Monday, October 26, 2020

Dollars and Sense

There's no doubt that this current pandemic has hit Major League Baseball clubs where it hurts the most, a swift kick directly into their bottom line. Playing the majority of this season without fans has made an impact on the money coming in, while pandemic protocols have increased expenses. Most of the clubs have made huge layoffs which they say were necessary to offset losses, although the opaqueness of their bookkeeping shields their true financial health from the rest of the world.

The pandemic has certainly put additional pressure on the already troubled financial condition of the Mets, but the Wilpons were actively trying to sell the club before COVID-19 really exploded, anyway. Steve Cohen is reportedly prepared to lose $400 million over the next couple of seasons, that expectation is said to be based on both the lingering effects of the pandemic and the need to invest in the infrastructure of the team. Of course, just how much Cohen will invest to improve the long-term competitiveness of the club remains to be seen once he actually takes over. The reports coming from "unnamed sources with knowledge of Cohen's plans" seem quite promising, but obviously should always be taken with a grain of salt.

Today in The Athletic, Evan Drellich reports on the hundreds of layoffs going on across MLB. While the COVID-19 pandemic has undoubtedly accelerated MLB's downsizing, many of these jobs won't be coming back:

Executives say some positions will never return in the same numbers, particularly in traditional scouting, because they expect operations can survive, and even thrive, with a reduction. In scouting, that means an expanded use of video is coming.

"Owners are being incredibly shortsighted," said one scout who was recently let go. "At the expense of saving a few hundred thousand dollars short-term they are risking making multi-million dollar mistakes by not adequately covering leagues, teams, organizations, and by eliminating some of the most proven talent evaluators in the game."

I lack the skills required to be a scout, so I write the following with some humility. There's little doubt that any large organization has some fluff in it, but those looking at this primarily from a business perspective are likely to underrate the contributions of those whose skillset they don't really understand. I have no doubt that the quality of video available in areas like pro scouting probably does to a great extent alleviate the need for the traditional method of scouting upcoming opponents. Combined with increased and more sophisticated statistical analysis, decreases in staffing in this area would seem to make sense to me.

When you get to amateur scouting, trying to spot and evaluate raw talent, I'd be pretty leery about becoming too dependent on new technology. You probably could use video to spot a kid worth following up on, but I don't think there is a substitute for having a really experienced scout follow a kid and get to know him a bit. If scouting was some sort of exact science, all of the teams would be really good at it. But, without question, some teams do it way better than others. It seems to me that, while technology could certainly augment the skills of your scouting, there's no replacement for having the best working for you. When you go further, attempting to locate talent outside of the U.S., whether in Latin America or other places, it seems even more essential to have humans on the ground that understand both baseball talent and the area in which they are scouting for that talent.

While many clubs are following the general trend to eliminate positions throughout their organization, other clubs are seeing opportunities in both retaining their own highest skilled people and perhaps snatching up some of the best and brightest recently handed pink slips. Again from Drellich's piece:

"I also think some teams will be opportunistic and go in the other direction in some areas,” another executive said. “I hope we are one of those teams."

Indeed, some teams could act with restraint as others make layoffs, perhaps in the hope of gaining a competitive advantage by carrying more talent in a given area. An act of loyalty now, too, could engender the same from employees later.

I'm not advocating for Steve Cohen to indiscriminately collect talented people with no rhyme or reason, but I hope that he and Sandy Alderson see the opportunity to improve the Mets in an area where they've been no better than "meh" for a long time. Talent is the lifeblood of a baseball organization, and failures in that area cost a team far more than the salaries of a few extra talent evaluators and talent developers.

There's a piece on AMNY.com by Joe Pantorno that cites, once again, an unnamed source that Cohen and Alderson have discussed making improvements to the Mets international scouting. Hopefully this is indeed true, as the Mets certainly lag far behind the teams that really do a great job finding talent outside the United States. This would seem to be a golden opportunity to find the best talent in this area that has been cut loose by other clubs.

I'd argue that there is very little that a baseball club can do that is more cost-effective than finding real talent and developing that talent into successful major leaguers. Not only do you pay less for talent, but your club is likely to be much more successful over the long run, and there is profit in being more competitive. The Mets have made the postseason 3 times in the past 19 years, how much do you suppose that has suppressed their revenues? An increased investment in scouting and development, at home and around the world, could have paid huge dividends even if they just doubled those playoff years. Imagine if they were regular postseason participants.

One final point on this matter. In the second quote from Drellich's piece above, he posits that an act of loyalty from a club now can really be rewarded by that employee returning that loyalty to his employer. I just turned 62 last week, and the idea of reciprocal loyalty between a company and its employees was fairly common back when I first entered the workforce, particularly among employers that were considered desirable places to work.

Nowadays that idea seems pretty quaint, but it's not something that should just be discarded out of hand by businesses, including Major League ballclubs. Having the best working for you and, as much as possible, retaining them, still matters if you want your business to succeed. While I wouldn't reasonably expect a team to keep large amounts of surplus people around, they should carefully consider the talent that they elect to discard in the name of cost cutting. I think the smartest teams will avoid cutting payroll carelessly to save a few bucks now, only to discover later on that it's cost them more than they saved.

Okay, that will do it for me today. Thanks for spending some of your time today with us. We'll be posting new content throughout the offseason, please check back. Until then, please stay safe, be well and take care.



 Follow me on Twitter @MikeSteffanos

2 comments:

  1. Being a Met fan is like being born under a bad sign...its very rare we sign a non discript ballplayer and he becomes a hall a Famer...going back to signing George Foster it has been very rare that a big signing had gone well..hopefully Sandy will be able to do what is necessary under new ownership...

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  2. I agree with you. I would say that Piazza and Beltran are two off the top of my head that did go well. Olerud, too, although that wasn't as big.

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