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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?