Trade Value, Explained
Talent is not what gets traded. Surplus value is.
The Standard take
A trade verdict is the difference between the surplus value each side receives, where surplus is projected wins priced at roughly $8 million each, minus the salary owed over the years of control. It explains why cheap young players cost so much and why a star on a market contract returns so little — and it says nothing about whether either roster actually got better.
Evidence: established framework, estimated inputs · Build a deal in the Trade Simulator.
The formula
totalWAR = Σ (playerWAR × max(1, years))
totalSalary = Σ (salaryPerYear × max(1, years))
marketValue = totalWAR × $8M
surplus = marketValue − totalSalary
netA = surplusReceivedByA − surplusSentByA
|netA| < $3M → fair · > $12M → a steal
- Wins over control
- Annual WAR multiplied by the years remaining. Six cheap years of a two-win player is twelve wins of inventory; one year of a four-win star is four.
- Market value
- Those wins priced at the free-agent rate. This is what a club would have to pay on the open market to replace the production.
- Surplus
- Market value minus the money actually owed. This is the tradeable asset. A fairly paid player has a surplus near zero, which is why he moves for very little.
- Net and verdict
- The surplus each side takes in, minus the surplus it gives up. The bands exist to stop the tool from declaring a winner on a rounding error.
The assumptions
- Production is flat across years. A player's entered WAR applies to every remaining year. No aging curve, no development curve, neither decline nor breakout.
- Every win costs the same. A single $8M-per-win rate for all players, all clubs, all seasons. Real markets pay more for stars and more in big revenue markets.
- Certainty. Projected wins are treated as facts. Injury risk and bust risk — the reason prospects trade at a discount to their paper value — have no term in the model.
- No discounting. A win six years from now is valued exactly like a win this season. Contenders do not think that way.
- A trade is two piles of assets. Fit, positional scarcity, roster spots, and no-trade clauses are outside the model.
A worked example
Team A sends a 4.5-win starter with three years left at $22M per year. Team B sends a 2.0-win prospect with six years at $1M and a 2.2-win outfielder with four years at $6M.
| Side | WAR × yrs | Market | Salary | Surplus |
|---|---|---|---|---|
| A sends: starter | 13.5 | $108M | $66M | $42M |
| B sends: prospect | 12.0 | $96M | $6M | $90M |
| B sends: outfielder | 8.8 | $70.4M | $24M | $46.4M |
| Net to A | 136.4 − 42 | +$94.4M |
The model calls this a steal for Team A — and that result is doing something useful and something misleading at once. Useful: it shows how much of a trade is decided by contract length and price rather than by who is better today. Misleading: it treats twelve hypothetical prospect wins as certain, which no front office does.
Where it breaks
- Prospects. Without a bust-rate discount, long cheap control is systematically overvalued. Haircut prospect WAR before entering it.
- Win-now clubs. A contender rationally pays above surplus for wins in a narrow window. The model scores that as losing the trade.
- Salary dumps. Taking on a bad contract has real strategic value to a rebuilding club with payroll room; here it is just negative surplus.
- Hard caps. In capped leagues, matching salary is a rule, not a preference, and the model has no cap.
- Garbage WAR in. Every verdict inherits the uncertainty of the win projections you typed. See the WAR explainer for how wide that error bar is.
FAQ
What is surplus value?
The market price of a player's projected production minus the money actually owed to him. A four-win player earning the minimum carries enormous surplus; the same player on a market-rate contract carries almost none. Trades are decided by surplus, not by talent.
Why price a win at $8 million?
It is a round, deliberately conservative stand-in for the free-agent rate per win in recent markets. The true figure moves every offseason and is not uniform across ages, positions, or clubs. Change it in your head and every verdict scales with it.
Does the model value prospects properly?
Only crudely. A prospect enters as projected wins times years of control at a low salary, which captures why cheap young players are expensive to acquire — but it ignores the probability that the player never reaches that projection at all.
What does 'fair — within noise' mean?
A net surplus gap under $3 million. That is smaller than the error in any single WAR projection, so the model declines to declare a winner.
Why can a team 'win' a trade and still be worse off?
Surplus value is not the same as a better roster. A rebuilding club maximizes surplus; a contender buys wins now and knowingly pays over the surplus rate for them. Both can be right.
Does it account for payroll limits?
No. It measures dollars owed but has no concept of a budget ceiling, a luxury-tax threshold, or a cap. In leagues with hard caps, salary matching is a constraint the model simply does not see.