Sunday, September 21, 2008

My Chat with Stan Kasten

Tucked in between the thrilling events of my day with Jim at ESPN Zone on Friday was a briefer but just as revealing conversation with Stan Kasten.

I had a lot of questions for him (e.g., "If the stadium isn't substantially finished, shouldn't my ticket be substantially free?), but I only had time to hit on the thing I care about most, Aaron Crow. I wanted to hear from him how it could possibly be in the best interests of the team from either a business or baseball perspective to walk away from Crow over $900,000--couch cushion change in the economics of MLB.

Now I know a lot of folks have decided that the Lerners and Kasten are just a bunch of cheapskates and that this is just one more example of that. But the thing that didn't add up for me is that even if you're just looking at it as a total skin-flint owner, there's no way the team comes out saving money here.

Look at it. First, someone will have to pitch next year, and Crow's roster spot will be filled most likely by a free agent or someone arbitration-eligible like Tim Redding. Even if they call up Jordan Zimmermann (and making him pitch 200 innings wire to wire isn't an option, right!?!), they need at least one more guy because Odalis Perez is a free agent. The costs of that fill-in free agent alone could easily wipe out all or most of the $4.4 million in savings.

Then also remember that when we draft 9a next year, we'll be facing a negotiation with far less leverage than with Crow because if we don't sign that pick next year, there's no compensation. So while all the talk of Crow--who had no option whatsoever but to risk injury in the Independent League for a year--holding the team "ransom" is risible, next year's 9a actually will kinda be able to put a gun to the team's head and make demands.

And also signing bonuses are rising way way faster than inflation. In 2007, picks 1-10 signed for a cumulative $31.325 million. This year, even with Crow getting nothing, numbers 1-10 signed for a total of $39.32 million.

And I'm not even factoring in the lost revenue from fan disinterest, season ticket holders throwing in the towel, reduced gate revenue, etc. Losing Crow was a body-blow to the hopes of the dwindling fan base. And wins have real economic value, and it could cost the team millions upon millions to wait one additional year to get better.

Some people have talked about how the Nationals need to avoid getting a reputation for caving in, and that this rep could cost them money down the road. Perhaps that's a factor for the later rounds, but the upward trend in bonuses among the top ten picks is overwhelming what any one team's rep might be. As Stan quoted to me at the ESPN Zone, in 2007, just Matt Wieters got $6 mil. This year, four guys did. Next year? Who knows. Maybe all ten will. God knows MLB has the money.

So I've racked my brain on this, and there's just no way that this team saves money by not signing Crow at $4.4 million. The "Kasten/Lerner is a cheap bastard" explanation doesn't make sense. And that's what Stan said in his interview with Nats320 last month--"It’s not a money savings. We need to disabuse people of that notion. This was not done for money. We still have that pick and we still have to sign that pick--10 months from now. So, there is not money savings here."

That's why I had concluded that the most likely explanation is that this was just a bungled negotiation. Bowden, hothead that he is (and I can now say first hand, he has a bit of a temper), allowed a delicate negotiation to become a dick-measuring contest and the whole thing devolved. It's the only plausible thing I could think of.

So all that was on my mind when I said to Stan, "Now honestly, Stan, wasn't it a mistake not to sign Aaron Crow at $4.4 million?"

"No, absolutely not," he said. "Don't get me started! I've been at this a long time. We offered a fair amount. Ross Detwiler got $2.1 million."

"Yes, I know," I cut in. "But that was last year. Bonuses are higher now."

"Right! Because agents are manipulating the system. Just because one agent decides he's going to hold everyone hostage doesn't mean we're just going to give him whatever he wants."

"But wait," I said. "They're just representing their clients trying to get the best deal they can. If you had to bid against the Red Sox and the Yankees in a free market you'd..."

Stan interrupted, "This is not a market. This is a draft." The way he said the word "draft" suggested to me that he meant, like, literally a draft, like conscription. He continued, "It's to ensure competitive balance, that's the point."

We chatted a little more, and Stan made it clear that at midnight he was the guy in the room running the negotiation and that he was the one who made the call to walk away over the $900,000.

So I was wrong. Bowden may also have bungled the negotiation, alienated Randy Hendricks, generally poisoned the well. But in the endgame, when it came down to that last 900k, it was Kasten who walked away. And he did it not to save money, not because it will help us win games, not because it's good for the Nationals really at all. His decision was, it would appear, ideological.

Stan, based on what he said Friday, believes that players when they come into the league should have basically no rights, period. Draftees should play when and where they're told for whatever amount of money he deems appropriate. The slot system was created out of whole cloth by the owners and asserted unilaterally as the new fair. And that's evidently how labor rights should work in Stan's world.

In the Nats320 interview, Stan disingenuously said this whole system came about after lengthy negotiations with the players' union. He said, "This is what the system was designed to do as negotiated with the players. Expressly for this purpose, so some errant agent could not come in and try to hold some one up (for ransom) at the top of the draft."

The reason this is disingenuous is because MLBPA doesn't represent amateur ballplayers in the draft like Aaron Crow. MLBPA could give a crap about Aaron Crow; he's not a union member. Aaron Crow didn't agree to this system of legal semi-conscription, and it's intellectually dishonest to present it like the player is somehow breaking his end of the bargain by even raising his hand and asking to discuss the situation.

Frankly the whole concept of a draft where corporations can divvy up all the hottest college grads and deny them the right to choose their own workplace of choice seems downright un-American to me. Imagine if all the top law firms or I-banks did that with the law school and MBA grads.

Clearly, you have to have some system for maintaining competitive balance and order, I agree, but the player isn't a conscript. No other sport has this system where the player has essentially no rights for the first three or more years of his pro career.

All this clearly would seem like just so much pinko claptrap to Stan. But here's something he might understand: his stubborn adherence to an abstract anti-worker principle is going to cost him money. Principles don't pay the bills. Principles don't pay for private jets or bottles of Dom Perignon. He's never going to bust the union, and if he keeps it up, he might just inspire the amateurs to find their own Marvin Miller.

Yeah, the Lerners and Kasten are super-rich, and I'm sure they want for very little. But it must gall them to know that because they walked away from Aaron Crow over a piddling $900k, they're going to be a little teeny bit less rich.


Hendo said...

. . . it's intellectually dishonest to present it like the player is somehow breaking his end of the bargain by even raising his hand and asking to discuss the situation.

I can't argue with most of this post, but it sure seemed to me as if Crow and the Hendrickses did as little to engage the Nats as they could get away with.

They, too, may have an ideological point; if so, it's entirely possible it's a valid one. Or maybe they just got pissed off.

Either way, they didn't do much to advance the cause of the amateur draftee, and I agree it's a cause that could use some advancing or at least a lot more honest discussion.

Will said...

Spot on, Steven. Keep it up with the great posts!

Nate said...

Way to work in a nice non-apology to Trader Jim after weeks of laying l'affaire du Crow solely at his feet. The transaction that FJB readers voted the biggest bungle of 2008 was actually a Stan Kasten joint. Care to revisit Point #2 of your case against Jim Bowden?

Steven said...

@Hendo--Rizzo, who in a 10 minute conversation said nothing that seemed unfair, exaggerated, or not credible to me--said a) it was a mistake not to sign Crow (more on this later), and b) Randy Hendricks, not his brother or Crow, but Randy was off the rails from the word go here. Rizzo hasn't done anything to undermine his credibility with me yet (other than the obvious self-interest he has in pinning the blame on the other side) so maybe there's something to it.

I still feel like the Hendricks side was using pretty standard negotiating tactics--refusing to engage in end-stage negotiations until the team make a higher initial bid and withholding access to their client as one of their few sources of leverage.

Still, as I've said, I just don't care. I want a team that is smart and savvy enough to deal with nutso players and wacko agents and come out smelling like roses. I want the Nationals to be the Chicago Bulls of the 90s, who were the only team that could handle Dennis Rodman, and used him to put the best team in history on the floor.

Steven said...

@Nate--I had a feeling when I clicked post that I would hear the I-told-you-sos from the Stan-haters.

That's fair to some extent. However, if you go back and read what I actually wrote at the time, like the "If Whining and Finger-Pointing Was an Olympic Event the Nationals Would Be Michael Phelps" I clearly cite Kasten and Lerner as being part of the problem here.

Here's that link:

But you're right, in the endgame it seemed to me that there was just a hot-tempered meltdown, and Bowden's the one with the reputation for that sort of thing. So that was my best guess. Also give me some credit that all along I've sprinkled these posts generously with lines like "from the outside it seems like" and "I don't really know but reading the tea leaves here's what it appears to be..."

Even now, this whole post on Stan as some John Rockefeller-esque anti-labor, anti-union, 19th Century robber baron out of Upton Sinclair seems a bridge too far. I'll say again--there's a ton I don't know and somehow there has to be a more simple explanation than everything we've heard, because none of it makes sense. You can't say it was cheap, because they chose the far more expensive path. You can't say it was smart from a baseball perspective. You can't say these people are just dumb, because they clearly are not. I almost think maybe there's some hidden deal between the Lerners and Selig that in order to get the team they had to agree to take a bullet for the owners collectively or something. NOw that's a crazy conspiracy theory, but at least it makes sense. hurting the value of your property and losing money just because you hate agents that much that you want to make some principled point?? That's the only way I can see to interpret what Stan said, but I still just cannot believe that's really what went down.

As for #2 on my basic case against Bowden, why would I change it? It's an undeniable fact that Kasten has forced Bowden to build through the draft and trading vets for prospects. Good, bad or indifferent, that the reality. I like that, maybe you don't, but it's a fact.

The point on #2 is that Bowden is a terrible drafter. Horrible. In 14 drafts he's never had one single MI even make the big leagues for one AB. He's never drafted an SP better than Brett Tomko and the second best SP is, who? Buddy Carlyle maybe? He's impatient, won't let guys develop, pulls the plug too fast on young guys going through growing pains (Church, etc.). He thinks the way to find a CY winner is the Pete Schourek strategy, which works once every 100 years, and Schourek was it. Make a list of the best players he ever drafted (minus the ones like BJ Ryan that he traded away before they made it), and it's Adam Dunn, Ryan Zimmerman, Scott Sullivan, Austin Kearns, Brett Tomko, Aaron Boone, John Lannan, then who, Jason La Rue?

Sorry, in 15 years of drafts, a guy like that shouldn't be in he top ten. There's one all-star in that group (2 counting Boone's affirmative action appearance for the Reds). No HOFs. Compare that to Rizzo's record and there's no comparison.

Steven said...

@Hendo--one other thing. The more I've thought about it, the more I realize that Crow's side didn't make such a terrible decision. If you look at the rate of inflation in first round bonuses, if he's a top ten pick again, he stands a good chance of getting $5-6m or more. Not a bad return for a 9-12 month wait. Of course, if he gets hurt, it's risky, but if not, I can understand if that's his thinking.

Jonathan Fellows said...

OK, here's where you lose me.

"Look at it. First, someone will have to pitch next year, and Crow's roster spot will be filled most likely by a free agent or someone arbitration-eligible like Tim Redding."

There's no way on earth that Crow was going to be in the majors next year even if he signed the day he was drafted.

Steven said...

@Jonathan F.—Why? According to Bowden, Crow would have been in the rotation right now. Maybe you’re right, but I don’t think it’s unreasonable to think Crow is in the rotation next year. But even if Crow’s he isn't there till 2010, even then you can’t fill a rotation spot cheaper than with a minimum wage player.