Why the Red Sox Front Office is Doing What it's Doing

If not for the good folks from Baseball Prospectus – via ESPN – I’m not sure who would be putting our front office into context. It seems clear that the Boston writers, with but a few exceptions, can’t be trusted with the task. Witness their breathless, hysterical escalation of the non-news of Theo’s “bridge” comment. Or, more importantly, their continuing inability to explain the big picture of how the front office operates.

For the casual, and perhaps not-so-casual fan, then, I offer the following question and answer series. Cribbed in part from conversations I’ve had with people less interested in obsessed with the club than yours truly, it attempts to answer that simple question: what is the front office is doing, and why?

Q: Ok, so what is the front office’s plan? Mazz says it’s “pitching and defense.” Is that true?
A: The truth is that there is no plan. Or more correctly, there is no single plan. The front office seems to recognize that the composition of championship clubs varies, as the material differences between our 2004 and 2007 clubs demonstrate quite adequately. Rather than have a fixed view of roster construction, then, the front office will dynamically readjust their plans based on the players on hand, those available via trade or free agency, and perhaps most importantly, inefficiencies in the current marketplace.

Q: So it’s not always going to be “pitching and defense?”
A: No. Bill James told us as much.

“I believe it’s accurate to say that it was our perception that that was where the value was in this year’s market, in this year’s set of conditions. It also had to do with the needs of last year’s team. Last year’s team needed some defense, we had to invest in some defense, and the market seemed pretty good for it. But to say that’s the new thing and it will be that way from now on, I wouldn’t do that…

I think we understand we’ve had good defensive metrics now for five or six years. When I started with the Red Sox we didn’t have them, we had kind of primitive ones. We’ve got pretty good ones now for several years. It has reached the point at which not only us but a lot of teams are confident about that now and are starting to let the money flow toward gloves, which is a good thing…

So I wouldn’t say it’s a one-year correction at all. But I also think next year’s market will be entirely different. It may well be that next year, we’ll look at our team and say we need to put our money in thunder.”

Q: They’ll adapt, in other words?
A: Precisely. The Lackey signing is Exhibit A here. As Theo has acknowledged, the Red Sox did not head into the offseason with the intent of pursuing that pitcher. When the opportunity presented itself, however, the Red Sox considered it, and layered it into a series of other moves that took the club in a different direction. It might have been Plan C or D, rather than Plan A.

Q: How is this different than what other clubs do?
A: Well, it’s not that different from what enlightened clubs might do, but it’s certainly not what the writers expect.

Q: How do you mean?
A: Consider how many times writers talked about our offensive shortcomings this winter. What was their expectation? That we would sign either Jason Bay or Matt Holliday – had to, in fact – because our needs were clearly on offense. That was their expected result. And what was the actual result? We signed neither, allocating our dollars instead to the best free agent pitcher available, strengthening an area of the club that wasn’t terribly weak to begin with.

Q: Why not pursue offense?
A: It’s not that they didn’t. We know that they bid for Bay, and we’re told that they were in on Holliday as well. But the front office doesn’t let artificial perceptions of need impact their judgments about player value. Meaning that they’ll pay Bay or Holliday this season, or a Teixeira last season, what they believe he’s worth – no more than that. Rather than overpay a Bay or Holliday, they’ll improve the club in other ways that they believe represent better value.

Q: So there’s really no plan?
A: If anything, the front office seems focused on what Theo talks about above: balance. They want to have good pitching, good defense, and good offense. But they appreciate the reality that all of those areas factor into winning, not just offense, so if they can’t improve in one area at a reasonable cost, they can improve in others and still achieve the goal of improving the club. Ultimately, they want to get good value for their investment, whatever that may be.

Overpaying an offensive player just because you may need offense doesn’t represent good value.

Q: But aren’t there times when they can’t improve in other areas? Where they’ll be desperate and have to, say, field a shortstop?
A: Certainly. That’s when you end up with a Julio Lugo on a four year deal. After that debacle, I’d guess that the front office will do everything in its power to avoid finding itself over a barrel in that fashion again. Even the Mike Lowell deal can be viewed similarly: without any good internal third base candidates and a poor market, they didn’t have much choice but to commit more years to Lowell than was prudent. And now, like Lugo, they’re likely to be paying him to play elsewhere.

In a perfect world, the Sox development system over time has viable candidates at multiple positions, so that they’re more frequently dealing from a position of strength when it comes to negotiations. But building that complete a system takes time.

Q: Let’s go back to value: how does the club measure that?
A: Based on their statistical analysis and their scouting assessments, presumably. But the Red Sox are also very cognizant of market influences on value.

Q: What impact does the market have on value? Isn’t a player universally valued? A 30 homer guy is a 30 homer guy, right?
A: Not at all. Market perceptions of value vary consistently, and the Red Sox front office, like their more enlightened counterparts with other clubs, look constantly for inefficiencies in the valuation process.

Q: Can you provide an example?
A: Sure. Moneyball is the canoical reference point here.

Q: Right: OBP is undervalued, right?
A: Wrong. First of all, Moneyball was not about OBP. Moneyball was about nothing more or less than the inefficiency of markets. Specifically baseball. The idea that it’s a book about OBP has been propagated by the less open-minded of the mainstream baseball media. Which is to say, most of them. As one of the exceptions, Chad Finn, observes:

There is an element of mean-spirited giddiness among those who didn’t much approve of [Billy Beane] being awarded the “smartest man in baseball” title belt after the success of Michael Lewis’s “Moneyball.” Not coincidentally, those who dismiss or discredit Beane typically tend to be the same shortsighted wretches who believe the book’s theme is about acquiring players who walk a lot. Must be easier to pick at the perceived smartest guy in the room and cheer for his comeuppance than it is to open your own mind and overcome those preconceived notions.

But more importantly, OBP isn’t undervalued, OBP was undervalued. Big difference. Prior to the publication of that book, and for a few years after its release, players that got on base were not properly valued by the marketplace. But, the Kansas City Royals aside, OBP players, in general, are getting the money they deserve. According to the market, at any rate.

This means that there are fewer inefficiencies to be exploited there, versus a few years ago. The days of getting high OBP players for pennies on the dollar are, in all likelihood, over.

Q: So, what, we don’t want high OBP players anymore?
A: Not at all. The ability to get on base is one of the single most important offensive skills players can have, so the Red Sox will continue to try acquire players with those skills, and cultivate it in the players that they draft and develop. What they won’t be able to do any longer, because the valuation of OBP is better, is acquire those players as efficiently (read: cheaply) as they have in the past.

Q: What do they do, then? What kind of player represents the new value?
A: That won’t be clear for a year or two, but the early indications are that the club believes that defense is currently undervalued. As the signings of Beltre, Cameron, et al would indicate. As Dave Cameron explains, this is why clubs like ours look more old school, than Moneyball.

Epstein and James have traded on-base percentage for ultimate zone ratings, believing that the market has over-corrected and is now undervaluing a player’s ability to save runs in the field. They aren’t the only ones — the Tampa Bay Rays, Seattle Mariners, and yes, even Billy Beane’s Oakland Athletics are also on the bandwagon.

The question is, particularly with newer and better defensive performance data about to be available, how much longer defense will be undervalued. When defense is properly valued, what’s next? Cameron’s guessing older players, which makes sense, because the value of younger players has never been higher, and older players are finding it a more and more difficult economic environment.

But we’ll see.

Q: Where does budget come into this? Mazz, CSNNE’s Joe Haggerty and others have argued in the past that the Red Sox are a big market club behaving as if it’s only got small market dollars. Is that fair?
A: I don’t think so, no. The Red Sox are, to be sure, applying the prinicples that have made small market teams competitive to their larger organization, but they are not at all shy with the dollars when – and this is the important part – it represents good value, in their opinion. They won’t spend just to spend, even if that’s what people want.

Q: Example?
A: Sure. Holliday was a player that the Red Sox liked, by all accounts. But they recognize that he isn’t a great player, just a very good one. So when he expected to be paid like a great player, they moved on. And when the dollars they had budgeted for Teixeira proved unnecessary because that player signed elsewhere, they didn’t simply throw that money at a player of lesser ability. That’s not being cheap, that’s not being stupid.

Q: But can’t the Red Sox, as a big market club, afford a couple million extra here and there?
A: Absolutely. But quite often the discrepancies between the player and agent’s opinion of his value and the Red Sox’s aren’t off by a couple of million – they’re off by tens of millions. Think of Pedro Martinez who wanted a fourth year, and got it – bless him, delivering about 1.5 seasons worth of performance for that. That’s a significant difference, in capital terms. Holliday, more recently, got $122M from the Cardinals. The Red Sox were prepared to pay him Lackey’s money, or $82M. The differences, then, aren’t small. And while the Red Sox, as a large market team, might not be sunk if a $120M player gets hurt or underperforms, it would unquestionably negatively impact the product on the field and, more importantly, it’s just not a good way to spend your money.

Better to take that extra money and plow it back into more efficient marketplaces, from the club’s perspective, such as the draft.

Q: So the philosophy, then, is to acquire the best players you can at the most reasonable cost?
A: That’s it in a nutshell, yes. Whether you’re the Marlins or the Yankees, you want to assemble the best possible roster at the lowest possible cost. Because every dollar you overpay is a dollar that can’t be invested, elsewhere. Money is not infinite, even for the Yankees. True, the marginal values of players, wins and such differ based on context – a good reliever likely has more value to a contending club than to one in last place, for example – but overpaying is bad business. And as Steinbrenner discovered, or rather Michaels and Cashman have educated him on, bought teams correlate weakly with success.

Q: Let’s go back to the draft: are there market inefficiencies to exploit there?
A: Absolutely. First, it’s an artificially constrained marketplace, unlike the free agency foreign born players have access to. Second, the draft dynamics introduce certain inefficiencies that have been heavily exploited by clubs like the Red Sox. MLB has recommended acquisition costs for slots in the draft; the first pick should get X, the second Y, etc. Unsurprisingly, the players and agents often have differing opinions on the player’s value. The question for a club, then, is whether you will pay above slot bonuses to talent, or whether you will rigidly follow MLB’s guidelines. The Red Sox have, for several years, ignored the recommended slotting, and have done well in the draft. Clubs like Houston Astros, however, have stuck to the slotting guidelines, and their minor league system is barren as a result.

In essence, the draft is just another market inefficiency that the Red Sox – and other clubs, to be sure – have identified and are actively exploiting. To their benefit, and to ours.

Q: All of this just sounds like economics.
A: Probably because it is. It’s essentially Econ 101: asset valuation, exploitation of market inefficiencies, etc.

Q: So can we expect a playoff berth every year running the team on economic principles rather than traditional baseball practices?
A: Annual playoff berths actually are an unrealistic expectation. Better to judge by the process than the outcome, on balance. If we fail to make the playoffs in a given year – as in 2006 – this doesn’t mean the process is flawed.

That said, in a small sample size – Theo’s only been in charge since November 2002, remember – the results have been generally positive. Two more World Series titles than in the previous eighty years combined, and a playoff berth every year but one.

Q: Why don’t fans understand all of this?
A: Mostly because casual fans only have so much time to follow the team, and leave the big picture contextualizing to those who follow it professionally. And those professionals are letting the fans down. The media can’t explain what the front office is doing to the fans because they don’t understand it themselves. It’s easier to write a story about how the Sox are cheap for “replacing” Bay with Cameron and Hermida. It takes a little more time, effort and education to put the economics and statistics into context, because you’d have to actually study, you know, economics and statistics. And most of the writers in our market have put about as much effort into learning those subjects as they have learning Spanish to communicate more effectively with an increasingly Latin heavy population of baseball players.

The good news is that with sites like Baseball Prospectus, Fangraphs, Sons of Sam Horn and others, the general level of discourse and discussion about baseball is rising quickly. More and more fans appreciate the better understanding we have of today’s game, which means the audience for the kind of uneducated and sensationalistic coverage typical of the Murray Chass’ of the world is smaller by the day. And not a moment too soon.

Four More Years

I like Stephen King. He’s no Gabriel García Márquez, obviously, but then who is? King, in my view, takes his craft seriously and does have legitimate strengths as a writer (besides the obvious productivity) that his fellow Hudson News bestsellers lack. More even than his absurd commercial success, however, I have a great deal of respect for the way that King has never forgotten the economically challenged state he hails from. That kind of loyalty is as admirable as it is rare in this day and age.

But one area where I break with America’s bestselling author is on the subject of one Terry Tito Francona. As has been documented, King and his co-author Stewart O’Nan spent much of the very readable Faithful slagging the Red Sox manager, much as an average fan might be expected to do.

Today, however, with the benefit of a second world series under his belt, the man King and O’Nan came to call Francoma received a contract that values him as the upper echelon manager his record proclaims him to be. Where value equates to $12 million, guaranteed, over a three year period.

Not that I’ve been a fan of Francona’s from day one. While I can’t dig up the actual text – and certainly I wasn’t writing here at the time, my recollection of my reaction to the signing within an email to a few friends can be summarized in one word: skeptical. Much like all of the Patriots fans in the audience probably were after Robert Kraft brought on Bill Belichick who had been fired in Cleveland. As Francona had been fired in Philly.

Nor am I convinced that the one-time Philly outcast is the perfect manager. I have frequent issues with his bullpen usage, occasional questions about his loyalty to certain players, and infrequent problems with his in-game tactics.

But for all that, I’m aware that Francona has forgotten more about baseball than I’ll ever know, and has access to information – quantitative, injury, personality, morale and otherwise – that I lack. Which is important, and can – at times – trump the numbers.

Francona was hired in part because of his acceptance of the numbers – the data wrangled by the front office into meaningful, actionable information. The front office makes a point of employing both traditional scouting techniques and modern statistical analysis side by side, rather than excessively favoring one over the other. It’s clear that Tito, for his part, augments his decision making process with the information fed to him by the front office. Whom he clearly trusts, and has forged an excellent working relationship with. Tito listens.

Where Little before him was content to leave the reams of statistical data provided him by the front office collecting dust on his manager’s desk, Francona seems to honestly and genuinely appreciate the additional data. He seems to uniquely understand that more data is generally a good, rather than a threatening, thing.

Off the field, Francona also seems to have the singularly unique yet utterly necessary talent for putting Red Sox nation in its place – without offending.

The fans, media and wicked clevah alike jump to the conclusion that Crisp is out in favor of my Navajo brother? Francona tells us that while it’s ok if we forget, it’s his responsibility to remember what Crisp brings to the table (which is, not coincidentally, almost perfectly aligned with the GM’s view). The fanbase is bitter after a mere 101 wins? Francona has no problem calling us on it, but does it so deftly we don’t even remember to be offended.

No, I’m not prepared to make the argument that Francona is the perfect manager. But I could certainly build and defend the case that he’s the perfect manager for this town, and this team.

All of which is a long winded way of saying that I’m very pleased the front office and ownership saw things the same way.

Why I Don't Want Johan Santana, But Would Be Fine With Him

Look, if we end up with Johan Santana – and sign him – I’m not going to complain. Pick your metric, he’s been the best pitcher in the league for several years now…by a wide margin. And of course I’m just as geeked about the possibility of slotting Beckett/Santana/whomever in a potential playoff series as the next guy. Maybe more so, given my self-admitted “problem” with baseball. But at the end of the day, I hope he ends up with the Mets. Seriously.

The problem with this position is that if or when you take it, the uninformed or superficial assume that you’ve gone koo koo for cocoa puffs, where cocoa puffs = Red Sox prospects. That you haven’t considered the matter logically, but rather have a weird and deeply confusing mancrush on Jacoby Ellsbury.

My Navajo brother aside, there are two very good reasons to be at least concerned about a potential trade for Santana. The first is that it doesn’t seem to make economic sense:

For the Red Sox, a trade is even more difficult to rationalize, driven by the lower free-agent valuation of Santana in a sold-out Fenway Park. Santana’s financial value to the Red Sox is in the range of $18 million to $20 million versus his annual value of over $30 million to the Yankees. Starter Jon Lester’s value may be lower than Hughes’ value because Lester has fewer years remaining until free agency, and outfielder Jacoby Ellsbury’s value is likely less than Hughes’ due to the premium paid to starting pitchers. However, neither of these facts changes the reality that the free-agent cost of Santana alone is likely more than his worth to the Red Sox. It may be that the only reason they are involved in trade talks is to bid up the acquisition price of Santana for the Yankees.

That whole piece is excellent, incidentally.

Just as important as the cost, is the predictability of the returns on that cost: i.e. the injury risk. Like many, I’m concerned by his late season fade (check his September splits). I seriously doubt that he forgot how to pitch, meaning that the most logical conclusion is that he wasn’t entirely right. Keith Law seems to share those concerns, saying:

“I haven’t read any of the others (I was on vacation), but I’d take A-Rod, Beckett, and Sabathia (because I’m a little concerned about how Santana finished 2007).

The good news is that I trust our front office – as I would not trust some others, say Houston’s – to have thought about all of this in far more detail than I ever would or could. As Seth put it:

I will, however, say this: I’ve always been reticent about jawing off when I have no real idea what I’m talking about…and such is the case with all of the sundry Santana trade permutations. I don’t mean the specifics of a possible trade — no one knows those except for Theo, Bill Smith, and Brian Cashman. I mean that I don’t know enough (and what’s more, haven’t done the work) to be able to make any kind of responsible or intelligent observations about whether this or that scenario makes sense. I don’t have the drilled-down numbers on Jacoby; I haven’t run the projections on Santana; I sure as hell don’t have any sense of what the pool of pitching talent is like in next few amateur drafts; I don’t know where else the Sox (or the Yankees) would spend that $130 mil or so it’ll likely take to lock up Santana…well, you get the idea. And even if I did have all of this info and even if I had done all of this work, I still would be so many light years behind where the Sox front office is in terms of brainpower, man hours spent hunched over spreadsheets, cumulative knowledge, and on and on, that it would be silly for me to start soapboxing about why this or that scenario makes sense.

It’s important to know what you don’t know, and in my case vis a vis Santana and the possible trade permutations, that’s just about everything. But neither will I concede that trading for him is an open and shut “hand over whatever the Twins ask for.” That’s just the kind of thinking that kept us out of the promised land for decades, so let’s skip it. Though some might lament the invasion of the game by the guys with “pocket protectors,” I don’t happy to be one of them. But then, I like winning World Series.

Motto of the Red Sox Front Office: Whatever Works?

Like every front office in the league, the folks who call Yawkey Way home have their pluses and minuses. I confess to never understanding, as an example, the affection they had – for some years – for Julio Lugo, who is not a bad player but to me undeserving of that level of attention. Let alone contract.

But though Theo declined to take my advice on that score – or, admittedly, any other – I remain fundamentally impressed with his willingness to rethink everything, and borrow shamelessly from approaches that have yielded results. This openness to reinvention, not of the wheel but rather antiquated, archaic practices, was to me the primary philosophical takeaway from the once lauded if now clichéd Moneyball.

As a life philosophy, it’s a bit blunt, but more front offices around the league would benefit from the simple realization that if something isn’t working: try something else.

The latest datapoint supporting the conclusion that the Red Sox front office is the baseball equivalent of the English language – which for all of its other faults, steals liberally from other languages to augment itself – comes to us courtesy of Joe McDonald from the Providence Journal.

The piece describes in some detail our offseason rookie development program, which incorporates community exposure, media training and other non-baseball educational activities with the relevant workouts. The important bit, to me, that McDonald extracted from director of player development Mike Hazen is the admission that the program itself is entirely unoriginal:

“This is something that is fairly unique within the game…There are a few other teams that do this and we’ve adapted what we do from the Indians, who have been doing it for about 10 years. We’re not ashamed to say we’re trying to model some things after their player-development system and we’re trying to grow on it. I’m sure there will be other clubs that do it in the future.”

Nor should they feel any shame, in my opinion: quite the contrary. Sifting through the techniques and practices of competitors for ideas and potential improvements should be the most logical exercise in the world, but Hazen’s comment is reflective of a culture that has permeated baseball for years. A culture afflicted with what is known within the technology industry as NIH: Not Invented Here.

If we’re lucky, the Yankees will be unable to learn from what is working for their hated rivals, in spite of suggestions from its fans. As long as Cashman is in place, however, I don’t expect that to be the case, since he and Theo seem to be not just cordial but positively like minded. Which is why I count myself amongst Hank Steinbrenner’s biggest fans, because when his GM is saying things like:

“The dynamics are changing with us…When I signed up with this current three-year deal, and this is the last year of it, it was with full authority to run the entire program. George had given me that. But things have changed in this third year now with the emergence of Hal and Hank Steinbrenner, and that started this winter.”

I don’t know about you, but my first thought is: short-timer.

Which would be an excellent development, in this Sox fan’s opinion.

P.S. A belated thank you to Michael Dolan‘s Indians for their most excellent rookie program. Really came in handy last year.