In the last 12 months or so the White Sox always seem to be finding themselves in these glass half empty predicaments when the long-term forecast should be glass half full. I can’t explain it, but you know how you always have that one friend who is an overall good productive person, but ends up doing tons of dumb shit that you can’t wrap your mind around. That’s kind of the White Sox right now. The latest was trading more International Bonus Cap Money to the Rangers for actual real live cash (aka buying out Welington Castillo‘s 2020 option for $500K). There are already great posts on this from other White Sox blogs that give you the ins and outs of the transaction and the tactical repercussions, both James Fox from Future Sox HERE and the OG of White Sox blog / twittersphereJim Margalusof SoxMachine HERE, covered this perfectly. So why another FUCKING POST ABOUT THIS!?!?!?!
Well, because I think it is important to put the value of this “fake” money in context.
Yes, it is fake money. “International Bonus Cap Money” isn’t actual cash, it’s just the RIGHT to spend some money on the young talent that resides itself outside of the borders of the US & A. It’s just an “option” so to speak. This option is capped. Teams are allotted a specific amount of cash and can trade for a further amount more. It should also be noted that signing MLB free agents that have been given qualifying offers will cost you $500k of this space.
While the two linked articles above are great, they don’t get to exactly what I want to get to here. Luckily, Fangraphs brings us Kiley McDaniel and this lovely post, which quantifies the ROI (Return on Investment) that a team gets for actually spending (in real cash) this “fake money”.
I know, TL;DR, but I’ll give yous the Cliff’s Notes. Kiley quotes an estimated 650% ROI on money spent internationally. Between the two deals with the Rangers (this current one and the Nate Jones one), we get $1,250,000. Assuming the quoted ROI is accurate, that would be $9,375,000 of player value. I know what you are saying, SO FUCKING WHAT?!?!?!
THE INTELLIGENT OF YOU CAN SKIP AHEAD TO THE PART WHERE I TELL YOU IN ACTUAL PLAYERS WHAT THIS IS WORTH.
Well, Fangraphs also gives us something called “THE BOARD” and it takes current prospects and using a historical model and current rating of the player value, estimates the value of the prospects. It’s a bit of a leap to do such a thing and might lack some of the precision that you nerdy numbers types might enjoy, but it’s the best thing we got. Before we had high powered computers we had a fucking abacus and that shit was good enough. If you lack faith, you can go to Fangraphs and review all of their materials to get a better feel.
$9,375,000 in White Sox prospects would be the equivalent of 2 Dane Dunning‘s, seems decent (per THE BOARD, Dunning is a 45 FV pitcher, which they estimate to be worth approximately $4M). Looks like reverse arbitrage. If you take it in straight dollars, Kiley’s estimates would say that the White Sox traded $9.375M for $1.75M. It’s like trading draft picks with the Jimmy Johnson in the 80s and 90s, you knew you were getting screwed, but man, when there are numbers put to it…
BUT WHAT….THERE’S MORE!
If I use Jim Margalus’ numbers of total bonus cap traded by the White Sox since 2017 and assume $250K for the two unspecified transactions, I get $4,500,000 worth of “fake money” traded. Going back and using the 650% ROI figure, I get $33,750,000 worth of future value. That seems pretty good. That would be like Andrew Vaughn + Dane Dunning or something to that effect (per the BOARD Vaughn is a 50 FV hitter worth approximately $28M in value).
Now, this is just the “average” outcome, there are better and worse teams at culling talent, but the talent does generally show up in a non-linear fashion, like spend money on a bunch of these young kids and most of them amount to $0 value and a few produce a bunch of the value. It is possible that the White Sox wouldn’t generate the value noted, maybe they are especially bad at this and trading for cash is a better result for them. This is the choice the White Sox are making. It’s not just some “fake money”. The recent moves with the Rangers look more like an Accounting move to improve share price (not that I have ever been involved with such a thing) than they look like baseball moves to improve a young core’s future outlook.