Wednesday, January 26, 2005

The Biggest Problems the Royals Face, Continued

5) Does David Glass want to win?

I must admit that I wasn't quite sure what I meant when I added this as a fifth challenge the Royals face. The top 4 dwarf any concern I might have about David Glass being a miser. So I don't know what I expect from David Glass or any other owner of a small market team. I don't necessarily expect them to hemorrhage their personal wealth simply to give their teams a chance to be more competitive, but why buy a team like the Royals without the expectation of sinking or investing some of your personal fortune into the franchise? I find it hard to understand why any superwealthy person would buy a major league baseball team outside of a large market if it wasn't their intention to act in an altruistic or community-oriented manner. People buy baseball teams for prestige and community standing, not for profits. If it was about making money, there are much, much better businesses in which to invest.

I suppose that I'm spoiled from my memories of Ewing Kauffman. He was a man who wanted to win as badly as George Steinbrenner, although I would never put Steinbrenner in Kauffman's class as an individual. He routinely kept the Royals' payroll among the highest in MLB, even when he was starting to lose money with the soaring escalation in player salaries beginning in the late 80s. The method wasn't very successful (think Storm and Mark Davis), but his effort was genuine.

I guess I'd just like to see the Royals try a different approach, because the slash-and-burn, cut payroll, and hope for your prospects approach doesn't work that well. I understand the value of the Moneyball approach, and the Royals can (and I think are) benefit from the introduction of objective analysis and taking advantage of market inefficiencies in their baseball operations.

What else can the Royals do? Since the Royals don't have the ability to compete with most other teams (even in their own division) on payroll or buying established wins shares, then the team needs to think about making some strategic bets that could pay off in the long term, such as:

-- Establishing the most advanced scouting and baseball analysis center in the league. Hire the most accomplished scouts, sabermetricians, mathematicians and pay them well above what anyone else is paying them, and make their working conditions so fantastic that they would have to think three times about leaving.

-- Do the same with the training staff. Invest in a world-class sports medicine institute. Overpay as necessary. The Royals have an abmoniable record with injuries in recent years, and this is a dire need.

-- Completely overhaul pricing schemes. If the stadium is 3/4 empty all of the time, then the pricing scheme clearly doesn't reflect how the marketplace values baseball tickets in Kansas city. Hire top flight economists to model the optimum market clearing pricing for individual and season ticket packages that will maximize revenue and place the most fans in the seats at optimum prices. Use auctions to sell unused tickets on Ebay at market clearing prices. Filling the stands builds interest all by itself - people like to get in on the action.

-- Build a boutique, 25,000 seat stadium in downtown. Recognize the limitations of your market and build scarcity by keeping the quality of seats high and their quantity low.

These are just example, and I don't know if they'd make a bit of difference in the long run. But every business has to make strategic bets and investments in order to advance the cause of the organization from time to time, and the Royals are in need of bold measures.


At 12:43 AM, Anonymous Anonymous said...

I really like your idea about bringing in economic, sabermetric, and training experts to the team. Think about what just a $1 million investment in such measures could yield. The Royals would get that money back tenfold within a couple years (especially if they manage to prevent just a couple injuries to key players). And there are SO many folks out there doing objective analysis and running their own matrices, that it's not even likely to cost that much. Hell, they could probably even find some folks who would be willing to do it for free at first.


At 4:48 PM, Blogger DL said...

Yea, it just seems like these types of innovative investments have the potential to yield significant gains over the long term. The problem is that baseball organizations are ridiculously resistant to fundamental change since they operate in such a protective shell of anti-trust.


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