Using Prospects To Unload Contracts A Dangerous, New Path

A GM can lose all credibility

With trades for financial flexibility

“We unloaded a bum

For a few sticks of gum

But now our farm system is history.”

I waited a week to write this story on purpose. First, it gave me time to pen that snazzy limerick. But more importantly, the initial shock of the Francisco Liriano trade is gone. We can analyze it with cooler heads.

It was a salary dump, but not necessarily a bad one. Liriano was packaged with Harold Ramirez and Reese McGuire (both of whom were consensus top 10 prospects in the Bucs’ farm system) for Blue Jays’ starter Drew Hutchison. Hutchison has merit as a starter (including a 9.5 K/9 rate in AAA), but the price seemed ridiculously high.

GM Neal Huntington is insistent that the goal of the trade was to bring in Hutchison, not offload salary.

“We used the younger players as currency to acquire Drew Hutchison,” Huntington said during his weekly presser Sunday. “That was the primary motivation.”

Ramirez was never going to be a part of the Pirates’ plans. The Pirates have a stacked outfield already. They also have one of the best prospects in the game patrolling center field in AAA to go along with the best minor league first baseman, who himself was converted from right field.

Reese McGuire has been disappointing at the dish during his time in the minors, but the former first rounder was rising through the Pirates’ farm system at a consistent pace. Depending on who you ask, he either was the catcher of the future or a future quality backup.

They were both expendable, but they had to have had more trade value than this.

Perhaps Liriano and McGuire was a fair trade for Hutchison talent wise. Including Ramirez was the equivalent of stuffing a 20 dollar bill into the maître d’’s pocket as a thank you for getting what you wanted now. For going that extra mile.

So who won the trade? At first glance, it’s Toronto. On the second, third and fourth glance, it’s Toronto. Baseball America’s JJ Cooper tweeted shortly after the trade that if Liriano never throws a pitch for the Blue Jays, they still made the better deal.

But let’s do some projections of how this trade could work out. Hold onto your butts. This gets messy.

The going rate for one fWAR in free agency is about $8 million (this is not an official number, but it is the industry “guesstimate”). If Liriano does not improve, he’ll probably be worth -0.6 fWAR before the contract is through in 2018 (-$4.8 million). He’s going to make about $18 million in that stretch, so the Blue Jays could be in the hole $23 million when it comes to his value.

If McGuire and Ramirez combine to produce 2.9 more fWAR than Hutchison does (2.9 * $8M/WAR), then the Blue Jays won the trade from a dollar and cents standpoint. That is of course assuming that Liriano does not turn it around. If he pitches well, then that figure is thrown out the window.

What if Ramirez and/or McGuire are dealt for someone else? What if Hutchison pitches so well that he makes more money than the Pirates can afford in arbitration? What if the money shed from Liriano’s contract brings in a better starter (or two)? There are dozens of possibilities on how this trade could work out.

Do you understand? Good. Now explain it to me. Especially the part where a team is willing to give up good prospects to unload contracts, but not give up good prospects to bring in quality players.

The most important part of this trade is not Hutchison or Liriano. It’s that these types of deals are starting to become common in the baseball world.

Rich teams know they can rebuild their farm systems as long as they take small market team’s toxic contracts. This isn’t the first time a team has shipped off prospects to unload bad contracts, and it probably isn’t the last.

In April of 2015, the Orioles shipped away their Competitive Balance pick to the Dodgers for two career minor leaguers. In exchange, the Dodgers took on the $2.7 million that was owed to Ryan Webb and quickly outrighted him.

Last year, the Braves took on Bronson Arroyo’s albatross contract from the Diamondbacks and swapped Philip Gosselin for Touki Toussaint. Gosselin is a 27 year old utility man who has been a worse than league average bat in his time in the majors (with a career OPS+ of 95). Toussaint was the 16th overall pick in the 2014 draft and now is a top 10 prospect in one of the best farm systems in baseball.

And now the Pirates are parting with two top 10 prospects to unload the man they gave the largest free agent contract in franchise history to with a year and a half to go on his deal.

In the early years of baseball, if a team wanted to improve their roster, they would have to buy players with money. Then Branch Rickey came around and implemented a farm system. Prospects became the most desirable asset for sellers, and teams who wanted to improve their major league club were willing to deal them.

Things seem to be coming close to full circle where teams will be able to buy prospects. A-level ball players are worth a million. AA are five million. AAA is ten. The lower the risk, the higher the price. Why develop these players if you can just buy the best now?

Rich clubs like the Yankees, Dodgers, Red Sox and Angels could consistently have the best farm systems by just buying one or two guys from each small market club. And what GM in Huntington’s shoes wouldn’t let a couple of their top 10 prospects go if it meant they could sign a free agent who could be the piece they need to compete for a pennant?

God help the first GM that sells a future MVP for “financial flexibility.”

Getting Liriano off the books is a good move for now.  He looks broken, perhaps beyond repair. His slider has been absent all year, which has made him rely on a poor fastball.

The team is probably better off with him this year, and his salary could be better utilized. After all, McCutchen, Cervelli, Harrison, Polanco and Marte are scheduled to make over $12 million in raises next year, and that does not even count players like Watson, Mercer and Cole who will make bank in arbitration.

It’s a deal that makes the team better for 2016 and ‘17. Starting in 2018, this could be bad. And if the Pirates continue to make trades like this, their farm system can be depleted quickly.