Now that the trade is finalized, I can finally publish this post. Basically, the long and short of it that the trade was a solid one for the Mets and a great one for the Jays. I get most people already agree with the first part of that, but might be a little iffy on the second part of that.
We've all been reading different perspectives on the trade, from "Flags Fly Forever!" and "TINSTAAP" to my personal favorite: "Dickey is a 38 year old gimmick pitcher who was only good for one goddamn year!"
Of course no one is sure what d'Arnaud and Syndergaard's performances will be in the next few years, just as no one is quite positive what Dickey will be for the next few years.
But in the words of W. Edwards Deming, "In God we Trust, but all others must have data." And so, let's try to do what Deming would do here.
Prospects, of course, are not black boxes, so they have expected value, which was nicely analyzed by Victor Wang at hardballtimes. I really liked his methodology (which is why I keep writing about it) and hope you all read it. It has some shocking revelations about prospects in there.
Anyways, I think his valuation there fits this trade really well.
Supposing R.A. Dickey pitches to his three year average of 4 WAR, (using baseball-reference here) at a valuation of $5M per win for the next 3 years, that amounts to a total of $60M. If you value the compensation draft pick as an additional $5M, as suggested by Rany Jazayerli's research, the total comes out to $65M of value.
Dickey's new contract totals $30M, leaving a surplus value of $35M.
Now the Mets picked up Travis d'Arnaud, most likely to be ranked as a top 15 hitter for 2013. According to Wang's research, at $5M per win, this results in a $25.6M value. Why so low? Well because prospects, even hitters ranked 11-25 generally don't amount to much.
Syndergaard is a bit more difficult to place, but thankfully, pitchers in the top 50 generally produce equivalent expected value! (Making them quite a bargain from the less sabermetrically inclined as they bust and succeed at similar rates.)
I think Syndergaard could end up anywhere between 25 and 60 on preseason lists, depending on whether the list is statistically-oriented or tools-oriented.
Either way, Syndergaard is worth about $16.3M, leaving the value of future expected wins coming to the Mets at about $42M.
Enter John Buck, who is slated to earn $6M and offers no surplus value, leaving the total at about $36M.
Thus the Mets win the trade slightly by about $1M.
This is chump change for baseball, so we can call it pretty even. However, I think it's actually a gigantic win for the Jays.
The problem with the above logic is that there is a huge difference in where each team is on the win-curve.
The price of wins 78-83 is markedly different than wins 86-91. Based on numbers computed in 2007, the difference for Toronto in wins 86-91 is almost 3 times the price for wins 73-81.
Based on this, let's try to guess how Toronto values Dickey's wins.
In 2012, the Jays made $188M in revenue on player expenses of about $100M, for a team that won 73 games**. This, of course, was entirely based on expectations from 2011, when the Jays won 83 games and had a revenue of $163M on a payroll of $100M. They had a revenue of $163M in 2010, when they won 85 games. This is because of the distastrous 2009, when they won 75 games.
To make things easy to follow,all things being equal, I would argue that an 85 win Jays team in 2013 will make about $160M in revenue next year, based on the results of 2009 and 2010.
I think we can agree that if the Jays can get to 90 wins without the playoffs, it should get them to at least $190M for 2013. After all, that's what they got to in 2012. Erring on the more cautious side, however, let's say that the cost of an additional win between 85 and 90 is at least $6M in 2013 or ((190-160)/5).
At that evaluation, the Jays "win" the trade by $3M. You can see the effect of the win-curve as the trade becomes more and more Jay-favorable as the price per win increases.
I actually believe I'm under-selling where the Jays are on the win-curve, because the value of the playoff clinching win (90th? 91st?) has to be worth a hell of lot more than $6M.
So why not just sign Greinke/Edwin Jackson/etc? you might ask, if these wins were so valuable?
Well, the Jays made another trade this off-season and also signed Melky Cabrera. By my probably flawed accounting take, the payroll is now at $101M, which represents an $18M player expense increase over 2012**.
According to the Forbes numbers, this means an $18M operational loss at $160M. This basically means a break-even point at $170M. This isn't a huge risk, and I would expect the Jays to get to $170M even without Dickey. Any additional payroll, however, would have to be matched dollar for dollar in revenue and that kind of arbitrage is super risky.
For example, it doesn't seem like a bad gamble if the surplus value of a marginal win is $10M and you sign Greinke for $9M per win. Of course, that's a lot of risk but it's possible the cost of a marginal win could be that high ($20-30M?).
Adding Dickey, however, gives the Jays 4 wins at the real world price of free for 2013, since that money was already committed to Buck.
I can't see any way that the Jays don't make $170M this year with the excitement around the team as well as the talent. They should make $190M easily, and I'm sure AA is sleeping a lot better these nights.
The trade wasn't as one-sided as you think at neutral value, and was actually hugely one-sided at anything greater than $7M per win, which is not as crazy as you might think. Since Dickey was the only pitcher with 4 win potential who was that cheap and that available, it seems almost totally implausible he could have ended up anywhere else.
Actually, it almost makes me think someone in the Mets front office has some kind of intimate knowledge of the inner workings of the Jays' business. Kudos to whoever it was not to overplay their hand.
** All accounting dubiousness can be blamed on Forbes' team evaluations..