Why I Love the Playoffs, But Not Drayton McLane: An Astros Hot Stove Rant
As I stated in the comments section of a post the other day, I love MLB’s playoffs. Yes, they haven’t involved my team for the last few years, but the thing about the playoffs that I love is that there’s so much character to the games that gets amplified by the stage. Sure, they’re short series with little actual merit to the true talent of teams, but they're entertaining and they generally teach us a lesson or two about how to construct an organization; which is what this post will be about.
Let’s start with everyone’s favorite bandwagon since 2004, the Boston Red Sox. Never in the history of man have so many fans popped out of nowhere as when the Red Sox managed to win game four of the ALCS that year. My bias towards their newbie fans who don’t understand that their newly anointed saints spent the better part of a century finding new and more humiliating ways to screw things up withstanding, the Red Sox are a model organization. The ownership and the management have one goal: winning as many baseball games as possible. They’ve hired some of the best and brightest minds and spent money on the free agent talent needed to shore up the gaps in their talent while paying what has been needed to build one of the stronger farm systems in the game. No expense has been too much and now corner has been cut. While it’s necessary to include the caveat that they also have one of the largest markets possible, the message they send to their fans is that they’re going to ensure you have something worth rooting for.
The Tampa Bay Rays. Jesus. Where do you even begin with this? This team defined atrocious for a decade. In spite of all the top draft picks and the big name free agents and managers, they just couldn’t put together a winner. They looked like the Pittsburgh Pirates without a hay day. Then, the organization put together a truly top notch front office with a belief in both traditional and sabermetric analysis anchored by the likes of Andrew Friedman and Gerry Hunsicker. A few tweaks in the line-up, some addition by subtraction via the Matt Garza and Jason Bartlett for Delmon Young and Brendan Harris trade, and viola: the Rays had a winner. This organization exemplifies the desire of a team to be bold and use its limited resources as judiciously as possible. It took them awhile to get the formula right, but I don’t think anyone in New York or Boston is going to enjoy the next four or five years as all of the Rays’ players enter the peaks of their very young and promising careers.
I’m just going to stick with the AL, because the NL teams almost remind me of the cluster fuck they we’ve got here in Houston (the Dodgers mainly). We have an owner whose sole interest is the bottom line. He ran a talented GM out of Houston who according to The Book On the Book, was the fourth best general manager in 2003, the year preceding our most successful seasons. An owner who has consistently refused to spend those last few dollars to tip the scales and take this team from good to great (2004 and 2005 withstanding). An owner who cannot possibly be interested in exploiting every possible avenue to ensuring that the players he invests in will provide the performance he expects -- how I’m so sure of this: Preston Wilson and Randy Wolf. An owner who neglected to invest in a farm system for too many years because it would have cost an extra million or two -- apparently he also doesn't understand Net Present Value.
He’s a man who’s gotten lucky; no more so ever than this year. Somehow, the addition of Randy Wolf and LaTroy Hawkins just happened to coincide with the Astros offense and pitching as a whole turning on after being dormant for two months. In retrospect, his comments that he wasn’t going to blow the team up and that he’d keep spending what he had to have a winner make him look like a saint. So how is the saint going to follow it up? Well he’s not going to sign the one piece of talent that this team needs if it’s going to do more than win just enough games to seem good.
It’s despicable.
In 2007, Forbes estimates that Drayton saw a net operating income of $20.4 million, a substantial portion of which was derived from the 3,020,405 attendees to Astros home games. Assuming that that most of the revenue a team receives is tied to attendance, I’m going to roughly estimate that in 2008, Drayton will realize a operating income of $18.4 million (there was 7.9% drop in attendance in 2008, but ticket prices also dramatically increased, making my assumption not as ludicrous as it seems). In essence, Drayton will have banked $35 million dollars+ over the last two seasons. Somehow though, there’s just not room in the budget for the addition of Ben Sheets or a comparable top tier FA starter. Word on the street is that Sheets, in his highest hopes, is looking for four years. Assuming that the going rate is a generous $15 million a season, on average, Drayton already has over half of that covered from the last two years worth of profit alone.
This is the team we have to root for. The cut corners, plays gung ho for the media, but apparently don’t give a damn behind closed doors cheap-skate, Drayton McLane. Every time I watched Matt Garza deliver a pitch the other night, Dustin Pedoria be gritty, or Dice-K walk his tight rope, a part of me died. If Drayton holds back in forking over the cash it takes to make this team a winner, it will really be hard for me to want to root for this team and that’s a shame.
Comments
Tell us what you really think....:)
Some comments:
Hunsicker is by no means a sabermetric oriented GM. From what I’ve read, he is not big on stats. Supposedly, Garner had to hire his own statistical analyst in 04 because he didn’t think the front office would like the idea.
Given his business success, I’m sure McLane understands net present value. Maybe Drayton has a high discount rate when it comes to the Astros…particularly in ligh of his age.
I understand you are getting this off your chest, but I think you may be a bit tough on McLane. And I’m saying that as someone who has been critical of McLane’s decisions in the past (I think his decisions to let Pettitte and Kent go really hurt his team). I think McLane may be a victim of his own success. And we have to admit that McLane’s teams have enjoyed a fair level of success while he owned them. McLane’s experience tells him that he can put teams together which can make the playoffs without spending too much money, and that “problems” can be cured with the mid-season trade. To some extent, his experience may be misleading. McLane was very fortunate to have a core built around Bagwell and Biggio, who are Hall of Fame candidates. I really have come to dislike the constant refrain “we can wait until mid season to make trades.” But one can see why he thinks that, given the success of adding Randy Johnson and Carlos Beltran.
To some extent, blame/credit must lie with the baseball people whom McLane relies upon for advice, like Tal Smith. The jury is still out on whether the Wade hiring was a success. It is up to Wade to convince McLane that the Astros need pitching, for instance. If he won’t do that, then Wade’s career with the Astros may not have a nice ending.
by clack on
Oct 15, 2008 10:05 AM CDT
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Eh
1) I didn’t mean to imply that Gerry was a stats guy, but that Friedman is and that the combination of someone like Friedman and Hunsicker was the blend of old way and new way that has led to their success.
2) Certainly Tal Smith, et al., share in some of the blame, but when the entire baseball world keeps telling you how big of an idiot someone is, at some point you’ve got to start questioning the yes men you have around you.
3) You raise an excellent point about the discount rate and Drayton’s age, but that will hold water only if he sells the team…now. Otherwise the barrenness of the farm system will really begin to weigh down on the value of the club, not to mention that it’s costing him a fortune in aged veterans to provide the services that a few decent farm hands could’ve — so I don’t think he made a very rational or intelligent decision in neglecting the farm system for a few years. To his credit, part of the problem came from Hunsicker’s last year or two with the team, when he was all short term focus.
4) You hit the nail on the head, Drayton has gotten lucky in his tenure with this organization because some hail mary’s he’s thrown up have some how worked. I know that sometimes when I take a test I’ve hardly prepared for that a few blind guess and prayers might get me the grade, but I don’t repeat that performance again and again, because the luck runs dry at some point. I think we’ll see that this year — i.e. who are we going to trade to snag that mid-season hero?
5) It doesn’t matter what the verdict is with Ed Wade, he didn’t create this mess, he’s only being given the tools that Drayton provides to fix it. If Drayton is going to stymie that effort, than that’s his fault.
I hope that covers most of it.
The Crawfishboxes
A good friend of mine used to say, "This is a very simple game. You throw the ball, you catch the ball, you hit the ball. Sometimes you win, sometimes you lose, sometimes it rains." Think about that for a while.
by DyingQuail on
Oct 15, 2008 10:51 AM CDT
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I think we can explain the farm system situation
as well as a lot of things, with Drayton’s experience.
For years, the Astros were able to use the old draft-and-follow system to get good talent for cheap. Drayton didn’t need to invest much in the draft, because the Astros could draft a bunch of unknown Junior College and high school players in the last thirty rounds, follow them for ten months, and then make the decision to sign them. He could invest (comparatively) little in the draft and still win big. That system’s been gone for five years now, and I don’t think the front office every really adjusted to the change.
And Drayton undoubtedly benefited from having two hall-of-fame hitters on his team tied up in lengthy contracts. And he also had a fairly spectacular collection of pitchers who were all made better by the Astrodome’s generous dimensions. He was able to low-ball on pitching and still win, especially when he had guys like Wagner, Dotel, and Lidge coming out of the farm system.
I think, however, that Wade understands the value of the farm system. He’s attempting to fix it, and I suspect that the Astros’ decisions this winter will be geared more towards the near future, rather than next season. Maybe that’s why they’re willing to commit to Wolf rather than Sheets – one is cheaper, and neither will get this team to the playoffs.
But Drayton is investing in the farm system, and it will start paying off soon. Go through this year’s draft, and you start to see some gems. It’s WAY too early to tell with those prospects, but you see some good things.
by Only_A_Lad on
Oct 15, 2008 1:55 PM CDT
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vent on
drayton leaves much to be desired in an owner, no doubt. i wonder how much he is influenced by the astros fan base? how do we respond to different moves by the front office, etc? I don’t have any numbers in front of me, but I’m willing to bet that Drayton looks to make money first, but does so at the acquiescence (at least in part) of Astro-fan.
by HighLeveragePerformer on
Oct 15, 2008 10:48 AM CDT
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That's a good point about the fans' reaction.
Astros’ fans don’t seem very patient with young or new players. I doubt that is any different than the fans of other teams. But my impression is that McLane is willing to ship players out of town if they get booed too much or if he gets the impression that fans don’t like the players’ performance. Guys like Towles and Bourn probably ought to be worried, for that reason. (I think the opposite occurs too…players may be kept on the roster past their prime because they have a positive fan base.) I think guys like Burke, Ensberg, and Lidge were destined to be shipped out because fans were fed up with them. Some of those decisions didn’t end up bady and some did (Lidge). But, generally speaking, I don’t subscribe to the idea that management should make moves based on player popularity. I recall Buddy Ryan saying something like, “If you listen to what the fans want you to do, then you’ll end up sitting on your butt in the stands with the fans.”
by clack on
Oct 15, 2008 5:58 PM CDT
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Return on Investment
According to your link, the Astros were worth $463 million in 2007, and cleared $20 million in profit.
Drayton is making 4.3% return on his investment. That’s not very good. I’m not saying that it wouldn’t be smart to spend more, because he may then get more, but I don’t think you can criticize him as a skinflint.
He could get close to that profit by selling the team and putting the money in a freaking’ CD, and that would be no-risk, unlike the Astros, who could (possibly) tank, and people quit going.
by Xan on
Oct 15, 2008 10:59 PM CDT
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That's the the real return on his investment though
He invested $112 million into player expenses, and I’ll over estimate and say another $20 on front office stuff etc. which is about a 15% return…and there’s no CD out there which will give you that return.
Next week I should have our win to revenue graph and a utility curve and we can really say definitively whether he’s being a cheap skate or not.
The Crawfishboxes
A good friend of mine used to say, "This is a very simple game. You throw the ball, you catch the ball, you hit the ball. Sometimes you win, sometimes you lose, sometimes it rains." Think about that for a while.
by DyingQuail on
Oct 16, 2008 2:44 AM CDT
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No...
His investment absolutely includes the value of the team. That’s the amount of cash he doesn’t have; he has the Astros instead.
by Xan on
Oct 16, 2008 7:56 AM CDT
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if you want to compare returns to other corporations...
you need to compute rate of return on his net original investment, rather than the current market value of his investment. the resulting return would be comparable to the rates of return reported for GE, GM, etc.
by clack on
Oct 16, 2008 8:35 AM CDT
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But that's not
the decision he makes this year. His [i]overall[/i] return would be computed that way, yes.
I’m sure the value of his investment has gone up, and that’s because (at least partially) he’s put a good team on the field. I’m not saying that he shouldn’t spend in order to continue that, but I am pointing out that his annual return over the past couple of years hasn’t been great.
by Xan on
Oct 16, 2008 9:28 AM CDT
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His original investment was $103 million in 1992.
So utilizing method, Drayton is kicking ass and taking names on return on investment — although owning a baseball team could have a weird liquidity premium so I guess I shouldn’t speak too soon.
I still think the most conducive discussion comes from the amount he invests each year into the team and the return he sees as the result of that investment.
The Crawfishboxes
A good friend of mine used to say, "This is a very simple game. You throw the ball, you catch the ball, you hit the ball. Sometimes you win, sometimes you lose, sometimes it rains." Think about that for a while.
by DyingQuail on
Oct 16, 2008 9:40 AM CDT
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GOT IT
I just had to get up and do something else:
Investment: $103 Million to buy the club
Investment: $112 million in player expenses + another $10 million or so in other costs
Total Investment in 2007: $225 million
Profit in 2007: $20.4 million
Return on Investment: 9.07%.
That is a hell of a lot better than you’ll get in a CD…that’s near junk bond good (in 2007, not in 2008).
The Crawfishboxes
A good friend of mine used to say, "This is a very simple game. You throw the ball, you catch the ball, you hit the ball. Sometimes you win, sometimes you lose, sometimes it rains." Think about that for a while.
by DyingQuail on
Oct 16, 2008 9:50 AM CDT
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That's goofy
Suppose at the start of the year you have $1000 in a bank account. On January 1 you put in another $100.
At the end of the year, your account is now worth $1200. What’s your return?
Well, you put in $100 this year, and now you’ve earned another $100 in interest. You’ve got 100% return!
If your banker told you that, he’d go to jail. Your return is about 9%.
by Xan on
Oct 16, 2008 10:32 AM CDT
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But that's not what I suggested.
The Crawfishboxes
A good friend of mine used to say, "This is a very simple game. You throw the ball, you catch the ball, you hit the ball. Sometimes you win, sometimes you lose, sometimes it rains." Think about that for a while.
by DyingQuail on
Oct 16, 2008 11:27 AM CDT
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It's close
How’s this: 10 years ago you put $1000 in a bank account. At the start of this year it was worth $3000, when you added $100. At the end of the year it’s worth $3200.
Your computation would say: my investment is $1000+100, or $1100, and my profit on the year was $100. Which would make my return 9%.
The correct computation would say: my investment is $3000+100, or $3100, and my profit was $100. My actual return is 3%.
by Xan on
Oct 16, 2008 11:49 AM CDT
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By your method
The total return from the investment is the $2000 that you’ve received in interest payments through out the years and this years interest payment. That’s why I was arguing for treating it as a season-by-season investment and treating the franchise value as a sunk-cost. Like I said though, hopefully next week we can determine the marginal return on investment for a top-tier FA signing and say whether not Drayton is just an idiot cheapskate.
The Crawfishboxes
A good friend of mine used to say, "This is a very simple game. You throw the ball, you catch the ball, you hit the ball. Sometimes you win, sometimes you lose, sometimes it rains." Think about that for a while.
by DyingQuail on
Oct 16, 2008 12:43 PM CDT
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