Originally Posted by dougdirt
Each player gets paid X amount of money once they reach the majors. What the value is, is the amount of money they were worth over what they were actually paid. For example, Ryan Braun so far in his career. He has made $1.8M as a major leaguer. He has been worth $51.6 over that time, so his surplus value was 51.6-1.8=$49.8.
What Wang did was figure out every player just like that who got these grades/rankings from John Sickels and Baseball America. The numbers shown are what the average person with that player/grade has been worth in a surplus dollar value over their 'controlled' years (typically the first 6 seasons).
I then just ran the grades of those guys and gave each player a value from Wang's research in order to figure out which farm system was 'best'.
The only problem I can see with this methodology is that you're trying to use one data point (a player's current rating) and do a lot of extrapolation. That may work well for players at the end of their development process, say Matt Maloney, but I question how well it works for players at the lower levels of the minor leagues.
Take the case of Yorman Rodriguez. Sickels currently has him graded out as a C prospect but given his age it seems safe to assume that his grade will fluctuate over time and if he is able to live up to his ability, he'll grade out much higher when he is close to matriculation. The question then becomes how do you pinpoint his value?