August 2007

Money Can’t Buy Me Love (or Titles)

Rarely do you find examples of a solid major league organization built on expensive free agents.   You have to grow most of it (see, for example, the 90′s Rangers — homegrown Juan, Pudge, Deano, Rusty, Helling, Witt, Oliver, Pavlik) and then you fill in the missing pieces with the right kind of vets.   That’s how the Braves have remained ultra-competitive for two decades under John Schuerholtz

Money hasn’t done the Yankees any good this decade.   Their greatness of the 90′s was built on young, home-grown products like Jeter, Posada, Rivera, Bernie Williams, Pettitte, etc.  surrounded by very modest free agent acquisitions like Scott Brosius and astute trade aquisitions like Paul O’Neill (picked up in a trade for the washed up Roberto Kelly when he was just a spare, 29 year old, career .250 hitter).

The 96 World Series champion New York Yankees had a payroll of $61mm.  The championship 98 Yankees ($71mm) didn’t even have the top payroll in baseball. 

Arizona is spending $15million less on payroll than Texas this year.  The Padres are  spending $10mm less.  Both are probably going to make the playoffs. 

Baltimore is spending $23 million more than Texas and getting the same result as the Rangers.   The White Sox are spending $33 million more only to find themselves in the same boat.

The fact of the matter is that you can go back and crosscheck payroll against winning over the last 20 years and barely see a relationship between the two.

Mark Cuban’s tremendous success as an owner came his way not because he outspent everybody, but because Don and Donnie Nelson insisted on drafting a 17 year old German kid while the league laughed at them for passing over Paul Pierce (a few local pundits even argued that they should have kept Tractor Traylor instead of trading him for Dirk). 

The Nelsons insisted on getting their hands on Phoenix’s third string point guard and making him a featured player.   They identified Josh Howard as a playa while the rest of the NBA ignored him.  I’m no Mavs expert, but it seems to me that the Mavericks success of late has had a lot less to do with money than it has with excellent  talent evaluation. 

And while it has become de riguer among D/FW media sports pundits (and Mark Teixeira) to dump on the Rangers for not spending money and to publicly flog Tom Hicks for being a cheapskate, that argument for explaining the Rangers lack of success doesn’t hold up under scrutiny.   

Here’s an example of what I’m talking about.   

Which rotation would you rather have?

1)  Chris Young:   $600K  / 2.02 ERA
2)  Aaron Harang  $4.25mm  /  3.37 ERA
3)  Scott Kazmir   $380K  /  3.58 ERA or Cole Hamels $380K / 3.64 ERA
4)  Doug Davis     $5.5mm  /  3.81 ERA
5)  Jered Weaver  $385K / 3.85 ERA

or….

1)   Barry Zito           $10mm / 5.13 ERA
2)   A.J. Burnett        $13.2mm / 4.09 ERA
3)   Kevin Millwood    $8.5mm / 5.90 ERA
4)   Vicente Padilla     $11mm / 6.69 ERA

The Rangers had or could have had through the draft, each of those guys in the first rotation.      The second list includes two starters the Rangers did sign and two who they unsuccessfully attempted to sign. 

Texas gave away or passed over every player in the first group and spent ungodly amounts of money (or tried to) on the second.    The first rotation — all five put together — cost less than Padilla alone this year. 

Now, tell me, what’s the problem with the Rangers?  The failure to spend money or the failure to properly identify and develop talent? 

It’s not about the money.  It’s about stockpiling young talent.  I’ll come back to that below, but first I want to dispel some of the anti-Hicks propoganda that has permeated our fair burg.   Study the chart below for a moment and I’ll comment on it once you’ve had a chance to do so:

Year
Payroll (Rank)

Revenues (Rank)

Profit / Loss

(Rank)

Fancost

Record (Finish)

1994
$32mm (13th)
$50mm (5th)
+$5.2mm (4th)
$99 (12th)
57-62 (1st)
1995
$35mm (13th)
$62mm (7th)
+$7.6mm (6th)
$100 (10th)
74-70 (3rd)
1996
$41mm (9th)
$88mm (6th)
+$18.9mm (4th)
$102 (15th)
90-72 (1st)
1997
$44mm (12th)
$97mm (6th)
+$9.1mm (7th)
$113 (11th)
77-85 (3rd)
1998
$62mm (3rd)
$108mm (7th)
+$500K (15th)
$127 (9th)
88-74 (1st)
HICKS

BUYS

CLUB

1999
$80mm (2nd)
$117mm (9th)
-$9.5mm (29th)
$139 (5th)
95-67 (1st)
2000
$61mm (10th)
$126mm (8th)
+$7.4mm (10th)
$157 (9th)
71-91 (4th)
2001
$88mm (7th)
$134mm (8th)
-$5 mm (25th)
$150 (11th)
73-89 (4th)
2002
$106mm (3rd)
$131mm (10th)
-$24.5mm (29th)
$150 (14th)
72-90 (4th)
2003
$106mm (4th)
$127mm (9th)
-$29.5mm (30th)
$130 (23rd)
71-91 (4th)
2004
$55mm (17th)
$142mm (14th)
+$3mm (26th)
$130 (23rd)
89-73 (3rd)
2005
$56mm (21st)
$153mm (16th)
+$24.7mm (6th)
$131 (26th)
79-83 (3rd)
2006
$68mm (18th)
$150mm (22nd) +11.2mm (25th)
$134 (27th)
80-82 (3rd)
Tom Hicks bought the Rangers for $250mm in 1998 when it was the 7th most valuable club in baseball.

The club is now worth $356mm, which puts it as the 17th most valuable franchise in baseball.

That  Rangers’ 10-year growth rate in value is the worst in baseball. Last year, the valuation grew 3% which, once again, was the smallest in baseball.

In the ten years that Hicks has owned the Rangers, the Mariners have increased in value from $251mm to $436mm. The Dodgers have gone from $237mm to $632mm.  The Cubs went from $202mm to $592mm.   The Yankees have gone from $489mm to $1.2billion.   The Red Sox have gone from $229mm to $724mm.   The  Mets have gone from $193mm to $736mm.   The Giants went from $188mm to $459mm.

Hicks has lost more money and seen the value of his club increase less than any other owner in baseball over the last 10 years.   Here is where his club has ranked among the 30 MLB clubs in profitability during his tenure as owner:   29th, 10th, 25th, 29th, 30th, 26th, 6th,  25th. 

The research also shows that Hicks makes less money off of the fan than just about anybody in baseball.  "Fancost" is the average cost for a family of four to enjoy a ballgame.  The Rangers, under Hicks, are consistently among the lowest in baseball (ranking 23rd, 23rd,  26th and 27th over the past 4 years).

So the notion that Hicks is simply making gobs of money on this venture is ridiculous.  I think that the record is pretty clear that Tom Hicks knows how to make gobs of money and clearly, this ain’t it.   

Moreover, the notion that some other owner would spend gobs more money on the Rangers than Hicks does and by virtue of his spending alone, all problems would be solved, is pure fantasy.  No owners in baseball are radically outspending their revenues.  In fact, Hicks seems to be just about the most likely owner in baseball to outspend his revenues.

The top ten revenue producing clubs in baseball in 2005 were, in order, Yankees, Red Sox, Mets, Dodgers, Cubs, Mariners, Phillies, Astros, Braves and Giants.

The top ten payrolls in baseball on opening day, 2006 were, in order, Yankees, Red Sox, Angels, White Sox, Mets, Dodgers, Cubs, Astros, Braves and Giants.

The Rangers were 16th in revenues in 2005 and 18th in payroll in 2006.  The Mariners, owned by video game giant Nintendo, and who were sixth in revenues while 12th in payroll are far more egregious offenders of earning more and spending less than the Rangers are. The Phillies were seventh in revenues and 13th in payroll.

Of course, some clubs spend well above their earning capacity (as the Rangers did from 2001-2003, losing $70 million in the process), with mixed results.

The Twins, last in revenues but long famous for existing in that group of clubs who received money in revenue sharing without reinvesting it in payroll, have increased their payroll from $16 million to over $60 million over the last five seasons, but only after pocketing tens of millions of dollars in baseball welfare over the years.

Of course, while big spenders tend to win more, there isn’t necessarily a direct correlation between spending and winning.

The Cubs enjoyed baseball’s fifth biggest revenue stream in 2005, spend the seventh most in 2006, and lose the fourth most in 2006. The Giants had the tenth highest payroll in 2006 and  lost more than all but ten clubs.

The Angels, with new owner Arturo Moreno, are spending like a team bringing in far more than they generate in revenues (much like the Rangers did during Tom Hicks’ first five years as the owner of the Rangers). Their 2006 payroll of about $103 million was the third most in baseball (and about what the Rangers payroll was from 2001-2003), but you may recall that the Angels won the World Series in 2002 (and haven’t been back since) with a payroll of $63 million.

The Angels are good, they were  really good at $63 million. Spending an extra $40 million didn’t bring more or more important wins.

Oh, Hicks tried to buy a championship.   But he learned the hard way (to the tune of about $70 mm in losses over a three year period) that money can’t buy you love or titles in baseball.   And the good news, as I see it, is that he seems to have found someone who can convince him that building a winning ballclub is a marathon, not a sprint.   Jon Daniels seems to have finaly taught Hicks that he has to patiently invest in the future to build lasting success.

The "kid" who has been lambasted by local media types as "Boy Blunder" is, by all accounts, the toast  of baseball right now for making out like a bandit at this year’s trade deadline and for executing an outstanding draft.   

Experts at both of the premier trade publications in the game — Baseball America and Baseball Prospectus — have weighed in on Daniels’ performance this year and both concede that he has taken what was universally regarded as one of the two or three worst farm systems in baseball to one which ranks near the top 10. 

People often jump me for my exuberance about prospects by pointing out, correctly, that almost none of them make it to the big leagues and even fewer are difference makers.    All true. 

But consistently good organizations develop two or three or four kids a year who become meaningful contributors to a big league club, and they find a star every two or three years.    An organization with 30 legit prospects has three times the chance to become one of those clubs as does a club with 10 legit prospects.

Six months ago, this was one of those 10 legit prospects organizations, now it’s  closer to being one with about 30.   

Daniels and his scouting department have added what is by all accounts an outstanding group of young prospects over the past two years:   Kasey Kiker, Chris Davis, Fabio Castillo, Blake Beavan, Michael Main, Julio Borbon, Neil Ramirez, Max Ramirez, Elvis Andrus, Neftali Feliz, Wilmer Font, Carlos Pimentel, Geuris Grullon, and Engel Beltre, to name a few, have this system jacked up to what is likely a 15 year high in talent level.   

Just as important, however, is the work being done by the development gang in the minors.    Everywhere we look, we are seeing guys jump off the page making improvements as they move up through the system:     Michael Schlact stepping up to sizzle in the Texas League after spending a year refining his game at the expense of his stats in the Cal League.  Eric Hurley adding two pitches to  compliment his devastating fastball.   Brandon Boggs putting up better numbers with each promotion.   Chris Davis and Travis Metcalf and German Duran and Junior Mayberry and Taylor Teagarden and Kevin Mahar and Johnny Whittleman becoming different and better hitters since they’ve come into this system.   And what may prove to be the coup d’etat,  the complete rebuild of Edinson Volquez.

Someday, my friends, the Texas Rangers will become the winning organization we all hope and pray it to be, but when it does it won’t have much to do with money.  It will have everything to do with the work we’ve seen from the scouting and development folks over the past couple of years and, one hopes, a commitment to the blueprint that Jon Daniels has laid out for long-term success.

Notes from Frisco

Just some random observations and bits of information I picked up while at the RoughRiders game on Wednesday, August 8:

You know that Frisco third baseman Chris Davis is a powerful man, but his defense is dramatically underrated.    Davis made two nice plays last night that challenged both his glove and his arm.  Pitcher Michael Schlact told me that the big lefty’s glove work was inconsistent through the first couple of months of the season but that he "worked his tail off every day.  I mean hard.  And he’s gotten to the point where he’s really strong.  He’s made a lot of great plays behind me." Schlact is one of the more pronounced ground ball pitchers in the organization, and so good infield defense is certainly not something he takes lightly.

If you have an opportunity to catch the Riders over these final few weeks of the season, make sure you get there very early.   You do not want to miss batting practice.   Davis launched one into the parking lot in right field with a blast that soared over the scoreboard.   A few rips later, he cleared the batter’s eye in dead center.   The raw power is literally breathtaking.

You just shake your head at the Junkmeister General Danny Ray Herrera.  The 5’6" lefty brings the 82 mph "fastball,"  subtracts about 12 mph to give you a fluttering 70 mph change and then drops his 65 mph bender on you.   And he seems to throw each pitch from about three different arm angles.     I asked Rangers pitching coordinator Rick Adair "what do you make of this?"  after Herrera worked  through a perfect seventh during which he induced an array of embarassing swings from Tulsa’s three best hitters:   "I’ve never seen anything like him," said Adair shaking his head.  "I’m not going to mess with that.  Just leave him alone."

Adair, by the way, was just back from Spokane where he’d seen  flamethrowing Neftali Feliz, acquired in the Mark Teixeira deal:   "there’s a lot to work with there.  A lot.   He’s only pitched about 50 innings in the States.  He’s really like a part of this draft class [with Blake Beavan, Michael Main and Neil Ramirez].  You add Neftali and those three? It’s just an amazing amount of pitching talent coming in at one time."   

Adair also shared some thoughts on Schlact, recently promoted from Bakersfield to Frisco.   Schlact’s Texas League debut (5.1 shutout innings, allowing three hits and a walk while recording six strikeouts — all swinging — in San Antonio),  was a statistical departure from the 4.66 K/9  he posted in the Cal League.  "Don’t make the mistake of reading too much into statistics.   Mark Twain said that there are three kinds of lies:   ’lies,***** lies and statistics.’    The Cal League is tough on pitchers, but it’s really tough on guys like Mike who rely on movement and sink.  There’s no humidity in Bakersfield and the ball doesn’t do what you want it to.   A kid has to really learn how to pitch there.  Mike worked his plan.  He learneda lot and he’s ready for this."     Schlact, a 6’8"  righty, is the third youngest pitcher in the Texas League, by the way.   

Schlact’s neighbor from back home in Marietta, Georgia, is center fielder Brandon Boggs.   Two thoughts on Boggs from last night’s game:   I’ve never seen a Texas League center fielder wait for more balls.   Boggs has good speed.  He’s not an Olympic sprinter like Freddy Guzman or Julio Borbon, but he seems to read the ball off the bat better and react more quickly than just about anybody I’ve seen in Frisco.    He also has less use for a cutoff man than anybody whose come through Frisco in the last several years.

Finally, I’ve been working on a feature about Edinson Volquez but I’m going to sit on it for now.   There’s a bigger story to be told about this situation and I’m going to wait until the time is right.   I think that the wait will be worthwhile. 

Rags to Riches? The Radical Metamorphosis of the Rangers Farm System

In the 2002 draft, the Rangers had one first round pick (Drew Meyer) and then didn’t have another selection until the sixth round (John Connolly Barnett).  As we sit here today, the draft netted the Rangers a grand total of one big leaguer (20th rounder Kameron Loe).

That same year, Oakland  — wielding seven first round or supplemental first round picks — added outfielder Nick Swisher, starting pitcher Joe Blanton, third baseman Mark Teahen and  catcher Jeremy Brown.   Teahen was later flipped for closer Octavio Dotel.   Brown, currently batting .281 / .373 / .472 in triple-A, is poised to assume a major role with the A’s in 2008.   Those were the only big leaguers who came out of the famous A’s "Moneyball" draft of 2002.

The  Atlanta Braves selected Jeff Francoeur and Dan Meyer (later traded for Tim Hudson) in the first round and Brian McCann in the second, that year.   No other big leaguers were found by the talented Braves scouting department in that year’s draft.

Adding one big leaguer a year to your organization is certainly a recipe for long-term problems.    The odds of adding mulitple future big leaguers to your roster through the draft increase dramatically when you have multiple first round picks.

For every one Loe (20th round) or Ian Kinsler (17th round, 2003), there are a dozen Blantons, Swishers and Teahens — first rounders — who make it.  As an example, 29 of 52 first-round draft picks in the 1997 draft eventually made a big-league appearance. Only five of the 30 players selected in the 6th round of the 1997 draft ever did so, and only two of those five played more than 40 innings in the major leagues.

Not only did the Rangers roll into the 2007 draft armed with five first round (or supplemental first round) picks, but in the past week, GM Jon Daniels topped that astonding haul by adding three teenaged prospects whom, "if they went into the draft, would all go in the first 10-15 picks" according to one anonymous GM  who spoke to ESPN’s Peter Gammons in the aftermath of the trade deadline.

With the addition of Blake Beavan, Michael Main, Julio Borbon, Neil Ramirez, Tommy Hunter, Neftali Feliz, Elvis Andrus and Engel Beltre to the system in the past 60 days,  Daniels has radically altered what Baseball America ranked as the third worst farm system in baseball at the beginning of the year.

Baseball Prospectus minor league guru Kevin Goldstein told me today that:

The Rangers system looked pretty bad going into the year, and with injuries to some of their bigger prospects like Thomas Diamond and Joaquin Arias, the trade of John Danks, and the early struggles of Edinson Volquez, things looked even worse for a while.

The trade to the Braves alone considerably beefed up the system, as not only did they get a budding your star in Saltalammachie, but Harrison, Feliz and Andrus are all guys who should be in the team’s top 10 prospects in the offseason.  Beltre certainly has top 10 potential as well, but will need some time.

Throw in two first round picks like Main and Beaven, and a third arm in Neil Ramirez (if he signs) with first-round talent, and the system has gone through a complete overhaul.  It might not be a top-10 system yet, but it’s close.  The Rangers have gone from pretty horrible to awfully strong in 60 days and to do so is pretty remarkable.

Will the Rangers strike gold on all eight of these kids?  No chance.   But Daniels has tilted the odds in his favor in a big way.  One or two of these kids will almost certainly end up in a trade (such as Teahen for Dotel, for example), one or two won’t make it at all anywhere.   But in a few years,  the odds suggest that you can expect a number of them to be key players, perhaps even elite players, in a Rangers uniform.

And Neftali Makes Three: Introducing the “BMF’s”

DVD is so last year.   Get ready for the BMF’s.

You already know that the Rangers added two blue chip pitching prospects in this summer’s amateur draft in 18 year old Blake Beavan and 18 year old Michael Main (assuming the former signs in the next two weeks, as most seem to believe that he will). 

What you might not know is that a third teenaged pitcher has joined the fold whose accomplishments and stuff make him arguably a better prospect than either Beavan or Main:   Neftali Feliz.

A little context for where I’m coming from:

Eric Hurley took a swim throught the short season Northwest League the year that he was 18 years old on opening day (2004).   The hitters, almost exclusively college guys, lit him up to the tune of a 5.40 ERA and a .295 batting average.

The year that John Danks began the season as an 18 year old, the older NWL hitters pounded out an 8.53 ERA against the first rounder while hitting him at a .267 clip.

2006 first rounder Kasey Kiker competed marvelously as an 18 year old in the NWL, holding the far more experienced hitters to a 4.13 ERA and a .232 average.   

Neftali Feliz — the kid who many probably think of as an extra, inconsequential name thrown on to the back of the Mark Teixeira trade if they think of him at all — began the season as an 18 year old and he held NWL-level competition in the Appy League to a ridiculous 2.05 ERA and a .178 batting average.

Feliz is not some marginal afterthought in the Teixeira deal.   He is, for his age and level of competition, arguably a better prospect and more accomplished than Hurley, Danks or Kiker and belongs in any discussion of the two blue chippers added to the system in the first round of the 2007 draft.   

The Rangers have been stung badly this decade with "afterthoughts" like Feliz being added on to the back end of a deal.    When Texas traded for a washed up Randy Velarde back in 2000, they threw in a young arm toiling in the Appy League named Aaron Harang.   A couple of years later, the tacked a rookie league third baseman named Edwin Encarnacion on to the back end of a deal to get Rob Bell.

This time, it seems that Jon Daniels is going to find himself on the right end of one of those seemingly unexpected bonanzas.

The numbers and the scouting reports suggest that Feliz has the goods to rank as one of the most dominant young pitchers this system has ever seen.   In 55.1 career innings over his first two pro seasons, his K/9 (strikeouts per 9 innings) ratio is a staggering 11.45 (among all MLB starters this year, only two are better than 10).

Last year, as a 17 year old pitching in the rookie-level Gulf Coast League, the 6’3",  180 lb. Feliz — a Dominican Republic native finding himself on American soil for the first time — did not allow a run over his last 11 innings of work, and he fanned 15 during that span.   

His manager Luis Ortiz told Baseball America that Feliz was the best prospect on his extremely talented young club:   "He’s tall, smooth and he does it so effortless. When it comes out of his hand, it’s ‘Bam’–96, 97."

Think about that:   17, 18 years old and throwing 96, 97… "effortlessly."

According to Baseball Prospectus’s PECOTA projections, the two most similar pitchers to Feliz are Francisco "K-Rod" Rodriguez and Joel Zumaya.

He’s awfully young, far away from the big leagues, can be a bit wild at times and he needs to refine his secondary pitches, but it’s abundantly clear that had Feliz been in the 2007 draft — like Beavan and Main, both of whom are roughly the same age — he wouldn’t have made it past the first ten or 15 picks.  Arms like this one just don’t make it that far down the list very often.

Follow

Get every new post delivered to your Inbox.