Maybe you enjoy coming to TPOP to read in-depth, stat-infused articles.  Today’s article is not one of those.

This article was borne out of a simple phone call that Steve and I had at lunch time on Monday.  We were discussing the allocation of workload for the upcoming SSL-to-Fangraphs project when Steve asked “Why do you have a lower hitting factor on 2B rather than 3B?”

I thought perhaps he may have been thinking of the factor in a different angle, so I just said “Because 3B is a more important defensive position than 2B on the spectrum and more adjustment should be given in case of lower offensive numbers.”

A second or two of dead silence.

“I think you’re wrong, Kevin.”

As Steve meandered his way through the Aldi’s he was shopping at, we debated the merits of 3B v. 2B on the defensive side of things.  [Aldi’s Side Note 1: Aldi’s is short for Albrecht Distributors, formed by two brothers (Karl and Theo) in Germany. The two billionaire brothers actually split the company in Germany into Aldi North and Aldi South, it got so big there.]

We carried on our two-person debate for a couple of minutes.  I was absolutely gobsmacked that Steve, who I am usually in fairly close sympatico with on baseball, could be so off of my pre-conceived notion.  So I proposed the most logical 2018 solution — put up a Twitter poll to see what the people said.

The people spoke loud and clear:

.@SteveDiMiceli and I were having a debate about this, so help us settle this question:
Which position is more important DEFENSIVELY

— The Point of Pgh (@thepointofpgh) March 19, 2018

In Defense Of 3B, by Kevin

It’s been ingrained in me from the onset of my baseball analysis career, as it were, that being on the left side of the infield is where the key defensive positions lie.  Yes, you build “up the middle” with strong defense from catcher, short, second, and center, but…c’mon.  I thought everyone knew that second was the Ringo of that quartet.

For me, it comes down to positional scarcity.  Second base is typically the refuge of either shortstops with not enough range or third basemen with not enough arm.  Or a combination of both, in some cases.  A good 3B with a rocket arm and solid range is much more important to me than a 2B I can convert from any other number of players.

I suppose since I got roundly trounced by Steve in the poll that I may as well keep going with the hot takes.  Here we go…ahem.  Pedro Alvarez could have been a great 3B.  Yeah, I know.  We all saw what happened at the end of his 3B days.  But many people are forgetting the absolute NASA-level laser he had for an arm, until his brain decided to tell him, “Hey, let’s aim for that lady in the 4th row.”  Alvarez had a rail gun for an arm.  If he had a tad more athleticism, I would have liked to see the Pirates try him in RF, instead of 1B.

[Aldi’s Side Note #2 — In 1971, Theo Albrecht was kidnapped and held for ransom.  His $2M ransom was eventually paid and he went on to attempt to claim it on his taxes as a business expense.  When he died in 2010 and the story broke on German TV, the news stations had no current picture to put up for the billionaire because he had lived such a reclusive life.  I have no idea why this is stored in my brain.  Also, I can’t remember people’s first names just a few seconds after they introduce themselves to me.]

In Defense Of 2B, by Steve

While I’d love to start my section off gloating about how I correctly predicted fans would value second base defense over third, I think it’s worth noting that the vote midway through the poll came in considerably closer than I expected. I suggested to Kevin that voters might come in three to one on tallies for second. However, as I write, we’re just short of two to one. Still considerably higher, but not nearly so steep as I thought.

I think we need to start first by examining what makes a strong defender at second base. Most obviously, I think you start with someone who has good lateral range to both their left and right in fielding ground balls. With the runner on first, the second baseman is essentially responsible for the entire right side of the infield.

However, a good second baseman also needs good range tracking down midrange popups anywhere from right-center to deep foul territory on the first base line.  We also take for granted how difficult it to serve as the 4 in a double play, because the play is so conventional. Think about it. The second baseman catches the ball with their back towards his eventual target. They need to receive the ball cleanly from the player who fields the ball initially, exchange it from glove to throwing hand, turn their body to get into a good throwing position, find the bag, evade the runner crashing in from first base, and make a hard accurate throw without their feet set. Piece of cake! Turning a double play is one way the arm is an underrated tool for the second baseman. Second basemen also need an arm to track down ground balls and record outs while moving away from first.

While I pride myself for thinking outside of the box with baseball, I also defer somewhat to convention on the value of defense at second versus third. When I look at who is in the Hall of Fame at third and second, Brooks Robinson stands out as the only modern guy who manned the hot corner well enough to carry him to Cooperstown. Of course, an MVP, longevity and 2,800+ hits and 268 homers didn’t hurt.  Roberto Alomar didn’t win an MVP or even a batting title, and amassed fewer counting stats than Robinson. Yet, he’s enshrined largely thanks to his ten Gold Gloves. Alomar isn’t the most extreme example of a glove first second baseman in the Hall. That honor goes to Bill Mazeroski whom the Veteran’s Committee honored. One could also argue that Ryne Sandberg and Nellie Fox are in as much for the glove as their accomplishments at the plate. Please don’t Ron Santo me in the comments section either.

I will concede that an excellent response to the poll came in that got me thinking.

I say 3B. I think the shift has diminished the importance of range at 2B at least a little

— Cannonball Corner (@CannonballCrner) March 19, 2018

Again, great point, but while it may have helped close the gap, shifts diminished the defensive value at every infield position. While data has reduced the need for range at second, it has for short and third as well.

The post A Friendly Debate On 2B v. 3B Defense appeared first on The Point of Pittsburgh.

Mitch Keller is just outside the Top 10 of the latest BA Top 100 — how much is he worth in surplus value?
Photo by Martin Griff

I realized last week that TPOP was coming up on its 1000th article published.  For some sites, that’s a good couple of months, but we’re pretty much a one article per day kind of place for the most part.  So it’s only fitting that for our 1000th article, we do an update on our 1st article that was on TPOP (and subsequently updated in 2016) and has been the article that put TPOP on the map both locally and nationally at multiple sites.

Unlike the 2016 surplus value update when we changed some key aspects of the methodology, Steve and I feel like the process is sound now and we just updated the actual data inputs, aside from the cost of 1 WAR on the free agent market.

If you’re an MLB team that hasn’t already pirated our research to develop your own in-house tools, here’s how we calculate prospect surplus value.

What Is Prospect Surplus Value?

More than ever, as we’ve seen this offseason with teams reticent to pay free agents for past performance, teams want young cost-controlled assets.  Years of control and the ability to pay a player at depressed wages, both at minimum scale and arbitration rates, is the key for a team seeking to get high value from players.  If you have some key players making little money, it can help you address other needs in free agency.  It’s how bottom lines are balanced.

Teams control players for six full seasons, typically with three of them at minimum salary and three at arbitration rates, which are a fraction of a player’s worth on the open market.  There are tricks that all teams employ to squeeze a little bit more than six seasons out of a player, like waiting until a few weeks pass at the start of the regular season to bring him up and thus not have the player get a full season or waiting until the Super 2 deadline passes in late June to avoid paying arbitration four times.

So if a team is assessing how much a prospect is worth when discussing him in a trade, they have to calculate what surplus value that player may contribute to the team for his six seasons of control in the future.  Teams are employing some type of financial analysis to do this.  At TPOP, we did ours on a present worth value model where future values over a period of time are shunted forward to present-day in one lump sum.  The player’s potential earnings are then subtracted from the present worth number to obtain surplus value, or the amount of value that a team places on that asset when discussing him in potential trades.

What Is The Source Data?

Baseball America’s Top 100 is the touchstone of prospects for me.  Other sites have been very ‘upside-based’, but I’ve found BA to blend upside and production together much better.  Sure, like every site they’ve had their misses, but by and large they are my go to site for Top 100’s, especially since they’ve been doing it since 1990.

For this article, the players used were from the 1994 to 2008 lists.  This presumes that the 2008 guys have progressed through the Majors and completed their 6+ years of service before reaching free agency as of the end of 2017.  Players are put into tiers, both hitters and pitchers, based on their ordinal location on the Top 100 lists.

How Was Player Value Calculated?

We used Fangraphs for the Wins Above Replacement (WAR) generated by a player during their six seasons under team control.  Allowances were made for the partial seasons that teams got by calling players up later in the season.

How Was Player Worth Calculated?

We have assumed through the analysis of free agent contracts that the cost to purchase 1 WAR on the free agent market is now around $8.5M.  Some sites have it even higher than that, so maybe our number is conservative, but I can’t bring myself to the $9.5-$10M/WAR figures I’ve seen.   So the player’s six (plus) years of team control WAR were added up, multiplied by $8.5M/WAR, then brought to present value with a discount value of 8%.

How Were Player Values and Costs Distributed Over 6 Years?

Steve and I have approximated that 3/5 of a player’s value was achieved in the arbitration years of team control after inputting all of this data in 2016 for that update.  Our arbitration percentages article found that during arbitration a player gets 25%/40%/60% of their free market value, on average, so those inputs were used as well.

So Surplus Value Is…

The present worth value calculation minus the amount of potential salary that a team has to expend over the three minimum salary years ($1.6M) plus three arbitration years (3/5 of present value WAR x 42% x $8.5M per WAR).  The results for the hitters and pitchers, broken down by the various tiers, are shown below:

For the most part, the WARs held steady for each tier, which is to be expected once you start to accumulate the number of players that we are seeing at this point.  The needle simply isn’t moving as much, even though as players move up and down the tiers their WARs go to different classifications.  As a result, the surplus values really only increased due to changing the $/WAR from $8M to $8.5M.

What did increase a little bit were the bust rates for “0 or Less WAR” and “3 or Less WAR”.  As a reminder, the first category is for prospects that either never made the Majors or did poorly once they got there.  The second is for highly touted prospects that really only provided enough WAR to be considered a bench or bullpen guy during their tenure.

Pitchers ranked #1-10 still have yet to have an outright bust (Jesse Foppert tried, but eked out 0.1 WAR), which always amazes me considering their injury risk.  Both hitters and pitchers #1-10 remain the most elite commodities in the game for both their surplus values and their relative lower risk to teams.  Hitters #11-25 are good values, too, but you can see that the bust rates are starting to jump up.

You can also see that there’s little striation between the #51-75 and #76-100 tiers for both hitters and pitchers, so at TPOP we’ll continue to refer to them as #51-100.  But take a gander at those bust rates for these combined tiers.  Essentially there’s a 40-45 percent chance that #51-100 prospects never accrue 0 WAR and anywhere from roughly 60-70 percent never achieve the 3 WAR level over their 6 years to be considered a bench/bullpen guy.

This is the point of the article where Steve and I differ somewhat. I’m a big proponent of moving prospects, especially ones at the back half of the list that aren’t trending up, for Major League assets.  Sometimes a prospect’s best value is his perceived value to another team.  For me, this is what happened in the infamous Francisco Liriano “salary dump” to the Blue Jays in 2016 — the Pirates included two “falling stars” that once were on the back half of the top 100 in Reese McGuire and Harold Ramirez, in order to get the Blue Jays to pay virtually all of Liriano’s salary (minus Drew Hutchison’s arb salary).  Ramirez (#95 in 2016) already looks like a bust as he’s unable to stay healthy and McGuire (#97 in 2015, fell off list since then) doesn’t appear to be able to hit enough to be a full-time starter.

Only two Pirates made Baseball America’s 2018 Top 100 prospects list (I think 2017 1st round pick Shane Baz should have been in the 75-100 range, personally), which is an indictment on the state of the Pirates’ farm system.  Here’s the two players, their ranks, and their surplus values.

• Mitch Keller — #12 ($45.9M)
• Austin Meadows — #44 ($37.6M)

But now also consider their bust rates.  Keller is in the same spot as Tyler Glasnow was in the 2016 update.  Keller has a much cleaner delivery and better command/control, but he still has a 40% chance of not accruing 3 WAR and a 23% chance of being an outright bust.  Meadows is his own tier has a 50% chance of not living up to 3 WAR expectations, which with his injury history seems like foreshadowing, and a 32% chance of being an outright bust.  Additionally, Meadows is a declining quantity, as he was ranked #22 in 2016 and #6 in 2017.  This makes the decision to not hold out for Kyle Tucker (#15 this year) in the deal with the Astros for Gerrit Cole even more disheartening.

For me, prospects are commodities.  I try to not wishcast scenarios where every prospect reaches their breathless forecasted potentials, but rather view them as objects that can improve the Major League team.  The Pirates GM, Neal Huntington, is a hoarder of prospects.  He holds on to them with a death grip in the hopes that every one of them becomes a cost-controlled star, when in mathematical reality it just doesn’t happen.  This would be a fine strategy for Huntington if his prospects were producing, but under his tenure only two prospects (as of the end of 2017) have produced even a single 3+ WAR season (Pedro Alvarez and Gerrit Cole).

Identify the high-end prospects, trade the rest to improve the Major League team, try to extract rising and under-the-radar prospects in trades.  That’s what I would do in order to maximize prospect surplus value.

The post MLB Prospect Surplus Values — 2018 Updated Edition appeared first on The Point of Pittsburgh.

This is how the Pirate fanbase feels after the 2016 season.

Steve DiMiceli (SD): As nerdy as Kevin and I are, we seem to both lack the skills necessary for actual podcast production. Fear not TPOPers, we’ve come up with a solid work around. Now, you can enjoy this podcast without all those modern conveniences like downloading and listening on your commute. Of course, we’ll save you some data on your plan.

Kevin Creagh (KC): No one is really clamoring to hear my terrible voice anyway, Steve.

SD: I don’t think Kevin and I will disagree that this season was a disappointment, even for someone like myself who saw a transition year coming. While the Pirates were able to compete deep into the season, they never seemed to get over the hump. They also had questionable success integrating young talent into the lineup. They didn’t get as much out of Tyler Glasnow as they may have expected, and they underutilized Josh Bell due to defense anxiety. I’ve always been a big believer that the bat is greater than glove at first base, so I thought holding him back was silly and hurt the team.

KC: But man…Bell’s defense is…woof.  It’s bad.  Just watching him throw the ball around the infield after making an out is odd.  He’s constantly short-arming the ball.  And a ball hit to him in the outfield is an adventure.  I don’t think his bat has enough power to justify the losses on defense.  Yes, the on-base will be good, but I don’t think low-to-mid teens in homers is going to offset it.  As for the team itself, they just had no magic this year.  Last year, they had 11 walkoff wins; this year it was just four.  Last year, you never turned your TV off or left the game early, as anything could happen.  This year, if they were down in the 9th inning, you were fine to flip the channel.

SD: There aren’t a lot of teams that win World Series built around their first base defense, but there are quite a few that I can think of that managed to win rings with a crap glove there. I think Bell has a ton of power but it may translate to more doubles than homeruns. That said, I think he’ll have a few season where he knocks close to 30 out. He’s still got some developing to do and I think his hit tool will eventually play up.

Not only could the team not get it going late in games, it also seemed like they could never get over the hump. They’d streak, tie for the wild card and then collapse. Of course, that could be a function of falling too far behind initially.

SD: I think the season really derailed on two things. First, the rotation never really took shape and second, the team really didn’t get a star performance from anyone capable of providing one. On the pitching, it’s never a good sign when you start the season with five different pitchers in the rotation than you finish it. It was, for lack of a better way of saying it, an absolute dumpster fire.

KC: That’s really amazing in regards to the totally different rotation at the end of the year.  I guess Francisco Liriano just has a certain shelf life before he tunes out the coaching.  I wish him no ill will, but he really torpedoed this season.  With Cole struggling, he could have stepped up and fronted the rotation.  Instead, he’s enjoying Tim Horton’s on Yonge Street.  I thought at the start of the year that Niese could have held the fort until Glasnow was ready (Taillon wasn’t even on my radar to be so ready for the Majors), but instead he was a total failure.

SD:  I qualify anyone who posts a five plus fWAR as a star performance. I think the Pirates started the year with seven players capable of star performance, but not only did Cole underperform, but Starling Marte, Andrew McCutchen, Gregory Polanco and Jung-ho Kang all fell short. While they are longer shots for elite performances, Liriano and Josh Harrison have both performed at that level in the past, and neither was even close. The Pirates had plenty of depth to supplement  the top players, but IMO, the best players still let them down.

KC:  Yeah, when McCutchen/Cole/Liriano all are either injured and/or drastically underperforming, it’s a miracle that the Pirates were in the playoff mix until mid-August.

SD: The good news: I do think the team has enough talent to rebound next year. It wouldn’t be the first time a solid team struggles and misses the playoffs only to come back strong the next year. Washington missed the playoffs last year and the Giants went 76 – 86 in 2013 before winning the World Series in 2014. San Francisco also finished outside the playoffs in 2011 before topping the Tigers for a championship the following season. I don’t think a losing season this year means the Pirates are down for the count.

KC:  I agree.  The skeleton for a playoff team is here, but Neal Huntington has his work cut out in order to put some muscle on that skeleton.  The rotation is Cole and Taillon and a whole bunch of question marks.  Kuhl could be the #5, but if they can upgrade over him and put him in the bullpen that would be a positive.  I think the Pirates really need to package some minor league talent together and get a legitimate #2-level pitcher on the trade market this offseason.  I will continue to beat the drum for Jose Quintana.  As for the bats, I think McCutchen will rebound, perhaps not to MVP-level, but a solid 4-5 WAR level.  Cervelli has to have better injury luck next year.  I also think Kang will be better with a clear head and hope that Polanco will not collapse in the second half.  Replacing the bench is an impossible proposition, given how great it was this year, but we’ll see.

SD: I  see Kuhl as a future #4. The sinker’s solid, the slider is decent, and he seems like he’d getting more comfortable with the change. If he can mix it in 10-20% of the time I think he’ll be better than expected. I think he’s wasted in the pen. I think they could cobble together some kind of five between Steven Brault, Trevor Williams or Glasnow especially if they trade for a legit two as you suggest. Not sure how available Quintana will be given the Chris Sale weirdness and the White Sox general refusal to actively rebuild.  I’d actually like to see them try to work their magic on Andrew Cashner and maybe trade for a reasonably safe three. Jake Odorizzi comes to mind, but I’m sure the Rays would be looking for the motherload.

The post Kevin and Steve’s Non-Podcast Podcast Article — Pirates’ 2016 Post-Mortem appeared first on The Point of Pittsburgh.

Artistic Rendering by Ben Samson for TPOP

Some ideas start their germination as the tiniest of seeds.  Like when Steve sends me this tweet:

A job for @thepointofpgh ? https://t.co/kY31qjJsMq

— Steve DiMiceli (@SteveDiMiceli) April 13, 2016

I was intrigued by it.  Mount Washington Community Development Corporation was hosting an open design competition for an idea to revitalize the Boggs/Bailey corridor.  Even though it was just a three minute drive from the Monongahela Incline and a few blocks away from Shiloh Street, I had never been in this sector of Mount Washington before.  As a Mount Washington resident, Steve had been through there plenty of times.

Steve and I met Neil Grbach from MWCDC on site in early April to get a walkthrough of the project and a feel for what they were looking to achieve.  Steve and I both keyed in on certain elements that we wanted to incorporate into our final design.  Steve wanted to utilize the steeply sloped terrain of the main parcel to create a tiered building that sloped down away from Boggs.  I wanted to take advantage of the area’s greatest asset in the form of the potential views of Pittsburgh.

This is how The Elevated City concept came to fruition.

The image shown above is the end result of work, which wouldn’t have looked nearly as elegant if Steve and I did it (although I greatly enjoy Steve’s preferred medium of crayon).  For that we enlisted TPOP contributor, Ben Samson, and thank him for taking our crude sketches and making them into a gorgeous artistic rendering.

Steve’s building would occupy the majority of MWCDC’s 5-acre parcel that they control.  Commercial businesses would occupy the ground floor, with street level access to Boggs, while residential units would occupy two floors on top.  The roof would be a large, communal green roof that would help with stormwater reduction by absorbing the first inch of rainfall into the plant matrix.  Balconies off the residential units would also have small green areas, both for aesthetics and environmental reasons.  We envisioned recycled barnwood for the siding and frontage of the building, but any type of re-used material would fit the motif of what we were trying to accomplish.

The center piece of the development, though, is the elevated tower with an observation deck.  An elevator shaft would take you probably 60 to 70 feet in the air to the observation deck that would allow the visitor to see over top of Mount Washington’s buildings to Pittsburgh below.  This tower and observation deck would be clad in material to resemble a tree, with some type of metal architectural feature to create a canopied effect over the observation deck.  The long-term vision for this project would be to install two additional tree towers near the Monongahela Incline and at Grandview Park and have elevated, canopied walkways connect these three points together.  The pathways would follow the alignments of Wyoming and William Avenues, but more than likely run behind each of these streets due to utility conflicts.

The City of Pittsburgh is focused on making Grandview Park the next great park and this concept could help accelerate this process.  Once the tower would be in place at Grandview Park, the expansion possibilities are myriad to other directions.

We know that The Elevated City is not a practical solution, nor is it one that is going to happen anytime soon.  But what it does is it forces people to consider the possibilities of such a concept and how it could revitalize a flagging corridor.  It was meant to be fanciful, not utilitarian, and to allow people to dream about the possibility of such a concept.  The Elevated City would be a conversation piece and a major tourist draw tied into the already in place draw of the Monongahela Incline.  People can go from The Elevated City down the Incline to Station Square (and in reverse), which may help to spur on new interest in a Station Square that has seen better days since its late-1980’s/early 1990’s peak.

Unfortunately, we did not win the design competition.  That honor went to QK Architecture for their excellent design called The Bend (it has a suspended monorail!).  Although we did not win, hopefully this design can live on one day in some form or fashion.

The post TPOP’s Boggs/Bailey Corridor Concept — The Elevated City appeared first on The Point of Pittsburgh.

Glasnow is on the precipice of the Majors. Will his value equate to what pitchers of his caliber have contributed in the past?
Photo by Kelly Wilkinson/Indy Star

When the first article on your new website spreads like wildfire, it’s both heartening and daunting at the same time.  In December 2014, we launched The Point of Pittsburgh and the first article was How Much Is An MLB Prospect Worth.  Its success made Steve and I realize we were right in that there was a large audience waiting for good analysis from TPOP.  The article has been featured in the Washington Post, virtually every MLB team’s website on SB Nation, various team message boards, and most prominently on Fangraphs across multiple articles.

But with all models, they must constantly be refined with new and revised input data to stay up-to-date.  For this update, we examined every facet of the model to see what needed tweaked.  What follows is the methodology behind the concept of surplus value and what was changed.  You can always click the link above to see the original and how things progressed.

What Is Prospect Surplus Value?

Youth is the currency of choice in Major League Baseball.  Years of control and the ability to pay a player at depressed wages, both at minimum scale and arbitration rates, is the key for a team seeking to get high value from players.  If you have some key players making little money, it can help you address other needs in free agency at inflated prices.  It’s how bottom lines are balanced.

Teams control players for six full seasons, typically with three of them at minimum salary and three at arbitration rates, which are a fraction of a player’s worth on the open market.  There are tricks that all teams employ to squeeze a little bit more than six seasons out of a player, like waiting until a few weeks pass to bring him up and thus not have the player get a full season (like Kris Bryant and the Cubs) or waiting until the Super 2 deadline passes in late June to avoid paying arbitration four times (like the Pirates and other teams with virtually all their top prospects).

So if a team is assessing how much a prospect is worth when discussing him in a trade, they have to calculate what value that player may contribute to the team for his six seasons of control in the future.  Teams are employing some type of financial analysis to do this.  At TPOP, we did ours on a present worth value model where future values over a period of time are shunted forward to present-day in one lump sum.  The player’s potential earnings are then subtracted from the present worth number to obtain surplus value, or the amount of value that a team places on that asset when discussing him in potential trades.

What Is The Source Data?

Since 1990, Baseball America has been ranking the Top 100 prospects across baseball.  I have always viewed Baseball America as being very middle-of-the-road in their analysis, in comparison to other sites that skewed too heavy in potential and tools.  Plus, they’ve been doing it longer than other places, so there’s more of a body of work to draw from.

The initial iteration of this article mined the data from the 1994 to 2005 Top 100 prospect lists and put the players into different tiers for analysis, based on being either a hitter or a pitcher and their rankings.  Since a shade over a year has passed, we included the 2006 Top 100 prospects, too.  The thinking is that a player on the 2006 list probably graduated from the minors no later than 2009, then spent 2010-2015 accruing their six full seasons with their team, thus giving us the proper amount of WAR they generated for their team(s) while under team control.

How Was Player Value Calculated?

We used Fangraphs for the Wins Above Replacement (WAR) generated by a player during their six seasons under team control.  Allowances were made for the partial seasons that teams got by calling players up later in the season.

How Was Player Worth Calculated?

It has been assumed through the analysis of free agent contracts that the cost to purchase 1 WAR on the free agent market is now around $8M.  The initial article used a figure of $6.5M/WAR, so this has been modified to fit the new figures.  So the player’s six (plus) years of team control WAR were added up, multiplied by $8M/WAR, then brought to present value with a discount value of 8%.  I briefly toyed with lowering the discount value (the compound interest from year to year), but ultimately decided against it because of the new Collective Bargaining Agreement on the horizon.  I think with all the money currently in the game, player salaries are going to be escalated through the new CBA, thus increasing the cost per WAR.

How Were Player Values and Costs Distributed Over 6 Years?

Originally, we made the non-quantified observation that approximately 2/3 of a player’s value was achieved in the arbitration years of team control.  Now after re-assessing the data, we have scaled that figure back to 3/5 during arbitration.  Additionally, we crunched the numbers on player contracts that went through arbitration in last week’s article and came up with arbitration values of 25/40/60% for the three arbitration years.  This averages out to 42%, rather than the 60% we previously assumed with the 40/60/80 model.

So Surplus Value Is…

The present worth value calculation minus the amount of potential salary that a team has to expend over the three minimum salary years ($1.6M) plus three arbitration years (3/5 of present value WAR x 42% x $8M per WAR).  The results for the hitters and pitchers, broken down by the various tiers, are shown below:

As with the original article, the best bets for prospects still remain the elite #1-10 hitters and pitchers.  It amazes me with all the volatility around pitchers, due to potential injuries and ineffectiveness, that pitchers #1-10 have the lowest bust rates of all tiers.  You know that you’re at least getting a bullpen-caliber guy (less than 3 WAR) and a pitcher won’t outright bust (Jesse Foppert came oh so close with 0.1 WAR).

There also remains little difference between both hitters #51-75 and #76-100, as well as pitchers #51-75 and #76-100.  Again, moving forward at TPOP, we’ll lump both groups in as #51-100 prospects within their respective hitter/pitcher groups when discussing surplus values.

The hitters #11-25 and #26-50 raised their average WAR totals up slightly due to the influx of the outstanding 2005 1st round draft picks.  Ryan Zimmerman, Alex Gordon, and Troy Tulowitzki all raised up the #11-25 tier (with their placements reflecting their advanced college nature), while Cameron Maybin, Ryan Braun, and Andrew McCutchen bolstered the #26-50 tier.  It’s a little surprising that Braun wasn’t up higher, but there were always concerns about his ultimate defensive position, which may have hampered his ranking.

Here’s a comparison between the 2015 Surplus Values and this article’s 2016 Surplus Values:

But the big takeaway from all this is how the surplus value of prospects of any ilk has increased, due to the rising market costs to acquire talent in free agency and how little these players are paid in relation to free agency prices.  This is why teams are so reticent in recent years to part with high-end talent, even in light of the shockingly high bust rates shown in the last two columns of the table for certain tiers.  If a player hits, it’s a goldmine for the team.

Baseball America unveiled their 2016 Top 100 prospects list a few days ago.  Four Pirates made the list at the follows positions and their corresponding surplus values:

• Tyler Glasnow — #14 ($39.0M)
• Austin Meadows — #22 ($62.0M)
• Josh Bell — #38 ($38.2M)
• Harold Ramirez — #95 ($20.6M)

Even though Glasnow is universally regarded as the #1 prospect in the system, Meadows is actually the more valuable prospect due to the volatility of pitchers in the #11-25 tier and the reliability of production from hitters in the #11-25 tier.

Josh Bell has nearly equal value as Glasnow, with the hitter #26-50 having nearly the same bust rates as Glasnow’s pitcher #11-25 tier, but Bell’s bust rates are double Meadows’s chances to accumulate 3 WAR and quadruple his rate to accumulate zero or fewer WAR.

Not just for Pirates but for all players, it’s important to trendline how a prospect is moving through the course of these lists from year-to-year.  If a player is sliding down, by all means consider moving him, especially any player ranked in the back half of the list.  This year, Taillon dropped off the list from #29 in 2015, but that’s what happens when you don’t competitively pitch for two years.  Reese McGuire also dropped off from #97, which happens when you can’t even hit for a 600 OPS, no matter how great of defensive abilities his supporters trumpet that he has.

In the end, all prospects are lottery tickets.  Our work merely shows that some have better chances of “hitting the lottery” than others.

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The post MLB Prospect Surplus Values — 2016 Updated Edition appeared first on The Point of Pittsburgh.

Mayor Peduto, in silhouette, under the watchful eye of Andy Warhol
Photo by Kevin Creagh for TPOP

When Mayor Peduto enters The Warhol Museum, he’s greeted by Steve DiMiceli and I and then chats for a few minutes with the Warhol’s Director, Eric Shiner.  His ability to keep one foot in the world of fine arts, then seamlessly transfer to a conversation centered around technology with two dorks is what sets Mayor Peduto apart from most politicians.

Mayor Peduto made it quite clear that not only would Pittsburgh aggressively pursue tech jobs, it would use technology to attract them. The mayor explained a creative Plan A and Plan B to create jobs by connecting the places supporting the land use with the places our smart people study.  If you want to be a technology-first city, as Pittsburgh does, then you have to put technology first.  Pittsburgh, with the vision and direction of Mayor Peduto, is on its way to that lofty goal.

Back when he was a Councilman, Peduto developed his concept of making Pittsburgh a technology hub.  Instead of Silicon Valley, he envisioned a “Silicon Hollow” as a play on Panther Hollow that would link Oakland to Hazelwood.

“In 2004, there was a lot of developmental pressure coming through Oakland into the East End,” he said, as we sat in the lobby of the Warhol, under the multi-media eye of the departed artist.  “I started to wonder, ‘Where are we going to put everyone if Eds and Meds come fully online?'”  So he developed a concept that would link Hazelwood to the technology factory of Carnegie Mellon University using an already-existing heavy rail line, currently operated by Allegheny Valley Railroad (AVRR) and owned by CSX.

The basics of the proposed route play like this: the “hub” is at the intersection of S. Neville Street and Forbes (link opens Google Map), near Central Catholic and CMU.  It would run south on the AVRR line through the Panther Hollow area down to the Monongahela River to the proposed ALMONO development.  ALMONO is undergoing its environmental review and the Mayor expects the results to come back no later than April 2015.  “We already have multiple clean technology companies queued up, ready to make a commitment,” he said.  Naturally, non-disclosure agreements prevented him from saying exactly which companies.

But why stop there?  The AVRR line runs north to the Allegheny River and meets the river at 33rd Street, so now that could open up two zones of development for companies interested in bringing technology to Pittsburgh.  The Mayor and his staff have had preliminary discussions with AVRR about extending their access from the current termination point (around 20th Street) all the way into the City.  Both sides have something the other wants, which is typically how deals get done.

“We’re building capacity by combining smart economic policy with good land use management and transportation planning,” said Mayor Peduto.  “We now could offer companies two distinct areas to meet their potential needs.”

“It’s the chocolate in the Reese’s peanut butter cup”

How much would this Lawrenceville to Hazelwood rail line potentially cost, though?  “We had a study done by a firm out of Baltimore two years ago and the cost estimate was if the existing heavy rail was used, we could create a park-n-ride system for $87 million dollars.”

There was a little bit of background noise from the piped-in music and the figure kind of hung over the table in one of the few breaks in conversation, until Steve chimed in. “That’s nothing,” he said, with a pause for, “relatively speaking of course.”   In the grand scheme of things for a city of Pittsburgh’s size, that’s budget dust. When the end result could be an economic investment tenfold, twentyfold, or even greater, that would be money well spent.

In the event the Silicon Hollow heavy rail line falls through, the Mayor has a second concept in reserve.  Earlier this month, private ride-sharing startup Uber announced that it was seeking to open a research and development center in Pittsburgh in the field of autonomous vehicles.  “It could really take off within a year.  We could become the world’s leading center for autonomous vehicles,” stated the Mayor.  Uber is partnering with CMU on various trial concepts.  The Mayor posited the idea of an alternative route through Schenley Park on rubber tires as the Silicon Hollow line to Hazelwood.

But the Mayor’s long-term transportation vision doesn’t stop there.  “When the MLK Busway was done back in 1974, they planned for it to eventually be converted into a Light Rail System, so the base and concrete thicknesses in place today could support LRT,” he explained.  “Now if that’s an LRT and then you create a Bus Rapid Transit (BRT) from Oakland to Pittsburgh, you’ve just linked the 2nd and 3rd largest economic centers in Pennsylvania.  If you run a line going west out to the airport and use the concept that you two developed to go north, now you’ve built the spine of a robust transportation network.  The buses could then be used as a feeder system to these spine lines.”

Obviously, the cost to complete all of this work is far more than budget dust, so how would those funds be generated?  “It could be through ‘sin taxes’ or a newly created tax levy, but we would also look heavily at P3’s,” said Mayor Peduto.  P3’s are Public-Private partnerships in which a private company fronts a large portion of the money to construct a project, in exchange for a portion of the revenues on the back-end to operate it.  These are becoming more and more common for governmental bodies to reduce the backlog on existing projects and pay for proposed projects.

The Mayor’s thirst for technology isn’t just all long-range, though.  As soon as he entered office last year, the Mayor tasked the Public Works Department with developing a way to better account for the usage and location of the city’s snow plows during major events.

“The genesis of this came about from Snowmaggedon 2010,” said the Mayor.  “People were calling the DPW and asking when their road was going to be done, but they were never able to track that info and say for certain when the next pass would be.”  So the Mayor hired a new Assistant Public Works Director, Lee Haller, from the consulting firm Deloitte.

“We’re just at the nascent stage of this with Snow Tracker version 1.0,” the Mayor stated.  The trucks were all fitted with GPS units so that the public can track the progress of the plow driver’s route.  “We are working to develop a Route Smart system so that instead of having to rely on paper maps, especially if a driver is brought in from a different sector and is unfamiliar with the area, they can just grab a pre-programmed unit that will guide them by the most efficient route.”  The Snow Tracker system may be so advanced and detail-oriented one day that a user can log on and see if the plow was up or down on the last pass and if the spreader is turning on the truck. The same technology could also be employed to coordinate street sweeping and trash pickup to make both safer and less intrusive to residents.

I read once that ‘Vision is seeing things not as they are, but as they could be’.  Nevermind that it was from a fortune cookie (and that the fortune still sits on my desk on work).  The statement holds true for Mayor Bill Peduto.  Every great Mayor in this City’s history has had a signature ‘thing’.  Mayor Peduto is shaping up to be The Technology Mayor.

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Kevin Creagh is the author of Creating Christ, available now on Amazon

The post Talking Tech At The Warhol With Mayor Bill Peduto appeared first on The Point of Pittsburgh.

Jung-ho Kang will be bringing his talents to the park by the Allegheny River
Photo from Global Sporting Integration

Kevin — Well, the Pirates signed Jung-ho Kang on Monday, Steve, for 4 years/$16M with an option for a 5th year.  Counting the posting fee, the Pirates have invested over $21M in him.  What do you think of the deal?

Steve – I liked it the moment I heard about the posting, because I thought it was an aggressive move outside of the normal channels. With the new draft and Latin American systems, it’s going to get more and more difficult to stockpile talent for the Pirates. This is a creative way to bring in talent, and it has the potential to provide huge value. Even if he busts, I like the thought of the move.

Kevin — My favorite part of the deal so far is the posting fee.  Someone over on Federal Street had a real sense of humor.  It’s been reported that it’s a $5M fee, but it’s actually $5,002,015.  That’s right, the extra $2,015 to represent the 2015 season.

Steve – Hadn’t noticed it before. I feel like Neal Huntington’s been watching The Price is Right.

Kevin — I’ve been reading online and hearing from some fans that they think this means Neil Walker is getting traded this year.  In actuality, I think the Kang signing is just going to allow the Pirates to have a deeper bench, one that is awash in positional versatility, as Rodriguez and Kang can play many different positions.

Steve – I think people are ignoring how much 4 million a year gets you in the majors these days. It’s a low end starter or a solid bench player. I think this move is designed for depth this year with the potential to give the Pirates options next year. It certainly won’t spell the end of Walker if Kang doesn’t work out.

Kevin — Why can’t Pirate fans understand that they can have nice things?

Steve – I don’t blame them for their trust issues with management, but I think it’s time to give the front office the benefit of the doubt. They said they would spend aggressively on the draft. They did. They said they would lock up their players long term and they bought out free agent years of Andrew McCutchen, Starling Marte, Jose Tabata (can’t win ’em all) and Charlie Morton. Now, they said the budget would increase with attendance and they have. Combine that with back to back wild card games and they are delivering.

Kevin — Some also feel that this move sends Mercer to the bench and makes Kang the starting shortstop, based purely on the monetary expenditure.  I don’t buy that.  Because Mercer is making roughly $500,000 this year, the total amount of money allocated to Kang/Mercer is only $4.5M.  That’s less than what the Pirates signed Clint Barmes to during his original free agent deal.

Steve — I think Kang will have an opportunity to earn loads of AB’s but I don’t think there are any guarantees here at 4 million. I think it’s an issue with perspective.  Four million per year gets you a solid regular in football and hockey. Not so much in baseball.

Kevin — I think Kang is going to need an adjustment period, both to Major League Baseball and to the United States and Pittsburgh, specifically.

Steve — He could easily start the year in the minors. The Pirates have options where they don’t need to rush him.

Kevin — I’m going to say that Kang gets 400 at-bats and plays all over the infield, giving each starter a break once or twice a week.  He certainly won’t replicate his video game numbers from the KBO (.356 AVG/.459 OBP/.739 SLG, 40 HR), but I’ll say .240 AVG/.320 OBP/.420 SLG with 12 HR.  I would take that for a solid bench guy.

Steve — Your numbers are way too round.  Get off the fence and be bold.  I’ll say 294 at-bats with a .267 AVG/.317 OBP/.392 SLG.

Kevin — This may be the first time I’m more optimistic than you about something Pirate-related.

Kevin — Two years ago, my family and I were at California Pizza Kitchen after a Pirate game.  We were wearing our gear.  Our Korean-American waitress brought up how she got tickets for an upcoming Cincinnati Reds-L.A. Dodgers series in Cincy so that she and her family could go see Shin-soo Choo potentially play against Hyun-jin Ryu.  I have to imagine that although Pittsburgh’s Korean population isn’t huge, there’s enough that will be interested in supporting him.

Steve – I doubt it will make a huge difference at the gate as we have a small Asian population to begin with. That said, most folks of Asian decent I know locally have ties to Korea.

Kevin — I found out through Jeff Sullivan of Fangraphs that Kang’s name is pronounced like “gong”.  That depresses me, because I was hoping that Kang the Conqueror could catch on as a nickname.

Steve – I think King Gong is just too easy.

****

Readers, let us know in the comments what you think Kang’s line will be this year or just your general thoughts about the signing.

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The post Steve and Kevin Chat About Jung-ho Kang appeared first on The Point of Pittsburgh.

Will this be the mode of transport for the North Hills one day?
Photo by David McKeen (Techno Imaging)

Back in December 2012, Steve and I had our Light Rail North concept published on The Next Page in the Pittsburgh Post-Gazette Forum section.  The article generated quite a bit of interest and we were fortunate to present it to high-ranking County officials, members of now-Mayor Peduto’s staff, and County Council members.  For this site, we thought it would be a good idea to expand on some of the ideas in a bit more detail, as the concept itself has evolved these past two years.

The premise itself is rather simple.  Take a vastly underused asset (the HOV lanes on I-279) and re-purpose it to create a new Light Rail Transit (LRT) line that could connect Cranberry to Pittsburgh.  The Light Rail would connect people in both areas together, open up new economic zones in between, and satisfy a growing demand for a more efficient form of mass transit craved by a younger generation.

As it stands currently, Port Authority, Allegheny County, and the City of Pittsburgh are all focused more on Bus Rapid Transit (BRT).  The proposed BRT line would connect Oakland to Pittsburgh, presumably through an exclusive use lane on Fifth and/or Forbes.  Both BRT and LRT have their positives and negatives.  It seems as if the above entities are pushing forward full bore on BRT, but we want to still keep LRT in the conversation.

BRT and LRT don’t have to be an either/or proposition.  They are quite capable of being complementary solutions to the same problem — minimizing traffic on our surface roadways.  BRT is a good idea for connecting urban, developed centers together — like Oakland and Pittsburgh.  But LRT is a far superior capacity-providing solution to link areas that are further apart — such as bridging the gap of the 18 miles between Cranberry and Pittsburgh.

The Light Rail North would start at the North Shore stop within the General Robinson Parking Garage and, for the most part, stick with existing exits on I-279 North.  When the gigantic boring machine was tunneling under the Allegheny, Port Authority had the foresight to say “go ahead and drill some stubs, in case we decide to expand to the north or the west”, so there’s already the makings of the route in the station behind the walls.  After that, the remaining stops (heading north from Pittsburgh) would be:

• Tripoli Street — currently not an exit, would turn existing bridge over I-279 into pedestrian-only bridge
• McKnight Road — lot of vehicles enter here currently from high population concentrations in North Hills
• Perrysville — existing Park and Ride lot, end of existing HOV lanes, could turn into major loading node with garage
• Bellevue/West View — can draw Ohio River Boulevard communities to Light Rail
• Camp Horne Road — existing retail centers can be augmented as a destination for under-served City dwellers
• Wexford — highly used exit, can draw Sewickley and Pine residents in via Route 910
• Warrendale-Bayne Road  — existing Park and Ride Lot can be expanded, draw portion of Cranberry and Marshall
• Cranberry — end point near Cranberry Woods Office Park off of Route 228 to connect Westinghouse, Mine Safety Appliances to Pittsburgh, large and growing population base

When Westinghouse moved from the Monroeville area to Cranberry, it shifted the population dynamics.  Over 5,000 people are employed at Westinghouse, to say nothing of the thousands of other jobs in the Cranberry Woods Office Park.  The North Hills, in general, is seeing high population growth from the 2000 to 2010 Census.  Pine Township (Wexford exit) increased 49.6%, Franklin Park (Wexford) 18.5%,  Marshall Township (Warrendale-Bayne) 15.3%, Ohio Township (Camp Horne) 54.1%, and Cranberry (Cranberry) 18.9%.

WHY IS IT GOOD FOR THE PUBLIC?

When HOV lanes were a popular form of ride sharing in the 1970’s and 1980’s, our lives were much different and, perhaps, simpler than today.  People typically worked the same time of 8 am to 5 pm, then came home to have dinner by 6 pm.  If my neighbor across the street and I worked downtown, it made perfect sense to hitch a ride with them.

Today, there is no standard work time.  Some people work 7 am to 3 pm, some work just four days a week, some work part-time from home.  And after work is when the real fun starts.  Even if my neighbor and I work the same time, he might be going to his daughter’s dance recital and I may have to go to my son’s soccer practice after work.  I may choose to stay in town for an after-work dinner.  It’s very difficult for two houses to have the same work-life balance in today’s hectic age.

Although carpool lanes may be out of style, the motoring public still desires a form of reliable mass transit.  A good form of mass transit, such as LRT, can achieve:

• Less stress from sitting in traffic
• Less stress from fighting inclement weather conditions
• Less money expended for gas, maintenance, and parking costs downtown
• More flexibility in post-work activities, such as attending cultural events or sporting events downtown

WHY IS IT GOOD FOR PORT AUTHORITY?

The Port Authority has an image problem.  The majority of their transportation fleet are buses, but buses are viewed as slow, dirty, and inefficient with their multitude of stops.  The Millennial generation of 18 to 34-year olds are not as interested in owning a car, instead preferring to either bike to work or take mass transit.  But this generation wouldn’t get on a “dirty” bus.  A clean, sleek LRT system would entice a whole new demographic to using Port Authority.

A LRT would also help justify the somewhat unpopular North Shore Connector project.  At present, the $500M+ project is seen as a tunnel under the river, a parking garage, and a subway extension to serve the Pirates and Steelers, as the stops are right outside PNC Park and Heinz Field.  Whether that’s fair or not, that’s the public perception.  By linking the Light Rail North line into the General Robinson Garage/North Shore T Station, this is a way for Port Authority to justify calling it a multi-modal center.  It would make the North Shore station an extremely busy hub, as riders desiring to go into Pittsburgh would disembark and get on a connecting T under the Allegheny River.

By creating a new sleek route to the North, it’s a chance for Port Authority to reinvent what it will be in the future.  Relying solely on buses and a South Hills T Line that is essentially a giant bus line is a business plan destined to fail long-term.

WHY IS IT GOOD FOR CITY/COUNTY?

Two words — economic development.

The first stop outside the North Shore would potentially be at Tripoli Street.  The area to the east of I-279 (Deutschtown), to be polite, is economically-challenged.  By having a stop here, there is a chance to create Transit Oriented Development, businesses that would crop up around transit stops to serve users and act as employment centers for mass transit users.  Creation of true affordable housing in this area could allow lower-income workers that work in the City to be closer to their jobs, thus eliminating the need for long bus rides with multiple transfers and fears of losing their route.

Outside of the city limits, areas around the other stops could have smaller forms of Transit Oriented Development to help spur on underutilized areas, such as around the Camp Horne Road stop and the Perrysville hub stop.

Millenials, an important demographic that all cities are trying to court, can now live downtown and enjoy the amenities that they desire, while still being able to use mass transit to go to work and retail areas.

WHAT IS THE COST FOR LRT?

This is where Bus Rapid Transit comes out on top.  Light Rail has an expensive upfront cost, especially compared to the relatively low upfront costs for BRT.  Three recent LRT extensions were examined in Seattle ($100M/mile), Phoenix ($60M/mile), and Minneapolis ($80M/mile).  In my opinion, the Minneapolis extension of LRT with 18 stations through urban areas, is the most realistic number.

For the 18.2 mile proposed route, that would be a price tag of $1.45 billion.  With a B.  Yes, that’s a lot of money, but there are other sources of money to draw from.  The State Transit Fund, created under Senate Bill 1, allocated $475M/year for transit.  The Federal Highway Trust Fund is used extensively for projects of this nature.  There’s also the route of public-private partnerships.  Essentially, a large multi-national firm or a conglomerate of firms agrees to front a significant portion of the construction cost in exchange for all the revenues over a long-term period (typically 30-50 years).  The firm and Port Authority would jointly handle the maintenance of the LRT, as well.

LRT is worth the initial investment for the capacity of people that can be moved.  Let’s presume that if you pack people in like sardines on a standard Port Authority bus, you can fit 80 people.  I’ll even bump it up to 100 for purposes of discussion.  So no matter how “rapid” the BRT is, you’re only moving so many people per hour — let’s say 400 with four bus runs.  A single LRT car can hold 225 people.  If you chain four together, you can push 900 users at a time.  Run that every 15 minutes during rush hour and you have 3,600 users/hour.  Conservatively, that’s at least 2,500 cars off the roads, garages, and parking lots.  And that’s just one hour with a fairly long 15 minute headway between cars.

LRT is also worth the investment for the economic development that spurs off of it.  Businesses and retail want to locate next to LRT.  It’s viewed as an attractive asset for a business zone.  It’s also easier to create new transit paths from the LRT stations.  More focused and targeted bus routes can be created to funnel people to/from the LRT stations.  Port Authority will know that people use them, so they won’t make the LRT stations into white elephants, and can re-focus busing routes accordingly.

The post The Light Rail North Concept appeared first on The Point of Pittsburgh.

If the Pirates dangled Tyler Glasnow in trade talks, how much is he worth?
Image from milb.com

EDITOR’S NOTE — THERE IS A MORE RECENT VERSION OF THIS STUDY DONE IN FEBRUARY 2016 FOUND HERE

In June 2012, Steve and I wrote an article at another website that attempted to quantify the dollar amount that a prospect had in trade talks.  We did this by combing through the Baseball America All-Time Top 100 lists and then figuring out how many wins each of those prospects provided their team during the team-controlled years, known as the “zero to six” years of service time prior to free agency.

In the two-and-a-half year interim, two things have occurred:

1.  Fangraphs and Baseball Reference came to an agreement about the definition of “replacement level”.  This affects how each player’s Wins Above Replacement were calculated on Fangraphs, which we used for our model.  It lowered, albeit slightly, each player’s WAR.  Dave Cameron explains it in this March 2013 piece.

2.  The cost per WAR has continued to rise since June 2012.  Our original piece used $5M/WAR as the basis of cost.  For this past 2014 season, it was widely assumed that $6M to $7M was the cost per WAR.  This means that teams are putting even more of a premium on young cost-controlled talent.

So Steve and I figured, what better way to kick off our new website than by re-visiting one of our favorite pieces and updating it for the upcoming 2015 season.

Why Would We Do It?

When trade talks surface, it inevitably turns to how much Player X is making.  Frequently, people want to know if a player is worth his salary by assigning a cost per Wins Above Replacement (WAR) that the player produces.  If you prescribe to the widely-held notion that the cost for 1 WAR is about $6.5M currently, then a player expected to produce 2 WAR would be “worth” $13M.  If that player is making $5M in 2015, he has a surplus value (production level minus salary) of $8M.

If the same Player X is being traded, the receiving team should provide some form of assets to allow for that $8M.  Many times, this is in the form of prospects.  Not all prospects are created equal; there are definite tiers of prospects, both within a team’s internal prospect list and the conglomerate Top 100 list put together annually by Baseball America.

By going back through Baseball America’s Top 100 lists from 1994-2005, we can evaluate 12 years worth of players and see how their careers went during their team-controlled years of zero to 6 years of service time.  This is when a team gets the most value out of a prospect, as they can pay them $500,000 for the first three years and then depressed salaries through the arbitration process for the next three years.

The next section will focus on the methodology used to calculate these new surplus values for the different tiers of prospects.  It will be a little number-crunchy so if you don’t want to see how the sausage is made, feel free to skip down to the What Did We Learn section.

How Did We Do It?

We took our original data that spanned from 1994-2003, added two more years of lists on to it, and then re-calculated every player’s WAR accumulated during the “zero to six year” phase of their service time using Fangraphs.  The 2005 Baseball America Top 100 list was determined to be the endpoint because it would have allowed prospects time to come up in 2008 (the “bonus” year when teams game service time) and then serve out their 6 years of team control through 2014.

We sifted the players from these 12 years of lists into the same tiers: Hitters #1-10, Hitters #11-25, Hitters #26-50, Hitters #51-75, Hitters #76-100, Pitchers #1-10, Pitchers #11-25, Pitchers #26-50, Pitchers #51-75, Pitchers #76-100.

For each year, each tier was filled appropriately.  We then went through and found which tier the player was in during his last appearance on any list.  We labored on whether to use the player’s peak value on a list or whether to use his last appearance, but ultimately went with the latter.  The reasoning is that a player may have initially been over-hyped and then it was determined that he: a) couldn’t hit off-speed stuff, b) couldn’t develop a third pitch, c) had his ceiling reduced by injuries, or any number of other reasons.  We felt his last appearance was more representative of how Baseball America felt about him after multiple viewings.

Once each player’s final tier was determined, each of the overall tier lists were filled for hitters and pitchers.  Each player’s value during his 6 years of team control was determined using Fangraphs’ WAR.  Best estimates were made for service time in cases where a player only had a partial season for a certain year; not every player was calculated using strictly the first 6 years of his career on Fangraphs.

When a team trades a major league player and receives a package of prospects back, they want to know the Present Worth Value of each player in 2015.  If a player can project to give you 15 WAR over the next 6 years, that’s not the same as what the major league player could give you in 2015.  That prospect’s value must be brought back to present day using a discount value.  Think of it this way: If I offered you $100 right now or $150 spread over the next 6 years, you would most likely choose the $100 now.  The same concept holds true with the prospects.  Teams have a time-money component to worry about as well; if they don’t invest money in a salary in 2015, they can use that money in other areas to improve the team — hence the discount value.  For the purposes of this study, we used an 8% discount value per year, which is considered a standard for this type of economic analysis.

Discount value works this way:

For year 1 — use full value

For year 2 — use 92%

For year 3 — use (92%)^2

For year 4 — use (92%)^3

For year 5 — use (92%)^4

For year 6 — use (92%)^5

For the purposes of this study, these 6 values were totalled and divided by 6 to get a Discount Value Factor of 0.82.

Each player’s total 6 Year WAR was multiplied by the 0.82 Discount Value Factor to get a Present Worth Estimate of their WAR.  That Present Worth Estimate of WAR was then multiplied by $6.5M/WAR to get their Gross Value Amount.

During the review of all the prospects’ WAR values, it was observed that the vast majority of them had a back-loaded shift to their WAR component — they were giving their team more value during their arbitration years — so we made an assumption to assign 2/3 of their Present Worth Estimate of WAR to the arb years.

The typical model for calculating arbitration values is 40% of a player’s presumed free agent worth in Year 1, 60% in Year 2, and 80% in Year 3.  This averages out to a 60% arbitration value over the three arb years.  The 2/3 Present Worth Estimate of WAR was multiplied by 60% and then multiplied by $6.5M/WAR.  This gives an estimate of how much the team would estimate to pay for that prospect based on his production level during those arbitration years.  Then an additional $1.5M was added on to that previously calculated arbitration years cost to account for 3 years of minimum salary paid to that player, using $500,000 as the minimum salary for model purposes.

Combining the arbitration value estimated cost with the minimum scale cost gives an estimate on Prospect Cost During Team Control.  The Surplus Value of a prospect was finally determined to be Gross Value Amount minus Prospect Cost During Team Control.

Here’s an example using real-life Jimmy Rollins.  In 2000, he got a look for a few games and put up -0.1 WAR.  Then from 2001-2006, he was a mainstay in the lineup.  These were his “zero to six” years of service time with the team and when he was, theoretically, not making much money.

• 2000 — (-)0.1 WAR
• 2001 — 2.1 WAR
• 2002 — 1.5 WAR
• 2003 — 2.3 WAR
• 2004 — 4.9 WAR
• 2005 — 4.0 WAR
• 2006 — 4.5 WAR

Total of 19.2 WAR during the zero-to-six service time.  He accumulated 69.7% of his WAR during his arb-eligible years, which falls in line with our assumption that 2/3 of the player’s value is accrued during those arb-eligible years.

Rollins’ 19.2 WAR was discounted over six years with the 0.82 factor to be 15.7 WAR.  This was multiplied by $6.5M to get a Gross Value amount of $102.3M.  Taking 2/3 of his 19.2 WAR gives a total of 12.8 WAR — this is what he was assumed to accrue during his arbitration-eligible years.  By multiplying 12.8 by 60% by $6.5M, then adding $1.5M on (the three minimum salary years), we get a total of $51.4M.  This is the Prospect Cost During Team Control number.

$102.3M minus $51.4M gives a total of $50.9M of Surplus Value for the Phillies in 2014 numbers.

What Did We Learn?

Each player’s Surplus Value was calculated as shown above.  If you assume that a typical bench/bullpen player supplies 0.5 WAR per year, we also wanted to know what percentage of each tier didn’t even meet that threshold.  Additionally, we found what percentage of players provided 0 WAR or less, implying that their teams would have been better off never using that player.  Both of these percentages are used to show bust rates among tiers of prospects.

There are a lot of conclusions to tease out from this table:

• The elite Top 10 hitters and pitchers are worth it.  They supply a lot of Surplus Value to a team and their bust rates are low.  Even though Pitchers #1-10 is the smallest sample, to not have a single pitcher give less than 0 WAR is impressive.
• There is very little difference, for both hitters and pitchers, between the #51-75 and #76-100 tiers.  For future reference, they’ll be clumped together as just #51-100.
• Look at those percentages on who won’t even hit the 3 WAR level!  Most tiers are between 40-70% that a team won’t even get a useful bench/bullpen guy.  That doesn’t even account for the outright bust percentages of 25-50%.
• It’s not really worth it to hold on to Pitchers #51-100 and Hitters #51-100.  If you can use them in a deal, go for it.

With regards to that last bullet point, keep in mind that the last year of the list is a snapshot of that prospect’s development.  Maybe that player in 2005 was still ascending and he wound up in a higher, more valued tier.  Of course there are players in the lower tiers that had very productive careers, too.  Adrian Gonzalez (#51-75, 25.2 WAR) and Ubaldo Jiminez (#76-100, 23.9) are just two examples.  The key for any organization in today’s 2014, soon-to-be 2015, is to identify which prospects project to be the truly elite and trade off the rest while they still have perceived value.

To put this in Pirate-centric context, here’s the Pirates from the 2014 Top 100 list:

• Gregory Polanco (#10) — $48.4M Surplus Value
• Jameson Taillon (#22) — $24.5M Surplus Value
• Tyler Glasnow (#46) — $18.7M Surplus Value
• Austin Meadows (#49) — $20.3M Surplus Value
• Nick Kingham (#64) — $9.4M Surplus Value
• Alen Hanson (#76) — $11.6M Surplus Value
• Reese McGuire (#81) — $11.6M Surplus Value

When the new list comes out in February 2015, Polanco will be off of it as he’s no longer a rookie.  Taillon will hold steady in his tier, probably.  Glasnow could move into the more valuable #11-25 tier.  Meadows will hold steady probably.  Kingham may sneak into the #26-50 tier.  Hanson and McGuire may drop.  The only other prospect that I foresee having a chance to make it is Josh Bell, maybe in the #51-75 range.

I would look to move Hanson and McGuire and, to be honest, personal favorite Nick Kingham, in the right deal.  All of those players seem to either be descending or in tiers that make their ultimate production a real gamble, one in which I would rather have a defined asset producing in 2015.

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