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.

6 Comments

The most important issue relative to the Rangers' minor league system is not talent, but rather forming a commitment to play that talent at the major league level. Said commitment would have at least three ramifications: 1)staying away from free agent contracts that tie up money and roster spots long term and 2) having the patience to play through the trials of using young players so that the team can truly evaluate whether they can perform consistently at the major league level and 3) possibly trading away popular veterans like Michael Young who don't want to be part of a youth movement.

By viperscoach1@hotmail.com on August 13, 2007 1:24 PM
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As usual, you apply solid research to logical thinking, resulting in superb analysis without the emotional, crude, and disrespectful rants of many Ranger "fair weather" fans. Job well done.


Len

San Antonio

By lmagsamen@satx.rr.com on August 14, 2007 10:29 PM
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Hicks needs to go. He is the author of this debacle. It isn't about the money, the Twins and A's have competed. Baseball is just like life, money isn't the cure all for the problems. That is what Hicks has done in the past, throw money thinking he can improve the product. His main problem is not hiring a good baseball man. He had Melvin, but didn't listen to him. If Hicks can see this, then he needs to go back to what Melvin told him right before he was fired, and implement those things. REBUILDING isn't a four letter word. Lets blow up the whole thing and start over. Trade Mike Young and commit to a total overhaul. This is the only thing that is going to save this franchise. We can't get any worse. Deal Padilla and Millwood in the winter meetings and let the young guys pitch their way to the top. Harang, Young and Davis were ours but we didn't keep them. It is a joke, how we continue to make the same mistakes of the past, Righetti, Henke, Darling and others. COMMIT to a philosophy and stick to it. Stop flip flopping! Flipper Hicks, now lets print some t-shirts up. They call him Flipper, Flipper, Flipper. Those growth margins are killing Flipper i am sure. Ha Ha.

By dwidregod@tx.rr.com on August 15, 2007 10:14 AM
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I couldn't agree more... Discovering and cultivating talent and keeping that talent on board is the way to go. Offset that with some "sane" pickups of veterans, and you have a team. Build it around a leader and you have a consistent team, and hopefully a winner.


dwidregod - I respectfully disagree. Hicks isn't the problem. The analysis I saw above supports that, and added a dimension I never thought about. Deal M. Young? No thanks... Explain to him the direction you are taking, and get him on board. He's the leader on the team. Not a overly vocal one, but a leader none the less. He wants to win, and win now or very soon. What player that is considered a "leader" doesn't? I have the feeling JD, and Hicks to a lesser extent, are beginning to cultivate Young as a leader and partner, and are talking to him more and more and explaining moves that they are making in order to insure Young in on board and lead his teammates. I think Young will respond favorably to that.

As for the high-priced talent found in Millwood and Padilla: Deal them both. Millwood's not performing as your #1 Ace, and unfortunately looks beat and tired. A Ranger player told me that he's pitching through some pain. If so, and I have no reason to disbelieve this player, then it's been that way most of the season. That kind of pain doesn't fix itself. Not for a player of Millwood's age. Padilla? Sorry, but that bipolar stuff he's shown is a bit tired. I prefer consistency over occasional greatness. Poor performance during SIX minor league rehabs, followed by pitching some amazing stuff in his first Rangers start after that rehab... It's too confusing. Too fickle. Not to mention that there are some demons running around in that man's mind that cause him to completely go inside himself and do exactly the wrong thing on the mound at exactly the wrong time. Philly figured that out and parted ways with him. We should too...

The biggest thing to sort out this winter will be choosing which to keep of the half dozen catchers and dozen outfielders we've seemed to pick up...

Just my opinion...

By thisgoesnoplace@yahoo.com on August 18, 2007 11:51 PM
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4comments. 2 wonderful ranger fans and 2 that could not crawl out of a paper sack.


Anyone who says to trade Young knows absolutely nothing about building a winning team. Every winning team has to have a couple of veterans go through the rebuiling process (see Pudge in Detroit). You need that stability and just ask any younger Ranger how much they have learned from just watching Young. Plus, he is becoming more of a vocal leader. Plus, plus no other team would trade a top of the rotation (Rangers biggest need) for a decent defensive shortstop that is a hitting machine but only average 15 homers a year.

Also, for veteran leadership Millwood sould be kept. His knowledge of pitching is vital for the younger pitchers to pick his brain on how to pitch. Millwoood in fact has talked so much how important his years in Atlanta were to him by learning from Maddox and Smoltz. He may be pitching through pain but that just shows how much of a gamer he is. He could easily say to DL me for the rest of the year since this year is lost, but he wont.

I agree that Padilla is confusing and I have no idea what to do with him. Right now I say give him a shot next year. I think it is his last of the 3 year contract so he will hopefully return to last years form since it is a contract year. Plus, if they think that Hurley is a year away, Padilla is likley better than the free agents out there to bridge the gap.

Why would anyone with a brain say to blow the whole thing up? They are finally going in the right direction, from the bottom up. Yes, JD made a mistake with Young, but he has learned from it. He said that he is commited to rebuilding so give him a chance.

PS dwidregod plese find a new team to follow because I have read your whining all year and am tired of it.

By qbaum2005@yahoo.com on August 21, 2007 7:42 AM
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btw, this was the first year of Padilla's contract, so we still have 2 more years of this....

By t4duzan@hotmail.com on September 4, 2007 11:03 AM
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