Mortgaging Years: When Is It Okay?

When people talk about organizations being built “the right way”, they are usually referring to developing a crop of homegrown players through the farm system by scouting and drafting well, building a core of internally produced stars that can win together. The Rays, Twins, and Rangers are all examples of teams that have followed this model, putting winning teams on the field comprised of players that they brought up through the minors, or picked up young players who they then nurtured into being better than they were at the time of acquisition.

None of this happens all that quickly. It takes years to develop a strong farm system, and it is generally accepted that teams need to accept a few losing years in order to accumulate assets for later winning. Often times, organizations who adopt this develop-from-within model take their lumps for a couple of years while attempting to ramp up prospect collection, trading away established veterans and taking risks on guys who contenders might shy away from. They lose at the big league level, but the understanding is that they are investing their future and the payoff will be worth the lean years while the team is rebuilding. Many organizations who adopt this approach are lauded for their strategies – it is “the right way”, after all.

However, if teams pursue the strategy in reverse, where they risk contention down the line in exchange for wins in the present, it carries the connotation of mortgaging the future. It is common to see resistance to trading prospects or giving overly long contracts to players, and it can be seen as reckless behavior by a GM who is trying to win either to save his job or to reap the benefits while he’s still employed. In effect, though, they are the same strategy – give up winning in some years to increase your chances of winning in others.

So, why is building from within a revered organizational philosophy while going for broke can be seen as bad stewardship when they share the same underlying philosophy? This is a question I was asked here in Orlando last night, and I think it is a great question. It seems like the perceptions of the two approaches do not match the reality of their similarities.

One counterpoint put forward is that the impression of building with youth leads to more sustainable winning. Or, at least the assumption is that the reward will be longer with an internal development model than one where current major league talent is the focus. I agree that this could be the perceived benefit, but I’m left wondering if it is accurate. Do teams that build from within have relatively longer periods of winning following their lean years than teams that put the winning first and accept some rough years when their lack of prospects or long term commitments come back to bite them?

I don’t know. Maybe, but I haven’t seen a study that shows that to definitively be true, and I can think of a pretty good list of reasons why it might not be. The obvious example is in Pittsburgh, where building for the future has been going on for two decades now with no fruitfulness. Bad choices on which young players to invest in can lead to the worst of both worlds – losing now and losing later. And it’s not like picking out which young players are going to become stars is easy. Prospects are fraught with risk, and if a losing team misses on some of their high draft picks that are supposed to jump start the rebuilding process, it can be tough for them to land the type of high ceiling talent necessary to put together a competitive roster.

We’ve also seen that years of losing have a significant adverse effect on attendance, which conversely leads to lower revenues. Unless you have a well capitalized and committed owner, lower revenues usually leads to lower payrolls, creating something of a death spiral that can be tough to break. Additionally, there’s evidence that losing teams either miss out on the free agents they would like to sign, or feel like a competitive offer requires them to pay a significant premium over market price in order to compensate for the lack of ability to pitch their team as a winning environment.

Whether it is true or not, there is no question that the Nationals felt that their annual position in the standings precluded them from being involved in the Jayson Werth negotiations if they made a fair offer. Baltimore has been trying to get premium free agents to take their money for years with little to no success.

This is an issue that deserves more scrutiny. Is lose-then-win really better than win-than-lose, or have we just accepted a set of principles that create a perceived difference where there isn’t really one?



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Dave is the Managing Editor of FanGraphs.


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phoenix2042
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Member
phoenix2042

the problem is that a few teams would keep throwing off a study. teams like the yanks and red sox would make win now choices but keep winning for years because their payroll can absorb it. teams like the pirates keep losing for decades because they sell their producing players when they get to arbitration and don’t sign any significant free agents to replace them.

second, the revenue from winning many times allows teams to raise payroll after a good year to keep players who performed well when they get expensive or go in on free agents that keep the team winning. the giants are doing this now, raising payroll after a winning season to keep winning. although this isn’t always the case, as the rays can attest. their farm system did lead to about 3 good seasons so far though!

matt w
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matt w

teams like the pirates keep losing for decades because they sell their producing players when they get to arbitration and don’t sign any significant free agents to replace them.

Which players are you thinking of? Zach Duke? Nate McLouth? Who else have the Pirates sold when they reached arbitration, as opposed to when they were a year-and-a-half or less from free agency? There may be some I can’t think of, but I think you have the Pirates and Marlins mixed up.

JH
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JH

Aramis Ramirez was traded halfway through his first arb-eligible season.

matt w
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matt w

Oh yeah, that one still stings. Apparently it was forced because the Pirates were in violation of debt requirements, though; I don’t think you can say the Pirates have habitually sold off their arb-eligible players.

That trade’s another example of not trying to build from within, by the way; Littlefield insisted on getting major-league players back instead of prospects, so the Pirates wound up with the totally useless Jose Hernandez.

(If you read the linked article and are confused about the Brandon Lyon trade that’s mentioned there, when Lyon turned out to be hurt the Pirates traded him back for Freddy Sanchez.)

BigHurt
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BigHurt

Jason Bay, Brian Giles, Jason Schmidt, Jose Guillen, Nady, kendall, LaRoche.

Maybe not the list the Marlins can put together, but decent enough talent.

matt w
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matt w

*facepalm*

Jason Bay: Year-and-a-half from free agency.
Xavier Nady: Ditto. Also didn’t do much after he was traded.
Jose Guillen: By the end of his sixth year, when he’d have been eligible for free agency if the Rays hadn’t cut him, Guillen had accumulated 4.8 wins below replacement. Doesn’t count as a “producing player.”
Giles: Pirates extended him, he played I think three years on the extension before they traded him.
Kendall: Pirates also extended him and traded him four years into the extension. The knock is that they held on to him too long and wound up trading him for f*&$ing Arthur Rhodes and Mark Redman.
Jason Schmidt: traded in his free agent walk year.
Adam LaRoche: Also traded in his free agent walk year.

So the only one of these guys that even possibly fits the bill of “traded him when he reached arbitration” is Guillen, and they traded him because he sucked — and continued to suck through what would’ve been his arbitration years. Is anyone seriously going to suggest that the Pirates would’ve done better to hold on to these guys till free agency? Except for Nady and Giles the trade returns could’ve been better, but the problem is not that the Pirates didn’t keep them.

Angry Sam
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Angry Sam

Saying that Boston relies upon buying their way to success is simply inaccurate. The Red Sox drafted their first and second pitchers in the rotation, their starting center fielder, their starting second baseman, and the guy who will likely start at shortstop this coming season. The catcher they keep hanging on to, who has been given the title of Captain and who has been instrumental in Boston’s playoff successes, was acquired in a trade from Seattle before playing a game in the majors.

If anything, Boston has relied upon growth from within, and only supplemented this approach it with signing the occasional big contract. Epstein’s front office has also developed sufficient talent to trade prospects for established stars and avoid having to shell out for free agency (see Gonzalez).

rogerfan
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rogerfan

You forgot that they drafted Youkilis, one of the best hitters in the league.

Angry Sam
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Angry Sam

Why do I always keep thinking they traded for Youk at some point when he was coming up? Anyhow, yes… and that’s a particularly embarrassing omission on my part.

JCP
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JCP

a fan of the small market Red Sox I see. one could make similar arguments about the Yankees, but personally I think it would be ridiculous, because even though Posada, Pettitte, Jeter, Rivera, Cano, Gardner, and Hughes all came up through the system, the Yankees would not be the Yankees if they didn’t have $230 million to float around, and the Sox would not be the Sox if they didn’t have their money.

this is not to say that the Red Sox are not well run – but pretending that their repeated 90 win seasons aren’t largely because of their money is just downright foolish.

John Lackey
J.D. Drew
Josh Beckett
Dice-K
Mike Cameron
Adrian Gonzalez

it’s safe to say that all of those guys would be on different teams if the Sox had the financial resources of the Rays, for instance.

Oddibe McBlauser
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Oddibe McBlauser

Just to shade in the grey of this haves-havenots, Boston is my favorite example of capitalizing on the broken free agent compensation system. I apologize for not listing specific sox, but Boston has certainly flexed its financial advantage in drafting many more and with higher frequency of high upside, prospects through the draft and internationally both.

Frank
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Frank

On what planet do Red Sox fans live?? As if no other team builds from within or flexes its muscle financially in the draft? Just because you have a total of two starting pitchers and a couple infielders from your farm doesn’t mean much. A team with the Red Sox resources should be able have impact players come up through their system.

And the last I checked, Marco Scutaro (a free agent) was your starting shortstop, and Mike Cameron (a free agent) was your starting CF because the player the Red Sox developed wasn’t good enough to play CF and they moved him off the position. The last time I checked the Red Sox were the team that had a deal in place to acquire Alex Rodriguez, they were minutes away from signing Mark Teixeira before the Yankees took him from under their noses, they’re going to have to pay Gonzalez ~ $140MM, and it won’t surprise me when they give Crawford a similar big money deal. But we’ll have to check back on that one…

The team the Red Sox actually, you know, won something with was the David Ortiz, Manny Ramirez, Josh Beckett, Curt Schilling, Daisuke Matsuzaka team. Those were the cornerstones of the Red Sox and NONE of them were drafted by the organization.

Stop acting as if the Red Sox are some small-market, “build from within” team because it’s nothing but total bullshit. The Yankees list of players acquired through the draft or via trade includes their ENTIRE outfield, half their infield, two starting pitchers, and thier starting catcher; regardless of who wins the job. I guess the Yankees are a “build from within” team too?

MikeS
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MikeS

That’s why it si so hard to study it. I would think the best scenario is to build through the draft and player development. Only when you feel you are “close” do you spend assets (money or players) to acquire pieces at market rate and push you over the top into a chamiopnship. If you do it right, you have assets (again, money and players) to spend. It takes patience both form the team and fans but it is the most sustainabale model sicne you have a core of young, inexpensive players and you add to them. You can be wrong from time to time but if you are wrong with the young players you will never get to the “close” point and if you are wrong with the expensive additions, you will use resources that can’t be used on the right guys.

As you said, teams at the top can be wrong either way since they have money to cover mistakes and teams at the bottom have to be right on the young players becauce they never have assets to spend on market rate guys. However, even teams just below the top can be crippled by bad decisions (Cubs, Mets). Even the Yankees have written some awfully bad paper. They can just absorb it and move on better than any other team.

Angry Sam
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Angry Sam

That’s a solid point. I was thinking a little more about how money makes a difference across very well-managed teams. I would guess that it’s a bigger impact when it comes to building around your stars. Monied teams can afford to bring on the guys that don’t have “future HOFer” written all over them but are still up there as far as talent, whereas even a very well-run team on a smaller budget has to fill gaps with just-above-replacement talent.

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