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Pioneers/Executives

How Baseball Transactions Have Changed Over Time

The Draft changed a lot. Free agency changed everything. One was all about owners saving money. The other about the players getting their cut. Together these strange bedfellows have completely reshaped how GMs do their job, make their decisions, and align their operations. As Miller and I have begun learning about execs in preparation to elect them, it’s clear that comparing those from before 1965 (the first amateur draft) to those after is kind of like comparing deadball players to everyone thereafter.

To begin with, here’s a list of the major player-acquisition channels available to MLB GMs through 1964:

  • Amateur Free Agents: Scouted and signed by the organization
  • Free Agents: Who either a) cleared waivers and were released b) were Negro League players signed without compensation to their team c) professionals in foreign leagues also signed without compensation to their team
  • The Rule 5 Draft (1903-present): Still in force since 1903, a way to avoid the stockpiling of talent by a team; teams  select players who meet certain criteria and are not on the 40-man roster
  • The First Year Draft (1959-1964): Similar to the R5 Draft, first-year minor leaguers not on the 40-man roster could be selected
  • The Minor League Draft: This might be the minor league portion of either the R5 or First Year Draft, but it’s listed as “Minor League Draft” on BBREF and retrosheet, likely derived from sources that didn’t specify
  • Expansion Draft (1961 and 1962): For expansion teams only
  • Purchase: From another pro team, minor or major
  • Trades: You know this one already….
  • Waivers: The arcane process by which a player are moved off a team’s roster, exposing him to be claimed by other team

Though we haven’t got very complete data yet, we’d guess that amateur free agents, purchases, and trades are not only the most numerous transactions but also the most fruitful in pre-Draft baseball.

Compare now to what the modern GM’s menu looks like:

  • Amateur Free Agents: Either foreign talent, subject to bonus limits, or undrafted talent scouted and signed by the organization
  • Free Agents: Who either a) cleared waivers and were released b) were professionals in foreign leagues who were granted free agency there c) the usual free agents we’re accustomed to who have six years of service time in MLB and whose contract has expired d) were not offered arbitration or tendered a contract by their team e) were minor league free agents f) all the many other varieties I’ve probably missed
  • Amateur Draft (1965-present): Its rules have been revamped several times, but basically, the owners want to keep themselves from spending like wild on amateur bonuses, so they reduce competition for amateurs by subjecting them to a draft (now with slotting). Lasts 40 or more rounds, so 1200 or more kids are drafted each year, though not all choose to sign.
  • The Rule 5 Draft (1903-present): Still going….
  • Expansion Draft (1969, 1977, 1993, 1998): For expansion teams only
  • Purchase: From another pro team, minor or major (though this rarely happens now between one MLB teams and is called a trade with “cash considerations” in many instances)
  • Trades
  • Waivers: Still going, still arcane.

Today, the primary channels for acquisition are the draft, Major League free agency, and trades.

Amateurism

In Branch Rickey’s day, with no amateur draft, the team with the best scouting network that hustled the most and had the biggest farm system won the amateur-talent war. Thus the Cardinals, the Dodgers, and the Yankees dominated the 1930s, 1940s, and 1950s among them. Today scouting departments are focused not on beating the bushes in North America so much as determining which draft-eligible players have the best shot at a long career. Except in Latin America, the process is less about “hunting ivory” as it is crosschecking. Less about following up a tip from the boonies as ensuring that a player doesn’t represent undue risk.

The thing about the draft, however, is that it’s an automatic. There’s a draft every single year, and each team knows exactly how many picks it will have. But in earlier times, teams had to act aggressively because they didn’t know how many boys they’d sign or how many would be signed out from under them.

While any team with a good scouting department and an ample budget for amateur talent has an advantage now over those that don’t, in earlier times the differences could be vast. Connie Mack’s latter day A’s, the Browns and Phillies of the same period all suffered from a lack of willingness or funding, which caused them to dwell in the second division for decades. And if they failed to bring along young talent, they were forced to buy talent from other teams.

Purchasing Contracts vs. Purchasing Players

Say you’re the owner of hapless team in the 1930s. That rotten Branch Rickey has gone out a scooped all the young talent up that you’d hoped your shallow pool of scouts and friendly contacts might bump into. Well, you’re going to have to get players somehow. So you buy them from an unaffiliated minor league team or from a Major League team. Of course, you’re still competing with all the other MLB teams, and these minor league owners aren’t backwoods yutes without any negotiating experience. Or sales experience. You might pay Joe DiMaggio prices and end up with Jimmy Reese. Worse yet, if you buy a player from an MLB team, you’re lining the coffers of your competition! This is why Branch Rickey’s farm system was so cunning. He made millions selling off players he had no use for and could funnel some or all of that money back into his player development machine or into fixing a hole at the Major League level.

There exists in this a key distinction from modern free agency: purchasing a contract vs. purchasing a player.

When a GM buys a contract, he’s buying the player’s performance from a third party. It’s an unexpired asset that includes the exclusive rights to the player and any future salaries and conditions. Modern free agency cuts out the middle man. GMs deal directly with the player. While an agent may well pit one team against another to increase the bidding, he’s not another team operator, so your costs aren’t magnified by helping the other guy buy talent you’re competing with him for. The cost is just cash, not the opposition’s opportunity.

Cavaet Seller

Of course, there’s another side to all this. In Branch Rickey or Ed Barrow’s time, the stakes were far higher thanks to the reserve clause that bound a player to his team in perpetuity. While in some ways it made a GM’s job much, much easier, it created two major risks. One that selling, trading, or releasing a player gave away his lifetime rights. Two, you better have an understudy in the wings because replacing the outbound player might not be as simple or predictable as it is today.

Take, for example, the famous sale of Babe Ruth. Under today’s rules, The Sultan of Swat would have had approximately five years and change of service time, meaning that selling him in 1919 meant hawking a year’s worth of contractual rights. Ruth goes ape in 1920, and then he’s eligible for free agency. Harry Frazee gets what he can for him in 1919 and hopes he’ll have enough dough in a few years to maybe be in play for Ruth’s next deal. What made Frazee’s sale of The Bambino so devastating was losing Ruth. Forever. Sure he could trade for him, but that would cost a team’s worth of talent. He might try to purchase him from the Yankees, but it would have taken a printing press to gather that much money. And surely, the Yanks wouldn’t release their star. Why should they, after all, they had him locked up for life.

So today’s GM has a certain built-in risk reduction. Even if you were on the bad end of dealing some aging reliever for, I dunno, Jeff Bagwell, your exposure is limited to the first six years of Bagwell’s MLB career and whatever’s left on this reliever’s contract. Compare that to trading Billy Pierce to get an aging catcher (Aaron Robinson). Bagwell was great and compiled an amazing 35 WAR in his first six years in Houston. Pierce gave the Chisox 49 WAR in 13 years while Robinson managed just 3 WAR with Detroit. Free agency raises the stakes in terms of cash outlay but it reduces the risk of trades since you aren’t giving your opponents a potential lifetime supply of awesome. They’ll have to work for it and sign the player to a big extension if they don’t want him to hit the market.

It’s not that today’s GM has it easier or harder than his counterparts from yesteryear. It’s that the two have fundamentally different levers to pull or points of emphasis. Bunting, stealing, and aggressive baserunning were the focal points of the Deadball game. Today it’s power pitching, power bullpens, and power hitting. Whether we’re talking about a GM or a player, conditions change over time and the baseball man changes to meet them. We are the ones who have to adjust our lenses to see the greatness in any era.

 

 

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