Comments on: Those Who Snooze Don’t Always Lose

By: Marsh

Marsh — Thu, 22 May 2008 01:26:02 +0000

in game thread is up....

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By: Schlom

Schlom — Thu, 22 May 2008 01:10:22 +0000

I wish I could continue this discussion but I have to leave to go to the game tonight.

I guess my main point is that I’m not sure that LaPorta will be an impact player as he is already as far right on the defensive spectrum as he can go — and I think the failure rate of drafted 1B or LF is so low. He better be an impact bad otherwise he’s going to be a bust.

Maybe with more time we can figure out what the average 3B does in Petco vs. the average LF and then we can better figure out who is the better player. Superficially, whoever plays in Milwaukee is always going to look better then someone in San Diego due to the park factors (another reason why it would be good to trade with San Diego as pretty much no matter what you are going to end up with the better hitter).

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By: Marsh

Marsh — Thu, 22 May 2008 01:10:17 +0000

#127@Marsh: Um, your line should have been in quotes. "But they didn’t sign him so they could turn him into Kevin Kouzmanoff"

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By: Marsh

Marsh — Thu, 22 May 2008 01:07:34 +0000

#124@Tom Waits: But they didn’t sign him so they could turn him into Kevin Kouzmanoff That's a great line. A clincher, if you will.....

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By: Tom Waits

Tom Waits — Thu, 22 May 2008 01:04:17 +0000

#123@Marsh: Oh, I don't think putting Braun back at 3b (or Hart in CF) would be their ideal outcome. But it's better for them than selling low on LaPorta. I wrote 122 before I saw 123, else I might not have.

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By: Schlom

Schlom — Thu, 22 May 2008 01:03:01 +0000

#122@Marsh: I'm not blaming the Brewers for drafting a player that isn't as good as what they had at the major league level as LaPorta still obviously has value. He needs to be traded to fully maximize that value -- probably the sooner the better.

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By: Tom Waits

Tom Waits — Thu, 22 May 2008 00:59:06 +0000

#122@Marsh: I apparently wasn’t clear. The 2 million is sunk, but it clearly indicates what the Brewers thought of LaPorta when they drafted him. They didn’t pick him 7th and pay him that 2 million dollars if they thought his future position would lead to him being traded, 1 year later, for a player like Kouzmanoff. The tangible proof of what the Brewers thought of him, rather than the cash involved, is what matters. If they didn’t think they could use him themselves, or trade him for more than Kouzmanoff, why wouldn’t they have drafted Matt Dominguez, Jayson Heyward, Kevin Ahrens, or any of the pitchers who were available?

I don’t doubt that LaPorta’s future trade value was considered. But they didn’t sign him so they could turn him into Kevin Kouzmanoff. LaPorta’s the kind of prospect you turn into an impact player, not a gap-filler, especially when Hall fills the gap already.

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By: Marsh

Marsh — Thu, 22 May 2008 00:55:11 +0000

#118@Tom Waits: Sorry Tom, re-reading your post, I’m not sure that you were actually talking about “forgetting the signing bonus” which is what I had stated.

It could be argued that LaPorta was signed for $2mil because - like you always suggest the Padres should have known with Porcello - he represented (1) strong insurance value (1b from above) and (2) strong trade value.

Now that things have played out they way that they have, you would have to assume that the brewers would be reluctant to move Braun back to 3b in order to suit up LaPorta. Maybe I’m wrong about that, I dunno.

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By: Marsh

Marsh — Thu, 22 May 2008 00:50:36 +0000

#118@Tom Waits: The signing bonus is sunk cost. Unless that sunk cost provides you some leverage in future negotiations (e.g. you’re a VC Firm and you previously financed a start-up therefore in a down round of financing you should be able to negotiate favorable terms), then you have to ignore it. Otherwise you’re mistakenly placing future value on costs incurred in the past. The fact is that bonus is a cost that has already been incurred. Nothing they do in the future can change that. LaPorta’s value is solely based on the cash streams he can create in the future. Again, ignoring sunk costs is fundamental to NPV analysis. Many, many bad decisions have been made by organizations (particularly governments, I imagine) forgetting that.

As for that being part of Schlom’s argument (I’m not going to search through the comments to figure out if/when he said that), I can’t support him there.

ps - the only way you could conceivably treat the signing bonus as a useful costs is if you thought of it as a capitalized asset that you depreciated every year over the players useful life. In that case, you could add back the depreciation cost as a non-cash charge when calculating your free cash flow. As I understand it, though, players are not thought of as “assets” in the financial sense. Rather, they are treated like operating expenses (this is like the difference between Delta owning a plane (capital asset that can be depreciated) or leasing it (operating expense).

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By: Steve C

Steve C — Thu, 22 May 2008 00:45:41 +0000

#119@Masticore317: not much the Padres don't match up well trade wise with Boston, they have kind of tapped out thier minor league system (position player wise).

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