Market inefficiency: Creativity needed
by, 04-26-2014 at 07:29 AM (459 Views)
Right now, one of the 30 best shortstops in the game, coming off a championship season - who should be earning a multi-million dollar salary and starting on a daily basis - is cooling his heels without a team. Other, inferior players occupy starting spots on teams across the league, including, most obviously, the Twins.
By now, most folks are aware of the circumstances that have forced Stephen Drew to sit out the opening part of this season. His signing is attached to a draft pick compensation, which has dried up his free agency market. Any team signing him would lose a valuable draft pick in the June draft; either their first round pick, or their second rounder if their first round pick is one of the first 10. If he is signed, Drew's former team, the Red Sox, stands to gain an extra pick in the June draft--a supplemental pick between the first and second round. But Boston only nets this pick if a team signs Drew before June 4.
In recent years, MLB teams have grown to increasingly value early round draft picks, and therefore have been increasingly loathe to give them up in exchange for signing quality free agents (who aren't at the most elite levels). This year, the draft is considered extremely strong, making it even less likely for teams to sacrifice their first (or second) round pick.
The presumed outcome of the Drew situation is that after June 4, he will quickly be signed by a team. By waiting until after the draft, the team will therefore avoid forfeiting a draft pick. This outcome has a clear negative outcome for Boston - it means that Boston will lose out on that supplemental pick they stood to gain.
The Twins have an obvious incentive not to sign Drew. They lose their second round pick by signing him. And this makes sense, as the Twins have relied on developing a strong farm system to get their organization back on track after down years.
But the Twins also have incentives to sign him before June 4:
1. They are fielding a sub-par SS in Pedro Florimon. The Twins' overall early 2014 performance has surprised many. This early success has leading to more optimism about 2014 that wasn't there for most at the beginning of the season - and improving their weakest position, SS, would improve their overall likelihood of success this year.
2. Come June 4, there may be several suitors for Drew's services, when the draft pick sacrifice evaporates. It may be very hard for the Twins to succeed in landing Drew when faced with competition to sign him.
Therefore, given the various incentives for the Twins and the Red Sox, it is in both of their interests to work out a deal before June 4. As we know, trading draft picks form the coming draft is not allowed. So to make this work, the Twins and Red Sox would need to work out a trade of players in their systems. They need to trade some prospects.
The question is what kind of trade would be fair. For Boston, they should be willing to trade anyone that is valued less than that supplemental pick they stand to gain. For the Twins, they should be willing to accept anything from Boston that is roughly equivalent (or slightly less) to the second round pick that they would sacrifice.
The Twins would also need to give something back in the trade. Therefore, the quality of what Boston would give up could be increased, because they would also be getting a (lesser) prospect back from the Twins.
Here is what I suggest:
Twins trade Luke Bard for Anthony Ranaudo. And then they sign Stephen Drew. The Twins lose their second round pick, but get back a quality arm. I'd prefer Henry Owens or Matt Barnes as the return, or Trey Ball (as a player to be named later, since he can't be traded until after June), but I am suspicious that these would be too far of a stretch.
I think this would be a creative solution to an inefficiency in the market the current draft system has created. It would get Drew playing, as he deserves to be, it gets the Twins a better SS (while there is debate over Florimon's worth, I don't hear anyone arguing that Pedro Florimon is a better overall SS than Drew), it lets Boston get the supplemental pick they might otherwise forego, and it allows the Twins to get something in return for sacrificing their second round pick.