The Los Angeles Dodgers have made quite a bit of news around baseball recently, as Guggenheim Partners bought the team for a cool $2 billion. Bill Shaikin of the Los Angeles Times also reports that a TV deal with the team could be worth in excess of $4 billion. Needless to say, the Dodgers will have money to burn for a long time.
Money can be a very toxic privilege to have unless it is in the right hands. The Philadelphia Phillies are a great example. After the 2003 season, when Veterans Stadium closed and was eventually imploded, the Phillies raised their Opening Day payroll from $71 million to $93 million, a marked increase for a team that had traditionally been among the more frugal teams in the National League. They opened Citizens Bank Park by introducing Jim Thome and acquiring Kevin Millwood. After winning a championship in 2008, reaching the World Series again the next year, and winning their division four years consecutively, the Phillies went into the 2011 season with a $165 million payroll, the largest in the National League.
The Phillies, however, have made a slew of poor decisions -- in the eyes of some, anyway -- as a result of having so much financial breathing room. The Dodgers should look at the Phillies' decision-making as a blueprint of what not to do to have a lengthy run of success.
Don't Lose Focus on the Prospects
Under GMs Ed Wade and Pat Gillick, the Phillies' minor league system flourished. The core of their 2008 championship team is owed in large part to the Phillies' excellent scouts. Ryan Howard, Chase Utley, Jimmy Rollins, Pat Burrell, Cole Hamels, Brett Myers, and Ryan Madson were all cultivated in the minors.
However, when Ruben Amaro took over after the '08 World Series, the prospects began to disappear. Baseball America's top-10 prospect list for the Phillies included Carlos Carrasco (No. 2), Lou Marson (No. 3), Jason Donald (No. 4), and Jason Knapp (No. 10), who ended up moving to Cleveland in the Cliff Lee deal. It also included Kyle Drabek (No. 5), Michael Taylor (No. 6), and Travis D'Arnaud (No. 7), who went to Toronto in the Roy Halladay trade after the '09 season. At the same time, Amaro traded Lee to Seattle for three prospects, but reliever Phillippe Aumont was the only one to enter the top-10 list, earning the No. 5 spot in a depleted system going into the 2012 season. In the Hunter Pence trade in 2011, the Phillies sent Jonathan Singleton (No. 2 going into the season), Jarred Cosart (No. 4), and Domingo Santana (No. 9) to Houston.
Trevor May, the Phillies' current No. 1 prospect is a pitcher who, this year, is getting his first taste of Double-A baseball, as is No. 3 catcher Sebastian Valle. Their No. 3 prospect, Jesse Biddle, was drafted in 2010 and is still in Single-A. There will be no youth movement for the Phillies for quite some time because Amaro has sucked the farm system bone dry. The Dodgers would be wise to avoid going all-in for near-future championship runs, as it has certainly made the Phillies worse in the long run.
Be Mindful of Positional Scarcity
Positional scarcity is a concept that has gotten a lot of play in fantasy baseball, but it has significant application to real baseball as well. Some positions are easier to fill with quality players than others. As an example, last year in the National League among players with 300 plate appearances, only three center fielders posted an OPS above .800 while nine accomplished the feat at first base (including four over .900).
The Phillies did not pay attention to positional scarcity when they signed Ryan Howard to a five-year, $125 million contract extension in April 2010. While Howard was certainly an above-average hitter, his production relative to his position was not nearly good enough to merit a contract of that much money and length of time. In 2009, Howard's last great offensive season, he posted a .929 OPS, which was 41 percent better than the National League average. However, relative to other first basemen, it was only 17 percent better than the average.
The Dodgers recently signed Matt Kemp to an eight-year, $160 million contract extension. While that contract is certainly risky in and of itself, it is significantly less risky because Kemp plays what is known as a premium position. When Kemp was the runner-up to Ryan Braun in NL MVP voting last year, his .986 OPS was 71 percent better than the league average and 64 percent better than the average relative to other center fielders.
Andre Ethier is eligible for free agency after the season, and with their influx of money, the Dodgers may be inclined to retain his services in the future. Ethier, though, plays a non-premium position in right field and is less likely to bring the Dodgers a positive return on investment, especially when you bring other factors such as age into account. The Phillies chose poorly when they handed out some of their lengthier contracts.
Devalue the Bullpen
Saberists have been beating this drum for years, but for good reason: Relievers are the most overpaid bunch, by far, in baseball. Last year, starter Roy Halladay threw 233 innings while Jonathan Papelbon threw 64. Despite pitching more than three times the innings, Halladay will make just $9 million more than Papelbon this year. In fact, the four-year, $50 million contract the Phillies gave to Papelbon during the offseason was the richest ever for a relief pitcher -- someone the Phillies will be loathe to use on back-to-back days or for multiple-inning stints.
The Dodgers are, at the moment, running their bullpen optimally. There is no star reliever earning megamillions on a long-term contract; rather, the bullpen consists mostly of homegrown talent (Javy Guerra, Kenley Jansen) and scrap-heap veteran signings (Todd Coffey, Mike MacDougal). There is very little risk involved with this setup. If Guerra doesn't pan out as a closer, they can hand the job to Jansen without having to justify to themselves and to the public why their $11 million closer isn't closing.
When the Dodgers have the ability to spend with reckless abandon, it will be easy to justify throwing $50 million at a reliever. The ninth inning is more important than the first inning, after all. But long-term contracts and relief pitchers are a volatile combination; just ask the Mets about Francisco Rodriguez, the Reds about Ryan Madson, or the Phillies about Brad Lidge.
If the Dodgers want to ensure they have success for many years to come, they need only look at the Phillies and do the exact opposite.