Baseball's New Landscape
Wednesday, March 28, 2007
In the offseason, almost imperceptibly, the very foundation of baseball's talent-flow system -- the means by which rich and poor teams amass players and move them among each other -- was jolted by a tectonic shift. When the New York Yankees not only held onto their best pitching prospect, right-hander Philip Hughes, but also traded away two potential Hall of Fame veterans, Randy Johnson and Gary Sheffield, for six prospects, it may have marked the end of an era -- one that we shall call what?
"We're not going to be anybody's sugar daddy anymore," Yankees General Manager Brian Cashman said this spring, when asked about this shift.
So there it is: The Sugar Daddy Era. And it's over, thanks largely to Cashman and the Yankees.
For generations, the Yankees drove the talent marketplace. Agents flocked to them to coax big paydays for their clients, which raised the market value of other free agents. Small-market teams, unable to afford to keep their players once they reached higher salary levels, knew they could always count on the Yankees -- and at times, other large-market teams -- to give away the fruits of their farm system to take those higher-priced players off their hands.
Even as smaller market teams such as Oakland and Minnesota began to figure out that the key to sustained success was through a healthy farm system -- which, if properly maintained, could continually replenish the major league roster with new, fresh talent wherever it was needed -- the Yankees remained willing to plunder their own farm system for the sake of the quick fix.
But not anymore. The Sugar Daddy Era is over. When even the Yankees have wised up to the proper notion of long-term success through a thriving farm system, all that can be done is to close the books on one era, and herald the dawn of a new one. The old paradigm, fueled by the Yankees' largesse, no longer applies.
"Small-market teams used to get their players, keep them until they couldn't afford them, then trade them to the Yankees and get prospects," said ESPN baseball analyst Steve Phillips, formerly the general manager of the New York Mets. "But now, large-market teams are holding on to their prospects. You can still trade your players but you're going to get less talent in return. And that cycle of large-market teams funneling prospects to small markets -- which is another form of revenue sharing, because prospects are assets -- isn't there now."
It is clear now throughout baseball, even among the largest-payroll teams, that the key to sustained long-term success is through the farm system. A thriving farm system is a constant source of young, cheap talent. And as the size of free agent contracts has skyrocketed, the relative value of the "zero-to-three" player -- one in his first three years in the majors, who typically makes less than $500,000 annually -- has grown exponentially.
"The best teams are a blend of youth and experience," Washington Nationals General Manager Jim Bowden said. "You need to have both. You can't pay everybody $10 million."
Think of it this way: If a team's payroll is $100 million (an average of $4 million per player on a 25-man roster), every cheap zero-to-three player that you carry -- at, say, the major league minimum of $380,000 -- gives you the leeway within your budget to carry an established, borderline-star veteran at close to $8 million.
Smart teams also have figured out how to hoard draft picks by signing relatively cheap free agents whose inevitable departures at the end of the season bring the team extra picks as compensation -- a system Oakland Athletics General Manager Billy Beane is widely credited with perfecting.
And while there always is a team trying to spend its way to a championship -- such as the Yankees, Baltimore Orioles or Texas Rangers of the early 2000s, and of late the Chicago Cubs, who spent around $300 million in contracts this winter -- recent history has proven that spending big money typically does not work, and makes the failures that much more painful.