Hey Neukom! My Business Plan: Draft Philosophy and Strategy

This is the latest in the series that I've been publishing (but it's been a looong while since I added one), here is a link to the Table of Contents, which I just put together recently and will updated as necessary when I add to this series or update any of the chapters.

The MLB Amateur Draft Is Worse Than Most Think

As I have posted before, the draft is a crapshoot (I wrote this under a previous handle). When you are winning, you have lousy draft position, the most you can hope for is around a 10-15% chance with your first round pick in the last third of the round of locating and selecting a amateur who will have the necessities to become a good to great player. Even when you are losing hand over fist, the first pick overall is not even a coin flip on whether he would be a good player or not, though close. Thus, you need a strategy that maximizes your draft picks for finding players for your 25-man roster, no matter where you pick in the first round.

Draft Picks, Like Any Rare Resource, Must be Maximized

With a scarce and rare resource, like a draft pick, you need to maximize it by focusing them on something and you need a strategy that will do that. Focusing on pitching, like the Giants have since almost when Sabean took over (and basically after Dick Tidrow became his VP of Player Personnel) is probably the best way to do it. With the success rate falling exponentially, even when you select the 50 total overall picks most teams select, you are not going to find a good player after the first round very consistently at those odds. It is even worse than a crapshoot, it is finding the proverbial needle in the haystack.

Given such a poor success rate with the first round pick when you are winning, you can only hope to find one good player with your first round pick every decade that you are winning consecutively. That is not a very good replacement rate.

The fact is that the historical performance is even worse after the first round. Just making the majors is a pretty low success rate, somewhere in the 10-15% range. Even at a 1% success rate for finding a good player after the first round, at 50 picks per year, that is a good player every 2 years, only 5 in a decade. Plus the one a winning team would pick on average, that is 6 good players in a decade.

However, there are 13 starting positions on a team plus a closer, and not all good players last for a whole decade. With maybe 6 good players drafted in a decade, that means that less than half of a starting team can be replaced in a decade, assuming you started out with good players at each position. Thus, no team is going to fill in all their starting positions with good players via the draft alone when winning. There is not enough talent in the prospect pool each year to fill up all the spots with good players. Thus, each pick needs to be maximized.

In addition, a consequence of this dearth of talent is that any strategy for building a winning team has to assume that you will be using free agency to fill in the gaps in your roster. And as long as you sign good players to free agent contracts, the picks you give up is a small price to pay for a good player because the odds of getting a good player is much greater when you sign one than when you pick one, even a pick in the last half of the first round.

Pitching, Pitching, Pitching

As shown in the plan so far in the other chapters, pitching is key to building a more successful team in the playoffs. So it would make sense that one might then focus on pitching in the draft. This way, you control the supply of the critical skills necessary for building a team that maximizes their possibilities of success in the playoffs. However, there is another good reason: roster makeup and flexibility.

Pitching Provides More Options

Let's say you are drafting and have a choice between two guys you think will be equally great, but one is a 1B and one is a starting pitcher. However, what you see is not what you get: sometimes (actually, almost all the time) the prospect fails. Getting a starting pitcher gives you options.

Many a failed pitcher can go to the bullpen. Not only can he go to the bullpen, he can be your long man, middle-innings, set-up, or sometimes even closer. So even when a pitching prospect fails to become a starter, he could fill in up to four other spots on the MLB roster.

Now lets say that both were a success, you now have a great player. If you have the 1B, and another great player is playing 1B, you now have a dilemma (see Giants McCovey/Cepeda and Rangers Teixiera/Gonzalez/Hafner) that does not always resolve itself nicely. If you have a starting pitcher, however, depending on how good he is, he can fill one of up to five spots in the rotation.

A pitcher could fill one of up to 12 positions on the MLB roster, a position player can fill maybe 2 positions relatively evenly, and at best 3, maybe 4, and that usually means you take a hit on defense if he is playing out of position.

Thus, focusing the draft on starting pitching gives you much more flexibility in filling spots in your 25-man roster, helping you fill up more spots and in a faster timeframe. Any pitcher should theoretically fill at minimum the last two spots in the rotation (or more if better) and somewhere in the bullpen outside of the closer and two set-up men, another 4 spots (or more if better). The majority of position players can fill at best 3 spots in the field (the three OF spots or 2B/3B/SS) and most really only can play 2 spots generally at the most. That will help fill your MLB roster with home-grown prospects faster and to a great extent than if you focused on position players or evenly between the two.

Focus, Not Exclusively

Now this is very obvious, but I am not advocating that a team should draft only starting pitchers, that would be suicide. You should never draft based on filling a spot in your lineup, you must always respect the talent that is available to you with any draft pick. Thus, if there is a hitter available who is clearly the best player, then you should pick him, even if you are focusing on pitching.

However, there will be cases where the prospect is just one of many who appear to be equally talented, or closely so. And in those cases, you should go for the starting pitching. Given equally talented prospects, the flexibility in filling the pitching staff is an advantage that tips the scales towards selecting the pitcher.

And by the time you get to anywhere around the 3-5 round (I would guess-timate), when the odds of finding a good player falls to roughly 1% or less, the odds of finding a good player is so low that there should be some competitive advantage gained by a team that focuses on one particular skill particularly well, such as pitching.

Pitching Is the Key

Focusing on pitching works in so many ways. As Baseball Prospectus and The Hardball Times showed, success in the playoffs can be positively influenced by good pitching and fielding whereas offense plays no significant part. But pitching also works in building up a team in a faster and more efficient manner.

Another thing I would posit is that this strategy is even more effective for NL teams to follow. AL teams have a position that NL teams don't worry about: DH. A good hitter who cannot field any position acceptably is useless and thus of little value to an NL team, but he would have value, potentially good value, for an AL team. Thus, over time, AL teams will have a subtle preference for hitters who might not be good fielders, and when they are selecting this player, that will sometimes leave a more valuable pitcher (from the NL team viewpoint) still on the board for the NL team to select. That would give NL teams an overall talent boost in terms of available pitching talent when it is their turn to select and a AL team ahead of it selects a hitter that is of lesser value to the NL team over a pitcher that would have been otherwise selected and of greater value to the NL team.

Overall, finding good players is such a crapshoot that you cannot effectively plan for building a team. When you find one, you can only shout "Eureka!" If a team focuses on position players or split it evenly between position and pitching, there will be the times when you find out that you developed multiple players who can only play one or two positions. That forces you to play someone out of position, which weakens one of the key qualities of a successful team in the playoffs - fielding - or forces you to trade for what you need, and as the history of baseball shows, trading is not a science, a lot of mistakes are often made.

By focusing on pitching generally in your overall draft, you can mainly improve your team over time. No matter how good your future ace looks like (for example, Matt Cain), if you find another future ace (for example, Tim Lincecum), you can easily slot him into the rotation and move everyone else down. And if your awesome starter can't handle starting, then you throw him into the bullpen, where maybe he can be a closer (for example, Brian Wilson). And as you build the pitching staff over time (Jonathan Sanchez and Madison Bumgarner), you could reach the point where you have so many good pitchers that you can start trading off starters to boost up your lineup and/or your farm system greatly without missing a beat in the pitching staff.

The Giants are reaching such a point in their rebuilding cycle, as Jonathan Sanchez is looking more and more like a potential ace in the making, and with another good season under his wing in 2010, and with Bumgarner basically ready to take Sanchez's place, he could be traded, like Dan Haren was, for a bushelful of good and nearly ready prospects who would restock our farm system for the next 3-4 years plus supply one or two prospects about ready to start in the majors. And with Wheeler hopefully coming down the pike in 2-4 years, that could open up another trade possibility within the rotation, and we have another delightful dilemma coming up in the future.

Giants Sign Moto, Invite to Spring Training

Baggarly reported that the "Giants signed RHP Guillermo Mota to a minor league deal and invited him to big league camp." He's 36 YO but had a great season last year for the D-gers, with a 3.44 ERA in 61 games, averaging more than one inning per outing, and even did well against LHH.

Unlike Kim or Ramirez, he's being invited to the big league camp, so he's a more significant addition than either of them, particularly since he was actually successfully performing last season. As Baggarly noted, if he can duplicate his performance, he would essentially replace Bob Howry, who signed with the D-backs (good luck in a hitter's park!).

Baseball Forecaster (just got it, hot off the presses!) is a bit down on him, though. They project a 4.03 ERA and 1.31 WHIP vs. his 3.45 ERA and 1.18 WHIP in 2009. And that makes sense, his numbers the previous four seasons are not that good, making 2009 an anomaly, though perhaps he was learning and changing as he improved in 2008 and improved further in 2009, on an overall basis. In addition, as they note, his declining strikeout rate "is a bad sign for a pitcher who has always lived and died by the K." Downside: 5+ ERA, 1.50+ WHIP.

A drop in performance makes sense in general because LA has an extreme pitcher's park, so Mota moving anywhere else would be expected to not do as well as he did in LA. And that is shown by his splits: he had a 2.21 ERA at home, but 5.02 ERA on the road. And his strikeout rate was horrible on the road. Another bad note is that he has been horrible when pitching in AT&T. He has also been bad in AZ and SD as well, plus of course COL.

Giants Thoughts

I would not put a lot of hope into Mota being the final piece of the 2010 Giants' bullpen but it does not cost much to sign him and have him around in case he can deliver.

It would be nice if one of these minor league signings work out but the fact that they are signed to minor league contracts show how unlikely they are to produce, else they would have gotten a major league contract. Like throwing spaghetti to the wall and seeing what sticks. That is how we got Yabu a couple of years ago, Medders and Miller last year, Jeff Fassero and Tyler Walker previously.

We also have internal candidates battling for a bullpen spot: Alex Hinshaw, Waldis Joaquin, Geno Espinelli, and Steve Edlefson, and perhaps someone among Dan Otero, Joe Paterson, and Henry Sosa.

In addition, Henry Schulman reported that:

The Giants also signed several six-year free agents to minor-league contracts and invited them to camp, which is how they got the successful duo of Medders and Justin Miller last year. They include Denny Bautista, Santiago Casilla, Osiris Matos (who came up through the Giants' system), Tony Peña Jr. and Felix Romero

Them, plus Kim and Ramirez, makes for a pretty big group of players battling for a bullpen spot. I'm still hopeful about Matos - I'm still not sure why he was DFA'ed last season nor why no team took a flyer on him - but he has done very well in the minors and in AAA, and I'm glad he decided to come back to the Giants and give it another shot. One of my prospect books thought that he had the stuff to be a closer at some point, so maybe he can harness that in 2010 for us.

Giants Weekend News: Wilson Agrees; Kim Comeback

As could have been easily predicted, the Giants signed closer Brian Wilson to a contract for the mid-point between the Giants' $4.0M offer and Wilson's $4.875 request, or $4,437,500, as reported by a number of sources, including sfgiants.com. The difference was so little between the two that this compromise was the obvious thing to do.

That represents over a 9-fold increase in salary for Wilson, who earned $480,000 last season. As a super two (due to two long stretches in the majors in his first two seasons, then the last two full seasons), he reached arbitration sooner than he normally would have and gained about $4M in pay due to this designation. Wilson will now easily be able to afford the gourmet pre-cooked foods pre-prepared for him to eat that Zito had introduced him to when they trained together last off-season.

Giants Handling Arbitration Like Usual: Get'em Signed

The Giants have handled each of their arbitration cases from low to high. First Medders for $820K, almost doubling his $475K salary fro 2009. Then Jonathan Sanchez for $2.1M, nearly quintupling his $455K salary in 2009, plus performance bonuses. Now Wilson for $4.4375M, over 9 times his $480K salary in 2009.

It is now down to Lincecum, who should get at minimum the highest salary for a player in his experience status (super-two), either the $10.5M mid-point between the Giants $8M and Lincecum's requested $13M, up to their figure if they decide to go to arbitration and win the case. The Giants have rarely had to go to arbitration, prefering to settle with the player before the unpleasantries that attend these arbitration hearings.

One of the few they had to go to was with A.J. Pierzynski, where it was obvious that they were going to lose, they way under offered. As I and a number of people discussed and debated on a previous post, the general feeling is that the Giants underbid by at least $1-2M, and that if the case were to go to a hearing, Lincecum would win the case and get $13M. I would expect the Giants to try to negotiate something in the $11-12M range plus performance bonuses that could push Lincecum above the $13M as an incentive to get him to settle beforehand.

I think the Giants did about as well as they could have done with Lincecum. Too low a bid, and you risk losing the case easily to the player. Too high a bid, and you have to pay that much more in salary to the player, whether through settling or going to arbitration.

$8M is in the range where it had to be given that Ryan Howard got $10M, which is the current record salary, but as we opined, on the low end. Arguments could be made that traditionally pitchers are not valued as greatly as position players, plus there is the salary deflation that appears to be happening for players due to the bad recession of 2009, but to me the arbitrators have been biased towards the players in general, and thus, as much as it might hurt to raise their offer, I think you just have to err on the high side rather than the low side.

Kim Comeback

Former All-Star and D-back closer, Byung-Hyun Kim, signed a minor league contract with the Giants and will join them in spring training. He last pitched (poorly) in the majors in 2007, the last of 9 seasons spent in the majors. He took a breather for a couple of years in Korea and is now 31 years old, re-energized and refreshed.

He had a 3.53 career ERA as a reliever, so he would be quite an addition to the bullpen if he is anywhere near as good now. He wanted desperately to be a starter and that probably is what helped caused him to do so poorly in his later years as he desperately held on to trying to win a starting rotation spot instead of focusing on actually pitching well. And with his experience as a closer, if he is anywhere near as good as he was as a closer, he would be a great right-handed complement to Affeldt in the set-up role, with Romo and Runzler providing very good backup there should either have a bad outing.

And if he doesn't do well, it would not have costed the Giants much, probably just for room and board during spring training, I don't think any of the players are paid anything for attending spring training, just per diem and getting housing. It is the type of low risk and potentially high reward situations that the Giants should be seeking at this point.

In addition, Horacio Ramirez was signed to a minor league contract as well. He pitched well enough when he was with Atlanta, but was never one to strike out many batters and thus ended up walking way too many to be effective in the long run, thus far. Also he had an injury in 2004 that took away half his season, plus injuries in 2006 and 2007 that took significant chunks of the season away as well. His last effective partial season as a starter was in 2006, and he hasn't really been that good as a reliever in the three seasons since. He is, at best, going to be a backup starter/reliever in AAA who would only come up if our #5 starter is unable to perform well enough (whether injury or poorly performing) or if one of our relievers are injured or performing horribly and I would not bet on him reaching 40 wins in his career (he's at 39 right now).

Given that the Giants are looking for someone to fill a bullpen spot (plus you never know if Runzler might have a set-back, much like Wilson did previously, in spring training, and they would need to fill another spot in the bullpen), the Giants should be inviting at least another 2-3 of these types of signings. Santiago Casilla and Horacio Ramirez are two of the better known names, but they haven't had any success at the major league level for years now, so I just see them as filler unless they see something they can fix in their mechanics or repertoire that would boost their performance.

Kim at least was very successful at one point and thus could come back and do it again, given that he should have more experience now and is not distracted by his obsession with winning a starting position in the rotation (he is content to be competing for a bullpen spot apparently). He has also not pitched in any organized baseball league for two years now, so hopefully any of the injuries he has had in the past 5 years are fully healed.

The odds are long against him, but the Giants have pulled a rabbit out of the hat before with Yabu doing well for us, so it is not entirely improbable. And, again, it does not cost much to give him a shot and presumably our scouts have checked him out and OKed him.