I’ve written a lot about how baseball is unfair to small market teams. The fact that some teams can spend double or triple what about a third of the league can spend in payroll illustrates that baseball doesn’t have equality.
A lot of times, this argument is mistaken as saying “small market teams can’t win.” We’re currently in a year where the Kansas City Royals are going to a World Series. The Pittsburgh Pirates went to the playoffs for the second year in a row. The Baltimore Orioles won the AL East, while the New York Yankees and Boston Red Sox missed the playoffs. The Oakland Athletics made two of the biggest trades of the summer, only to lose in the playoffs to the Royals. And expanding beyond this year, the Tampa Bay Rays have been one of the most successful teams in baseball since the start of the 2008 season, despite having one of the worst payrolls in baseball.
Small market teams can win in baseball. But that doesn’t mean baseball is fair.
The key to winning for small market teams is being smart. That’s the obvious key for any team, but it matters so much more for teams like the Royals, Rays, and Pirates. These are teams that can’t afford to make a mistake. A $15 M per year contract is nothing to a team like the Dodgers or the Yankees. But for a small market team, that’s a massive expense, and if you make that expense, you had better be sure it will work out. If it doesn’t, you can’t just sign another $15 M player to replace him.
That’s the advantage big market teams have. They can afford to make mistakes. Look at a lot of the biggest payrolls in baseball, and you’ll see that some of those expenses were either bad contracts or mistakes. For example, the Yankees were spending $7.4 M this year on Alfonso Soriano and Vernon Wells. They are spending $23 M on Mark Teixeira, who looks worse than Ike Davis. CC Sabathia made $23 M, and is owed $48 M over the next two years, despite looking like he might be on the decline. Despite these bad contracts, the Yankees will be back next off-season, spending on new needs. Meanwhile, if a small market team could even afford one of those players, they’d be in “blow it up” mode if they had a Teixeira or Sabathia situation.
The successful small market teams have found a way to compete by being smart. They’ve drafted well, and focused a lot of resources on amateur talent. That also includes the international market — and not just spending on the big names, but investing in scouting in Latin American countries to find million dollar talent for a fraction of the price. They’ve made smart trades to build for the long-term, rather than going for a quick fix. They’ve used advanced analytics to get an edge and find value where other teams can’t.
There have been “big market moves” along the way. The Athletics traded one of the best prospects in the game to get Jeff Samardzija, and traded one year and two months of Yoenis Cespedes (and the draft pick that would have come with his free agency departure) to get two months of Jon Lester (and no compensation). The Royals traded Wil Myers, one of the best prospects in the game, along with a few other valuable pieces to get James Shields and Wade Davis. The Pirates traded Dilson Herrera and Vic Black for one month of Marlon Byrd.
All of those cases involved teams taking a risk to win-now, while their fans hoped the moves didn’t hurt them in the long-run. That’s the thought which only small market teams have. The Angels and their fans probably weren’t thinking that when they traded practically the only prospects they had left for Huston Street.
Baseball is unfair for small market teams, but that doesn’t mean small market teams can’t win. At least for now.
What about the next era? What happens when the big market teams decide to get smart? This isn’t a new concept. The Boston Red Sox won the World Series in 2004, adopting similar strategies that the Oakland Athletics used with a much smaller budget. Theo Epstein left Boston to take over with the Chicago Cubs, and they’re now a huge threat in the NL Central — a team that built up some of the best young hitting prospects in baseball, with tons of money to buy a great pitching staff to pair with that group.
This week we’ve seen one of the biggest moves in large market teams adopting small market strategies. Andrew Friedman was hired by the Los Angeles Dodgers from the Rays to take over baseball operations for the Dodgers. Here we have one of the best executives in the game being grabbed up by the biggest spending team in baseball. The Dodgers were already a threat due to their ability to spend countless dollars. When you combine that ability with the approach that made the Rays one of the most successful teams with a payroll that was a fourth of what the Dodgers can spend, then you’ve got a dangerous situation.
On a smaller scale, the Pirates just lost Jeff Banister to the Texas Rangers. This isn’t as big of an impact as Friedman to the Dodgers, obviously. That said, it does represent a downfall to a small market team having success. That success attracts attention from other teams, and causes you to lose personnel. It almost happened last year with the Phillies trying to hire Jim Benedict.
In the press conference with Rangers’ General Manager Jon Daniels today, I couldn’t help but get the impression that the Rangers were about to adopt some of the things that made the Pirates successful. Daniels mentioned that Banister would be bringing a concept similar to Clint Hurdle’s, where he makes scouting, development, and the big league roster co-dependent. He also had this quote when being asked about the Pirates’ use of stats.
“There might be a perception because of my background, some of the folks in the front office, etc, that we’re an analytics-heavy group,” Daniels said.
“What was illustrated to me throughout this, is we’re probably below average in that department.”
The Rangers are another team that can spend a ton of money. They have some great scouting, as shown by a lot of the young talent that always comes through the Texas system. So what happens when they start spending that money based on the combined advice of their scouts and analytics departments? What happens when they start applying analytics to the field? That’s something that most managers would be against, but Hurdle and Banister have been open towards. What happens when other big market teams start taking the same approach?
Baseball has been unfair for about 20 years because big market teams could out-spend small market teams. That leads to a situation where the Pirates would love to have Russell Martin back, but will have no shot if the Dodgers or Rangers or Red Sox really want him. But we ignore that, because somewhere along the way, small market teams found a way to win, despite not having access to the best players in the game. They started winning by hiring the smartest executives, coaches, and putting more focus on analytics.
The next development will involve big market teams trying to hire those executives, coaches, and even analysts away from the small market guys. It will no longer be a battle for Russell Martin and Francisco Liriano. It will be a battle for Neal Huntington, Ray Searage, Dan Fox, and every other person who plays a key role in the success of a small market team. Based on the financial divide in the league, the raid on executives and coaches will probably be the same as the situation with players. The best example I can come up with is Andrew McCutchen. He’s under team control through the 2018 season. After that he will have two choices. He can either take one of the biggest contracts in baseball with a big market team, or he can accept less money to remain in Pittsburgh.
That will be the same situation a few years down the line for coaches and front office members. And small market teams won’t always lose. There will be people like Jim Benedict who stick around with their team, despite being pursued by a bigger market. But as we’ve seen with the battle for the best players, the best coaches and executives will eventually end up with the big market teams. The strategies that small market teams use to gain an edge will be adopted by big market teams as well.
What can small market teams do to contend when that happens? I have no answers. But if small market teams want to continue winning in the future, they’d better hope they find the solution first.
Links and Notes
Tim started Pirates Prospects in 2009 from his home in Virginia, which was 40 minutes from where Pedro Alvarez made his pro debut in Lynchburg. That year, the Lynchburg Hillcats won the Carolina League championship, and Pirates Prospects was born from Tim's reporting along the way. The site has grown over the years to include many more writers, and Tim has gone on to become a credentialed MLB reporter, producing Pirates Prospects each year, and will publish his 11th Prospect Guide this offseason. He has also served as the Pittsburgh Pirates correspondent for Baseball America since 2019. Behind the scenes, Tim is an avid music lover, and most of the money he gets paid to run this site goes to vinyl records.