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What is the true cost to the Detroit Tigers of signing Jose Valverde?

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Reports yesterday out of 97.1 WXYT-FM in the Detroit area said the Tigers offered closer Jose Valverde a two-year contract worth between $12 million and $14 million. If that's the deal out there, I don't like it.

We know the true cost of signing Valverde is higher than that. Due to his status as a Type A free agent, the Tigers would have to forfeit their first-round draft pick -- 19th overall -- to the Astros, too.

That obviously sounds bad. No one wants to lose a first-round pick. A franchise with a weak farm system that has recently traded a popular player to bring more young, cost-controlled players into the fold does not sound like a candidate for giving away a draft pick so easily, either.

But how should we value the draft pick at stake -- as well as the two compensation picks the Tigers received for losing Brandon Lyon and Fernando Rodney? Building on research done by BaseballAnalysts.com and The Hardball Times, via our sister site Beyond the Box Score.

Victor Wang broke down the value of picks by tier last January at Hardball Times, applying a financial value to the draft picks based on the wins above replacement statistic. Rather than try to explain how he came to these numbers, causing some of my readers to have their eyes glaze over, I will just present the findings. Be sure to click the links for more information. These numbers should probably be adjusted down a bit, as the value of a win above replacement is less this offseason than last.

16th-30th Surplus Value: $5.2M (late first round)
31st-45th Surplus Value: $2.6M (supplemental)
46th-60th Surplus Value: $0.8M (early second round)

By this figuring, the Tigers actually break even in losing a first-round pick by gaining a pair of compensation picks.

However, I am not sure the bottom-line view is the best way to look at things. As of right now, the Tigers own the 19th overall draft pick, as well as a pair of sandwich round picks. While breaking even is commendable, it's still giving up about $5 million in value that the Tigers currently own. Unless that was part of the plan all along, I suppose.

One quibble Tigers fans might have with this entire figuring is that first rounds have been pretty kind to Detroit. In recent seasons, Rick Porcello came as the 27th pick, and Ryan Perry the 21st. Porcello, however, was an exception to the rule; the top high school pitcher in the draft dropped that far simply because of his agent. Perry made it to the major leagues quickly, but his value remains to be seen. It will be substantially less if Valverde is signed, making Perry a middle reliever. Any other memorable pick came early in the draft.

Beyond that, well, the Tigers don't have a lot of experience with making later picks in the first round because they've typically been a bad team. But it never hurts to gather as many picks as you can and hope one turns out really well. In the past few years, Phil Hughes (23rd), Daniel Bard (28th), Jacoby Ellsbury (23rd) and a few others have come out of the last first round. It's not exactly fruitful territory. There are many more names you likely don't know than names that you do. But it's good enough.

My take on Valverde

This whole conversation seems a bit academic in nature, of course. Those who subscribe to the theory an organization should be as economically efficient as possible will loathe to give up the pick, while those who don't mind a little waste are probably not as concerned.

I fall somewhere in the middle. If the Tigers were giving up a first-round pick for a player who would you could reasonable expect would make a difference and put them over the top, then there is hardly reason to debate it. However, giving up a draft pick for a relief pitcher does not seem like the best use of resources to me, for several reasons.

  1. The Tigers have been collecting relief pitchers this offseason, and have some bubbling up in the minors as well.
  2. To that end, there are several pitchers who have been thought of as the closer of the future: Joel Zumaya, Perry and Schlereth are among them. Signing Valverde to a multi-year deal derails that and makes you wonder why the Tigers bother stockpiling relief pitching.
  3. The closer role is over-rated, and paying free agent prices for saves is inefficient.
  4. The Tigers' problems are bigger than just who finishes games. They need to score some runs, too.

And none of that even speaks to the fact Valverde had some baseball luck on his side last season. Which isn't to say he's not a good pitcher, because he is. But he's not a great one, and not worth committing $12-14 million to. So regardless of the draft pick, I am not really in favor of this move as a multi-year deal. I'd actually be more in favor of it as a one-year stopgap. If the Tigers are out of contention by the trade deadline, they could move him and possibly receive a draft pick's worth of value -- and a player with some professional baseball track record as well.

I don't like the reports we're hearing so far and hope Valverde signs elsewhere.

Beck's take.

MLB.com reporter Jason Beck did not have any information confirming or denying the offer, but he was not all that surprised by the report either and called it the most logical destination for Valverde. He blogged:

There's a line of thought that if you're going to give up a first-round draft pick to sign a reliever, you almost have to do a two-year contract to justify it. It lessens the risk of the reliever having a bad year or missing time and dropping his ranking in the Type A/Type B free agent list