The Problem With Trade Valuations: Kepp Edition

A little while before Jeff Keppinger was traded to the San Francisco Giants for pitching prospects Henry Sosa and Jason Stoffel, I had written an article about his value, concluding that Kepp was worth about $11.1 million in surplus value. That means, the amount of production Houston could expect get from him, less his salary, meant he was still a very valuable player, even if he profiled more as a bench player on a contender.

What kind of value did Houston get for Kepp?

Two Grade C prospects, according to John Sickels. On top of that, one of those players was above 23 years old, which changes his worth. If you add up the values of similar prospects, that gave Houston a return of $3.6 million. Considering that the draft picks from a Type B free agent would be worth $2.5 million and a Type A (which Kepp currently profiles as) is worth $5 mill. That means Houston barely broke even with his free agent compensation, much less his surplus value on the field.

Now, my figure was assuming Kepp would average 1.5 fWAR over the next two seasons. Despite missing a month at the beginning of 2011, he still has produced 0.7 fWAR already this season. To get down to the value Houston actually got, Kepp would need to post 0.7 fWAR this season and 1.0 fWAR next season, plus get to Type B status. Without Type B, he'd merely have to post 1.0 fWAR each of the next two season while under team control.

Why is there a difference between how we are rating this trade and what Ed Wade got? Well, part of that is he got less than Kepp was worth, but it's also telling of how teams view these kinds of pieces. Kepp isn't a great player. He isn't a defensive whiz, he's not a big power guy, he's just a good hitter who's locked in for another two years. Teams value that differently, and it seems like the Giants and Astros both value him less than his actual value, much less his surplus value to the team.

Okay, so we've established Kepp isn't well-thought of enough to earn a bigger deal than this. What's left to discuss?

Let's run through what Sosa and Stoffel would have to do to provide value in the long-term. See, now that we have a deal, we can figure out not just prospective values for players, but actual performance. The Astros now have 12 years of big league service time from these two players (potentially). That automatically trumps Kepp's year and a half.

But, we can also see a hole in this kind of analysis. See, for Houston to get value out of this deal, they just need one of the two pitchers to make the big leagues and play two years for minimum salary while posting 0.5 fWAR in each of those two seasons. That'll give Houston about $4 million in surplus value. If that same guy lasts all six years at 0.5 fWAR each year, the Astros will come very, very close to getting full surplus value in return for Kepp.

It's a risk. To make these values work, you have to be confident that one of these prospects will make the majors, and that's no certain thing. Sosa especially looks bust-able even as he dominated on Thursday night. But, if a talent evaluator falls in love with a player and thinks he can play in the majors (however briefly), that could return enough value for a guy like Kepp. Sure, Eric Surkamp may have a better pedigree and, thus, a better chance for making the major and, thus, giving Houston value in return. But, there's still risk even with him. 

To make a long post short...Houston needs one of these prospects to put up two years like Wilton Lopez for this deal to make sense. Since even that feels like a bit of a stretch, I think Ed Wade may have lost this trade...

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