Garza to Cubs: Microcosm of Rays Successful Strategy
by joshamaral on Jan 10, 2011 6:41 PM EST
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PrintGreat analysis from Josh, here. Added a jump, a new title, and a pic for presentation purposes. - ed.
The trade of Matt Garza to the Chicago Cubs for four prospects this afternoon is a wonderful microcosm of the Tampa Bay Rays franchise.
In the fall of 2005, an investor who had accrued a fortune on Wall Street took over the more-or-less moribund Tampa Bay Devil Rays. Stuart Sternberg wanted to get away from qualitative analysis and the old scouting He sure can hit it a mile philosophy. He wanted a team that operated like his financial services firm. He wanted someone like himself running the team he now owned 48% of. After firing Chuck LaMar on October 6, 2005, he promoted his 28-year-old Director of Baseball Development, a former Bear Stearns analyst with a mindset for equity, to Executive Vice-President of Baseball Operations, aka General Manager.
Private equity firms function in a variety of ways, dealing with venture capital and growth capital. Venture capital is what’s used to start a successful business, get it off the ground. Growth capital is, in layman’s terms(not to be confused with Lehman’s terms), used "in order to finance a transformational event in [a business'] lifecycle." It is used in keeping the business off the ground, or in the ascension of the company. These are the terms that Sternberg, and more importantly, Friedman, are most familiar with.
After eight seasons of .400 baseball since the Devil Rays’ inception, the roster was still pretty barren, save for 23-year-olds Carl Crawford and Jorge Cantu and 21-year-old lefty Scott Kazmir. Friedman’s franchise was on the ground, floored, and the cupboard was bare. He needed venture capital. Capital in the form of players. He couldn’t afford to acquire any pricy free-agents. They wouldn’t be of use anyway. He couldn’t make any blockbuster trades. He didn’t have the talent. His option was the proverbial scrap heap — a collection of aging, troubled, or forgotten about players who lacked recent success but had a semblance of potential. For pennies on the dollar, Friedman broke out the checkbook.
From the fall of 2005 when he was promoted to the spring, he signed a bunch of these guys. Chad Harville, Sean Burroughs, Josh Paul, Darnell McDonald, Ty Wigginton, Mark Malaska, Dan Miceli, Justin Miller, Greg Norton, Shawn Camp, Luis Rivas, Russell Branyan, Travis Lee, Al Reyes, and more. Keep these names in mind. He also formulated an outlook on the draft. The Rays selected now-perennial MVP candidate Evan Longoria and 2011 ROY candidate Desmond Jennings.
During the season, Friedman was active on the trade market, eager to trade aging or ineffective players for players with potential. He traded Fernando Cortez and Joey "Too Bad You Can’t Steal First Base" Gathright to the Royals for eventual closer JP Howell. In one deal with LA, Friedman traded hot and cold closer Danys Baez for out-of-favor prospect Edwin Jackson. He later traded aging rocks Toby Hall and Mark Hendrickson to LA for 2008 All-Star catcher Dioner Navarro, Jae Seo, and Justin Ruggiano. He also traded Aubrey Huff for Mitch Talbot and a guy named Ben Zobrist.
He went back to his bag of tricks in 2007, again trying to create value from thin air. He signed Akinori Iwamura, an import from Japan, and purchased the contract of Brendan Harris from the Cincinnatti Reds. He extended an invite to first-baseman Carlos Pena. He also started to toy with some growth capital — he eyed bullpen help, trading the AL East allergic Seth McClung for an low-risk high-ceiling injury guy, Grant Balfour, and former scrap heap signee Ty Wigginton for the ever-reliable Dan Wheeler.
The growth capital stage continued. He traded Brendan Harris(purchased from CIN), Jason Pridie(scrap heap signee), and Delmon Young(high profile prospect) for Minnesota’s Jason Bartlett and Minor League Pitcher of the Year Matt Garza.
The team won the AL East in 2008 with 97 wins.
Friedman made smart bets at the beginning of his tenure, bringing in tons of scrap heap guys with the expectancy that some of them work out and turn into assets. They did. He then moved them for younger, cost-controlled assets. And now the wheels keep turning.
Bartlett and Garza, originally acquired together, provided the Rays with 7.4 and 7.9 WAR respectively from 2008-2010. With internal replacements for both, and both players getting costly through arbitration, the Rays flipped them for new prospects. More capital. They acquired Brandon Gomes, Cole Figueroa, Cesar Ramos, and Adam Russell for Jason Bartlett. They also went on a shopping spree through the Cubs organization, making off with Chris Archer, Brandon Guyer, Hak-Ju Lee, and Robinson Chirinos for Garza.
The Rays organization is pure and simple, a machine. The Garza trade is just the latest example of that. With capable replacements for both of them, they shaved roughly 12M(post 2011-arbitration) off their payroll, added eight minor leaguers with varying levels of potential, while not subtracting much, if any, talent.
The genius is apparent in more ways than just Garza and Bartlett, however. Here are some other instances of Friedman creating value out of thin air:
- Carlos Pena → 14 WAR (2007-2010)
- Akinori Iwamura → 6.1 WAR (2007-2009) → Jesse Chavez → Rafael Soriano 1.6 WAR (2010), Type-A Free Agent status
- Joaquin Benoit → 1.5 WAR (2010) and a supplemental draft pick in 2011
- Brad Hawpe → August acquisition cost team ~$77,000 → supplemental draft pick in 2011
- Edwin Jackson → 3.0 WAR (2006-2008) → Matt Joyce 1.8 WAR (2009-2010), still under first contract for 3 more years
With a low-budget in the hardest division in baseball, saying the Rays need to be shrewd is an understatement. They need to be steps ahead of everyone, and they are. Their relevance comes from this perpetual machine that turns today’s asset into tomorrow’s asset without any hiccups. Further, as long as non-saber minded teams like the Cubs are willing to pay such premiums for pitchers like Garza, the Rays machine will be that much more effective.
WAR figures taken from FanGraphs. Contract terms taken from Cot’s Baseball Contracts. See my follow-up to this article and more at my blog here. Thank you.
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First Post
This is my first post over here at BTB. I hope you enjoy reading it as much as I did writing it. Thank you.
Welcome, Josh! Great post. Thoughts:
It’s readily obvious that, much like venture capital (or informed betting in Vegas), a good way to mitigate losses is by spreading risk among many high-return, low-cost investments. If one of them hits, the team is in pretty good shape. If several of them hit, BLAMMO, playoff run.
That said, I think the conversation probably revolves around finding and selecting the best options for those many low-cost/high-reward youngsters in the system. Which, unfortunately, is another way of saying it comes down to scouting.
If the assumption is the smartest teams unload expensive peaking talent to increase their chances at multiple, younger talents, then the crux of the issue is
a) determining the moment to sell
b) correctly judging the talent in return
c) having the ability to sell when the market recognizes the strategy and does the same thing.
Then, we come to a two or three-stage cycle where teams take turns with youth movements vs. low-cost FA piece-togethers vs. high-cost/high-talent FA squads — precisely where we’re at today.
See Data Differently: Beyond the Box Score | @justinbopp
Nailed it
I couldn’t agree more. The two or three-stage cycle is necessary for these teams without a ton of financial backing like the Rays.
It’s also pretty apparent in the Marlins. They seem to be in contention every year. They don’t have the playoff appearances to really back it up, but they somehow piece together 80+ wins every year despite having a roster that seemingly lacks talent. The Rays may be the “sexier” team to study, but in the future I’d like to look into the way the Marlins do business as well.
Excellent post. Really good research.
I hope that others not associated with the team can read this and better understand why the Rays are in such a secure position for the prolonged future. Friedman clearly makes extremely shrewd moves that other GM’s overlook, and most importantly, as Justin Bopp states, Friedman utilizes and trusts his brilliant scouting team that finds and nutures the next wave of talent. The proverbial talent pump is constantly being primed by the Rays at every opportunity and it’s paramount to their success.
The Rays way sure is interesting
I’m a fan of the Red Sox myself, so the Rays took the division by storm right before my eyes. After the Garza trade, I really wanted to go back and take a look at how they created such a successful wave. Moreover, it’s remarkable that Friedman had such an impact in such a short time.
That said, it’ll be interesting to see where the Royals go too. They have, pretty much by far, the best system we’ve seen in quite some time. The question is whether they’re adept enough to manage these players and build a team around them. Remains to be seen. Thank you for your input.
I like their FA strategy
Seems like they’ve gotten more value simply going after the mid-tier guys in the $2-6 million AAV range, with the exception being Pat Burrell, who was a bust. For years as Royals fans we said that the mid-tier guys sucked, but maybe it was the mid-tier guys we were bringing in – Scott Elarton, Reggie Sanders, etc. – that sucked, and there were indeed gems out there to be found.
Anyway, Andrew Friedman is really smart.
Relive Royals History at royalsretro.blogspot.com
Really, really strong read, Josh. It blows my mind when "fans" of this team I love can't grasp the mindset here. This is the way the Rays do business, and so far, it's proving extremely effective.
You can’t expect them to win the division every year, but they just might because of the solid minds that help form decisions. Love these guys and hope they stick around a while.
Hell yeah it is.
Any amount of points can be scored week to week. well, besides 1 point. Any number is as likely to be reached as another, since there’s only one of each number, each has the same chance to be hit. IT’s how the syetemof averages works.
by waltermercier on Sep 21, 2010 1:11 PM EDT up reply actions
by Andy Hellicksonstine on Jan 10, 2011 7:44 PM EST reply actions
Someone was complaining on twitter that his daughter couldn't wear her Crawford or {I forget} jersey anymore.
One, sure she can. Two, start compiling a wardrobe of Division Champion clothing, instead of players. Three, what kind of father hasn’t bought an Evan Longoria jersey for his daughter? That’s awful parenting.
by Sky Kalkman on Jan 10, 2011 7:57 PM EST up reply actions 10 recs
This post is why the [rec] button was made.
See Data Differently: Beyond the Box Score | @justinbopp
Excellent work, Josh
I’ve been thinking lately that we tend to bifurcate team strategies—either they follow a “small market” strategy of focusing on player development and a portfolio strategy, using maturing stars as chips to reload the organization and compete on a small budget, or they follow a “big market” strategy using their revenues to build through free-agency.
I don’t think this properly captures the variations that exist. I wonder if it might be worthwhile to create a typology of team strategies.
This is a lovely post.
I only wish it were longer! The writing is excellent, and the content is very good as well.
Really good stuff, Josh
You clearly have an excellent grasp of how the Rays do business. As someone who punted two years of his life to learn all about these guys, I can only say: kudos.
Hahaha you really did didn't you?
As I was reading his post I was thinking… this may just be the cliffs notes to Jonah’s book.
I kid, I kid.
@RealNolenBailey
Haha
There are tons of similarities between what Jonah has written and what’s here.
Strangely enough though, I’ve never read Jonah’s book(though I’m pretty sure it’s on my ever-growing list of reading) — I do know first-hand, however, how tremendous a writer he is. To broach the same subject as him and receive his kudos is truly an honor.
Beyond floored
Thanks for all the praise. It was quite a surprise to see my article on the front page when I logged in to BTB to read some other posts on my break at work tonight.
It’s truly flattering to be interacting and, further, complimented by the same skilled authors and statisticians I was reading just a few days ago. The warm welcome doesn’t go unnoticed.
How big of an impact did their last place draft picks have?
Love the article, but wanted to ask: what about draft picks?
Do you think that the current model is sustainable if they keep winning and are denied some of those really sweet early draft picks? (Overall pick # in parentheses)
’99: Hamilton (1)
’00: Baldelli (6)
’02: Upton (2)
’03: Young (1)
’04: Niemann (4)
’06: Longoria (3)
’07: Price (1)
’08: Beckham (1)
In 2009 they had pick #30. 2010 they had pick #17. If they keep winning, they will keep having worse draft picks which prevent them from drafting such great players constantly. Do you think they can make up the gap through their trading style?
I’m not sure what the answer is, but looking at that list of draft successes, I’d say that drafting is another huge part of their strategy, and the one most affected by their recent competitiveness. Thoughts?
My Work: Henkakyuu. Entice me to use twitter more @henkakyuu
Jennings, Lobstein, Bailey, Barnese, Cobb, Gorgen,
Fleming, Satow, Matt Moore, Joe Cruz, Jennings, Jake Thompson, etc… Not to mention the Enny Romero, Yoel Araujo, and Hector Guevara Intl. signings. Also with around ~10 picks in the first two rounds, I think they will be just fine if they can start evaluating hitters better.
Carlos Zambrano: 26.6 HR/FB%
by CubFanRaysaddict on Jan 11, 2011 3:15 AM EST up reply actions 1 recs
I think it will hurt, yes, but not as much as a lot of people think.
Other people point out that a lot of the high picks were busts. But I think that misses the point that of course a lot of the picks were busts, that’s the nature of the game. They still had an advantage with all those high picks, because they had more quality players left over after all the busting than most teams did with their first rounders.
But the larger point...
Is that because a lot of the higher picks are busts, it means the overall value of picking high is lower than it might be, since many draft picks bust anyway. It’s more important to have lots of picks in the early rounds when possible.
Yeah, but those first few picks each year are WAY more valuable than the middle of the first round, or later.
by Sky Kalkman on Jan 11, 2011 11:02 AM EST up reply actions
Awesome graph
My Work: Henkakyuu. Entice me to use twitter more @henkakyuu
by jmaciel on Jan 11, 2011 9:01 PM EST via mobile up reply actions
And a lot of those guys were the anti-busts
Team Control WAR:
’99: Hamilton: 15.6 WAR
’00: Baldelli: 7.5
’02: Upton: 14.0
’03: Young: 1.4
’04: Niemann: 4.2
’06: Longoria: 19.6
’07: Price: 6.0
’08: Beckham: N/A
And how many of these guys still have service years remaining?
Yes, late first round picks are nice because you can grab guys with signability concerns if you’re willing to throw the money at them, etc. But will you get the quality the Rays did with any frequency?
Sounds like a good study — how much value have the Rays gotten through the draft vs. trades vs. free agency vs. international signings?
My Work: Henkakyuu. Entice me to use twitter more @henkakyuu
Pie Chart!
See Data Differently: Beyond the Box Score | @justinbopp
by Justin Bopp on Jan 11, 2011 10:23 AM EST up reply actions
On a more serious note,
this is an awesome idea.
See Data Differently: Beyond the Box Score | @justinbopp
You keep mentioning Hamilton
He ended up being a $3.5m sunk cost for the team, lost in Rule 5 after years of injuries and drug addiction. Baldelli was toast by the time the Rays got successful. Yes, Upton, Longoria and now Price have been major contributors, but I’m not sure that lacking an individual impact player if they can’t get the high picks will have that negative of an effect.
Bad Left Hook - The SB Nation boxing blog
"Baseball is played on the field, not on a calculator."
He is still under team control
Baldelli had a freak mitochondrial disease. Hamilton had a freak substance abuse problem. That shouldn’t negate the point.
My Work: Henkakyuu. Entice me to use twitter more @henkakyuu
by jmaciel on Jan 11, 2011 9:01 PM EST via mobile up reply actions
That's not the reason
I haven’t done it for 2010, but I published “The No Turnover Standings” in June at BP (http://www.baseballprospectus.com/article.php?articleid=11074) which adds up the WARPs of all players drafted or signed as amateurs by every team and creates standings to describe how the team would have done without signing and trading professional players.
It’s basically a measure of how well the team acquired amateur talent. The Rays’ No Turnover Standings record in 2009 was 66-96. In 2008, it was 79-83, and in 2007, it was 69-93.
They actually have gotten BELOW average production from their drafts. Where they have succeeded is trades, primarily.
by Matt Swartz on Jan 11, 2011 11:30 AM EST up reply actions
I don't think we can be sure
The thought out there is that they’ll take the ~12M they’re saving with the Garza and Bartlett trades to fill holes at a low cost and then invest in the draft. If they have bonus money to dole out, I have no doubts they can draft premier talent. Obviously the Strasburg’s of the world won’t be available at, say #28, but you might be able to get a Renaudo type who slips because of signability concerns.
But you raise an interesting question and I think the only absolutely true answer is that we don’t really know. We see how the organization elevated itself to a high level. Luck and forward thinking got them there. I’m confident the forward thinking is there to solve the problems as the organization evolves, but without the same luck, it’s awfully hard to tell.
by joshamaral on Jan 11, 2011 1:09 PM EST via mobile up reply actions
One point that's being missed is that they are trading some of the risk of draft picks by trading for guys that have already established
they can play a bit. Would you rather have a top-10 pick or guys like Lee, Archer, etc… that have already proven they can play and just need to establish that they can play at a higher level as they continue to mature. By trading for guys in AA they’re already shedding all risk of total bust flameouts, because if you’re that bad then you don’t even get to AA.
Hell yeah it is.
Any amount of points can be scored week to week. well, besides 1 point. Any number is as likely to be reached as another, since there’s only one of each number, each has the same chance to be hit. IT’s how the syetemof averages works.
by waltermercier on Sep 21, 2010 1:11 PM EDT up reply actions
by Andy Hellicksonstine on Jan 11, 2011 2:16 PM EST up reply actions
I got your pie chart here
My Work: Henkakyuu. Entice me to use twitter more @henkakyuu
by jmaciel on Jan 11, 2011 10:39 AM EST reply actions 4 recs
flagged for animal abuse.
See Data Differently: Beyond the Box Score | @justinbopp
by Justin Bopp on Jan 11, 2011 10:58 AM EST up reply actions
No doubt, there is no reason Pac-Man should be forced to eat such a disgusting object
- .-. ..- … – / – …. . / .—. .-. - .. . … …
by Jeff Zimmerman on Jan 11, 2011 12:17 PM EST up reply actions 2 recs
I know sarcasm when I see it
but it still hurts
See Data Differently: Beyond the Box Score | @justinbopp
Good stuff
Just one minor correction – Pridie was a draft pick, just one who hadn’t progressed all that well.
Bad Left Hook - The SB Nation boxing blog
"Baseball is played on the field, not on a calculator."
Also no Supplemental pick
for Pena, but awesome piece. You should join Draysbay.com, if you enjoy reading the type of analysis pieces you wrote.
Carlos Zambrano: 26.6 HR/FB%
by CubFanRaysaddict on Jan 11, 2011 5:34 PM EST up reply actions
Good catches
I corrected them in the article. Thank you. I think I was confused because Pridie was taken by the Twins in the Rule 5 draft and later brought back.
And a quick check of my google history shows “Carlos Pena Type B” but I never checked if he was offered arbitration. Also, I’ll keep the draysbay suggestion in mind. I’ve read some stuff over there but posting there would be pretty cool I’m sure.
This is awesome.
Just getting to it now… my feed reader was stuffed and I’m glad I caught up. Great work, and hope to see more!
On Twitter: @baseballtwit
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