6
2012
The New Market Inefficiency
An article by 72MetsFan
Friends, Mets Fans and Metsmerizers, lend me your ears. I hope all of you enjoyed your holidays and let me wish you all a belated Happy New Year.
I want to share an article I read with all of you on the perceived virtues of small market strategies, but first I must chime in on the top Mets story of the last 24 hours.
Look, I am no expert in financial matters and I’ve always been terrible at making predictions (just ask my wife). But here is my take on this whole ball of wax. Whether the Mets owners file for bankruptcy and sell the team, or whether they avoid bankruptcy and sell the team, it’s still a good thing for our fanbase. And, if by chance the current ownership group finds a way out of this messy affair and gets back on solid financial footing, it’s still a good thing for team and fans, isn’t it?
Basically what I’m saying is that finally everyone knows there’s a problem and one way or another this problem will get fixed. The ultimate goal is to get the Mets back to behaving like a large market team and making better player decisions. So here’s the good news:
1. Hiring Sandy Alderson was a good decision and will lead to better decisions in the future.
2. The Mets are taking steps to stop the financial bleeding which will ultimately get us back on the right track.
So take it from an oaf like me, better days are on the way.
Now on that note, here’s a quote from Jonah Keri on a must-read article at Grantland:
Smaller-revenue teams have a tougher time signing premium free agents, or retaining their own top players past their initial six years of team control. That puts extra pressure on these poorer teams to bring up a bunch of great prospects all at once, then hope they get good at the same time before they get expensive.
But far more often it’s a bullshit excuse. It’s a vague, faraway goal that always seems several years out of reach. It’s a cover for cheap, greedy ownership, lousy scouting, drafting, and player development, and myopic trades. It’s a weak attempt to placate a fan base screwed over by years of management incompetence and indifference.
Keri is referring to the windows smaller market teams refer to as far as getting competitive and maintaning that competitiveness. Exploiting market inefficiencies worked well for a little while until slowly but surely the rest of the league, including large market teams, caught on. Keri explains:
For years, Beane had prided himself and his staff on their ability to sniff out young talent and acquire it cheap. But other teams’ increased recognition of said talent and its value put a major dent in Oakland’s plans. “Is it a more challenging environment? Absolutely,” Beane told SI‘s Tom Verducci. “Ten years ago teams didn’t value young players, other than as chips or assets to get the players they needed. Now, even the large-market teams with great resources, everybody values their young players.
So true. Every team is feeling the crunch in this economy. I read the other day that the Yankees have only spent $4 million dollars or something like that this offseason. The Red Sox will have a lower payroll too in 2012, it’s not just the Mets. The times they are a changin’.
This article focuses mostly on the A’s, but you can seriously apply the lessons learned to any major league team, and the Mets in particular.
The old ways of doing business for both small, mid and large market teams is dead.
Small market teams have no more inefficiencies to exploit and large market teams are unable to spend like drunken sailors every offseason. Middle market teams might have the advantage and it’s mostly because they always devoted ample money to the draft and player development, but also made better and more cost effective free agent decisions than their large market brothers.
Now getting back to the Grantland article, I found this to be one of the more interesting quotes from Billy Beane and I included the lead-in so you don’t lose context:
You can excuse the A’s for falling back after their great eight-year run. You can even understand them taking a step back in the face of fierce intradivisional competition. But let’s not kid ourselves about what’s going on here. Years of iffy personnel decisions have turned the A’s into a bad team with little hope for the foreseeable future. Yet they’re spinning this as something else.
“I don’t think there was a move we could have made that would have put us in position to compete with Anaheim and Texas and what they have,” Beane said after the Gonzalez trade.
OK, sure.
“For us to compete, we’re going to have to have a new stadium.”
Ahh yes, the new stadium. Hey Billy, is that the new market inefficiency?
Brand new, tax payer-funded stadiums have always managed to fix a team’s financial problems and lead to world series titles, right? Sure they do, just ask Fred and Saul.
Look there are 30 MLB teams out there who all want their chance at the brass ring. So far the only thing that seems to work is a great vision and a front office that is committed to improved scouting, solid player development, and spending wisely on the right players to fill in the gaps in your roster. A team that can do all of those things very well is the new market inefficiency.
Anyway, read the full article and let me know what you think.
About the Author: Drew Staley
On June 1, 2012 Johan Santana officially became my favorite current Met! I'm a Queens native who grew up in the shadows of Big Shea. I was a huge Ron Darling, Dave Magadan and John Olerud fan. Honored to be a part of such a great site for Mets fans. Ya Gotta Believe!
32 Comments + Add Comment
NL East Standings
| Team | W | L | Pct. | GB |
|---|---|---|---|---|
| Braves | 42 | 30 | .583 | - |
| Phillies | 35 | 37 | .486 | 7.0 |
| Nationals | 34 | 36 | .486 | 7.0 |
| Mets | 27 | 40 | .403 | 12.5 |
| Marlins | 22 | 48 | .314 | 19.0 |
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Pretty much, I am pretty frustrated with the way the Mets did with Reyes this off season. Don’t think I will forgive Sandy and the Wilpons for this dick move. In other cases, when you think about teams trade prospect chips for stars trying to get to the World Series. Pretty much you are running the risk of burning the farm to the ground and jeopardizing the future of the franchise. The other issue is teams willing to shell out lots of money to get one player or two to get to the World Series. The parity between these markets are bigger and unfortunately there is no salary cap in baseball to stop these enormous contracts. So its feast and famine for MLB and the consequences will eventually come if these enormous contracts continue to balloon out of control.
I have no idea what you said and now my head hurts.
^ I concur with brian, lmao
Oakland got lucky with some pitching prospects like many teams have in the past including Mets (Seaver, Koosman, Ryan and Gooden, Darling, Fernandez). They couldn’t afford to keep them and the party was over. There was no magic tricks or great strategy here other than a few prospects that panned out.
That’s what people say who saw that moneyball move they say it leaves out mention of Mulder, Husdon, & Zito among a whole lot of other things.
Hopefully this moneyball/saber fraud goes the way of the Slap Chop & ShamWow and winds up on late nite TV infomercials because that’s exactly where it belongs
The ShamWow was and still is fantastic.
You know the Germans make good stuff.
Tony larussa said the movie was fiction, they left out the part that during that run all the juicers and the excellent pitching staff they had
“The joke on ‘Moneyball’ was, ‘Where was the chapter on having three of the five or six best starting pitchers in the game,’” current Padres GM Jed Hoyer, formerly an assistant with the Boston Red Sox, told Sports Illustrated
..and here some more, um, slight little details that Moneyball left out
http://blog.moviefone.com/2011/09/26/moneyball-facts-fiction/
Bayonne, my god, then not only the movie was terrible, but the facts were all left out.. what’s next, a book about moneyb… ohh wait…
LoL, the movie was entertainment, not a biography. So was the book, but to a lesser extent. Wishing and hoping the book or movie was some sort of fact-based encyclopedia so you can bash it for being “wrong” does not make it so.
You’re Gonna Love My Nuts.
Someone had to to do it….
72, please explain this: Hiring Sandy Alderson was a good decision and will lead to better decisions in the future.
What are you basing this on? How do you know this was a good decision? Don’t you think it’s a bit early to be piling on the accolades?
I hope it does end up being a good decisions, but so far there’s no indication that it was unless you consider a losing season some sort of a crowning achievement.
72, please explain this: Hiring Sandy Alderson was a good decision and will lead to better decisions in the future.
What are you basing this on? How do you know this was a good decision? Don’t you think it’s a bit early to be piling on the accolades?
Yes Alex it’s a bit early to be piling on accolades even though that’s not what he’s doing,just like it’s a bit early to be saying he’s the worst GM in franchise history but that won’t stop you from making such an assinine comment.
Pretty simple concept really. If all teams have access to the same information, then you either have to be smarter, or spend more, than the competition to come out ahead (though luck certainly helps). But, working smart or working wealthy put the odds more in your favor.
the ideal thing of course is being smart, and having money (pretty much what the Red Sox pulled off). And what conceptually the Mets should be able to do with their potential revenue streams.
but, over the long run in this MLB environment, you really need $$ to be able to stay competitive.
oh yeah, real simple.
I love when these people post these “it’s simple” posts. Like if you just double your money every day than in around 2 weeks you’d become a millionaire.
real simple!
Like saying taking a guy on a dinner date will convince him to take $20 million less to play for you?
Like saying all you have to do is trade your highly paid, under performing third baseman for a top pitching prospect?
Seriously, the guy who really believes dopes on a fansite can run a major league team better than an actual general manager really needn’t be making comments like that.
oh yeah, it’s not possible to trade Wright & prospect/prospects for young starting pitching – of course we’ll never know as this waste of a human being who makes a living as a couch potato with all of life’s answers from his podcast won’t admit
and of course we’ll never know what would have happened if a genuine attempt to want to make Jose a part of the team’s future was entertained. We will never know – but this racist parrot and his negative ways have their mind already made up because of what his Lord Saviour says.
And I DO think some of us can do a much better job than Alderson. Yep, that is MY opinion.
And naturally this dope’s response had absolutely NOTHING to do w/my original response to ‘any’
Like Joe D so aptly put it – the parrot redirects the conversation and he does it MOST of the time
by genuine attempt, I assume you mean outbidding the 6 year offer from the Marlins?
“And I DO think some of us can do a much better job than Alderson.”
I know, that what makes you so unintentionally funny
” Yep, that is MY opinion.”
No, you’re just repeating something you have seen other places. It’s not an original thought.
“And naturally this dope’s response had absolutely NOTHING to do w/my original response to ‘any’”
Actually, I’m pointing out how it is hypocritical of you to give anyone grief for pointing out how a certain aspect of front office work is simple. Do keep up.
yes, it is an extremely simple concept to understand. you either have to outthink or outspend the competition.
outspending is easy, if you have a huge budget. Outthinking of course is tougher to do, and can only get your so far, which is why over time big spenders win more.
yep, very easy, very simple
just like that. Easy to type right?
Yes. glad to see you got it now.
simple concept. Hard to do.
yeah, i didn’t understand it the first time, thanks for clearing it up for me.
just so simple
Alderson record as GM is 1674 wins and 1663 loses and one WS win with Oakland (back when Oakland was big spenders) in 21 years…he has won six division titles and three pennants. His teams finished with over 90 wins four times. He finished under .500 12 times…he finished under 70 wins three times.
His record in the last five years in Oakland in 329W-415L… and he never finished over .500 once in that span…those are the years that he was mastering “Money Ball” and mentoring Beane.
Alderson had four great years…three good years…thee years around .500 (give or take four games) and eleven years with 77wins or less.
Scoreboard!
Not sure where you got your information, but Alderson was forced to slash payroll by 33%, then 50% of THAT (roughly 66% total) after 1995 when new owner’s took over and forced him to. Before then, he was consistently in the top 7 or 8 in payroll in the league.
You’re right…Sandy was forced to slash payroll in 1995, team owner Walter A. Haas, Jr. died and new owners Stephen Schott and Ken Hofmann. Aldersons last year was 1997, so only two of his last five terrible years was under budget slashing.
I can’t find the MLB payroll numbers during his time in Oakland…but…
His first four years in SD, his budget was pretty even…it was ranked
-17th in 05 ($62,888,192 (82W – 80L)
-17th in 06 ($ 69,896,141) (88W-74L)
-24th in 07 ($ 58,110,567)…these are the times only three teams spent over $100mil in 2005 and seven teams did it on 07. (89W-74L)
-2008 he spent more but was ranked 19th ($ 73,677,616) (63W-99L)
-2009 he dropped in 2nd to last ($42,796,700) (75W-87L)
Thanks. I just want to put to rest the notion that he’s a “cheap moneyballer.”
Xtreemicon, can you provide a link for this? i look for that but nowhere i did find where he was forced to slash payroll.. also, as USFM point out sandy only had 4 good years before 1995.. 1988-89-90-92, he was above 500 5 times out of 12 years, the rest of the time the A’s were below 500.. the man as a GM has been a failure and yet ppl here still think he’s some sort of genius who will lead us to the promise land
Well, it’s fairly common knowledge and widely known. But if you insist, here’s just one of the many: http://www.thebaseballpage.com/content/sandy-alderson-biography-baseball-page
You can also just look at the team payroll for that time period and see a top payroll for years, then the ownership changes, then the payroll is slashed by 66% in two years. Not exactly just a “coincidence.”
When are the fans gonna realize that Fred Wilpon woke up one morning and no longer was in the money. If he had profited by the Madoff scandal we would not be in the situation that has proverbially “hit the fan”. Call him stupid, or call him duped by a friend but the bottom line is that he is trying to survive by bringing in small minority partners to keep things running until he finds out what the decisions will be in concern to the ‘lawsuits”. The best he could do was find a man to realistically look at the talent and capability of the roster and see to it to trim payroll and rebuild the organization. That man is here and like it or not SANDY ALDERSON is doing the right thing.
NOBODY LIKES THE FACT THAT WE ARE NOT GOING TO BE VERY GOOD IN 2012 BUT THERE WAS NO OTHER CHOICE…..
SO…..MET FANS…..HERE’S A SLAP ON THE FACE…..SNAP OUT OF IT!