A Yoan Moncada signing may be imminent, with Hank Steinbrenner attending Moncada's notable third private workout with the Yankees just days ago, so I'll take this last chance to weigh in on whether he's worth the small fortune he'll cost. My first thought was: No way is a 19 year-old amateur worth the $80-$100m we hear he may get. My second thought was: Come to think of it, I have no idea what a top draft pick is really worth to a team. Team owners prevent American amateurs from earning their true value by agreeing to sign them only in a "draft" -- i.e., a cartel agreement that each player will get an offer from only one employer, not from multiple employers bidding for his services. I'll leave for another day my tirade about how badly baseball owners violate free-market economics and morality by being tied with OPEC as the top billionaires-for-cartelization club. But the point is that the several million it takes to sign a top draft pick is his cartel-depressed price, not his value to his team. If he were draft-eligible, Moncada likely would be the #1 overall pick. While I'm no draft expert, I'm reading that the two top draftees this year are more reliable, but have lower ceilings, than Moncada. My impression is that the team with the #1 pick dreams of fishing for the next Trout, so it more often goes for high ceiling, not high floor – meaning Moncada likely would be a #1 overall draft pick, or maybe a #2.
And a #1-2 draft pick really is worth a lot. A great analysis by Andrew Ball found that, on average, the #1 player in the draft produces 28.5 WAR in his first six MLB years (the team-controlled years), with the #2 player not far behind at 23.9 WAR. The dollar value of those picks is about $90 million and $75 million, respectively – but that's based on 2013 dollars-per-WAR estimates. Recent free agent signings show the cost of a marginal win has risen, easily by 10% over the past two years – which is to say a #1-2 draft pick is worth about $82-$100 million. Marginal wins also are worth more to big-market teams, so a #1-#2 pick is worth more than that $82-$100m to the Yankees and Dodgers – reportedly the two top Moncada contenders. Which is to say that at least some of the billionaires who own MLB teams know what they're doing, at least when it comes to whether something or someone is worth a $100 million investment.
Or look at it this way: What does $80-100 million get you on the free agent market, the other place you could spend this money? Sure, Moncada is a high-risk/high-reward investment -- but so are the 30somethings who command that much as free agents. Remember that the $80-$100m for Moncada includes the MLB "tax," and many of the teams considering Moncada also face luxury tax for free agents (e.g., Yankees, Dodgers), so let's consider what similar sums have gotten the Yankees on the free agent market: (1) it took over $120m ($85m plus luxury tax) to land Brian McCann; (2) $68m, Carlos Beltran ($45m + luxury); (3) $78m, Chase Headley ($52m + luxury). Moving on to other teams' signings, James Shields just cost the Padres $75m, close to Moncada money, but he would've cost a team paying luxury taxes over $112m.
Not one of these $70-120m(ish) free agents will produce the 24-28 WAR a #1-#2 draft pick like Moncada should – and while Moncada is risky, so are these guys. Beltran has a decent shot at a modest comeback, but he was a 0-WAR player last year, so if he doesn't come back, he's identical to a minor-leaguer who never makes it. Carl Pavano and Kevin Youkilis show Beltran wouldn't be the first free agent to provide about 0 WAR for eight-figure pay. If you expand the list to pricey free agents who provided just one good season you get A.J. Burnett as another example of how major-league free agents aren't necessarily less likely than an elite prospect to come with a risk of either providing zero value or proving a one-year flash-in-the-pan. As many folks noted in our Shields/Scherzer discussions: top free agents almost all are in their early-mid 30s, the age at which even a reliable star easily could be 0, 1, or 2 years from a permanent plunge to the replacement-level value that is all most players can offer by their mid-late 30s.
Now, it's possible Moncada's workouts showed enough holes in his game to convince teams he's not actually at the level of a #1-2 draft pick. If he costs only $40-50m, that'll be decent evidence the workouts showed the reality didn't match the "he'd be #1" hype. But if the hype held up, then Moncada does seem worth the money, and for a team with a farm system that's looking better this year, but is a bit lighter on IF than OF/P talent, Moncada seems a good fit too. So, here's hoping.