Saturday, August 16, 2008

The Morning After: A Slightly More Measured Take

After sleeping on it and thinking some more, here's my slightly more thoughtful take on the Crow debacle.

First, if you're looking for winners, there really aren't very many, except maybe the Mets and the Phillies.

The Nationals are big losers. Assigning blame is a separate question, but there's clearly no way this is a good thing for us. The money involved is inconsequential in the economics of MLB, and the 10 pick next year will never have as much value as the 9th pick this year. It's one pick lower, and you have to discount for the one-year wait to get your hands on a good player. Moreover, Crow on talent was probably more of a top-five pick who slid to us (ironically) because of signability. So without question, we are further away from the arrival of The First Great Nationals Team than we were 24 hours ago.

Aaron Crow is also clearly a loser. It's a huge risk for him to have to play independent league ball and risk injury, and he's now one year further from arbitration and free agency. He needs 3 years of service time to get up in the $5-6m range in salary, and 6 years before he can really cash in on the free market. At best, he just lost a year of prime earning. At worst, if he gets hurt, he just passed on a once-in-a-lifetime opportunity to set up himself and his family for life.

The Hendricks agency is also a big loser. The whole point of hiring an agent is to make sure that your interests are protected. This is one of the more botched negotiations I can remember, and if you are a player you have to hold your agent accountable. If I was a talented 21-year-old, Randy Hendricks is about the last guy in the world I'd want representing me.

If you are looking to cast blame, there's blame to be shared by many. A debacle like this can't happen without what seems like almost purposeful incompetence by virtually everyone involved.

For the Nationals, the team struck an extremely aggressive posture from the start, publicly saying over and over that they team wouldn't go over slot, period. Mark Lerner said it. Stan Kasten said it. Jim Bowden said it. As late as yesterday afternoon, reports were coming out that the team was sticking by it's hard-line "slot or bust" position. This is a dangerous game, because when you open negotiations with an unreasonably hard-line position, it pushes your opponent to do the same.

That said, there's no reason necessarily for the team not to do this, up to a point. As I've written before, the player has almost no leverage whatsoever. The team controls his future as a major leaguer almost totally, and if he wants to be a major league baseball player, he needs to basically accede to the team's demands or else do something else for a year, which as I said is a really, really undesirable bad plan B for the player.

By playing hardball like this, the team can reasonably expect to save some money. They can get the player to accept a slightly lower deal, maybe a million one way or another, and it also chips away at the team's growing rep as a team that will always go way over slot, as long as you hold out long enough. I don't blame the team for playing chicken for a while to push these imperatives.

However, the team needs to come back from the ledge with plenty of time to make sure they don't just flat-out lose the player. The reason is that Crow is a rare talent. He isn't a 2nd or 3rd round pick like Sean Black. Top picks like Crow have a success rate in MLB that is better than just about any other avenue of player acquisition, other than maybe blockbuster type-A free agents. And as you know, those guys cost a lot more, and Our Washington Nationals have taken it off the table.

Baseball Prospectus did a lengthy study a couple years ago measuring the value of draft picks, and without going into the details, one of their prime conclusions is that top picks (especially the #1 and 2 overall, but not only) have tremendous value, but that the real premium value is really contained to the top 5, maybe 10 picks. This chart is their effort to show the long-term value of first-round picks (without getting into detail, this shows you the number of additional wins a typical player drafted at each position will give you over 15 years--read the study if you want to look at this in more detail):

You will notice that the line is really high up there around #1 and 2, and then falls pretty fast as you get out of the first ten, and then from the 25th pick to the third round it's all kinda similar. But those top top picks, you're dealing with a different animal. Crow was the 9th pick, arguably more of a 5th pick talent.

Since the Nationals arrived in Washington, DC, Crow and Ryan Zimmerman are really the only players we've had an opportunity to acquire who have this much value. We mostly haven't had the trade chips to acquire players like this, and we won't spend the money for premium free agents.

Now let's look at the money here. There are differing accounts from the team and Hendricks, but let's assume the team is telling the truth, and we offered $3.5m and a major league deal, and Crow wanted $4.4m. That means we could have had him under team control at the major league minimum through at least the 2011 season (assuming he was basically in the the majors from Opening Day, 2009), and more realistically through 2012 or maybe even 2013, if it took him a couple years to make the bigs. Without getting into the details, players basically earn the minimum, around $400k, no questions asked, for their first three years in the big leagues.

So most likely, we would have had Crow for around 4 years (counting some time in the minors) for around $420 a year, plus the $4.4m bonus. That's 4 years for $6.08m, or $1.52m a year. You can see all the Nationals' 2008 player salaries here, but basically we're talking about Rob Mackowiak money. It's chump change for a premium talent. When you look at the overall economics of MLB, the team walked away from a steal. Even if we had completely caved to his most completely unreasonable demands, we wouldn't have been paying him much more than Wily Mo Pena money over this period of time. There's no chance he could have been as expensive as Lopez or Lo Duca, two guys we just cut for nothing.

In short, while there's little downside to playing chicken for a while, there's huge downside for actually going over the cliff. The goal of the negotiation is to go as close as possible to that edge without going over.

So back to the question of blame, for the Nationals, it's Bowden's job more than anyone else's to make sure that the negotiations don't go over that cliff. He just can't let the situation crater because of a lack of communication or running out of time. I don't care if the kid locked himself in a compound in Waco with an armory full of weapons demanding heaven and earth, the team has to have enough negotiating finesse and savvy not to allow the situation to fall apart like this.

Kasten and Lerner deserve blame too though. They pushed the hardball stance, and they sent a guy to conduct a hardball negotiation who wasn't up to the task. I know from my job in politics that you can't try to execute a sophisticated, high-risk negotiating strategy if your lobbyist doesn't have the skill, heft, and experience to pull it off. If you don't have that firepower, you have to take the safer path, even if it means getting a slightly less good deal.

That doesn't mean the agent isn't at fault also. He is--big time. I think that the team is more at fault for creating the high stakes game of chicken in the first place--they've been negotiating in public for weeks, and the Crow camp didn't say a word until this week.
But the demands of the Crow side--reportedly $8-9 million--were never realistic, and Crow's side seemed to eagerly embrace the escalation at the endgame, only coming down to $4.4m in the waning minutes. Hendricks clearly overplayed his hand and left his client in a much, much worse situation.

And the kid is at fault too. At some point, he needs to take control of his life and tell his agent, "look, just make a deal. Let's not be dumb." It's possible that he's young, arrogant, thinks he's invincible, and just decided that he's above risk. Or he could just be a dumb jock who had no idea what was going on around him. Either seems easy to imagine.

But for me as a Nationals fan, I take very little solace knowing that the player and the agent share blame. I'm rooting for my team to do well. I want my team to be a well run, winning organization. I couldn't care less about the Hendricks agency, and if we got pulled down to their level, shame on us.

When I was a Bulls fan in the 90s, we were proud of the fact that we were able to make Dennis Rodman work when no one else could. We knew Rodman was a wack-job, but that wasn't the point. The Bulls--MJ, Phil, et. al.--were skilled enough to get the best out of a challenging but hugely talented gut. I want a team like that, with leadership that leads. I want at team that is better, smarter, and more effective than the crappiest agent and the least mature 21-year-old out there. Is that so much to ask?

But right now we don't have that. The best we can say about our team is, "yeah, our guy screwed up royally, but their guy did too. Our GM is no more of a screw-up than Crow's agent." So I think it's fair to put primary blame on Bowden. Not all the blame, but primary. He was the lead negotiator in a negotiation that went completely, terribly haywire.

Now, we can only hope that we'll strike gold with the first and tenth picks next year and that in retrospect maybe it'll all work out for us. But I would feel a lot more confident about the possibility of that happening if we had someone else making the picks and leading the negotiations next time around.

17 comments:

The Doctor said...

Excellent summary and spot on.

Steven said...

danke.

jimbo's brain fart said...

Spot off. You say For the Nationals, the team struck an extremely aggressive posture from the start, publicly saying over and over that they team wouldn't go over slot, period. Mark Lerner said it. Stan Kasten said it. Jim Bowden said it. As late as yesterday afternoon, reports were coming out that the team was sticking by it's hard-line "slot or bust" position.

Huh? There was like one second-hand quote from an assistant GM (was it Dana Brown?) saying that he was disheaterned that the Lerners had laid down the law on not paying above slot. That quote was repeated ad nauseum in blogs like yours, but hello! That does not constitute the team "publicly saying over and over that they woudn't go over slot, period." You're great at digging up obscure and miniscule pieces of information to bolster your often-ridiculous arguments, so why not here? Produce the sources and quotes where Mark Lerner, Stan Kasten and Jim Bowden said over and over that they wouldn't go over slot, period.

And hello! again. If reporters are saying that a team is sticking by a hardline "slot or bust" position on the same day that the team is paying over slot to several of its top-10 draft picks, how stupid are you if you give those reporters any credibility at all?

Steven said...

@jbf:

I can think of someone else whom I wouldn't want handling a delicate negotiation on my behalf! ;)

Chico Harlan's Ghost said...

Asked about the tendency from last year's draft to pay bonuses exceeding the slotted suggestions, Lerner said, "Well, for the right guys it's a possibility. We were willing to do it for a Jack McGeary because we thought the long-term payoff would be incredible. Our guys were just enamored with the fellow. And the reports are, the guy is doing great. That's what we need to improve.

"Jim and the guys are negotiating, and a lot of them will be right up to the deadline, August 14, August 15 -- they might be midnight signings. But everybody plays a different way. A lot of these agents are not letting anybody sign. They're all waiting until the last minute, trying to get better bargaining power. If we don't sign them, we get the same pick next year. So, we'll have another shot it at if for some reason we didn't sign the top picks."

Lerner called some of his early draft picks' bonus requests "ridiculous," and added, "You have to look at the global thing. This is the budget for signing these guys, and you if sign them for this much, you won't be able to sign somebody else down the ladder."

jimbo's brain fart said...

Ah yes. That quote has "we won't pay a dime over slot, ever" written all over it. Not!

Anonymous said...

The $700,000 or $900,000 difference is small potatoes compared to all the money Jimbo has blown on FLop, Lo Duca, Estrada and Fat Dimitri. The biggest problem is that the Lerners are too baseball dumb to fire Bowden.

Anonymous said...

Jack McGeary was a great signing by Bowden. Bodes gave away the store and McGeary has exactly one win and a 5.10 ERA in the Gulf Coast Rookie League.

Steven said...

@ghost of chico--I'm not sure I totally follow your point.

If you're saying you don't think that the team was as aggressive in their public negotiating as I think, that's fine, I disagree, but it's not that central to my assessment.

I think there were a lot of careless statements made on our side, a lot of talk about slot, how Crow should get what Detwiler got, how there isn't that much to talk about, etc. No, you're right, they didn't just flatly say, "it's slot or bust, punk"--people like Stan Kasten don't talk that way. But I think that was the message being sent. That's how I interpreted that series of comments from Lerner, Kasten, Bowden, etc. over the last few weeks.

But it's not really that important who "started it." The point is that a game of chicken was created and went off the cliff. It shouldn't have been allowed to happen.

Kristen said...

Thanks for this. It helps put everything in perspective.

jimbo's brain fart said...

I think there were a lot of careless statements made on our side, a lot of talk about slot, how Crow should get what Detwiler got, how there isn't that much to talk about, etc.

You think. You think?!?!? So you're admitting that all your posturing on how this deal did or didn't go down is based entirely on conjecture. You can't produce a single sourced quote to back up what you're saying.

I think you're an idiot. I know you don't know what you're talking about.

Section 222 said...

Well reasoned. So many commenters at NJ are satisfied with being pissed adn assigning blame to Crow and Hendricks. The point is, as you said, that even if Hendricks was incompetent and Crow stupid or clueless, it was in the best interests of the team to sign Crow and it was Bowden's job to get this deal done, whatever it took. In the end, the economics didn't much matter. Certainly 700-900K was chump change over time, in comparison to what Crow might bring to the team, and especially in comparison to money squandered on PLod, Young, Estrada, RobM ad nauseum. The fact that the worst team in baseball didn't sign its no. 1 pick is a huge embarrassment for them, and very sad for the fans.

Steven said...

222--Sad is the word. I'm not even mad anymore. I just feel demoralized as a fan. Really--I was a Cubs fan when Maddux left, and a Bulls fan when we traded Scottie Pippen for Roy Rogers, and a Packers fan when we took Tony Mandarich over Barry Sanders.

I've never felt this hopeless as a fan.

John O'Connor said...

I don't agree that the Nats necessarily blew it with what they did this week in not getting Crow signed. I think one two thyings happened:

(1) The Nats blew it by not getting Crow signed,

OR

(2) The Nats blew it by not drafting someone who they could get signed at a reasonable number.

Basically, it was incumbent on Bowden to know last June what it would take to sign Crow and know how much money he had to sign the first rounder. If Crow wanted more than the team would pay, then the GM HAS to pick somebody else. Either way, it's Bowden's fault that the team drafted a guy iot ultimately couldn't (or wouldn't) sign.

As for the expected wins from a top pick, I'm not so swayed that losing THIS GUY necessarily is an apocalyptic event. On NJ, I listed all the college pitchers taken in the top ten from 1993-2002, and only four of them were difference makers. There were about five other guys who were thoroughly mediocre (e.g., Braden Looper) and another twenty or so guys who never made it or really were never very effective.

But every other team in the top ten got at least a lottery ticket on a talented guy who "might" someday make a difference -- except us. And it's terrible PR to have the worst team in baseball and be just about the only team to assuredly get no help from the first round of the draft.

So even if Bowden was right in not paying what Crow wanted, he was wrong to take a guy that would create that dilemma, and that makes reason 1,487 why he needs to get canned.

And Crow is the one making the really big bet . . . one that has only a marginal upside and the potential for a very bad downside.

Steve Shoup said...

Steven i think overall this was a great article, esp. the part of the value of Crow vs. the 10 pick next year. You are 100% right, whoever we get next year will not be worth losing a top pick this year and a year of development time. My one critical assessment is I do believe that you were a bit too harsh in stating that Bowden, Kasten and the Lerners were 'sticking to slot'. Yeah there were a few reports in regards to that and Lerner and Kasten made some statements, one all ready quoted here and Kasten talking about likely not signing all the top picks. Remember Bowden aslo went on the record refuting the unnamed sources that consistenly came up in the Post and MLB.com articles. I also believe its hard to label the Nats as a slot team when they gave out some of the highest payments in each of the next 4 rounds. As well as the fact that obviously the Nats offered Crow more than slot as well as an ML deal.

I have not been trying to defend Bowden, I fully believe that he is not capable of handling the job and there were multiple failues in this draft process that can be attributed to him:

1.Lack of an aggressive draft, yeah the Nats took some interesting players in rounds 2-5 but the only player that could be a real steal is Nieto, (Hood is a nice prospect but is extremely raw even more than Burgess, and his price was inflated due to his football scholarship). Overall I feel like they took minimum risks (outside I guess Crow) nice players sure but not a draft that is gonna be a goldmine for years to come. They could have grabbed guys like Melville, Danks, Hunter, and Galloway and gotten great value. (no they wouldn't take all of them but if they had taken Melville in the 3rd and missed out on Crow it would be a completely different story).

2. Taking a pitcher with the 1st round pick. Yes I realize Crow fell and at one time he was thought of the top pitcher in the draft, but there was a top hitter there as well in Smoak, who profiles as exactly what this team needed a clean-up hitter at first base. If we wanted a more premium postion, Weeks, Hicks even Lawrie were all available with amazing upsides. This is where I have a problem with the Nats drafting strategy; they have exactly two quality hitting prospects in their system Marrero and Burgess and neither are going to be ready with in the next 2 years, while at the same time they have a system with pitchers like Balester, Detwiler, Zimmerman + solid guys like Chico, Mock and Clippard to fill out a rotation to go along with younger talent like Martis, Williems, Smoker, McGeary and they Nats draft only 1 advanced bat (major college, maybe the CC guys will get to the bigs faster but I won't count on it) in the first 10 rounds. Again guys like Hood and Nieto are great but your looking at an ETA of 2012 or 2013 at best. Add a guy like Smoak or Weeks who can be in the majors to stay within in a year or two. Or if you are in love with a highschool bat a 5 tool player take the real deal, take Aaron Hicks or Lawrie both should move quite quickly through their systems. I just don't understand the logic here of taking Crow I didn't understand it on draft day and I don't understand it 2 months later.

3. Nats had to have some idea of the money Crow was looking for, now I'm sure they felt they could talk him off the ledge. As Steven says picks don't have much leverage so feeling like they could bring him down is not unreasonable, it worked with Alvarez, Hosmer and Alonzo so there is no reason it shouldn't have worked here.

4. Lack of tacful negotiations, too much postering was done in the media, on both sides. But one only has to look at the Orioles negotiations with Matusz and see the difference. It was almost the exact same situation, but the difference was both sides were much more positive the team said they were hesitant about the deal and/or a big bonus but they showed a willingness to work. Matusz for his part as very positive, he sent out a letter to media outlets expressing his willingness to play for the O's and his hope that a deal would get done. He also did come to Baltimore got his physical out of the earlier just set a different tone. The Nats failed to do that, now I don't think its all their fault b/c they did entertain their other picks and offered Crow the same red carpet treatment. I mean I never really understood that, come out meet the Lerners and Kasten show some good faith maybe they authorize the extra money to get the deal done.

Steve Shoup said...

I know my last post was an epic so i wanted to break it up. I do have one more point as to why of Bowden's MANY transgressions this is not one where he should be blamed. And my point is this; Crow is the only first round pick not too sign b/c of money, (Fields will get done, and it sounds like Cole decided college was the right choice over the Yankees). Not only that through the first two rounds (77 picks) only two other players didn't sign and both were pitchers coming back from arm injuries and the Pirates and Yankees didn't think that the risk was worth the cost. So basically of the 4 unsigned picks in the first 77 Crow is the only one without a mitigating circumstance, college or injury. I just honestly believe this is a failure of Crow and his agent, maybe the negotiations went sour but at the end of the day the Nats offered him the largest bonus for a pitcher and an ML contract and all the benefits that come with it. One can't say the Nats didn't make a fair proposal, an ML contract to a draftee is quite rare, players have a better chance of finding one of Willy Wonka's Golden Tickets than getting an ML deal. On top of that they offered him a larger bonus than Matusz who was taken higher, a lefty, and argueably a more complete pitcher.

Could the Nats have afforded the extra $700-900K? of course they could we know they have the money, thats not the question. The question is whether or not the Nats should be held hostage by a player who has never thrown 1 professional pitch. Again I feel like Crow and his agent used the Nats poor performance against them and I think that is just bad taste.

Steven said...

@Steve--thanks for your thorough and thoughtful post. I've talked about a lot of this, agree with some, disagree with some. On the point of the team's aggressive public negotiation, I was more precise in how I described this in today's post, but bottom line I think we had a lot of StanSpeak for "you'll take slot and like it, punk."