The Dodgers Have Discovered Another Market Inefficiency

The moneyballing Oakland A’s of the early aughts popularized the term “market inefficiency” around baseball. Yet, by the time Brad Pitt’s film adaptation of Moneyball hit theatres, it was the Tampa Bay Rays who were making the most of an inefficient market.

Tampa Bay has continued to succeed despite low payrolls year after year, but at this point, the Rays are old news. Another team has discovered a brand-new, genius payroll hack for winning more ballgames than anyone else: the Los Angeles Dodgers. Their secret? Spending money. As it turns out, signing great players is the best way to field a great team.

Although my tone is tongue-in-cheek, I’m only partly joking about the Dodgers making the most of an inefficiency. While other teams have been pinching pennies to minimize payroll, the Dodgers realized that building a perennial contender is the best way to maximize profit. Who would have guessed?

I’m far from the first person to point this out. Indeed, even the simple brilliance of the Dodgers’ spending might be old news by now. However, the team made a recent move that has me thinking they’ve discovered yet another market inefficiency.

While most of the baseball world has been focused on Shohei Ohtani and Yoshinobu Yamamoto making their Dodgers spring debuts, I’ve been thinking about Enrique Hernández. Let me explain.

The Dodgers Chose Enrique Hernández Over Manuel Margot

At the end of February, Hernández and the Dodgers came to terms on a one-year, $4 million deal. The veteran has spent time with the Dodgers in seven of his ten big league seasons. In 2024, he will return to the club he knows best.

Before the Dodgers could officially re-sign the beloved utility man, they needed to free up a spot on the roster. To do so, they traded outfielder Manuel Margot to the Minnesota Twins. Margot came over to L.A. earlier this winter as part of the Tyler Glasnow trade.

The Dodgers received a lottery ticket (21-year-old shortstop Noah Miller) in return for Margot, but they sent a prospect of their own (20-year-old Rayne Doncon) back to the Twins. They also sent enough cash to cover all but $4 million of Margot’s 2024 salary. In other words, they pretty much dumped Margot on Minnesota so they could add Hernández in his place.

That’s a lot of effort to swap out one right-handed bench player for another, but this is the Dodgers we’re talking about. They may have a lineup of gods and a rotation of superhumans, yet they have always cared about all 40 spots on the roster. Nothing is surprising about that.

What stands out about this move, however, is that Margot is pretty clearly a better player than Hernández. Here’s a quick comparison of the two:

• Margot is three years younger, and he is still on the “right side” of thirty.
• Hernández has a pitiful .639 OPS and 73 wRC+ over the past two years. Margot has a decent .693 OPS and 99 wRC+ in that time.
• Margot boasts 75th-percentile sprint speed. Hernández ranked in the 37th percentile last season.
• The ZiPS, Steamer, and PECOTA projection systems all see Margot as the more valuable player in 2024.

The one skill Hernández brings to the table that Margot does not is his ability to play around the infield. Margot is strictly an outfielder, while Hernández played every position except for pitcher and catcher last season.

However, the Dodgers already have Miguel Rojas, an excellent defensive shortstop, on their bench. They also have Chris Taylor, another right-handed utility player with superior offensive skills to Hernández. Former top prospect Miguel Vargas will be around too, although he’ll be working in the outfield this spring.

On top of that, Hernández had dreadful defensive metrics all over the infield in 2023. He produced -4 OAA in 36 games at second base, -2 OAA in 12 games at third base, and -12 OAA in 74 games at shortstop. DRS, UZR, and DRP agree that he cost the Red Sox and the Dodgers runs in the infield.

Perhaps the Dodgers think they can unlock a new level of performance from Hernández. For what it’s worth, he had a 96 wRC+ in 54 games with L.A. after the trade deadline last year, and his defensive metrics weren’t quite as dismal as they were in Boston.

Still, it’s hard to imagine many other teams picking the 32-year-old coming off of a 72 wRC+, -18 OAA season over the 29-year-old coming off of a 93 wRC+, 3 OAA season.

So, why did the Dodgers pick Hernández over Margot?

The Dodgers Are So Smart That They Don’t Have To Be Clever

A poorly run baseball team doesn’t care about its bench, focusing too heavily on star power and forgetting to add depth. In contrast, a well-run club understands the proper value of every spot on the roster.

But what about a really well-run team?

The Dodgers have put together such a phenomenal super-squad that they no longer need to worry about maximizing every spot on the roster. While a team like the Rays is churning through players trying to find every possible advantage, the Dodgers are free to pick the players they want, projections be damned.

Enrique Hernández is a fan favorite. He’s a beloved figure in the clubhouse. It’s clear the Dodgers love him. In fact, they love him so much that they were willing to part with a slightly better player to make room for him. And because the Dodgers are already so good, they could make that move without losing any sleep.

Let me be clear, I’m not saying POBO Andrew Friedman acted with his heart instead of his brain. Signing Hernández was absolutely a smart move. But it goes beyond on-field results. With all due respect to Margot, Hernández will drum up more excitement on and off the field; in the clubhouse and amongst the fanbase; in person and on social media.

It’s like the Ohtani signing on a micro-scale. Friedman outbid every other team for Ohtani’s services because the two-way superstar will be more valuable to the Dodgers than he would have been to any other team.

Hernández isn’t going to bring in huge endorsement deals or attract legions of fans from overseas markets. Still, his face on a billboard or the team’s social channels will attract engagement. His presence on the field will boost morale. Few other bench players, if any, would have the same impact.

Most teams can’t afford to think of much beyond on-field results, because every game matters in their hunt for October. The Dodgers, however, are so assured of their position atop the NL West that they don’t need to worry about that. They are free to choose a 0.5-fWAR bench player (Hernández’s FanGraphs Depth Charts projection) over a 0.9-fWAR bench player (Margot’s FGDC projection). That is a true privilege.

The Dodgers are so good that they can make their team better by adding worse players. It’s the newest market inefficiency, and L.A. is on the cutting edge.