Monday, March 24, 2014

The Secret Ingredient.

I know that many of my newer readers are under the impression that I am a pessimist by nature who enjoys skewering the Royals at every opportunity. Those of you who’ve been around a while know that if I’m guilty of anything, it’s of being unrealistically positive about the Royals; there’s no way I could have kept writing about the Royals when they lost 100 games back-to-back-to-back years otherwise. But it’s true that of late, I’m better known for criticism than praise. But I really do want the Royals to succeed, and I really do want to say nice things about their front office. So today, I have a column for you that’s nothing but sunshine and roses – and, best of all, completely truthful.

Once upon a time, the Royals didn’t do a good job of scouting Latin American talent.

That’s a euphemism. And not a small euphemism either; that’s not like saying that someone who died has “passed away”. That’s like saying that someone who died is actually alive and well, cleaned out the hospital’s stash of applesauce, and led the nursing team in singing a spirited karaoke of “Let It Go.”

By “once upon a time”, I mean the entirety of the franchise’s history before Dayton Moore was hired. And by “didn’t do a good job”, I mean the Royals conducted themselves as if the most popular sport in the Dominican Republic was jai alai. They acted as if there was no amateur talent in Latin America to speak of.

Back in 2011, I believe I wrote somewhere – and you’ll have to forgive me, I can’t find the reference – that the Royals probably had more Latin American talent in their farm system at that moment than they had developed in the 37 years before Dayton Moore was hired combined. Now, I know I can be guilty of hyperbole sometimes, hyperbole that occasionally tiptoes the line of outright untruth. But I stand by that statement 100%.

Here is a list of every amateur player that the Royals signed out of Latin America from 1969 to 2006, that would bat even 500 times or throw even 150 innings in the major leagues. (It’s possible that I missed someone, but I tried to be extremely thorough in my search.)

Player            Signed  Career    bWAR

Melido Perez       1983  1987-1995  11.3
Luis Salazar       1973  1980-1992   9.1
Hipolito Pichardo  1987  1992-2002   6.3
Carlos Febles      1993  1998-2003   3.5
Runelvys Hernandez 1997  2002-2008   3.3
Andres Blanco      2000  2004-2011   1.2
Ambiorix Burgos    2000  2005-2007   0.7
Onix Concepcion    1976  1980-1987   0.0

This is an astounding list. In 37 years, the Royals came up with eight players that would last the equivalent of just one season in the major leagues, barely one every five years – two in the 1970s, two in the 1980s, two in the 1990s, and two in 2000. And it’s actually worse than that, because only three of those players amassed even 4 bWAR – the equivalent of basically two league-average seasons – in their careers.

And it’s actually worse than that, because the two best players the Royals developed contributed nothing to the organization. After making three starts for the Royals in 1987, Perez was one of four players traded to the White Sox in an ill-conceived move for Floyd Bannister. (Sorry, Brian!) Perez would be a league-average starter for most of the next seven years. (Greg Hibbard, also included in the trade, would be a league-average starter for the next five years. Bannister would be a serviceable but below-league-average starter for the next season-and-a-half.)

But Perez, at least, was developed by the Royals until he was ready for the major leagues. Salazar, who played every position except catcher during his 13-year-career in the majors, was signed by the Royals in 1973…and released in 1974, after playing two games in the Gulf Coast League. In 1976, he resurfaces in pro ball with the Pirates, and reached the majors four years later. I don’t know the story here, but I’m going to say that the Royals deserve exactly zero credit for his development as a player.

Over 37 years, the best Latin American player the Royals developed who made a contribution to the team was Hipolito Pichardo. That is one of the most astoundingly depressing facts about the franchise that I’ve ever written, and I’ve written a lot of astoundingly depressing facts.

Just for a fun comparison, I thought I’d look at how the Blue Jays fared in Latin America. The Blue Jays started play in 1977, and soon thereafter Pat Gillick took over as their general manager. Here’s a sampling of the players they signed out of Latin America over the ensuing decade:

1978: Fred Manrique (2.6 bWAR)
1979: Luis Leal (10.6 bWAR), Tony Fernandez (45.2 bWAR)
1981: Luis Aquino (10.3 bWAR), Jose Mesa (11.7 bWAR)
1982: Nelson Liriano (3.0 bWAR)
1983: Tony Castillo (6.3 bWAR), Geronimo Berroa (7.5 bWAR)
1985: Junior Felix (6.1 bWAR), Francisco Cabrera (1.0 Franchises Murdered)

And so on. (The Jays would sign Carlos Delgado in 1988.) The Blue Jays were coming up with a useful player out of Latin America roughly once a year; even the guys without a lot of WAR, like Manrique and Liriano, played over 10 years in the majors. In their first five years, the Blue Jays came up with more 10-win players than the Royals have in their history. And they came up with a franchise player in Tony Fernandez.

Gillick is arguably the most successful baseball executive of my lifetime. He won two World Series with the Blue Jays in 1992 and 1993, assembled the Mariners team that tied the all-time record for regular season wins in 2001, and put together another world champion in Philadelphia in 2008. And his success in player development certainly wasn’t limited to Latin America; the Blue Jays were unusually successful in the Rule 5 draft (George Bell, Kelly Gruber), and of course they drafted well (Dave Stieb, Jimmy Key, Lloyd Moseby, Jesse Barfield). Aside from Fernandez and Leal, most of the Blue Jays’ Latin American talent from their early years moved on from Toronto before they found success. But the Blue Jays, a team that was starting from scratch in 1977, nonetheless came up with a talent stream that the Royals completely ignored.

The irony is that when the Royals were starting from scratch, they came up with a talent stream that every other team in baseball ignored. I’m speaking of the Royals Baseball Academy, still one of the most radical and innovative ideas ever implemented by a major league team. The Academy opened in 1970, taking undrafted American high school graduates who were short on baseball ability but long on tools. The Academy closed in 1974 because of its expense, and while closing it was a mistake, you can maybe understand that the Royals had yet to see its benefits but were definitely feeling its costs.

Many years later, Royals owner Ewing Kauffman would say, “If I were a younger man, I’d reinstitute it. That’s a disappointment in myself, because I wasn’t smart enough to see it and I let the finances of it bother me too much and, of course, at the time I didn’t have as much money as I did later on.” The shame isn’t that the Academy closed in 1974, but that in 1980 – when the starting middle infield of their World Series team, UL Washington and Frank White, were both Academy graduates – they didn’t re-institute it.

But maybe it’s understandable that the Royals, or any team, wouldn’t want to start an Academy to develop the best American teenagers that were left over after 1000+ players were drafted each year. Their reluctance to invest in developing the best Latin American teenagers, when there’s no draft siphoning away hundreds of players every year, is inexplicable. But that’s what happened. Kauffman passed away in 1993, and over a decade later the Royals still had as small a presence in Latin America as any team in the majors.

You have probably read this before – I know I’ve written it before – but according to Buster Olney, from 1995 to 2006 the Royals spent approximately a quarter million dollars in signing bonuses on Latin American talent. Not annually – total. That’s a total signing budget of barely $20,000 a year. That’s absurd, and it’s why during that entire time, the best players the Royals signed were Carlos Febles, Runelvys Hernandez, Andres Blanco, and Ambiorix Burgos.

It’s also at least part of the reason why the Royals sucked for pretty much that entire timeframe.

Dayton Moore was hired in 2006. He was hired in mid-June, too late to influence the draft that year, but not too late to influence the Royals’ ability to sign amateur talent south of the border. And almost immediately, the Royals’ fortunes began to change.

In 2007, the Royals made their first big financial push into Latin America, signing a pair of infielders from the Dominican for real money - $250,000 for Yowill Espinal, $230,000 for Geulin Beltre, each getting about as much as the Royals had spent in the last decade combined. The Royals also opened a new academy in the Dominican Republic that year. I’m not entirely certain whether this was something instigated by Moore or whether it was already in the works under Allard Baird – it takes more than a year to build an academy from scratch, I think. Whether the academy was Moore’s brainchild or whether it was just a coincidence, the fact is that the Royals had already started turning things around before the academy opened.

Because you see, in 2006, the Royals signed two players who have already made an impact in Kansas City. In October, they signed Salvador Perez. In December, they signed Kelvin Herrera.

With barely two seasons in the majors, Perez, with 8.6 bWAR, has already had the best Royals career of any player the franchise has ever signed out of Latin America. With one more half-decent season he’ll the greatest player the Royals have ever signed out of Latin America, period. With just two promising but not spectacular seasons in middle relief, Herrera, with 2.1 bWAR, is already seventh on that list.

In his first six months as the Royals’ GM, Moore signed two Latin American players who may well turn out to each be better than any Latin American player the Royals had ever signed before.

And that was just the first year. 2007 proved to be a fallow year, despite the bonuses to Espinal and Beltre. But since then:

In 2008, the Royals signed Yordano Ventura (#2 Royals prospect per Baseball America) and Angel Baez (#27).
In 2009, the Royals signed Jorge Bonifacio (#4) and Cheslor Cuthbert (#14).
In 2010, the Royals signed Miguel Almonte (#5) and Orlando Calixte (#13).
In 2011, the Royals signed Raul A. Mondesi (#3), Elier Hernandez (#11), and Pedro Fernandez (#16).

So by the end of 2011, the Royals almost unquestionably had more Latin American talent in their organization than they had developed in the 37 years before Dayton Moore was hired. Acknowledging that some if not most of these prospects won’t pan out, the Royals had Ventura, maybe the pitching phenom of this spring, who opens the season as their #3 starter; they had Bonifacio, who might be their starting right fielder next year. They had Cuthbert, who has had two disappointing years in a row but is still just 21 and already has Double-A experience. They had Almonte, who might be in their rotation at some point in 2015. They had Calixte, who’s an offense-minded shortstop who spent all of last year in Double-A at age 21, and will probably have a long career in a utility role if nothing else.

And in 2011, they signed the guy I consider the best prospect in the system in Mondesi; a potential prototype right fielder in Elier Hernandez who hit .301/.350/.439 in the Pioneer League at age 18 last year; and Pedro Fernandez, who is this year’s Almonte, the Dominican right-hander who is expected to emerge from obscurity onto the prospect radar by season’s end.

(As I mentioned when I wrote about Mondesi a couple of articles ago, he is pretty clearly the best shortstop prospect in Royals history. And the reason for that is pretty simple: shortstops, more than any other position on the field, tend to hail from Latin America. The reasons for that are multi-faceted and I’m not going to get into it here, but it makes sense that a team that ignored Latin American prospects suffered its most glaring development failure at the position most associated with Latin American prospects.)

And of course the Royals already have maybe the best young catcher in baseball, and a reliever who touches 101 on the gun. Put that on one side of the scale, and on the other side you’re putting a #3 starter (Melido Perez), a utility infielder (Salazar), a swingman (Pichardo), and a short-lived second baseman and #4 starter (Febles and Hernandez). We probably won’t have to wait until the careers of all of these prospects play out completely before we can declare a winner.

The Royals, truthfully, haven’t drafted all that well under Dayton Moore. While they drafted Eric Hosmer and Mike Moustakas, they had to spend a top-five pick on each, and they also used top-five picks on Christian Colon (bust) and Bubba Starling (the next good scouting report I read on him this year will be the first). And while they’ve drafted several fine relievers, most notably Greg Holland, from 2007 to 2011 the only impact player they drafted after the first round is Wil Myers.

The irony is that the Royals’ ranking as The Best Farm System Ever three years ago was built on the backs of their draft picks. All nine Royals in Baseball America’s Top 100 were American-born; Jake Odorizzi was acquired in a trade, but the other eight were all Royals picks. Hosmer, Moustakas, and Myers have (generally) lived up to their rankings; Colon and the non-Odorizzi pitchers have not.

And it’s possible that the Royals will have as little success with their Latin American talent as they have with their American talent. But Perez and Herrera are already ensconced on the roster, Ventura has already won a rotation job, and it’s hard to imagine that every other prospect will fail. Using Baseball America’s ranking list, four of the Royals top five prospects, and eight of their top 16, were signed out of Latin America. The renaissance of the organization might have been started with talent from the draft, but it will be completed – if it is completed – with talent from Latin America.

As impressive as the Royals ability to find talent south of the border has been since Moore was hired, it’s possible that it’s just a fluke, much like a team that just has a lucky run in the draft. But I don’t think it is. For one thing, Latin Americans occupy a significantly larger portion of major league talent today than they did a generation ago. As Nate Silver wrote about back in 2005, the percentage of major league players from outside the US – almost all from Latin America – more than doubled from 1985 to 2005.

And as Silver also wrote, that percentage would almost certainly continue to increase over time – simply because population trends dictate it. In 2005, the birth rate in the Dominican Republic was about 70% higher than in America. More babies mean more 16-year-old boys 16 years later; more 16-year-old boys mean more potential major leaguers. The trend of more and more baseball players from Latin America isn’t going to reverse itself any time soon, and will probably accelerate. It is for this reason that investing in Latin America is simply not an option for major league teams anymore, the way it obviously was for the Royals, who built a model organization and won a World Series without doing so.

It also means that a team that leads the way in Latin America today has more to gain than a team that did so 30 years ago, because there’s so much more talent. The Blue Jays’ record in Latin America is even more impressive when you consider they were fishing in a much smaller pond in the late 1970s and early 1980s. But it means that the Royals might actually find more major league talent in Latin America today than the Jays did in their salad days. They’re already well on their way.

The deeper well of talent is an advantage for the Royals, but then it’s an advantage for every other team as well. For the Royals to take real advantage, they need find more of that talent than every other team. The question is whether they can continue to do that, particularly given that since the new CBA went into effect in 2013, there is a soft cap to how much money teams can spend in Latin America. (I say “soft” because the penalty for going over is weak enough that it’s sometimes worth it to go over, and the Rangers and Cubs decided it was a trade worth making last year.)

But I think that, cap or no cap, the Royals are going to be fine. It’s true that the Royals’ success in Latin America coincided with them finally deciding to spend some money, and most of their big investments so far seem sounds. The only seven-figure bonus the Royals have doled out that looks unwise so far is Humberto Arteaga ($1.1 million), who has a slick glove but doesn’t look like he’ll ever hit. But Hernandez ($3 million) and Mondesi ($2 million) look like they’re worth the investment and then some; Cuthbert ($1.45 million) and Calixte ($1 million) still have time to pay off. (Edit: I was remiss not to mention Noel Arguelles, the Cuban defector who got $6.9 million and then had shoulder surgery almost immediately afterwards, and hasn't remotely looked like a prospect since. Cuban defectors are so hard to scout that they're almost an entirely different animal than the typical Latin American amateur, and I give the Royals a bit of a pass given that we never saw a healthy Arguelles in uniform.)

But what makes the Royals success in Latin America particularly remarkable – and why I think it will continue under the new CBA – is that they’ve done so well with players who didn’t get big bonuses.

Salvador Perez signed for $65,000. Yordano Ventura got $28,000. Miguel Almonte? $25,000. Jorge Bonifacio got lavished with cash – he had the major league bloodlines – to the tune of $135,000. The Royals potentially got two everyday hitters and two starting pitchers for $253,000 – basically the slot money for a sixth-round pick – combined.

They were able to do this because the nature of Latin American signings – players are eligible to be signed once they turn 16 – radically increases the variance in players. It increases the odds that a top prospect will bust, and increases the odds that a lightly-regarded kid suddenly gains 10 mph on his fastball, a la Yordano Ventura, and becomes a top prospect. If American kids were eligible to be drafted after their sophomore year of high school, we’d see first-round picks turn to mush and 37th-rounders become superstars all the time. (And conversely, if we raised the age limit we’d see fewer busts and fewer surprises. Stephen Strasburg wasn’t drafted out of high school; a year later he would have been a sure first-round pick if he were eligible.)

Signing 16-year-old players has two strategic impacts. It means that teams need to cast a wider net, signing more players rather than putting all their eggs on one or two baskets, because you never know when the malnourished kid you’re looking at today might be an absolute beast of a ballplayer a year from now. And it means that money is less important than connections.

Having a lead on the 16-year-old kid who can’t catch up to a fastball now but will grow three inches once he starts getting three square meals a day is immensely valuable. Developing a relationship with the family of a kid who might take a lower bonus because they trust your organization is immensely valuable. Having a relationship with the buscones, the unlikeable but indispensible trainers who find prepubescent players with promise and train them until they’re old enough to sign with a major league team, is immensely valuable.

Which is why the person who is key to the Royals’ Latin American success isn’t Dayton Moore at all, as I’m sure Moore will tell you himself. It’s a man who most Royals fans have never heard of. It’s Rene Francisco.

Francisco was one of the first hires that Moore made when he took the job, luring Francisco to be a Special Assistant to the General Manager/International Operations – basically, their international scouting director – in August of 2006. A few weeks later he was down in Venezuela watching a tryout where kids did their best to impress him. One of those kids was Salvador Perez.

Francisco was hired from the Atlanta Braves, and as much as we’ve made fun of Moore for his reliance on familiar front office hires from a familiar organization, he certainly nailed this one. Francisco had been the Braves’ Director of International Scouting for about a year; he had held the same role with the Dodgers for three years, and before that he had been with the Braves from 1993 to 2002 as an international scout and later a Latin American coordinator. He was “instrumental” in the signings of Rafael Furcal and Wilson Betemit, among others.

(I’m taking this from the Royals’ media guides, as online information on Francisco is, perhaps appropriately for a man whose contributions are so overlooked, scarce.)

That’s not to say that Moore doesn’t deserve credit for the Royals’ success in Latin America, because of course he’s the guy who hired Francisco in the first place, and hiring the right people is 80% of management success. It wasn’t Pat Gillick who was personally scouting Latin America; it was legendary scout Epy Guerrero, who Gillick hired soon after he became GM of the Blue Jays in 1978, and headed international scouting for the Blue Jays until 1995. Like Gillick, Guerrero’s tenure with Toronto roughly corresponds to the glory years for the franchise. (This obituary of Guerrero also tells the story of how Guerrero helped the Blue Jays land George Bell in the Rule 5 draft by arranging to keep him out of winter ball so that other teams wouldn’t get a good look at him.)

One of Moore’s unquestioned assets as a GM and as a person is that he’s the kind of GM that other people want to work for; the Royals have had remarkable stability in their front office, particularly on their minor league side, even as they developed the best farm system in the game and some of those employees would presumably be highly coveted by other organizations. J.J. Picollo, who was hired from the Braves the same day as Francisco, has run the player development operation since then. Picollo added “Assistant GM” to his title in 2008, and Francisco did in 2012, and presumably their responsibilities have increased over time – but they’ve remained with the organization and loyal to Moore since the beginning. They’re not the only ones – the turnover in the front office over the last eight years has been remarkably low, which says something about the man they report to.

I’m obviously not privy to the inner workings of the Royals’ operations, and I don’t want to suggest that it is only Rene Francisco who deserves credit for the team’s success in Latin America. Certainly there are scouts on the ground who do the grunt work and should be recognized. But just as the buck stops with Moore for the results of the team as a whole, the buck stops with Francisco on the international side. He, and those who work under him, have done a phenomenal job these last eight years. And they continue to do fine work.

In 2012, with the new CBA limiting their spending power a bit, the Royals backed off on their Latin American spending relative to previous years. But their #1 guy, a first baseman named Samir Duenez, has shown an advanced bat (albeit no defensive skills) so far. And last year the Royals broke new ground internationally by ponying up $1.3 million to Italian shortstop Marten Gasparini, the biggest signing bonus any team has ever paid to a European prospect.

I’ve had a love-hate relationship with this organization for longer than I care to admit, and I’ve probably flipped back and forth between loving and hating this front office a half-dozen times. I was perhaps irrationally exuberant about the farm system three years ago; I was perhaps unfairly bitter about the team’s inability to convert that promise into results in 2012, and then the Myers trade broke me for a full solid year.

But I’m getting my groove back again, and I’m doing my best to see the Royals as a capable and competent organization that simply let desperation coax them into making a single terrible move fifteen months ago. An organization isn’t defined by one trade, it’s defined by their accumulated decisions and – dare I say it – processes over years and years. For many years, beneath the surface, the Royals have put together a process of finding and developing Latin American talent that is unlike anything they’ve ever done before, and has become a huge competitive advantage for them.

They deserve a huge amount of credit for that, so much so that I’m even willing to try to see the bright side of Moore’s notorious comments about rebuilding being an eight-to-ten year process. That timeframe has been conveniently flexible, and suspiciously forgiving, and doesn’t simply excuse the fact that the Royals never won more than 75 games in his first six seasons on the job. And that timeframe is too long when it comes to draft picks, many of whom are college players who are 21 or 22 at the time. I mean, Luke Hochevar, who was drafted a week before Moore started, is 30 years old.

But the one place where an eight-to-ten year timeframe is entirely reasonable is in Latin America, where most kids sign when they’re 16 years old. It’s now nearly eight years since Moore was hired, and the first two kids they hit upon in Latin America, Perez and Herrera, will be just 23 years old on Opening Day. Perez, in particular, should still be three or four years from his peak. But they’re old enough now that they’re here and they’re contributing. This year they’re being joined by Ventura. Next year Bonifacio and Almonte should arrive; Mondesi could be ready the year after that; Elier Hernandez could follow, and now you can project new prospects coming off the assembly line at regular intervals into perpetuity.

No rebuilding process should take eight years. But those eight years are in the past, and now we can finally enjoy the fruits of the part of the rebuilding process that takes the longest, but that the Royals have done best. Maybe it won’t be enough to get the Royals over the playoff hump this year or next; maybe it won’t even be enough to save this front office in the end. But building a Latin American pipeline that is the one of the best in the game from scratch is this front office’s greatest legacy, and they deserve all the credit in the world for it.

Ultimately, talent wins. The signature weakness of the Royals during their dark ages was that they simply didn’t develop enough of it. It remains to be seen whether the Royals’ current front office can produce the talent to constitute a playoff team. But when it comes to this one vital source of talent, they most certainly are.