Opportunity Cost, Beane, and payroll

Embree & Stewart have been great.  Piazza got injured, but he's still performing at nearly the level we expected

And I don't know how to study this, but I agree with what a few people on this site (PaulThomas, Devo) have said about the free agents that teams SHOULD pursue.

(Like I said, I don't know how to study this - Sal and Devin's statistical chops are infinitely better than mine, and so are David Gassko's).

But here's what I've come to believe:

The shift in the past few years that several teams have made toward diversifying risk and taking several mid-level FAs (think the Indians with David Delucci, Jason Michaels and Trot Nixon) is actually the WORST free agent approach possible.

That sounds ludicrous, because those types of moves were lauded when the Indians made them in the offseason(s). But as usual, the game is changing, and I think that change has made mid-level FAs the worst types to pursue.

-On the current market, a talent such as ARod is actually UNDERVALUED, for two reasons:

1.) he's one of the only guys on the market who gets you guaranteed performance that is far, far above what you could find in Freely Available Talent.  (Cust, Hannahan, etc. show that you can potentially find Kotsay, Jay Payton, or Trot Nixon performance for 400K). Thus, you should never pay 3-5M for it. Conversely, ARod's guaranteed .900 OPS at 3b is NOT ever conceivable on the open market. You could potentially get what Trot Nixon gives for much cheaper; it is inconceivable to get what ARod gives in any other scenario.
2.)  "diversifying risk", which sounds great, has an attendant opportunity cost as well. If you sign 3-4 mid-level, sort of crappy free agents, you're team will probably leave a good guy unprotected in the Rule 5 draft, and you'll have no room to take flyers on 400K solutions like Dinardo and Cust. That's a problem.

A-Rod takes only one roster spot. Sure, he makes 30M a year, but the fact that you didn't waste 3-4 roster spots means that you try out more freely available talent, and surround A-Rod with more 400K players. Players that are just as good as those 3-4M players, just with less service time.  In other words, you get more Rajai Davises and less Dave Robertses. You get Dave Roberts when he HAD value (400K), not when he cost 6M. That's easier to do when you have the extra roster space to try out guys like that. Few of them will stick, but if you devote 7 spots on the 40-man roster to that goal, you'll find, say, 3. If you have 3 crappy Trot Nixons and Deluccis, you'll be forced to DFA guys like Fernando Cabrera or Jeremy Guthrie.  

And that was my point cycling back to PaulThomas and Devo has said: A-Rod is a great investment, even to a small market team. I believe, absurd as it sounds, that he's an undervalued investment, even at 30M per, in part for those reasons above, which too many teams still aren't taking into account.

He's also a good investment because he's one of about 15 players in league who truly sell tickets/merchandise, and he'll continue to as he goes toward the home run mark, even if his productivity drops. Jeter-Matsui-Ichiro-Bonds-Clemens-Jose Reyes-Dontrelle-Sizemore-etc. - you get the idea - those 15-20 guys sell tickets. But the point is, there's a lot of guys in the league who make 9 million a year who still don't sell a ticket. Matt Morris, on his own, has never sold a ticket.  Even the most marketable player on a bad team, if he isn't charismatic (Dontrelle), internationally famous (Suzuki), exciting/good-looking (Grady, Nick Swisher), doesn't REALLY sell tickets - he's just the T-shirt jersey du jour. If Sweeney hadn't been a Royal the last 5 years, they would've just slapped a different name on the back of T-shirt jerseys at the park and sold those each game, so you can't argue that HE sold tickets. He was just the face du jour of the marketing campaign. Seriously, there's about 20 guys in baseball who legitimately sell tickets on their own. A-Rod's one of them.

In the current economy, with FAT that is Cust-worthy, the best free agent investment is the A-Rod-type signing or the Shannon Stewart bargain-basement - but not the one in the middle.  

Ironically, what Texas did initially in signing ARod, even in a small to mid-market, could work if you did it right. If literally every player on your 40-man was useful, and all of them were 0-3 service time guys or close to it (which is the direction the A's are moving in), and you had NO DEAD WEIGHT in terms of long-term FA contracts (Kendall/Loiaza/Chavy/Crosby/Kotsay), you could have a very good team, and it'd be marketable, because you'd appease both parties:
a.) You'd have the "face of the franchise" guy for the wine-sipping casual fans who need someone to recognize and follow.
b.) You have the cheap, cost-efficient undervalued guys that save an owner's money and make nerds excited.
This means taking a pass on the FA market for like 5 years (no GM has this discipline, because their jobs are on the line), and then every 5th year, making a splash and hitting a home run with the perfect high-profile FA signing.  (Signing Barry Bonds at age 28 in '93, signing Vlad Guerrero at age 28 in '04). The key is, you HAVE to guess right when you make your 2 investments per decade, but THAT'S the way to play free agent roulette - not waiting to see which crappy players the Yankees and Red Sox don't want, and then spending 8-10M per on them.  

You pay huge money to get the once-or-twice in a generation FA, and you also 1M free agents like Shannon Stewart that you could cut without a big financial hit...but you NEVER get the ones in the middle.

I believe that wholeheartedly, but I can't prove it's merit statistically, and Sal or David Gassko can...and that's why they can consult for big league teams and I can't.  :)

...because their "sell-off" (if we can use the term) isn't coming during the offseason right after a World Series championship a la the Marlins.  It's coming after sputtering at the All-Star break.

The A's could be upfront about it, but I don't think it would make much difference in the overall perception of the team.

If it's obvious to the casual fan that we're in "rebuilding" mode -- ie (in the fan's mind) not really trying to win this year -- I think that hurts ticket sales.  More important, it erodes the fan base in a way that is hard to gain back.

Billy has commented numerous times that the best way to sell tickets is to have a winning record.  The flip side of that is that having losing seasons is the best way to lose sales.

I think different markets respond to this slightly differently.  Another market -- eg, Detroit, Seattle -- is better able to withstand an obvious rebuilding period than Oakland is. That's why our strategy has been different, shying away from the blatant boom-and-bust fire-sale cycle.

If you have to go through a rebuilding period, it's still better to do it more subtly and not as extremely. Keep the team competitive enough that the average fan doesn't realize it's going to be a bad year.

Now that's a cool theory, kind of pooling several comments other people have made together into one giant conspiracy theory.

The A's trade Blanton, and essentially Loaiza, and eventually get the Dodgers' top SS and 3b prospect, maybe a great pitching prospect (Kershaw? I'm dreaming) too, because they also throw in...

Southern California native Eric Chavez, who goes to Chavez Ravine to continue Ned Coletti's love of overpaid vets. Chavvy can't be traded after next year because he'll have his 10 and 5 rights soon after the All-Star break. If he's gonna be dealt, it's this offseason.

So the Loaiza "you scratch my back I'll scratch yours" becomes a huge deal where Coletti essentially has received Loiaza, Chavez, and Blanton, and the A's get SS Chu/Wu?, LaRoche, and Kershaw.

After Ethier for Bradley and this Loiaza deal, Coletti is the rare guy who will really sit down at the table with Beane.

Hey, it could happen...especially if ARod stays in NY and Lowell re-signs with Boston. The Dodgers have money to burn and Nomar just doesn't cut at 3b for them. They have a vacuum, especially with Betemit gone.  Nomar becomes an expensive super-utility.

Beane himself said it was due to the lost revenue from not getting into the playoffs; in his words "the product was flat."

The product is alot flatter this year.

And you are undeniably one of the best analysts here. I enjoy reading your responses, andeux.

And I'll agree that I should be wary of floating "87 wins" and projections when I don't heavily study Win Shares (but then, even the most sabermetric prognosticators often miss when projecting in the preseason, too). I won't ever try to present my post as science - I do try to warn people that I'd prefer Gassko, Sal, Devo or yourself for that anytime I wade into that water.

The Marlins reference may have been lazy, but my point was that, when the Marlins aren't close to a contender, they are honest about it and don't spend money. Cearly they haven't been as successful year-to-year as the A's have, you're right. I hope the A's will show the same honesty, and it appears they are.  I do think it will make them healthier, long term.

But citing the A's 100-win seasons of 5-6 years ago is futile. Those are ancient history. It's a different game than it was even five years ago.  A lot of teams have gotten a lot smarter, and there is a lot more money being spent.

One of these years, Vlad is going to get hurt (I'm surprised he hasn't yet). That year, the A's will be in contention and in case it's 2008 you want to be within striking distance. That's why an 85 win team is a lot better than an 80 win team--you can trade up mid-season once you see Vlad hobble off the field and try to get to 88, or 90, or 92, or whatever it takes that season.

there's no fun in just telling each other how great we are ... despite that sub .500 record.

cracking the code of Beane's sometimes puzzling decisions

for bringing into the system the players that were the heart of the A's playoff (or playoff run) teams from (1999) 2000-2004: Giambi, Tejada, Hudson, Mulder, Zito.

this is a great post.

daily late afternoon rain and a stadium in Ft Lauderdale don't help much, either.

I was more talking about the risk of NOT being about to move him for next year (a very real possibility, if he had pitched horribly or gotten hurt again in September - both of which could've happened).

You're right, the 40-man roster spot isn't that valuable now.

But I disagree with you that it's not that valuable going forward.  The way you cut that group down to 29 shows, IMHO, a bit of a lack of foresight about what those people COULD be capable of, and the value of having adequate people with options in roster slots 26-40.

*Those 4 guys on the 60-day DL all have to budgeted for next year's roster. The hope is for all of them to be healthy, which means they do take up a 40-man slot.  Beane will cut bait on Snelling after his next major injury; not this one.  

*Calero and Scutaro still represent bargains relative to what the FA market would yield. They could be offered arbitration and still perhaps be traded.  If there's no interest, and if their spots can be filled internally, then yes, I agree with you.

But that's kind of my point:  In your response above, you wrote, "If we have Donnie Murphy then there's not much reason to have Scutaro."

As I referenced in my diary, who would've made that comment when he was acquired?

*Komine would not slip through waivers. That's ludicrous. The fact that he currently gets rocked by legit AL lineups doesn't mean he can't pitch. He's better than the last 10 Pirates on their 40-man, and that's the only one team.

Neither would Halsey, neither would Windsor.

These types of guys are the DiNardos and Murphys
of '08 or '09.  

And 2 years from now the same people who wrote "we don't need Halsey" will then confidently write "well, we have Halsey, so we can afford to let Duke walk in free agency", etc., completely ignoring the fact that they were poo-pooing Halsey two years before. (Or some variation of those names. It's not the names we should be quibbling over; it's the principle).  

Cust/DiNardo/Murphy : Hannahan/healthy Meyer/Windsor/Halsey.  

Maybe it's not "small-minded" - that was a very poor word choice. But I do believe it shows a lack of foresight, or even a lack of hindsight, considering it's a pattern we've used successfully several times over now.  Certainly you could be right and I could be wrong - we don't yet whether of those guys have value going forward.

But that's also what makes AN an interesting sociological experience for me, too.  You put an idea out there, and a few hundred people read it, and all of them are intelligent, but we all think differently and have different ideas and opinions. We all see the world and see complex problems in different ways.

I think a more plausible explanation than 40-man roster spots is that NSJ is basically right about '08 pessimism, and if we are unlikely to compete (and Loaiza is obviously far from a sure thing to help in any case), that it is better to evaluate Meyer and DiNardo (who I believe will both be out of options), in starting roles, since they are more plausibly part of the future beyond next year. If that is the mindset, it could conceivably make sense to get rid of him now just to eliminate the risk that he tanks/gets hurt again, and they're not able to move him at all in the off-season.

Still, I don't really like the move, because it eliminates some upside the team had going into next year, and I doubt that the saved money will actually be more usefully spent than it would have on Loaiza.

direction, but they can't possibly spend even 75% of the player budget on non-FAs, and given that that money is always there they might as well spend it. They could probably stand to spend about 5 mil. more on "draft picks, the minor league system, rule V draft, and paying other teams to give us the next jack cust," but after that you would get severely diminishing returns on the money spent, because I don't think those areas are principally about money.

DOTM + DOTM = 0 productivity.

I agree that Beane has better trading relationships than most GMs, but your list needs a little refinement. The relevant point is not what teams he has traded with, but which individuals. It also matters whether they're still current.

The trade with the Angels for Olivares and Velarde (which is when we gave up DaVanon, by the way) was way back in 1999. Bill Bavasi was GM of the Angels then; Stoneman took over after the season.  Beane has never done a trade with Stoneman, and he hasn't traded with Bavasi since then either.

Beane used to trade with Kenny Williams, but the last deal they made was the Foulke/Koch trade after the 2002 season. It's widely speculated that they no longer have a working relationship, and many blame that on Moneyball.

The Texas trade you list was with John Hart. Jon Daniels took over after the 2005 season. He was in the organization already, so Beane may well have dealt with him, but I can't think of any trades he's done with Texas since Daniels has been GM.

GMs sometimes move from team to team. For example, Beane had a working relationship with Omar Minaya when he was with the Expos, and that carried over to Minaya's term with the Mets. Same goes for assistants. Josh Byrnes is now GM at Arizona, but I think Beane knew him from the Boston organization.

Mostly.  But I would think about adding Bavasi to your list.  Seems a little odd that they'd go so long without dealing.  I don't think being in the same division is enough to explain it.

If nothing else, I would have expected Beane to try to get Jeremy Reed by now.  Reed totally fits the profile of the type of player Beane has targeted lately.

This year, Seattle really needed starting pitching. Oakland would have been a natural place to look for it, but as far as I can tell there was no discussion at all. The Seattle system has plenty that we'd be interested in at pretty much any level of talent they want to try for. They were dangling Adam Jones to other teams, and he's a perfect fit for Oakland's needs, but so far as I can tell, Bavasi didn't even make the slightest effort to try to talk us out of Blanton or anyone else.