Monday, December 2, 2013

Dayton, More. (And More.)


If you thought it was incredibly easy to snark about the Royals’ press release on Black Friday that “ROYALS AND DAYTON MOORE AGREE TO TWO-YEAR EXTENSION”, you are right. I confess to succumbing to temptation on Twitter a time or two that day.

And even now, I want to blast the extension, not because I hate Dayton Moore (I don’t) or because I want him fired (I don’t), but because it doesn’t sit right to me that finally putting together a winning season in your seventh full year on the job, after cashing in a substantial piece of the future to do so, should be rewarded so quickly. Once upon a time Moore criticized “our immediate-gratification society” when it came to Royals fans expecting a winning team. Well, this contract extension smacks of his own immediate gratification. Moore was already under contract for 2014; surely ownership could wait until mid-season to see if the Royals built on this year’s success before extending him.

Just like the last time he got a contract extension, back in 2009, Moore has more contract extensions (2) than winning seasons (1) during his tenure as GM. That’s a difficult morsel of information to digest. To be frank, I’m not convinced that Moore deserves an extension.

But that’s the wrong way to look at this. I’ve come around to the position that extending Dayton Moore’s contract for two more years was the right thing to do, for two reasons:

1) A General Manager does his job best when his interests are aligned with his organization’s interests;

2) I was focusing on the wrong word in the press release.

As I said on Twitter a few minutes after digesting the news, as my opinion on the extension continued to evolve*, if Moore had gotten this contract extension last November, would he have traded Wil Myers for James Shields last December?

*: In retrospect, working through my thought processes on social media in front of twenty-five thousand people probably isn’t the smartest thing to do, and I probably need to stop doing it.

I don’t know the answer to that question; in all honesty, I think Moore might have done it anyway. But this brings us back around to the concept of moral hazard.

To reiterate – I’ve said this before, but I don’t want to be misunderstood on this subject – I don’t think that Moore consciously let his decision to trade Myers for Shields be influenced by the fact that if the Royals didn’t win more games in 2013, he might be out of a job before he’d get the chance to reap the benefits of Myers in 2014 and beyond. Again: I think he might have made the trade anyway.

But the subconscious influence that job security has on a GM’s decisions? I think that has to be a factor, because job security is a factor in how we all make decisions in our job. I’m a doctor, and I’m aware that one of the reasons – admittedly one of several – health care costs are so high in this country is that every day, physicians make decisions about a patient’s treatment that have a direct effect on their own paycheck.

Every doctor in America will swear up and down that every decision they make, every test they order and every procedure they recommend, is done purely with the patient’s best interest in mind. And yet every study done on the subject shows that when a physician’s income is not directly tied to the amount of work that they do (like doctors who are employed for a fixed salary), that health care costs drop, sometimes dramatically.

I am self-employed as a doctor, and I know that every time I present treatment options to a patient, and it so happens that one treatment option can be administered by my office (and generate lots of revenue) and one treatment option is not, that there is going to be a subconscious influence on myself to steer the patient in a particular direction. I’m aware of that influence because the minute I stop being aware of it is the minute it starts impacting patient care. It’s the reason I rarely see drug reps in my office, and blocked my prescribing data from drug companies so that they cannot see my prescribing patterns and attempt to reward or punish me as they see fit. And in my experience, the physicians who take the most umbrage to the notion that they might let their own financial considerations affect the care of their patients are the ones who game the system the most.

Dayton Moore is by all accounts an honorable man, but he’s human, and I’m pretty sure he’s subject to the same kinds of subconscious influences that the rest of us are. And letting a GM go into the final season of his contract without an extension is a gigantic subconscious influence on him that the upcoming season is all that matters. It’s a huge conflict of interest between what matters to the GM – 2014 – and what matters to the organization, the fans, and the owners, which includes 2015 and beyond.

Extending Moore for two more years eliminates these specific concerns. Naturally, Moore has tremendous pressure on him for the Royals to win in 2014, which have nothing to do with the length of his contract and everything to do with the fact that it’s Year 8, and even his beloved model of the Long Rebuilding Project, Terry Ryan’s Minnesota Twins, won 94 games and went to the playoffs in Year 8. But this eliminates the temptation before the season to trade three wins in 2015 for one win in 2014. And if next season does go south in a hurry, it eliminates the temptation to not cash out quickly, whether that means trading James Shields or Alex Gordon or whoever.

The alternative would be to let a GM who just won the franchise’s most games since 1989 to twist in the wind. And as Sam Mellinger put it, “letting a GM go lame-duck a year after the franchise’s most successful season in a generation is the kind of nonsense the Royals used to do.” If Moore’s contract had run through 2015, I doubt we’d be talking about an extension right now. But the timing is what it is. The last year of a GM’s contract is a loss leader of sorts – the decision to extend or not has to be made the year before, which means eventually, that last year is going to be eaten when ownership decides a change has to be made*.

*: I’ve been told that Brian Sabean has worked on the last year of a contract multiple times in San Francisco, but aside from the fact that I’ve really never quite got a handle on how the Giants do business, it’s quite possible that a handshake agreement was already in place.

I accept everything I just wrote rationally, but I’m still trying to accept it emotionally, because I’m still not over the Moral Hazard Trade of last winter. Or as Matt Klaassen tweeted, “Without job security, Moore might do something nuts like trade six years of a good hitting prospect for two years of a good starting pitcher.”

I know some of you want me to get over the Myers trade, and I’d like to get over it myself. But I can’t “get over” a trade that so many people still think was a good idea. The point of rehashing the trade over and over again is so that we might learn something from it, but too many Royals fans don’t think that there’s anything to learn. So long as that’s the case, I will keep doing my best to educate.

Giving Moore a contract extension this winter feels on some level like shutting the barn door after the horses got out, even if – in light of the Royals’ 86-76 season – it makes perfect sense that he got an extension this year instead of last. But this brings me to the other reason, the one that really convinced me to accept the extension:

The most important word in the press release isn’t “EXTENSION”. It’s “TWO”.

In 2009, Moore got a four-year contract extension. Four years is an eternity for a GM. Dave Dombrowski was hired by the Tigers in 2002; the Tigers didn’t even hit rock bottom until 2003, when they lost 119 games, and by 2006 he had the Tigers headed to the World Series. Andrew Friedman took over as the Rays GM after the 2005 season; four years later he had followed up an AL pennant with an 84-78 season that is the only year in the past six when the Rays haven’t won 90 games. I didn’t understand the extension then, but as I wrote at the time, “I’m fine with Dayton Moore getting a four-year contract extension…as long as it’s really a one-year extension with three option years.”

That’s obviously not how it works for a four-year extension. But for a two-year extension…well, having just established that the last year of a GM’s contract is really just window dressing, it’s safe to say that this time around, Moore really did get a one-year extension with an option for 2016.

And that seems reasonable to me. Moore deserves to keep his job; while the Myers trade may rankle me for a long time to come, it was made possible by drafting Myers in the third round in the first place. Moore made an enormous commitment to developing talent from Latin America, and for all the criticisms levied against Moore for the length of his timetable, when it comes to Latin American players it really does take eight years to turn a 16-year-old malnourished kid into a 24-year-old major leaguer. That pipeline has already delivered Salvador Perez and Kelvin Herrera, and Yordano Ventura just arrived, and more is on the way. The long-term contract for Salvador Perez may wind up being as much a net positive for the Royals as the Myers trade was a net negative.

It’s certainly possible that if the Royals fall apart next season, and start 34-47, this extension may save Moore’s job for another year. But I think that’s pretty unlikely. Much more likely on the downside is that the Royals regress a little and finish 79-83 or something. In which case, a contract extension now saves the Glass family from the difficult decision of whether to extend Moore next year, when at that point they wouldn't want to commit for more than another half-season.

If the Royals tread water in 2014, then 2015 becomes a pivotal year for Moore to show that, even without Shields, and with Alex Gordon and Billy Butler in their last contract year, they can win. This extension vastly reduces the odds that Moore gets fired in 2014 – but it really doesn’t change the odds for 2015 at all. If they don’t win by then, everyone’s job is on the line – Moore in the next-to-last year of his contract, and Ned Yost in the last year of his. There’s a massive housecleaning pending in 2015 if the Royals don’t take the next step, and I’m sure that even with a contract through 2016, Moore is well aware of that. You can’t eliminate moral hazard entirely, but you can contain it.

Does Dayton Moore deserve a contract extension? To quote William Munny from Unforgiven one more time, Deserve’s got nothing to do with it. This is what’s best for the Royals as an organization, and that’s all that really matters.

- As you might have noticed, Phil Hughes signed with the Minnesota Twins last week. He got a three year deal for $24 million, which means that he’s making the same annual salary as Jason Vargas, but was guaranteed one less year.

I don’t know how to process this, other than to say that I evidently have a much different view of Hughes than pretty much the rest of baseball. I mean, I can criticize the Royals all I want, but 28 other teams didn’t see Hughes as worth more than $8 million a year either. And even within the analytical field, there are a lot of people who think that the Twins overpaid or overcommitted to Hughes, both national baseball writers (e.g. Keith Law, Jay Jaffe) and Royals-specific ones (e.g. Craig Brown).

But I’ll stand by what I’ve said before, which is that Phil Hughes looks to me like a league-average starter with upside, that getting out of Yankee Stadium will have a huge positive impact on his career, and that a 3-year, $24 million contract looks to me like a bargain.

Consider this: Jason Vargas has a 4.30 career ERA, and Phil Hughes has a 4.54 career ERA, but if you just look at their performance on the road – where Vargas doesn’t get the benefit of Safeco and Angel Stadium, and Hughes doesn’t have to deal with Yankee Stadium’s short right-field porch – here are their numbers:

Jason Vargas: 5.17 ERA, 1.44 HR/9, 1.78 K/BB
Phil Hughes: 4.10 ERA, 0.86 HR/9, 2.52 K/BB

I’ve seen many people criticize Hughes’ fastball for having no movement and being a gopher pitch, but away from their vastly different home ballpark, Vargas gives up home runs 67% more often than Hughes.

Vargas throws 87-88; Hughes throws 92-93. Even factoring in the natural advantage that left-handed pitchers have, Hughes has the advantage. And while Hughes is just 27, Vargas is 30, and will turn 31 before spring training.

Nonetheless, the Royals had more interest in Vargas than Hughes, to the point where they gave a longer contract to an older pitcher with a lower strikeout rate.

I can’t say that Hughes is 100% guaranteed to be better than Vargas, because we can’t say 100% about anything in baseball. The Rays were, probabilistically speaking, probably about 90% likely to win the Scott Kazmir-for-Victor Zambrano trade. The Royals had about a 10% chance…no, 1% chance…no, 0.1% chance to win the Neifi Perez for Jermaine Dye trade. We’re always dealing in probabilities here, and being wrong about a single transaction doesn’t mean you’re wrong any more than giving up a single to the next batter he faces means that Clayton Kershaw sucks.

But I think the odds are something like 70% that Hughes will be a better pitcher than Vargas over the next four years, which is massive in baseball terms. (Most of that 30% involves some underlying arm problem with Hughes that has the rest of baseball looking askance at him.) Vargas may superficially look better in 2014, because the Royals will probably have a well-above-average defense, but if you strip that away I suspect Hughes will be better next year – and that the gap will increase over time. Again, I could be mistaken. It wouldn’t be the first time I was wrong to criticize a decision the Royals made. But it also wouldn’t be the first time I was right.

- Finally, I can’t write this long and not mention the toughest news of the week, which is that Bob Dutton is leaving the Kansas City Star to cover the Seattle Mariners for the Tacoma News Tribune. The departure of a beat writer shouldn’t be this sad, but Bob’s not your ordinary beat writer.

For one thing, he’s the beat writer for the only daily newspaper in town. The Yankees have half-a-dozen beat writers covering them for different outlets; the loss of one is barely felt. But aside from the Royals’ internal reporters (mostly Dick Kaegel) with, Bob is the sole conduit for the day-to-day happenings for the team.

And he’s been that conduit for a long, long time. Bob’s been the full-time beat writer since 2002 or so, but he covered the Royals on at least a part-time basis since  before the Star launched their website and I could read it every day starting in 1996 or 1997. We started Baseball Prospectus in late 1995, so Bob’s Royals beat covers virtually my entire career as a writer and analyst. I don’t remember a time, since the internet unveiled the secrets of the world to me and I could read about the Royals from a local perspective, where I didn’t see Bob’s byline.

And he’s really, really good at his job. Think about this: he’s watched the Royals play over 2000 games over the last 15-20 years, and none of them had pennant implications for the team. The Saturday game against the Rangers with a week left in the season this September was, objectively, the most important game the Royals had played in 28 years. It’s not that Bob is a Royals fan – he’ll tell you that his job is simply to cover the team – but I can’t imagine how hard it must be to take your craft so seriously, to nail your deadlines and capture the feel of the game and get player quotes and weave them into your narrative, when the stakes are so minimal, game after game, year after year. And he does it so, so well. Has done it.

I’ve had the privilege of getting to know Bob over the last decade; we generally would get together for a meal when he was in Chicago covering the Royals once a year, and he’s always treated me as a peer even in the days before Moneyball came out, when people like me were looked at with disdain by most traditional journalists.

The world has changed, and I no longer need to explain to print writers who I am, what I do, or why they should give a damn about what I have to say. But it wasn’t always that way, and my connection with the point guy for Royals information could have been much more tenuous or combative in the early days. In another market, it probably would have been. But it wasn’t, because Bob’s a professional, and I am truly grateful for that. I’ll miss him dearly.