30 May 2016

Why You Should Care That The Orioles Traded A Draft Pick

This is a guest post by Jeff Long of Baseball Prospectus. You can find his work here and follow him on Twitter.

As I write this (before Sunday's win over the Indians), the Orioles sit at 27-20; one game behind the Red Sox in the AL East and right in the thick of the race among some of the best teams in the American League thus far. We’re just over a quarter of the way through the season, but surprise starts from teams like the Mariners and the White Sox have muddied the (very-early) playoff picture.

It’s been a terrific start for an Orioles club that faced a lot of questions coming into the season. The team spent a lot of money—their Opening Day payroll went up nearly $30 million from Opening Day 2015—to essentially field the same club as last year. The 2015 version of the Orioles finished 81-81, a dozen games back in the division and five out of the Wild Card. It was a disappointing season, and the team didn’t have any significant upgrades coming into 2016.

All of this is to say that performance to date might not reflect the team’s actual chances of making the playoffs and battling for the World Series. As of this writing, Baseball Prospectus has the Orioles with a roughly 26% chance of making the playoffs. That projection—based on BP’s PECOTA projection system—lands the Orioles fourth in the division behind the Rays (34%), Blue Jays (42%), and Red Sox (76%) respectively. Lest you think this means that PECOTA is down on the Orioles, that number represents a roughly 18 percentage point increase from their preseason playoff odds of 8%. Matt Trueblood worded PECOTA’s opinion thusly, They’ve gone from a very long shot to a legitimate contender, which is significant progress. From here, they have an honest chance to make a run at the postseason. That they aren’t a favorite is affirmation that, yes, some things are starting to carry real meaning, but it’s still early.

This is an elaborate (314 words, if you’re counting) way of saying that the Orioles have a shot at the playoffs. It may not be a great one, but it’s a shot.

This is critically important, because of the way that the team’s front office is running the club. They’ve largely thrown all of their eggs into the 2016/2017 basket; the future be damned. Trading draft picks and international bonus slots is simply their modus operandi in its most basic form.

I won’t get into the details, but it’s important that we understand that moves like the Brian Matusz or Ryan Webb trades are simply salary dumps wherein draft picks are exchanged for cold hard cash. This approach has ramifications that Dave Cameron summarized well:
If Peter Angelos just pockets the $3 million, and the team doesn’t reallocate this money back into the franchise, then it’s perfectly reasonable for Orioles fans to be annoyed by this trend of the team selling draft picks. Making a habit out of reducing your prospect stock isn’t a great idea if you’re not using those prospects to acquire other things of value, and if shedding Matusz’s contract just allows Angelos to go buy some fancy art, well, that would suck for the franchise. But at this point, with the Orioles as likely buyers this summer and some obvious holes on the roster, I think it’s probably best to assume that this is a move made in preparation for taking on big league salary in July.

And if that’s the case, then all the Orioles are really doing is trading a prospect for some help at the big-league roster, which is exactly what we expect teams in first place to do.

Dave Cameron – The Orioles Sold a Draft Pick Again
There are a few components to this that are worth exploring in more detail. Cameron suggests that the Orioles’ trading of draft picks for money gives them more flexibility to take on salary at the July trade deadline. The argument, in hindsight, is often that the trading of Ryan Webb’s salary led to the acquisition of Gerardo Parra who helped (Parra actually cost the Orioles wins with his performance, but nevermind that for now) the team down the stretch run.

OK, sure. Perhaps the $3 million or so the club saved by not designating Matusz for Assignment will be used to acquire someone that will help them make the playoffs this season. Here’s the simple problem with that argument. Nobody outside the warehouse knows where that money goes. Did Webb’s salary go to Parra? Maybe. Did they really need to save the money knowing that their Opening Day salary went up 10 times that between last season and this one? Probably not.

Whether or not the Orioles need to save the money is something that frankly we won’t ever have the answer to. What we do know is that they have a long history of trading away the opportunity to acquire players and pay them paltry minor league salaries. Let’s take a trip down memory lane, shall we?

Do you remember that time the Orioles traded Jake Arrieta and Pedro Strop to the Cubs for Scott Feldman and Steve Clevenger? They also sent the Cubs multiple international bonus slots to sweeten the deal. In fairness, it’s not like the Orioles were going to use them anyway, their international spending is often pathetic (with the exception of Asia, generally speaking).

I mentioned it previously, but they sent Ryan Webb and the 74th pick in the 2015 draft to the Dodgers so they wouldn’t have to pay his $2.8 million salary upon cutting him. The Orioles said, at the time, that they liked the "prospects" they got back in the deal, though those players are org guys who are unlikely to ever appear on a major-league roster. Stop me if this sounds familiar.

Then there was that time the Orioles traded two slots to the Astros for Chris Lee, who at least seems interesting, unlike previous acquisitions.

Then came the Matusz trade, followed swiftly by a dumping of international bonus slots to the Reds for a 23-year-old pitcher who hasn’t gotten past A-ball yet.

The problem with the Webb and Matusz trades of course is that those issues were completely avoidable. Both players were deemed to be DFA candidates during the offseason, when the club could have cut them without incurring financial penalties. Instead, they kept them on the roster and opted to pay a hefty price for their removal later.

The problem is sizable. As long as the major-league team keeps winning though, why should you care? Sustainability, that’s why.


Building a sustainable winner is a difficult task. Still, there are dozens of models to follow. You could look at the Cardinals who eschew veteran free agents in favor of a well-stocked farm system that produces impact player after impact player. This takes significant resources, but the club seem to deem it worthwhile. You could be like the Pirates and sign your young talent to long term deals, creating a cost-controlled core around which you can build. This too keeps costs down, but requires proactivity with contract negotiations. You could even follow a Red Sox model where free spending and free agency are the means by which wins are acquired. Even the Red Sox though, have a robust farm system stocked with future talent. The Orioles do not.

According to Baseball Prospectus, the Orioles have the 26th best farm system in baseball. Baseball America has them 27th. Keith Law of ESPN agrees, slotting the club at 27th. Across the board, the comments are the same. The club has some interesting talent in short season or A-ball, but those players are a long way off. The upper minors is filled with org guys and AAAA stars, guys who look good but aren’t likely to help the major-league team in a significant way.

They can’t seem to develop pitching properly, as their top pitching prospects routinely get hurt and underwhelm. Any interesting hitting prospects tend to get moved in trades, and the ones that have stayed are too few to be a true core to build around.

If you’re looking to the farm system for reinforcements or help either this season or down the road, you’ll be left wanting.

The farm system being down is a bigger problem than it seems of course. Who exactly is the team trading for veteran help at the deadline? Dave Cameron’s argument that these moves can help them win more games this season is built on a weak foundation given that the club hardly has the assets to acquire impactful talent in the first place.

The future? That’s bleak too. Matt Wieters is a free agent next season. The club will likely let him walk, with or without a qualifying offer. Mark Trumbo too, is a free agent-to-be. Chris Tillman’s team control ends in 2018, the following season, along with Hyun Soo Kim and Ubaldo Jimenez (which, let’s be honest, is probably a good thing). In 2019 both Adam Jones and Manny Machado will be free agents, along with Zach Britton who has grown into one of the best relievers in baseball.

Some of those changes are a ways away, but the fact remains that there are almost no replacements for these players in the minor leagues. They’ll need to come from somewhere, but with the club shredding draft picks and international bonus slots at every opportunity, it’s unclear from where.

The period from the late 1990s through 2012, an abysmal black hole in the franchise’s history, was set up with many of the same moves that this Orioles’ team is now engaging in. The team ignored the minors in hopes of capturing a World Series with its aging veteran talent. It didn’t work out, and the subsequent cliff was steep. It took the team more than a decade to dig out of that cliff.

The problem is that 2016, 2017, or maybe 2018 look a lot like the edge of the cliff that the team faced in 1997. My suggestion is that you hope and pray that the team wins a World Series sooner rather than later, because their odds of doing so in each subsequent season are getting worse and worse. I’m all for the win-now attitude this team has; I just hope they actually do win now, because I’m not optimistic about their chances of winning in the future.


Pip said...

Please forward this to Dan Duquette. He won't read it, because he will consider it beneath him, but maybe somebody will.

GRob78 said...

This is a solid piece, thanks. You have to wonder how much of the current draft/player swaps (where the player gets DFA'd) are more a product of the existing CBA than anything else. Of all the major sports in the US (and Canada-ish) baseball is the only one with such a complex structure of contracts. Granted, baseball has a much more complex developmental structure than all the other sports. Thankfully (maybe) the current CBA is done at the end of this season and some of this kind of stuff is likely going to go away. I'm entirely okay with the Brian Matusz trade/swap because I think the results will be better. Matusz lost his stuff and couldn't find it in Spring or the few innings he pitched in season.

As far as Angelos and Duquette...the larger issue is still the ownership. Duquette has put together a decent team but let's be honest, a lot of this is Buck Showalter developing and playing guys. We can't underestimate how much of a lid Duquette has to work under with the current owner. That said, the Orioles have a pattern of missing on good players and being unable to develop others. So replacing a farm system with long term prospects from other teams might be the best way forward.

But a lot can change between now and 2018...including ownership.

Anonymous said...

Good post. While I agree with everything, I also have to be skeptical about the Orioles ability to judge amateur talent and draft/develop accordingly. Outside of top-5 draft picks (Machado, Wieters), the organization has shown very little in terms of getting real results from the draft--really going back 20+ years. While some have obviously had success in other organizations, the value of the Orioles draft picks to the Orioles organization, has been very miniscule. There's very little positive to say about the organization's amateur scouting and player development departments, in my view.

Anonymous said...

The trading of the 76th pick to the Braves is not a precursor to the Orioles long term future. Keep in mind the O's still have a first rounder along with two more 2nd round picks, all higher than the the 76th pick traded to the Braves. The far worse move was giving up the original first round pick for Gallardo who is nothing short of useless. That has far more potential to screw up the O's future development potential than does the trade with the Braves.

Pip said...

The problem isn't the specific pick, but the logic behind it. Giving up a pick for Gallardo, especially after his Medicals revealed a significant problem, is incredibly flawed logic.
Dan doesn't value draft picks the way he should, and seems to prefer a "qualified major leaguer," even a BAD one, to a draft pick.
He traded the 76th pick, basically a mid-third rounder, for two 16th round picks with no future.
He's tacitly admitting to no faith in his ability to get a productive player in the middle of the third round.
That is a very big problem.

Anonymous said...

With the benefit of hindsight, signing Jimenez was probably the biggest mistake of Dan Duquette as the Orioles GM if you consider the entire chain of events:

* Because so much money was tied down to Jimenez, the organization could not afford to re-sign Chen.
* As a result, Duquette "had to" waste a draft pick to sign Gallardo because he has no other choice for upgrading the rotation.
* And then Gallardo wasn't effective before he landed on the DL.

The net result is creating 3 additional holes in the rotation at a cost of $72 million and one first-round draft pick-- he could have gotten similar or better results with AAA call-ups! Duquette deserves to be fired for this mistake alone before even factoring his tendency to trade away draft picks.

Anonymous said...

Really good article. I wish things were different, but unfortunately, the O's are going to have to get very lucky to change. They have very limited additional resources (available money or quality minor league players) that are necessary to have any chance to better the terrible starting rotation.