Why You Should Ignore Off-Season Winner/Loser Recaps

With James Shields finally signing, the off-season is probably closed for business now. Sure, there are a few veteran relievers still out there, and Rickie Weeks still has to find a new home, but most of the money has been spent and the trades have been made. We’ll see a few more deals in Spring Training, but with pitchers and catchers reporting next week, the Hot Stove is now more of a pile of smoldering coals.

And that means you’re about to be inundated with various lists and rankings of off-season moves. You’re going to read about the best and worst individual moves of the winter — I’ll likely have my own posts on those at the end of the week — as well as the always popular “winners” and “losers” of the off-season. In general, I find the winners/losers recaps to be a little bit formulaic, as they could almost always just be rewritten as “teams that made the most win-now moves” and “team that made the fewest transactions”.

For instance, in the linked video above — granted, this is from a month ago, so the list might be different today — Ken Rosenthal lists his off-season “winners” as the San Diego Padres, Chicago White Sox, and Miami Marlins. I’d imagine pretty much every iteration of the topic will contain the Padres and White Sox, as they both made a lot of moves and several high profile acquisitions, propelling themselves from mediocrity into potential Wild Card contenders. The Marlins will show up on a decent amount of lists as well, though their spot could also be absorbed by the Blue Jays, Cubs, or Red Sox, depending on the preferences of the person compiling the list.

In pretty much every one of these cases, the teams exchanged future assets — prospects, draft picks, salary commitments, or a combination of the three — in order to boost their chances of winning in 2015. And with very few exceptions, teams who spend the off-season exchanging future value for present value are lauded for that choice. Teams who intentionally get worse, even if they do so because they were correctly responding to a seller’s market created by so many teams currently demanding win-now upgrades, almost never appear on these lists.

I’m not trying to pick on people who write these columns, because this isn’t a baseball-specific problem. Our culture has a strong positive bias towards borrowing from the future in order to live more comfortably in the moment; note that the American Dream is based around home-ownership, not having a robust 401k. Celebrating a team for signing a major free agent or making a few splashy trades isn’t that different from praising someone for taking out a mortgage. I’m pretty sure I’ve never been invited a party to reward someone for downsizing and putting the savings into a low-cost index fund, however.

But there’s a reason that lending is a highly profitable business to be in, especially when the economy is strong and everyone wants to be a buyer. Baseball’s economy is absolutely booming right now, but because most talent is already distributed throughout the league, teams can’t simply head to the bank and take out a loan to finance their new purchases. Instead, when demand rises as it has this winter, other teams can effectively become banks for their competitors, charging ever higher rates for talent while the strong market exists.

But these winner/loser columns don’t acknowledge that lending is often more profitable than selling in a high-demand market. Instead of focusing on the magnitude of the change in value for a franchise, they often focus solely on the direction. And that’s why I think so often the team that “wins” the off-season ends up as a regular season bust.

Yes, the Padres and White Sox got better this winter, and maybe the Marlins did too, though I’m a little skeptical on that one. The A’s, Rays, and Braves all got worse on purpose, and I’d be happy to wager that none of those three will end up on any off-season winners list. But if you look at the projected standings, OAK and TB both still project as better teams in 2015 than SD and CHW, even though they spent their off-seasons moving in opposite directions. Of course, that doesn’t mean that OAK/TB had better off-seasons — they were starting from much stronger positions to begin with — but we should at least be willing to acknowledge that it is possible to degrade your team in the short-term while adding long-term value and retaining your status as a contender.

If we’re going to celebrate the White Sox and Padres moves towards decency because the consensus is that they didn’t mortgage their futures in order to achieve the upgrades, why not acknowledge that putting a decent potential contender on the field while actually upgrading the organization’s future can also be an admirable pursuit? Why are we only ever rewarding the buyer’s side of the equation, when there’s only something to buy because the market incentivized selling to a degree that lured teams into acting as a lender?

Maybe we’re just not programmed to like bankers, especially after the last five or six years. Maybe our culture will just always value buying over saving for the future, regardless of the wisdom of owning a McMansion versus having a well-funded retirement account. But I don’t know that we have to accept these same ideas when it comes to grading each team’s off-season.

Acting as a buyer is absolutely the right way forward for some franchises in a certain year. It would also be absolutely the wrong way forward for other teams in that same year, and for another swath of franchises, the wisdom of buying or selling can depend upon what the market is demanding at the moment. It’s never as clear cut as short-term upgrades are good and building for the future is bad, or vice versa. The goal should be to maximize value to an organization, and trade-offs always have to be made.

Sometimes, teams should trade future for present. When they do that and do it well, absolutely, let’s celebrate a job well done. I think the Blue Jays did an excellent job of that this winter, for instance, adding Russell Martin, Josh Donaldson, and Michael Saunders to their starting line-up, plus an underrated Devon Travis as a low-key acquisition. They spent some money and traded some real talent in order to make those moves, but overall, I think the Blue Jays organization is in a better place now than they were at the start of the winter.

But I think I could make a case for the Rays having had a nearly equally strong off-season. Their moves weren’t as flashy — the likes of Asdrubal Cabrera, Rene Rivera, John Jaso, and Steven Souza weren’t demanding attention — but as much as I like Toronto’s off-season, I’m not sure they’re significantly better than Tampa Bay for 2015, and yet Tampa built up their future asset base rather than diminishing it. That’s a notable accomplishment, but one that is mostly lost in the process of rewarding teams for making win-now moves.

I think it’s great that so many baseball teams are legitimately trying to win in 2015. That said, I don’t think we should box ourselves into thinking that the only way to have a good off-season is to focus solely on making your team better next year. We shouldn’t pretend that lending is never a good idea, or that a franchise can’t move forward by first taking a small step backwards.

We hoped you liked reading Why You Should Ignore Off-Season Winner/Loser Recaps by Dave Cameron!

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Anon
Guest
Anon

I’m pretty sure I’ve ever been invited a party to reward someone for downsizing and putting the savings into a low-cost index fund, however.

Sounds like Fangraphs just found a new February tradition!

Youppi!
Guest
Youppi!

{n}ever been…. minor typo but i had to read it twice to catch the meaning of what sounds like a pretty sweet party where hopefully the host reinvests their savings in good hors d’oeuvres.

Paul G.
Guest
Paul G.

Buying a house is a bit more complicated than simple borrowing. Typically houses go up in value – save the recent housing bubble crash – so it is both borrowing and investing. Plus buying a house provides tax benefits that renting does not. 401ks are awesome, but you can’t live in them.

Economics
Guest
Economics

“Typically houses go up in value” — because of increasing populations and increasing leverage/lower interest rates on mortgages, house prices have trended upward over time in the United States. However, houses depreciate and incur variable expenses to maintain the property and the leverage incurred adds extra cost.

Long story short, you can be earning interest or paying it — this is Mr. Cameron’s point and this is what is lost on most people.

Paul G.
Guest
Paul G.

True, true. Still, you have to live somewhere. The mortgage gives you an asset you own (eventually). Rent does not. Most likely you will have to pay one of those. The analogy to baseball teams is a bit stretched.

Little Mexican Girl
Guest
Little Mexican Girl

Why not both?

(cue Mexican Hat Dance music)

KK-Swizzle
Guest
KK-Swizzle

I think its a great analogy…both are culturally considered to be investments while actually offering little in the way capital growth. Best case scenario, your house rises in value with the market…the thing is, investments do too, and they give interest instead of taking it away.

To extend the analogy: buying a house is like signing a free agent. It can be a great move, if you time it right and have appropriate capital available. In both cases, it usually functions best as a “cherry on top” to a strategy with a sound foundation (i.e. stocks and bonds or player development).

Devil's Advocate
Guest
Devil's Advocate

Economics makes a lazy comment with “Long story short, you can be earning interest or paying it”. Hypothetical: I have a 2K mortgage. I have an extra $200 a month. I can send the extra $200 to the mortgage and avoid paying interest on that extra amount. OR I could invest it and hope to earn a greater return that my mortgage rate in the market. The mortgage allows you the opportunity to invest in something else. Economics is wrong. Long story short, a mortgage allows you the opportunity to earn more interest.

KK Swizzle makes a bad analogy as well and he is only correct if talking about investing available capital in raw land vs. investing in the market.

Buying a house is NOT an investment in the majority of cases.

A better analogy would be buying a house is similar to trading a 1 WAR player when you possibly have a 3 WAR player to replace him on your AAA team. Borrowing is about opportunity cost. I borrow at one rate so I can use my money to try to get a higher rate elsewhere.

dave gb
Guest
dave gb

I prefer a Roth IRA, but I get your point

B N
Guest
B N

Also, he clearly has never worked at a mergers and acquisitions firm. Step 1: Buy the company, Step 2: Fire all the workers, Step 3: Increase quarterly profit, Step 4: Re-invest profit in index fund until next acquisition, Step 5: Bonuses and office party.

B N
Guest
B N

*Step 6: Quietly sell off stock in company where you have reduced its long-term viability)

Mcneildon
Guest
Mcneildon

Most guys I know who work in mergers and acquisitions really don’t like it.

Free_AEC
Guest

You like real estate?

Google: John Powers Middleton Weekly Online

24 pictures of J.P. Middleton’s Hollywood Hills mansion

J.P. Middleton’s kitchen is as big as the first floor of my
house.

I wonder where the $6 BILLION that Comcast gave
John Middleton to buy players went to?

JP Middleton
Guest
JP Middleton

You mad bro?