Roy Oswalt’s Trade Value: Update

While yesterday’s proposed trade fell through, Roy Oswalt remains one of the top players on the trade market, and one of the most likely to be moved by the July 31st deadline. That being said there seems to be a great debate as to what his value really is.

Few doubt that Oswalt is a premier pitcher, and no worse than a good (or even great in my book number 2). He might not be the bona fide ace that say Roy Halladay or CC Sabathia when they were traded, but he’s not far off. Oswalt has a career 143-81 record with a 3.22 ERA. While his record is 6-11 this season, much of that has to do with the failure of the Astros offense than any knock on Oswalt. His ERA sits at 3.12 and he is having one of the best season’s of his career. His strikeout rate (8.49 per 9 innings), HR rate (.80 lowest in 3 years), Avg. against (.222), and WHIP (1.07) are all incredibly impressive. His walk rate is up this year (2.40 per 9 innings), but since his K rate is so high and avg. against so low, it hasn’t been a big problem.

Few executives/baseball pundits are questioning Oswalt’s talent, they just aren’t sure if he is worth the contract going forward. This is the part I tend to disagree with them. Oswalt is owed roughly $7 million for the rest of this season, and not a bad figure considering the year he is having. The problem is what he is owed for the rest of his deal. Oswalt is scheduled to earn $16 million in 2011 and has a $16 million team option for 2012 with a $2 million buyout. Meaning that including the $7 million he is owed this season Oswalt will require $25 million for a year and a half of work (though you technically spread out that $2 million over a third year budget). While a few teams have balked at that price, most contenders are willing to pay it. The problem is that Oswalt has a full no-trade clause and wants his 2012 option picked up meaning he will be owed $39 million over the next 2 and a half years. That has left a lot of teams with pause in terms of acquiring the front line starter. For me though I don’t believe that is as big of a deal as people are making it out to be.

That $16 million a year is roughly the average that Derek Lowe, A.J. Burnett, and John Lackey signed for in free agency, and Oswalt has been a better pitcher than them throughout his career (and is having a better season this year). Oswalt is roughly the same age as them (and a few years younger than Lowe). And to top it all off the team acquiring him doesn’t have to pay it for 4-6 years, which is always the biggest problem with signing a free agent pitcher. Oswalt will probably be worth that money in 2012, but afterwards as he gets to his mid-30’s his production will likely decline, when you sign a free agent you are stuck with that deal. Now this will give teams financial flexibility going forward.

The other benefit with taking on all that money is it will lessen the prospect return. Oswalt won’t cost whomever acquires him what the Phillies paid for Roy Halladay or the Mariners and Diamondbacks paid for Eric Bedard and Dan Haren. His value is closer to Jake Peavy’s in terms of a trade return, and that is something that many teams can afford to give up. If Oswalt can be had for less than a front line prospect (even if it means giving up 3-4 solid guys) it will be worth it. His contract is far better than dipping into the free agent market (which you’d have to give up a draft pick for) and he won’t cost as much as say Dan Haren on the trade market.