parties involved don’t have leverage, they all do to a certain extent, but Halladay/the Jays (as separate parties) each have the most, followed by the Phillies (because they can offer the best package), Yankees, etc.

  9. Bill Baer

    December 13, 2009 01:22 AM

    Andre, speaking of game theory, check out this article by Pizza Cutter (Russell Carleton) at Baseball Prospectus:

    What I’ve recounted is a classic framework in game theory called the Ultimatum Game. It’s been studied experimentally, and what’s shocking is that people routinely turn down offers that would make them better off because they “aren’t fair.”

    […]

    And so we have all the elements of the Ultimatum Game. In Halladay, the Jays functionally have nothing. Someone is willing to come along and give them an offer which will make them better off for saying yes than for saying no (and taking the two draft picks). The problem is that it’s not an “equal” trade in terms of talent. Here’s where Alex Anthopolous just can’t win. If he’s thinking rationally, then he has to say yes (assuming he doesn’t think a better offer from another team is waiting). A team should say yes to any trade which makes them better off compared to the other options available. However, he’s going to have to fight what appears to be a very normal human inclination to say, “That’s not fair! No deal!” Even if he makes the deal, he’s going to have guys like Ed from Scarborough angry at him for “not getting enough” or “getting nothing” for his star pitcher.

  10. hk

    December 13, 2009 07:56 AM

    Bill,

    1. Just because Mark Shapiro accepted “next to nothing” for Lee doesn’t mean that trading Doc at the deadline ensures getting less than they are being offered now. In fact, an argument could be made that by July, the possible suitors for Halladay will increase relative to today. There are some lower budget teams that probably can’t take on Doc’s $16M right now (i.e. Tampa), but who might pony up top prospects and $6M to rent him for 2 months and collect the 2 draft choices upon his departure. IMO, Milwaukee gave up more for CC (LaPorta) with 2 months until free agency than the Mets did for Santana in the prior offseason.

    2. It’s a little inconsistent to write that Alex A. won’t repeat the errors that JP made in the same article where you say that Cleveland got next to nothing for Cliff Lee. If the best offer that JP got for Halladay was Taylor, Happ, Carrasco and Donald and Carrasco and Donald weren’t even the highlights of the “next to nothing” that went to Cleveland, JP essentially turned down Taylor and Happ. It seems that he wanted Brown not Taylor and he probably thought what you’ve already pointed out about Happ – that he was very lucky last season and is not likely to be more than a #3 or #4 in the NL and a #4 or #5 in the AL East. Therefore, if JP felt that the Phillies offer was subpar, I disagree with the conventional wisdom that he erred. If you believe that Boston actually made the six pitcher offer that has been rumored and that JP’s error was turning down that offer, disregard all of the above.

    If I was a Jays fan, I would be happy with JP’s trade deadline in that he did not accept too little for Doc and that he shed salary and picked up a couple of arms for Rolen.

  11. Bill Baer

    December 13, 2009 09:11 AM

    The Santana trade involved the Mets giving up their #2, 3, 4, and 7 prospects according to Baseball America.

    The Sabathia trade only involved one top-ten player of the Brewers’ in LaPorta.

    Just because the prospects didn’t pan out doesn’t mean that they were worthless at the time. I do agree that the Twins could have asked for even more for Santana but they did get a lot.

    Just because Mark Shapiro accepted “next to nothing” for Lee doesn’t mean that trading Doc at the deadline ensures getting less than they are being offered now.

    Halladay for 162 games + post-season > Halladay for 54 games + post-season

    The longer Anthopoulos waits to trade Halladay, the more his value depreciates. Sure, a team may offer more than Happ, Taylor, and Gose around July 31. Is it likely? No. Teams will be very hesitant to give up that much for a two-month rental.

    Therefore, if JP felt that the Phillies offer was subpar, I disagree with the conventional wisdom that he erred.

    Check out the Pizza Cutter article linked in my previous comment. To turn down offers because they’re simply not meeting some arbitrary criteria of fairness is to err. Ricciardi erred because he turned down a package of players the value of which will not be matched in any future offer.

    The Jays need to move Halladay. The past two seasons will be considered utter failures if the Jays can only recoup a late first-round draft pick and a sandwich pick when Halladay enters free agency.

  12. hk

    December 13, 2009 10:13 AM

    The Santana trade involved the Mets giving up their #2, 3, 4, and 7 prospects according to Baseball America.

    According to Baseball America, the “next to nothing” the Phillies gave up for Lee was the Phillies #2, 3, 4 and 10 prospects. So, it is possible that the Twins got a similar “next to nothing” for Santana and that it was less than what Cleveland got for CC at the deadline (including LaPorta, who was the Brewers #1 prospect).

    Halladay for 162 games + post-season > Halladay for 54 games + post season.

    I agree with this premise if you’re running the Phillies, Red Sox, Yankees or Angels among others, but not if you’re running a small budget team with a chance to contend. I’ve heard rumors of Tampa being interested, but I don’t see them ponying up prospects plus $16M for Doc for the whole year. However, if they are in the race in late July, they might be more likely to “go for it” and trade for Doc where the financial commitment is only $6M and they’ll recoup the draft picks when he leaves after the season. I believe that the supply and demand dynamics of every trade of this sort differs from past trades and the jury is still out on whether they might be offered more in July than they are being offered now.

    The Jays need to move Halladay. The past two seasons will be considered utter failures if the Jays can only recoup a late first-round draft pick and a sandwich pick when Halladay enters free agency.

    I agree with the premise of the Pizza Cutter article. However, I’m just saying that maybe JP wasn’t as much holding out for a fair deal as he was waiting for one that was worth more than the two picks. It seems that he (and his scouts) ranked Brown higher than Taylor and maybe he (they) believed that the packages offered

  13. Bill Baer

    December 13, 2009 10:21 AM

    hk,

    It’s also relative as not all top-ten prospects are worth the same. That was a lot for the Mets to give up given their weak (or at the time, mediocre) Minor League system. Donald, Carrasco, and Marson was a very easy package for the Phillies to relinquish because that did not represent most of the wealth of their Minor League system.

    You make a good case for the Rays making a mid-season push for Halladay. However, I just can’t see the Jays trading him within the division though — that would be terrible P.R., probably on the same level as not trading him at all. Certainly not something a new GM wants to do to acquaint himself with the Toronto fan base.

  14. hk

    December 13, 2009 11:19 AM

    Bill,

    The comparison should be viewed from the perspective of the team trading away the star, not the one trading for him. In other words, the Mets had a weak farm system; therefore, getting their #2, 3, 4 and 7 prospects was not a good haul for the Twins, even though they traded Santana with 162 games to be played. Contrarily, the Brewers had a good farm system (LaPorta, Parra, Escobar, Gamel); therefore, the Indians got a better package for CC, even though they traded him with less than 1/2 the season remaining.

    Point taken on the Rays and being in the same division as the Jays. However, I don’t think the potential 2 month rental market for Doc will be limited to the Rays. Any number of small and mid-sized budget teams that currently cannot consider paying him $16M for the entire season could potentially be players for him if they are contenders at the deadline. One example to consider, going back to 2008, is that the Brewers were never considered players for Santana at the beginning of the season. However, when they found themselves in the race in July, they were willing to give up prospects to (a) rent Sabathia for 3 months and (b) receive the draft pick compensation. Another example of this is that the smallest of small budget teams, the Marlins, were in the Manny Ramirez trade negotiations at the deadline in 2008.

  15. steve

    December 13, 2009 11:37 AM

    Ken Rosenthal, whom I normally like, certainly did nothing to enhance his reputation with this far-fetched fantasy.

  16. hk

    December 13, 2009 12:42 PM

    Bill,

    In your response to Matthew’s comments above, you wrote the following:

    Last year was the first season since 2004 in which they won fewer than 80 games. Their Pythagorean record was 84-78. They can certainly be competitive in the AL East even without Halladay.

    One thing that has been absent from the conversation is the value of retaining Halladay in an attempt to compete and draw fans in 2010. With a Pythag record of 84 wins, the addition by subtraction of Rios going to Chicago, the expected improvement from young starters like Rzepczynski and Cecil and the return of Marcum, maybe the Jays could compete for a playoff spot next year with Halladay in the rotation. It would also be interesting to know how the Jays have fared at the box office when Halladay has pitched vs. when others have been on the mound. If Halladay starts equate to more attendance, keeping him around may pay a significant portion of his contract.

    I appreciate your views, your blog in general and the work that you do to bring good Phillies-centric content to your readers. With that (and everything else I’ve written) said, I think we’ll probably have to agree to disagree on this one and continue to share the hope that Doc is a Phillie by April or July at the latest.

  17. Bill Baer

    December 13, 2009 12:56 PM

    hk,

    Feel free to debate as often as you want. I’ve tried to cultivate an environment here where all opinions can be heard. We may see baseball in different ways (and we would probably agree on 95% of topics), but it is interesting to discuss and debate our views.

    There’s nothing wrong with disagreeing with me. I have the capacity to be wrong, to miss certain details, and/or to be influenced by various biases.

    You don’t have to “agree to disagree” until you run out of things to say. :)

  18. hk

    December 13, 2009 01:13 PM

    Fair enough and thanks. I’m glad I found the site and look forward to more debate. By the way, your friends at Drunk Jays Fans have addressed Rosenthal’s report (in their own way of course).

  19. André

    December 13, 2009 03:05 PM

    The problem is that it’s not an “equal” trade in terms of talent. Here’s where Alex Anthopolous just can’t win. If he’s thinking rationally, then he has to say yes (assuming he doesn’t think a better offer from another team is waiting). A team should say yes to any trade which makes them better off compared to the other options available. However, he’s going to have to fight what appears to be a very normal human inclination to say, “That’s not fair! No deal!”

    I agree, getting equal value is incredibly tricky, especially in sports, where it’s never certain what the value of the traded players will turn out to be (as you’ve mentioned, the Santana trade is a good example).

    Obviously, AA just has to pick the best package available. I’m sure he has an idea of what that will be. He’s said that he will execute on any deal that he likes. Referring to the example above, he believes that “an offer from a better team is waiting”. Once he’s exhausted these, and there doesn’t seem to be a better deal on the table, then he can make a choice: whether to trade Halladay for what was offered or keep him from one more year. Unless another team comes in at the last moment that the Jays really like, which is the sort of deal they were looking for, and then they make that deal–the other teams know this too, and that’s why the Jays have leverage.

  20. Mike P

    December 14, 2009 01:37 AM

    As others have mentioned, I get the feeling that AA is waiting out the market, trying to see if the Yanks and Sox get involved to drive up the price. I think that this will turn out to be a big mistake, mainly because I doubt that the Yanks and the Sox are seriously interested. The Sox already have a strong rotation, and I suspect that they will stay focused on finding a good OF bat to produce runs. The Yanks could certainly use an additional starter, but I find it hard to believe that they would expunge the few remaining top prospects from their system, especially with a MLB squad that has aging talent. You can throw this on top of the reasons already discussed by Bill (namely, that AA has to be nuts to trade within his division). I could be completely wrong about this, it could be total conjecture. But that’s my 2 cents.

    This brings me back to my original point. If Boston and NYY are just feigning interest, the Phils and the Angels are the two remaining competitors for Halladay. If AA tries to wait out the market, the Angels may very well decide that a deal is impossible and move to resign Lackey. If that happens, the Phils would be the only serious candidate for a trade remaining, putting AA in a much more precarious position.

    There’s a lot of “if”s and “probably”s here, but I just mean to highlight the dangers of waiting out the market when the market isn’t all that big to begin with. If the Yanks and Sox are just feigning interest to keep the other team on its toes (or if AA is feigning interest in the Sox and Yanks to drive up the market), and if the Angels decide that Toronto is being too coy and goes to Lackey, instead, AA would suddenly find himself with no real choices except the Phillies. If I were AA, I’d want a deal done by Christmas.

  21. Mike P

    December 14, 2009 01:18 PM

    And now the rumor mill is suggesting that Lackey is getting a physical in Boston today. If that’s the case, you can label my previous comment: “Comment Fail.” It also makes the market for Halladay much more crowded, with the Angels seeking to replace their ace, the Yanks thinking about one-upping the Sox, and the Phils.

  22. Bob S

    December 15, 2009 04:35 PM

    “hunch” is actually sports-journalist speak for “tip-from-inside-source-that-won’t-be-named”.

    Sometimes. Other times, it is just a hunch. But Rosenthal nailed it.

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