Did the D-backs Get Fair Value for David Holmberg?

There was an uproar over the Bronson Arroyo signing two weeks ago. Arroyo is supposed to provide starting pitching depth by pushing Delgado out of the rotation and moving all the minor league pitchers one spot further from the majors.

The Diamondbacks used to have depth, however, in the form of prospects Tyler Skaggs and David Holmberg. Ryan wrote a great piece about the Holmberg trade shortly after it happened. I agree with almost all of Ryan’s piece, but I want to look at it from a slightly different perspective. To refresh your memory, the Diamondbacks traded Heath Bell, $500,000, and David Holmberg. They received minor leaguers Todd Glaesmann and Justin Choate.

In order to ‘win’ a trade, the Diamondbacks bounty has to be worth more than what they trade away. The two minor leaguers they received are not expected to have futures in the major leagues, so they have no value for the purposes of this exercise. But they also saved $5.5M (the $6M owed to Bell minus the $0.5M included in the trade) by trading Bell. So essentially the Diamondbacks are saying that Heath Bell and David Holmberg combined are worth less than five and a half million dollars.

First, let’s think about what Bell is worth. The amount is not anywhere near his actual salary. If he were a free agent, there is evidence to suggest that he would be worth more than the league minimum. Edgmer Escalona, a former Colorado reliever, signed with the Orioles for just above $500k with a WAR of -0.2 last year and -0.1 the year before while bouncing around between AAA and the big leagues. Matt Albers received a one-year deal worth $2.45M while only providing 0.3 WAR last season and having an inconsistent track record. Bell is likely somewhere in between; he posted a 0.0 WAR last year, close to Escalona, but he had put up WAR totals of 0.5 and 0.4 in the previous two seasons. I think $750,000 is a good, conservative estimate of Bell’s value.

Subtracting Bell’s $0.75 million from the $5.5 million, David Holmberg’s value needs to be less than $4.75 million for in order for the Diamondbacks to win the trade. It’s difficult to determine the value of a prospect like Holmberg. Some prospects become productive players, some never make it past triple-A. Other people have been faced with the same problem and created some interesting work. They have taken large samples of minor league players and found their average WAR over their first six years. These studies can provide evidence for an estimate of Holmberg’s present value.

In 2012, “Pirates Prospects” used Baseball America’s rankings to determine the surplus value of the average player based on their ranking. For example, a pitcher ranked between 76-100 on Baseball America’s list generated $7.93 million of value on average. David Holmberg has never been ranked in the Top 100 of BA’s prospect list, but the information can still be used to help approximate his value. We can use this average value of $7.93 million as a ceiling. That is to say, David Holmberg’s present value is definitely less than $7.93 million.

We have a ceiling for Holmberg’s value, but we also need a floor. John Sickels, a longtime writer and prospect evaluator, has given letter grades to prospects for a long time (A, B, C, etc.). Victor Wang took the Sickels rankings and found the average value for players given a certain letter grade. The average value of a Grade C pitcher 22 years old or young is $2.1 million. Holmberg fits the age profile, but he is not a Grade C pitcher. This is just setting his floor. David Holmberg is worth more than $2.1 million.

David Holmberg was rated as a Grade B prospect in 2012, but was demoted to a B- very recently. A Grade B pitcher has an average value of $7.3 million — this is a steep increase from the average value of a Grade C pitcher. The midpoint of $7.3 million and $2.1 million is $4.7 million. I’d like to think that Holmberg is closer to a B prospect than a C prospect, putting his value around five or six million dollars.

This approximation leaves us very close to the value that Holmberg fetched on the open market. It’s very possible that the Diamondbacks front office was not as high on Holmberg as others. If that’s true, then in their eyes, his value was even less. In that case, they certainly made a good move. Either way, it seems that for about $4.75 million, the Diamondbacks received a good approximation of Holmberg’s present day value.