Trade Values 101: How the Market Affects Price

I’ve done a lot of the trade values articles, not only looking at the value of guys the Pittsburgh Pirates have, but also looking at guys the Pirates could acquire.  There is one common question that gets asked in regards to the values that are presented: how does that change when other teams enter the mix?  Usually that’s people looking for a bigger return on the players on the Pirates’ roster.  The thought is that you might get a team to overpay out of desperation.  Sometimes that’s the idea that a player might cost the Pirates more if other teams are interested.

The values are always designed to reflect the standard market price.  As with any market, supply and demand can definitely play a role.  As an example, let’s take a look at a fictional market for first basemen, using Carlos Pena’s value.  Before we look at the teams, here is a refresher on Pena’s value, from the article a few weeks ago:

2011 $10.0 2.5 $0.9
TOTAL $10.0 2.5 $3.4

Pena is currently projected as a Type B free agent.  He’s not necessarily a guarantee to receive compensation picks, since he would be more likely to accept a raise on his $10 M salary, which he would be guaranteed through arbitration.  Thus, his value might not include the $2.5 M in value that a Type B player would normally get.  However, I included that value to be safe.  The overall value is pro-rated to assume that he gets dealt on July 31st, reflecting his value over the final two months of the season.  A big reason Pena’s value is so low is due to his big salary.  He’s putting up nice production, but his salary is near the maximum amount to get any value from his production.

Pena would likely cost a combination of Grade C hitters (worth $0.5-0.7 M each) and/or Grade C pitchers (worth $1.5-2.1 M each).  If you reflect his $2.5 M Type B value, the best price seems to be two Grade C pitchers.  For reference in the Pirates’ system, that would be a pair of guys like Nathan Baker, Tyler Waldron, Aaron Pribanic, or Brett Lorin.  Now for the four teams in this fictional market who are looking for first basemen:

Team A

Situation – This team can afford to take on Pena’s salary for the remainder of the year.  They also have prospects to spare, and can afford to give up two Grade C pitchers to meet Pena’s value.

What the Cubs Get – In total, the Cubs would get two Grade C pitchers, and wouldn’t have to pay any of Pena’s salary for the remainder of the year (which would be $3.3 M over the final two months).

Team B

Situation – This team can afford to take on Pena’s salary for the remainder of the year.  However, they are thin on prospects.  They can’t afford to spare two Grade C pitchers, so their package is made up of one Grade C pitcher, and two Grade C hitters.

What the Cubs Get – Rather than getting two Grade C pitchers from the first deal, the Cubs would get a Grade C pitcher and two Grade C hitters. They still wouldn’t have to pay any of Pena’s salary for the remainder of the year ($3.3 M over the final two months).

If the Cubs wanted the best possible prospect, their asking price could be a guy like Marte.

Team C

Situation – This team can’t afford to add much salary, which means they will need the Cubs to pick up salary.  In turn, that means they will need to add up to $3.3 M in value to compensate the Cubs for picking up salary.  They have a loaded farm system, so they could afford to give up a Grade B hitter ($5.5 M value) in exchange for Pena and $2 M in salary (putting his value at $5.4 M).

What the Cubs Get – In total, the Cubs would get a Grade B hitter, which is much more valuable than the Grade C hitters.  For reference, a Grade B hitter would be someone like Starling Marte.  The Cubs also would be paying $2 M of Pena’s remaining $3.3 M for this return.

Team D

Situation – This team can’t afford to take on much salary.  They also don’t have any Grade B hitters to trade like Team C.  In order to make up for the salary relief, this team will deal 1-2 extra Grade C pitchers, making the total package 3-4 Grade C pitchers for Pena.

What the Cubs Get – In total, the Cubs would get four Grade C pitchers, but would have to pay $2-3 M for the extra pitchers.

The Cubs Priority

The market has four teams looking for a first baseman.  Two teams can pick up salary.  Both teams are offering value, although one team is offering two higher value prospects, compared to the alternative of one higher value prospect and two lower value prospects.  Two teams can’t pick up salary.  One of those teams can offer a top prospect.  The other team is going with more of the “quantity” approach, although the value is the same.

It really comes down to what the Cubs want to do in this situation.  Can they afford to pick up some of Pena’s salary?  Are they looking for the best possible prospect?  If they’re looking for the best prospect, and don’t care about picking up salary, then Team C is their best bet.  They can get a Grade B hitter, while paying $2 M.

If they’re looking to boost their farm system with a lot of prospects, and don’t mind giving up money, then Team D is their best bet.  They could get 3-4 pitching prospects.  None of those prospects grade as high as the hitter that Team C is offering, although if the Cubs priority was adding pitching, or adding multiple prospects, this would fit their need.

If the Cubs just want to get rid of Pena’s salary, and don’t care about getting the best possible return, then Team A or Team B would be the options.  Team A would be the best bet in getting the best possible prospects.  Team B would be more of an option if the Cubs were looking for more prospects, or wanted some hitting prospects.  Either way, the Cubs shed the $3.3 M in salary.

Again, it all depends on the priority of the Cubs.  All four of the above teams meet the value for Pena, although all four teams have different end results.  Two teams are giving the best prospects, with one picking up the entire salary.  Two teams are giving more of a “quanitity” return, with one picking up the entire salary.

I mentioned how the Pirates could give up two Grade C pitchers, like a Tyler Waldron and a Nathan Baker, while picking up the entire $3.3 M owed to Pena.  That would make them Team A in the above scenario.  However, that might not do it.  If the Cubs don’t care about salary relief, and want the best prospect, they might go with Team C, offering a Grade B hitter in exchange for $2 M.  In that case, the only way the Pirates could beat the offer is to accept salary relief (even if they can afford the $3.3 M) and up their offer from a Waldron/Baker package, to a Starling Marte type hitter.  That certainly changes the scenario of adding Pena as a two month rental.

There could also be a scenario where two teams end up with “Team A” offers, picking up the entire $3.3 M, with both offering two Grade C pitchers.  In that case, it would come down to which pair of pitchers the Cubs liked better.  The Pirates might be meeting the value with Waldron and Baker, but if the Cubs like another team’s pitchers better, the Pirates would have to find a way to up their offer.

In all cases above, the value never really changes, although the possible return can change, based on the priority of the Cubs.  The only way the value can change is if the Cubs pick up salary, and the value would only change to repay the Cubs for that salary relief.  The only other way the value could change is if multiple teams had the same offer.  In that case, the team with the least attractive offer would have to up their offer, and provide added value, in order to beat out the offer that the Cubs prefer.

So when we talk about values, it’s really a baseline.  In the end, it all depends on the trading team’s needs.  The above was all a fictional example for Pena.  I don’t know what the Cubs priority is.  I do know that it only makes sense to add Pena for two months if the Pirates can get him without sacrificing a key piece in the farm system.  If the Cubs are looking for the best possible prospect, and there’s a team out there willing to pay that in exchange for salary relief, then it won’t matter at all if the Pirates can afford the rest of Pena’s 2011 salary.  In that event, their offer wouldn’t meet the needs and priorities of the Cubs.

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I wouldn’t trade marte he’s supposed to be a top 5 prospect of ours for a a guy like Pena I think he’s a good player but I think we should add another guy like a Soriano maybe take the off the cubs for his contract I think that would be a smart move for both teams giving the pirates some power in the middle of the lineup


The Soriano contract is terrible.  There is a reason he is still in Chicago, nobody wants it.

And he isn’t all that good anymore.


The Soriano contract is terrible.  There is a reason he is still in Chicago, nobody wants it.

And he isn’t all that good anymore.


is pena an upgrade? maybe. really the only offer you can make is grade j prospect and pick up all his salary, if that’s nor enough ,darn.


Yes Pena is an upgrade…he is 1.3 WAR player.  Overbay is a -.7 WAR player and G Jones is a 1.3 WAR player, but his value would decrease if he played first base permanently.


Yes Pena is an upgrade…he is 1.3 WAR player.  Overbay is a -.7 WAR player and G Jones is a 1.3 WAR player, but his value would decrease if he played first base permanently.


The Cubs poor record and apparent willingness to trade Pena potentially diminishes their negotiating position and Pena’s trade value.  If he “wasn’t available” teams A-D would have to give up more in prospects to pry him from the Cubs, etc.

Well under no circumstances would I trade Marte for Pena.  However, there is no doubt that the Pirates cannot stay in the race without some punch in the middle of the lineup. Besides Pena, I like Gabby Sanchez of the Marlins as a potential player to go after.  With Presley and Marte in the picture I wonder how attractive an offer of Gorkys Hernandez and Morris would look. I believe that Morris offers some upside as a reliever, but not as a starter. If the Bucs are going to bring in a high level bat, I would prefer that they do it before Cinn comes to town later in the month. Facing Cinn, St. L, Atl, and Philly the Bucs will need all the ammo they can muster.  I believe the Bucs will wait to the last two days of July to access their position.  I just hope by then it’s not to late.


No way does a Hernandez and Morris deal get Sanchez.  Sanchez isn’t even arb-eligible right now.  He is also only 27 and just hitting his prime power years.

Sanchez is an All Star-type player with a 2.6 WAR.  To put this into focus Neil Walker is a 1.o WAR player, Carlos Pena is a 1.3 WAR (and remember he would require a Starling Marte-type Player), and Derrek Lee is a 0.0 WAR player. 

I know the Fish have Logan Morrison in LF right now and he could slide back to first, but that doesn’t mean the Fish have to accept anything less than market value.

If you wanted Sanchez, you’re looking at giving up something along the lines of Taillon, Marte and Tony Sanchez at the minimum.

Could you possibly list what “grade” our our potential trade prospects are. Guys like Pressley? Rojas Jr.? etc…



Not just potential trade prospects but like top 5 hitters?  We dont have any grade A hitters in our system do we? 

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