Mining for Gold?

I've been part of this discussion over on the Scout.com discussion board, and although its a familiar topic its worth continuing here on the Daily Lancer.

As we all know, Allard Baird has been a spectacular failure at acquiring major league talent. While acknowledging that he is working within small market limitations, AB suffers because he takes the same approach to major league talent acquisition as he does to minor league talent: he's always trying to find the diamond in the rough, on the cheap. This works fine for minor league talent, because its practically risk-free; the only drawback is having to use a spot on the 40-man roster. There is a low level of risk for a modest level of reward. It works terribly for major league players, because all C grade major league veterans have established a pedigree of mediocrity, injury or decline. There is a high level of risk for a modest level of reward.

Take this year, for instance: Jose Lima, Terrence Long and Eli Marrero.

-- Combined salary: $10,575,000. I understand that this isn't all new salary; the Royals traded away Darrell May's salary in exchange for Terrence Long's (higher) salary, and the Braves are paying for a small portion of Eli Marrero's salary. But AB made the ultimately disastrous decision to re-sign Darrell May in the first place, so we shouldn't give him much credit for "dumping" it in exchange for a $5 million backup outfielder (who has admittedly played above expectations thus far).

-- Combined win share totals of these three (Lima, Long and Marrero) : -1. In terms of production, these players are a net loss to the Royals, but even if they played up to their potential they're still going to provide a rotten ROI. The Royals could almost certainly get the same or better level of production from replacement level minor leaguers at a fraction of the cost.

I think there's something to be said about young players benefiting from having veteran players around (and I think that's been a part of the Royals recent return to normalcy), but how valuable can veterans who set a terrible performance example be? Jose Lima isn't exactly a beacon of light getting lit up every 5th day.

A constant refrain from the Royals is that they can't afford to sign big ticket free agents, because a) they can't commit to a high salary level for one player, and/or b) they need payroll flexibility that doesn't allow them to commit to long-term deals. The Royals aren't going to sign the Carlos Beltran's of the world, but overall I think this argument is specious and gives the GM too much shelter. If the Royals continue to sign the high-risk, injury-prone, speculative one or two year deals in the $2 to $4 million range and they don't pan out (which has been the case with practically EVERY AB veteran acquisition), then they have prefabricated consolations built-in. They knew it was a risky signing, but it was reasonable given that the Royals aren't committed to much money or a long contract. Low-risk, high reward, so what's the harm? I have been sympathetic to this line of thinking until this season, but its become patently obvious that it doesn't work.

And its not about money. The Royals have demonstrated that they've perfectly willing to shell out between $8 to $12 million to sign borderline major league veterans every year, so there isn't any reason they couldn't sign a pitcher of Matt Clement-caliber to a 4 year, $40 million contract (accounting for the Royal premium) and fill in the other roster slots with the GOOD kind of free talent - minor league free agents - who will provide the same level of production as Eli Marrero.

The issue is that they REALLY can't afford to make a mistake with a high salary, long term contract (ahem, Mike Sweeney), but isn't the job of the GM to make the right decisions? How else do we evaluate them? The Twins are in the same low revenue pickle as the Royals, but they made two major commitments in the offseason for two very good pitchers. Maybe Radke will fall off a performance cliff, maybe Santana will blow out his shoulder. But its better to assume that risk than continue to spend $10 million on a gaggle of retread veterans.

Of course, all of this is about playing the hand they've dealt themselves the proper way. But in fact the Royals just haven't developed enough of their own talent to fill key positions, nor enough organization depth to use someone else to step in if the prospects in question don't pan out (which is very often the case). Ideally, they would use their payroll flexibility to retain impending free agents and pay arbitration-level salaries to quality players approaching free agency. But the Royals haven't developed enough good players to apply this method, so the Royals have to rely on cheap major and minor league free agents to fill these voids, and all things being equal this is a much less effective way to build a baseball team.