Friday, December 5, 2008


After the season ended, I was hoping to hand out quick, Whitlock-like end-of-season grades for everyone associated with the Royals, but ran into a time crunch instead. (Although a comparison of Tony Pena’s 2008 with Eddie Drummond’s 2007 might have been interesting, in a grisly-car-wreck sort of way.)

If I had, though, the grade that might have surprised the most people was the grade I would have given to David Glass: an A. Glass (and particularly son Dan) had as much to do with the Royals’ stretch of 100-loss seasons as anyone, but things have changed dramatically in the Dayton Moore era.

There’s really three things you want from an owner: 1) open up the pocketbook when necessary; 2) hire the right people; and 3) stay the hell out of their way. In 2008, at least, Glass has done all that. The Royals have money to spend on free agency every year; Dayton Moore is highly-regarded in the industry, and just as importantly, has been allowed to hire a number of highly-regarded baseball men to assist him, most recently Mike Arbuckle.

And on the third point…when was the last time you saw David Glass’s name in the paper? Unlike five or even three years ago, you never see Glass weighing in on baseball matters. Occasionally he’ll talk about the finances of the club or the ongoing renovations, but that’s it.

Like today:

Royals owner David Glass has an easy explanation for the anticipated increase of 20 percent or more in the club’s payroll for the 2009 season.

“You just put money in,” he said with a chuckle. “It’s simple.”

The increase figures to boost the Royals to about $70 million — nearly $12 million more than last season’s franchise-record $58.2 million — and comes at a time when several teams are trimming payrolls because of concerns over the economy.

Glass cites two reasons for the increase:

•The Royals are making measurable progress in their rebuilding plan after winning 75 games last season and escaping last place in the American League Central for the first time since 2003.

•A sign of good faith to the fan base upon completion of $250 million in public-funded renovations to Kauffman Stadium.

Those are both good reasons. Let me add a third reason, far more compelling than the first two.

I want you to compare these three stocks:

Stock July 2 2007 December 4 2008 Change

A 35.51 27.55 -22.4%

B 36.23 14.11 -61.1%

C 48.33 55.11 +14.0%

Stock A is Wells Fargo & Company, which represents the bulk of Carl Pohlad’s fortune. Last year the Twins’ owner ranked 114th on Forbes’ list of the 400 wealthiest Americans, with an estimated net worth of $3.1 billion, $1.3 billion of which was tied up in Wells Fargo stock.

Stock B is Cablevision Systems Corporation, which is the primary source of wealth for the Dolan family. Larry Dolan, who bought the Cleveland Indians in 2002, doesn’t appear to be involved with the company all that much – it was founded by his brother Charles. (If only idiot nephew James could have bought the Indians instead. Based on the way he’s run the New York Knicks into the ground, you’d figure that by now the Indians would have a permanent hold on last place.) But it does appear from this article that Dolan’s wealth is tied into the company. He’s a successful Cleveland lawyer, but you don’t amass enough wealth to buy a major league baseball team just by being a successful lawyer. (Now is not the time for a Miles Prentice joke. Actually, scratch that – now is a perfect time for a Miles Prentice joke.)

And Stock C, of course, is Wal-Mart.

The stock market is in the midst of its worst decline since the Great Depression, but if your portfolio consisted mostly of Wal-Mart stock, you’d almost be forgiven for thinking otherwise. It’s a cliché to say that companies which service the bargain-basement sector of the economy are recession-proof, or even a hedge against the market, but in this case the cliché is absolutely true.

I can’t find a recent estimate of David Glass’s net worth; the best I can do is this KC Pitch article which (quoting a KC Star article that is behind the wall) estimates his net worth at $323 million in 1999 – before he bought the Royals. It’s instructive to note that from 1999 until mid-2007, Wal-Mart stock was essentially flat – the stock price was 47.94 in July, 1999, which meant the stock price went up about 1% in eight years. Where Glass has made a real killing this decade is on the Royals themselves – he paid $95 million for them in 2000, and in April Forbes appraised them at $301 million.

But over the last 18 months, while Carl Pohlad has lost hundreds of millions of dollars, and the Dolan family has seen their net worth cut in half…Glass has done well for himself. His net worth is still a fraction of Pohlad’s, but Pohlad has never seemed interested in using his financial assets to the Twins’ advantage anyway. A team like the Indians, though, are feeling the pinch. Most teams in baseball are.

The Padres are having a fire sale (in addition to everything else, their owner is going through a costly divorce.) The White Sox have unloaded Nick Swisher and Javier Vazquez in the last month, though if anyone knows how to rebuild and compete at the same time, it’s Kenny Williams. Meanwhile, the Royals felt they could take a risk on offering Mark Grudzielanek arbitration, even as the Yankees didn’t feel they could take the same risk with Andy Pettitte and Bobby Abreu.

So why is Glass willing to raise payroll while other teams are looking to cut costs everywhere? Partly because he can afford to. With the White Sox retrenching, with the Tigers adrift, and with the Indians’ ownership watching their net worth crater – Cablevision stock is down almost 10% today as I write this – Glass may be thinking that a well-timed cash spend this winter might put the Royals into contention much sooner than anyone thinks.

If there’s a silver lining to the economic meltdown – at least if you’re a big fan of schadenfreude – is that some of the richest and most successful titans in America have been brought down with it. But at least a few of them have survived nicely. As a Royals fan, I guess I can’t complain that David Glass is one of them.

Tuesday, December 2, 2008


In my last column, I openly wondered whether Miguel Olivo would have earned the Royals a draft pick as a type B free agent had they let him move on to another team. My friend Keith Law set the record straight: Olivo would not have entitled the Royals to any compensation. This makes the decision to bring him back more palatable, though still not particularly appetizing.

But it turns out that Dayton Moore had his eye on an extra draft pick after all. Yesterday, after it was long assumed that the Royals would not offer Mark Grudzielanek arbitration, the Royals caught everyone off guard by offering arbitration just hours before the deadline. And this evening, Grudzielanek responded by saying “I’m probably 95 percent, 98 percent sure I'm going to pass on it.”

Let’s take this one by one. The Royals offered Grudzielanek arbitration, even though they can’t really afford him, and even though they appear to have moved on from him. Grudzielanek made $4.5 million last year; even if he had hit like the love child of Tony Pena Jr. and Andruw Jones last year, he’d be looking at an arbitration award comfortably in seven figures. Grudzielanek didn’t hit like Pena or Jones; he hit like, well, Mark Grudzielanek, batting .299 and playing his typical heady defense at second base. He’d be looking at an arbitration award in the range of about $5 million or so.

And yet Grudzielanek, who is unlikely to get anywhere close to $5 million a year on the open market, is at least 95% sure he won’t take the offer. Trying to guess the market for Grudzielanek is difficult, because it only takes one outlier to alter it. But the market isn’t exactly lacking in second baseman; Cot lists Alex Cora, Ray Durham, Jerry Hairston, Orlando Hudson, Felipe Lopez, Mark Loretta, Nick Punto, and Juan Uribe as free agents at the position, and simply by virtue of age, most of those guys are going to be more desirable than Grudz.

I could see this going one of two ways: either Grudzielanek finds a team that thinks he still has enough left in the tank to be an everyday player, and gets a 2 year, $8 million deal – or he doesn’t, and he’s forced to sign a 1 year, $1 million contract and fight for playing time in spring training. There isn’t much go-between, because a second baseman only has value if he’s playing every day – you can’t be a utility player if you can’t play shortstop.

So why would the Royals offer Grudzielanek more money than he’s worth, and why would Grudzielanek decline it? I’m the last guy to believe in a conspiracy theory – I’m the guy who checks every forwarded email with, then embarrasses the sender by hitting “Reply all” and replying (with proof!) that the United States is not actually minting the “Amero” coin and discarding the dollar. But this time, well, call me Mel Gibson.

I think – and this is only an educated guess, not predicated on any kind of insider knowledge – that Moore and Grudzielanek have reached some sort of gentlemen’s agreement, in which Moore has offered Grudzielanek arbitration with the understanding that it won’t be accepted.

Why? Well, it’s a win-win situation, or at the very least, it’s a win-no lose situation. The Royals get themselves a supplemental first round draft pick, which is a very valuable commodity. The Royals got one of those last year when David Riske left, and used it to select Mike Montgomery, a high school left-hander who was named the #1 prospect in the Arizona League and the Royals #4 prospect overall by Baseball America.

But because Grudzielanek is a Type B free agent, this supplemental pick would not be taken away from his new team; this is an extra pick created solely for the purpose of compensating the Royals. A Type A free agent would cost his new team their first or second round pick, but a Type B free agent is free to his new team from a draft standpoint. Therefore, Grudzielanek’s Type B designation is irrelevant to any team interested in his services, which means his price tag should not be affected at all.

So the Royals get themselves a very valuable commodity, and Grudzielanek does his old team a favor with no skin off his back. To the best of my knowledge, there’s no way for the Royals to compensate Grudzielanek for his participation in this charade with anything more than their gratitude, but that might be enough.

The reason I'm so certain that the Royals can frame this in a way that makes it worthwhile for Grudzielanek is that this has almost certainly been done before. After the 2006 season, the San Diego Padres hit upon a bonanza of extra draft picks, as no fewer than five of their free agents signed with other teams, earning the Padres compensation. One of them, Woody Williams, was a Type A free agent, earning them a supplemental first rounder as well as the Astros’ second-round pick. (How’s that working out for you, Drayton?) Then Type A free agent Dave Roberts signed with the Giants, earning another supplemental first rounder and a fourth-rounder (because the Giants were busy giving up all their higher draft picks to other teams.) Then things got interesting.

Chan Ho Park, who gave the Padres a 4.81 ERA in 2006 (and had a 5.74 ERA in 2005), was mysteriously offered arbitration – and declined. Alan Embree, who had a 3.27 ERA as a LOOGY in 2006 – but a 7.62 ERA the year before – was offered arbitration. He signed with Oakland instead. And finally, Ryan Klesko, who was injured almost all season and had nine plate appearances all season, was offered arbitration. He signed with the Giants.

Park, Embree, and Klesko were all Type B free agents. Embree and Klesko were the two lowest-rated Type B free agents to sign with another team. Yet the Padres got extra draft picks for all of them, and wound up with six of the first 64 picks, and eight of the first 87 picks, in the 2007 draft.

Park signed with the Mets, for one year and $600,000. In 2006, he earned $15 million in the final year of the ridiculous contract the Rangers gave him in the 2001-02 off-season. I find it…hmm…odd that Park would decline arbitration, and then accept what amounted to a 96% pay cut with another team. (It’s extremely rare to see a player awarded an arbitration salary lower than the previous year, and almost unheard of for their salary to decline more than 20 or 30%.)

In 2006, the Padres paid Klesko $10 million, then another $500,000 to buy out his 2007 option. In 2007, Klesko declined the team’s offer of arbitration in order to sign with the Giants for $1.75 million – a pay cut of more than 82%.

Like I said: odd. Even, dare I say it, suspicious.

It’s possible that Grudzielanek could stab Moore in the back (I believe the technical term for this is that he might “Boozer” the Royals), but Moore has an out. As Bob Dutton reported, “The Royals retain some financial wiggle room if Grudzielanek accepts arbitration because arbitration-determined salaries are not guaranteed. Teams must pay only one-sixth of a salary if they release a player with 45 or more days remaining before opening day.”

If that were to happen, Grudzielanek could respond with one final salvo of his own: he could file a grievance. Once again, we have the Padres to thank for the precedent here. It seems that after 2006, one of their players didn’t get the memo: Todd Walker, who was offered arbitration along with all of his friends, gleefully accepted, and won his arbitration case to the tune of $3.95 million. A month later, the Padres released him. “This is strictly a baseball decision,” general manager Kevin Towers said, adding that Walker's salary “didn't factor into the decision. We're two-time NL West champions and want to win again. For us it's putting the right 25 guys on the field to start the year and we felt there were people that were ahead of him.”

While I have found evidence that Walker and the MLBPA were considering a grievance, I can’t find any confirmation that it was officially filed, and certainly there’s no evidence that he won.

I’m not anticipating any of this with Grudzielanek, mind you; I’m simply pointing out what options each side has if this deal were to sour. I have no reason to think either Moore or Grudzielanek are anything other than honorable, so the odds are slim that this will blow up in the Royals’ face. Assuming it doesn’t, this is a huge under-the-radar win for Moore and the Royals: they basically acquired a top prospect for nothing.

In fact, even if Grudzielanek were somewhat likely to accept arbitration, the potential reward of an extra draft pick would make this a worthy gamble. We can’t say just how worthy a gamble this is until we calculate the value of a draft pick. Fortunately, my colleague Nate Silver already did this in a column from back in 2005.

What he found was that late first-round and supplemental picks (basically any pick from #26 through the end of the supplemental round) returned an average of $4.24 million in value, above and beyond a player’s salary (but not his signing bonus) over the course of his career. The average signing bonus for these players was about $1 million – so after accounting for the cost of signing the player, earning an extra draft pick was worth $3.24 million. Accounting for salary inflation over the past three years, we can revise that number upwards to about $4 million.

On the other hand, if Grudzielanek decides to accept arbitration after all, then he’ll cost the Royals about $5 million, and is unlikely to deliver that much value in return. Let’s say that he’s worth about $2 million, which seems reasonable for a second baseman with declining range and no secondary skills, but someone who can still punch the ball to right field.

So if the Royals offer arbitration to Grudzielanek and he leaves, the team earns a draft pick worth $4 million. If he accepts, the team flushes $3 million down the drain. If these numbers are accurate, the Royals should offer Grudzielanek arbitration whether he’s 100% certain to decline, or 95% certain, or even 50% certain. The break-even point is 42.9% - if Grudzielanek is more than 42.9% likely to decline, they should offer him the deal. That number is obviously approximate, and based on a number of assumptions, but if it's not 42.9%, it's 37.1% or 57.3% - not 95% or 98%. This is a low-risk, high-reward move.

Since I started this blog, I’ve written fewer words about Grudzielanek than almost anyone else on the roster, even though he was an everyday player. Like a good umpire, I suppose the mark of a good veteran player is that no one ever talks about him. Grudzielanek joined the Royals in 2006, and for three years did exactly what he was expected to do: hit about .300, rope some doubles, and turn the pivot as fast as any second baseman in the game. And he did so with eerie consistency: in his three years he hit .297, .302, and .299, and finishes his Royal career with a batting average of .29955 – which conveniently rounds up to .300. (Only two other players have hit .300 or higher as a member of the Royals, with at least 1000 plate appearances: Jose Offerman and George Brett.)

Grudzielanek won a surprise Gold Glove in 2006; while his range isn’t what it used to be, he still turns double plays very well. He goes down as one of the better free agents the Royals have ever signed, along the lines of Greg Gagne, who was an exceptional defender at shortstop for the Royals from 1993 to 1995, hit with better-than-expected pop, and (this isn’t something I say very often) did all the little things right.

So Grudzielanek, if this is goodbye – and nothing personal, but I hope it is – then thank you for all you’ve done for this team. Playing for a team that was usually remembered only for its gaffes, thanks for being the forgotten man. Thanks for proving those of us wrong who thought you were too old and too average to help the Royals when they signed you in 2006, and when they picked up your option in 2007, and when they picked up your option in 2008.

And thanks for the parting gift. Dayton Moore might have thought it up, but it was very thoughtful of you to deliver it.

Monday, December 1, 2008


In anticipation of what I hope will be a news-worthy month, and with the Winter Meetings just a week away, let’s start cleaning house on the smaller-print news items of the past two months.

The mystery over whether Miguel Olivo would be classified a Type B free agent (and snare a supplemental first round pick upon his departure) turned out to be a moot point when he and the Royals papered over their differences and mutually agreed on his 2009 option, adding a 2010 option in return.

The calculus of this deal partly depends on whether the Royals could have swapped his services for a draft pick. Unfortunately, I still don’t know if he was a Type B free agent or not; two different source have given two different results.

Just evaluating him as a player, it’s hard to get past Olivo’s .278 OBP last year, or the fact that this performance actually raised his career mark to .275. Olivo was as responsible as anyone for the team’s historic reluctance to draw walks last year; he took a free pass just seven times all year, which is to say, he was as likely to steal a base (a perfect 7-for-7 in attempts) as he was to accept one as charity.

In his defense, Olivo is pretty damn valuable for someone with a .278 OBP. He hit 22 doubles and 12 homers in half a season’s work; on defense, he threw out 14 of 33 attempted basestealers, proving that John Buck’s difficulties (12-for-71) were not the fault of the pitching staff. (Buck was Meche’s personal catcher for most of the season, and with Buck behind the plate, opponents stole 12 bases in 13 attempts. In eight games with Olivo back there, only one player attempted a steal – and he was gunned down.)

Olivo had a better year than Buck, both offensively and defensively, but that alone is hardly justification for bringing him back. Olivo remains a terrible fit for the lineup, as his lack of OBP exacerbates a team-wide problem, and precisely because the rest of the team struggles to get on base, Olivo’s power (with him batting low in the lineup, behind out factories like Jose Guillen) is less valuable than it might otherwise be.

There’s no question he’s deserving a roster spot – it’s a big question whether it’s worth paying a couple of million for a platoon player. Olivo once again played wallball against left-handed pitchers, hitting .262/.296/.534 against them, but just .251/.268/.399 against more traditional folk. This extends a career-long tendency for pronounced platoon splits; his career numbers are .286/.315/.526 vs. LHP, .224/.260/.367 vs. RHP.

Because his platoon splits are so massive, Olivo’s worth is very much tied up with his usage. Unfortunately, I see no reason to think that the Royals are going to maximize his value by using him in a way that utilizes his strengths and avoids exposing his weaknesses. He agreed to return largely because he was promised the role of #1 catcher, and anyway, the Royals are in no position to spend millions of dollars on a platoon catcher, which means they have no intention of using him in that role even if they should.

So while the decision to re-sign Olivo could work, I am doubtful that it will, and I think the Royals would have done better to let Olivo go and keep the money (and – possibly – the draft pick.) But now that they’ve kept Olivo, they have to figure out what to do with Buck.

Having both Olivo and Buck didn’t make a lot of sense in 2008, and I don’t see how it makes any more sense in 2009. You’d be hard-pressed to find two more similar players at the same position – low-average hitters with OBP issues and mid-range power. Olivo’s a lifetime .241 hitter; Buck’s at .234. If you compress their career numbers into a 162-game season, then Buck has 29 doubles, 1 triple, 19 homers; Olivo has 28, 3, and 18. Buck would strike out 137 times over a 162-game season, Olivo 141 times. Buck has figured out the strike zone the last two years and draws walks at about a league-average rate, but his ability to throw out baserunners has deteriorated badly over the same timeframe. Olivo’s a little faster, but he’s also two years older.

Really, the most significant difference between them is that Olivo has a much more pronounced platoon split – Olivo has much better numbers against LHP, but Buck has better numbers against RHP. This makes Olivo the more useful player in a part-time role, and Buck the more useful player in a full-time role. Naturally, the Royals have re-signed the former to a position more appropriate for the latter.

Everyone’s talking about Mark Teahen and David DeJesus on the trade market, but I’m really curious to see if Dayton Moore can move Buck this month, and if so, what he can get in return. I’d rather keep Buck and toss Olivo back, but if you’re going to go with Olivo, then it makes no sense to back him up with the exact same player. Especially since Moore shrewdly snagged Brayan Pena off waivers from his former employer.

Pena has hit just .228/.252/.315 in 127 career at-bats over four different seasons, but in the minors he has been a consistent .300 hitter. Literally: going backwards from 2008, his minor league averages are .303, .301, .302, .326, and .314. His career high in home runs is six, but over the last four years he’s hit 76 doubles in just under 1200 at-bats, so he’s not a complete punch-and-judy hitter. He’s an extreme contact hitter who could give Alberto Callaspo a run for his money: over those same four years he has whiffed just 102 times, but also has walked just 94 times. He turns 27 in January, and if he gets regular playing time I could see him approximating what Johnny Estrada did for the Braves in his late 20s.

Perhaps most importantly from a roster management standpoint, Pena’s a switch-hitter. As I’ve written before, he’s kind of like Gregg Zaun, The Practically Perfect Backup Catcher himself, without the walks. Pena would make the perfect backup to Buck, and given Olivo’s struggles against right-handed pitching, I’d argue that Pena should really be in a job-sharing arrangement, getting the start against any right-hander with a good slider or a three-quarters motion. According to Clay Davenport, Pena’s numbers with Omaha this year translate to a line of .246/.313/.375 in the majors. Not great, but not bad, and if the Royals can combine that line against RHP with Olivo’s typical line against LHP, they’d have themselves a pretty nice combination behind the plate.

The Royals could just go with Olivo and Buck again and play the hot hand like they did last year, but I doubt it. Pena’s out of options, and was added to the 40-man roster after the season. I don’t think Moore has spent this much time trying to snatch Pena from the Braves, and keep him around, just so that he can waive him next March. Plus, the Royals just signed J.R. House to do the catching in Omaha next year.

House is a very nice minor-league pickup. He’s already 29 and has just 60 major-league at-bats, but he was once a very-well regarded prospect in the Pirates’ chain, and put up numbers to match. He hit .306/.378/.480 in Triple-A last year, a doppelganger of his career numbers of .310/.372/.496, and just two years ago he hit .345/.392/.521 between Double-A and Triple-A. He’s never gotten a real shot at the majors because 1) he’s considered rough defensively; 2) he was in an organization that didn’t know what the hell it was doing; and 3) I’m guessing that his heart was never 100% in baseball, given that he was a prized quarterback recruit out of high school, and finally gave into temptation after the Pirates released him in 2004, returning to West Virginia and playing as the third-string QB for a year.

House would appear to have football out of his system now, and has had three good seasons in a row in the high minors. He only got the briefest of opportunities at the major league level, despite playing for the Orioles and Astros – check that, because he played for the Orioles (who gave the backup job to Paul Bako in 2007) and Astros (who will probably enshrine Brad Ausmus in the team’s Hall of Fame one day). He’s 29 and his teams have yet to deem him worthy of a regular roster spot in the majors – but then, he has yet to play for a team that knew what the hell it was doing. If you want to take a long-shot gamble on a player who might be the surprise of baseball next season, the Mike Aviles of 2009, put your money on the House.

But for Opening Day, it looks like the Royals’ optimal solution would be to go with a combination of Olivo and Pena, with Moore hopefully turning Buck into some useful talent elsewhere. (Buck, at the very least, would be one of the better backup catchers in the game, and the upside that he has a late-career emergency a la Mike Stanley or something is still there.) I just feel that the optimal solution for the Royals was to avoid the path with Olivo that they’ve already ventured down.