April 24, 2014

What the 2010 Indians’ Draft Signings Mean

TD gave us all the details this morning, but I wanted to throw my two cents in on the draft signings from yesterday, and what they tell me about the organization moving forward.

The Tribe spent close to $10 million to sign 27 of their 50 draft picks.  That doesn’t sound like a lot of money for a MLB team (or a huge signing rate), but consider a few things: (1) I’m pretty sure that’s more money than the Indians have ever spent on signing draft picks; (2) they signed their first four picks; (3) they consistently went “over slot” to sign talent; and (4) on a related note, they drafted and signed guys with “signability concerns” meaning that they drafted for talent rather than price.

What does all of this mean?  Probably a few things.  Let’s discuss.

First, it means that it’s not quite fair to drag the front office through the mud for “dumping salary”—they saw the opportunity to (re)build through the draft this year, and were aggressive in both their picks and their willingness to pay for those picks.

But we need to remember that money came from dumping some salaries; namely, Jake Westbrook, Cliff Lee, and yes, even Victor Martinez.  When those salaries came off the books for this year, the Indians could sink more money into the draft.

So at least for the time being, Cleveland might want to stop crucifying the Dolans for lining their pockets rather than investing in the team: judging by the attendance (worst in the Majors!), this was a spend that could only happen by cutting elsewhere, and once the front office decided that the team wasn’t going to be able to contend this year (around July 2009), they moved money so that they could rebuild.  While it’s not an easy process to watch, it’s better than dying the slow death of a barren farm system and aging veterans.  Just ask Royals fans how the last 20 years went.

Second, for me, this draft completes a shift in the drafting philosophy of the Cleveland Indians that has been taking place over the last few years.  The shift started three drafts ago when Brad Grant took over, but never has the difference between the early aughts and the present day been more defined in regard to this team’s philosophy on drafting and signing young talent.

For years, the Indians drafted players that they believed they could sign “at slot”—the amount of money the MLB “suggests” they pay for a certain pick.  This wonderful strategy gave you such glorious first round picks as Jeremy Sowers (rather than Jared Weaver), Beau Mills (rather than Jason Heyward), and Trevor Crowe (rather than Colby Rasmus).  Sure, our guys signed for less money than those drafted after them, but none became impact players.

It finally seems that the front office has learned that the one place it makes sense to spend wildly is in the draft—especially for a small market team.  Like I said, the $10 million spent this draft is more than the Tribe has ever spent, but it’s still less money than Jake Westbrook will make this season.  It’s also less money than Jake Westbrook made last season, when he pitched exactly zero innings.  Out of the 27 players signed this year, if just one ends up being a mid-rotation starter, we will have made our money back out of this draft.  So it’s a wise place to “over-spend”, and it’s refreshing that the Indians finally understand that.

But even if you’re willing to overspend, you still have to make the right picks.  Not all players who enter the draft are seriously interested in signing.  So while the Pomeranz deal was never in real doubt (he had no leverage, being a college junior facing a potential hard-slotting system next year), Levon Washington (2nd round), Tony Wolters (3rd round), and Alex Lavisky (8th round) all had serious talent, but teams passed because they weren’t sure they could get them signed.  It’s a good sign that the Indians not only drafted guys with high upside, but they drafted these guys with a game plan on how to eventually get deals done with them.

I really can’t say anything but positive things about this whole process.  It was a coup for the front office.  And they really needed one, given the standings.

This is, of course, no guarantee that these picks will materialize into good (or even average) everyday players.  MLB prospects just don’t work that way: there’s too much space between the signing and the Majors to ever suggest that anyone is a “sure thing”.

The point, rather, is that all signings are risks.  Free agent signings.  Trades.  Draft picks.  We ask questions about them all because they are all fundamentally risky.  Will this player get hurt?  Will that pitcher develop secondary stuff?  Will this guy’s athleticism translate well to the baseball field?  Is that hitter getting too old to sign a long-term deal?  Will this closer punch his father-in-law in the clubhouse?

No, what this draft told me is that the Indians finally understand that the place for a small-market team to make high-risk, high-reward moves is in the draft, not on the free-agent market.  The mistakes in free agency kill a team (paging Travis Hafner) and the successes basically mean that a player will “earn” his money.  But with young players, a miss means a couple million bucks at most, whereas hitting on draft pick means you get tens of millions of dollars worth of production for what will look like nothing in hindsight.

If the Indians finally understand this, then this draft will be a success regardless of the performances of Pomeranz, Washington, Wolters, and Lavisky.

Which doesn’t mean I’m not eager to see ‘em play.  Mahoning Valley, here I come.

  • http://www.waitingfornextyear.com TD

    great stuff Jon….and the Dolan’s deserve credit on this for all of the “cheap” talk they take.

  • Mark

    I agree. Good write up Jon. It makes me hopeful the drafting issues of the past are behind us.

  • 5KMD

    Neil Huntington is doing the same thing here in Pittsburgh and the local sports guys are also effusive in their praise.

    On a sour note, I wish the Tribe could have signed 20th rounder, Burch Smith. Here’s the profile on him from Tony Lastoria’s site:

    http://www.indiansprospectinsider.com/2010/06/2010-indians-20th-round-pick-rhp-burch.html

    The tribe has drafted this guy TWICE now, and not signed him.

  • 5KMD

    Don’t forget that th eMarlin’s Mike Stanton was also in Beau Mills draft class. Of course, he was taken in the second round so it looks like everyone missed at least once on that one.

    Heyward was one pick after Mills though, I’ll bet the Braves ran up to the podium with that pick.

  • Alex

    They deserve credit until you read the piece about Dan Gilbert and the other Cleveland owners. In that piece somewhere it states the Dolons only spend roughly 50% of their revenue on winning, which in my humble opinion is a piss-poor effort. Maybe we’ll have Isiah signing with the tribe soon too…

  • Dave G.

    Wasn’t Westbrook’s salary paid via insurance last year? To me, that statement is unnecessary to make the larger point.

  • http://www.waitingfornextyear.com Jon

    @ Alex:

    From the numbers I’ve read, the Indians spend about 53% of the revenues on Major League player salaries. Which is exactly the same percent that the Yankees spend.

    You could suggest that the other 47% of revenues are lining Dolan’s pockets, but I’m pretty sure you’d be wrong. 53% on player salaries doesn’t account for paying other personnel, stadium maintenance, draft bonuses, travel expenses, advertising, and the thousand other things that an MLB team has to spend money on.

    I’m not saying Dolan is poor: he’s not. But he’s right in line with the other MLB owners as far as percent-of-revenue spent on Major League talent, and considering that we have the worst attendance in baseball, I would say that Dolan might make less money than any owner in baseball.

    But the point here is not entirely about Dolan. It’s about the front office (Shapiro, Antonetti, and Grant). They’ve been dealt a rough hand–crummy economy, bad attendance, and a (consequently) limited budget. With that hand, they’re doing the right thing–finally. I wanted to appreciate that formally, considering the amount of grief they take.

  • http://www.waitingfornextyear.com Jon

    @ Dave:

    Don’t know about whether insurance paid Westbrook’s salary. I’ve heard people assume that, but the front office hasn’t commented on that to my knowledge.

    But if so, that’s another expense that MLB teams incur. What do you think they pay to insure players who are almost certainly going to get hurt at some point in their career (pitchers)? I’m not an actuary, but that’s got to be a hefty dose of cash, no?

  • Jonathan

    From what I understand, very few players are insured. The costs are simply too prohibitive. I would be shocked if the Indians were carrying a policy on any of their players.

  • Omega King

    Yes, but Jon, you’re not taking into account what STO makes for Dolan, either. With that revenue, couldn’t he spend more than 53% of Indians revenues, knowing that a better team may yield more butts in the seats AND higher ad revenues from his network?

  • http://www.waitingfornextyear.com Jon

    @ Omega:

    I don’t know whether that figure (the 53%) accounts for STO revenue or not. I would guess that it does, but maybe you’re right.

    But if it doesn’t, then the Yankees aren’t taking into account YES revenue (which is astronomically higher than STO’s); in which case, the Yankees would look cheap–which no one is accusing them of.

    So either way, we’re back to square one, I think: the Indians spend as much (percentage-wise) on their players as any other team does.

  • Fred Beene

    Good piece.

  • baconlover

    Great read Jon.

  • Gbwoy

    I should have saved my post on the earlier signings thread for this piece.

    $10 million is a lot to spend on the draft. And it is absolutely the right way for a small market team to operate. Stock your farm system with the best talent money can buy as many times as you can. Any small market team not doing this is missing the boat big time. The draft system is broken beyond any doubt, but if you are smart about it and not cheap, it can benefit even the teams with less dough to throw around. The smaller market teams just have to be very, very thorough with their scouting and getting a read on what it will take to sign a guy.