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October 27, 2011

Transaction Analysis

One Curse Down, One to Go

by Ben Lindbergh

CHICAGO CUBS
Team Audit | Player Cards | Depth Chart

Signed RHE (right-handed executive) Theo Epstein to a five-year contract. [10/25]

When the Nationals signed Jayson Werth to a seven-year contract last winter, we were told that what they’d really done, in addition to the more mundane achievement of finding a right fielder, was “change the culture.” The most important byproduct of the move wouldn’t necessarily be Werth’s value on the field (two wins and counting!), but the allegedly legitimizing effect his arrival would have on the organization. With Werth in town, free agents would come flocking to Nationals Park, secure in the knowledge that the Nationals A) wanted to win, and B) were willing to spend (unreasonably) large sums in pursuit of a pennant.

If you thought Werth’s first season in Washington was a disappointment, just wait till you see Theo Epstein’s. Removed from the friendly confines of Citizens Bank Park, Werth hit only 20 home runs. Having bid farewell to Fenway, Epstein won’t hit any. Someone in a suit can do plenty for a team’s on-field fortunes, but not directly; Epstein’s arrival doesn’t bolster a bullpen beset by shaky performances, strengthen the NL’s second-most-porous defense, or up the on-base percentage of a chronically walk-averse offense. Chances are he can’t even channel Alex Anthopoulos and find a GM gullible enough to take Alfonso Soriano’s contract (or even Carlos Zambrano’s) off the Cubs’ hands. As such, the immediate payoff of this protracted tug-of-war for one of baseball’s brightest executives, which resulted in Epstein being appointed as Chicago’s new president of baseball operations, could prove disappointing to any observers unreasonably expecting an overnight improvement.

As Epstein noted in some of his introductory remarks, while the similarities between the Boston organization he took over in 2003 and the Cubs organization he inherits now are obvious—the interminable title drought, the ancient park, the loyal, if long-suffering fanbase—the differences are almost as difficult to miss. In November of 2002, Epstein was hired to oversee a team fresh off a 93-win season, with one of the best pitchers ever (Pedro Martinez) and one of the best hitters ever (Manny Ramirez, not to mention a still-productive Nomar Garciaparra) already on the roster. By contrast, the Cubs are coming off a 71-win, second-to-last-place finish, and while the team does boast its bright spots (Starlin Castro chief among them), competitiveness isn’t just around the corner. Epstein’s last first season led to a seventh-game ALCS loss, with a World Series victory for a sequel; don’t expect a similarly rapid rise to success the second time around.  

Those caveats and obstacles aside, the Cubs are better bets to end all talk of billy goats by, say, 2015 than they were with Jim Hendry in charge. In his first press conference as a Cub, Epstein made mention of the pitfalls of paying for past performance, most likely with players like Mike Lowell and John Lackey in mind. The same principle applies to executives. If the Cubs were simply paying Epstein for the pennants in his past, bringing him on would be a bad idea, and were he a player introduced to great fanfare at age 37, even a particularly well-preserved one, we’d note that his best days were almost certainly behind him. Fortunately, the aging curve for GMs (and presidents of baseball operations) is a good deal more forgiving, and Epstein is still very much on the young side for a man tasked with running a team. That doesn’t mean that his second act will be as successful as his first, but there’s no obvious reason why the Epstein approach to team-building can’t translate to another big market, especially if he's re-energized by a change of scenery and a new challenge, aside from the fact that the competition hasn’t been idle and rival teams are smarter than they were in 2002 or even 2007 (in part because Epstein’s acolytes have found homes in other front offices).

Epstein has earned enough accolades that I needn’t recount his qualifications here; hell, we already wrote a book about them. Suffice it to say that Theo is a top-tier talent both in his ability to evaluate and acquire talent and in his skill at instituting a self-sustaining program of player development; he’s also among the best at dealing with the media, and he’ll be sure to move quickly to get the late-adopting Cubs an equivalent to Carmine, the information management system whose development he oversaw in Boston. What’s more, if Werth was valued by Washington for his potential as a tool for recruiting player talent, then Epstein has the same significance to Chicago. His recruiting powers are paying even more immediate dividends, as Padres GM Jed Hoyer and AGM Jared McLeod will be getting the gang back together under Epstein in Chicago, with Hoyer serving as GM. The round-the-clock business of running a baseball operations department has become too demanding for any one man, so one of the most important measures of a modern GM is the quality of the co-workers with whom he chooses to work. As Epstein plays Mark Shapiro to Hoyer’s Chris Antonetti, the two will continue to add to an assortment of experienced and innovative assistants, giving the Cubs a braintrust that one day might make Epstein himself dispensable.

What is an executive worth? Compare Epstein’s salary (reportedly $15 million over five years, plus a $3.5 million transfer bonus) to similar amounts made by players: the Cubs are on the hook for roughly equal amounts to Epstein and Sean Marshall, a roughly one-to-two win player, in 2012. On the free-agent market, a win goes for far more. What that pay scale tells us is either that teams place far more importance on their players than they do on the masterminds who assemble them, or—maybe more likely—that the supply of potential GMs outstrips the limited demand by a much wider margin than is the case with players, leading to a higher replacement level.

That jibes with something we’ve heard over and over—that once a process is in place, the executive who put it into place becomes inessential, if not quite interchangeable or disposable. Since the Red Sox have already turned Epstein’s vision into a reproducible reality and lined up his capable understudy, Ben Cherington, to replace him, his value is far higher to the Cubs, who have much more to gain from his presence. In light of that calculus, it’s not surprising that this complicated deal got done, even independent of any allure Chicago might have for Epstein as he seeks to cement a legacy as the most memorable Cubs GM and the man who brought titles to two towns where so many had failed before him.

 It may take some time for the Cubs and Red Sox to sort out the matter of player or cash compensation for Epstein’s old club, a process in which the Commissioner is likely to become involved, but the prospects changing uniforms are unlikely to be big names (especially since Cubs prospects with big names are somewhat scarce these days). As Kevin and Jason discussed on Episode 69 of the Up and In podcast, a baseball team’s winter work doesn’t wait until after the World Series; most teams have already had their organizational meetings to determine off-season strategy. With the Winter Meetings less than two months away, Epstein, Hoyer, Josh Byrnes (who ascends to the top job in San Diego) and all the other front office dominoes falling as a result of this game of general managerial musical chairs are already behind the curve; both the Cubs and the Red Sox need to decide who’ll be managing their teams come spring, but that could be the least pressing of their problems, given that arbitration and other signing decisions are just around the corner. The coming weeks and months will bring further developments as the execs of the hour take a break from posing for photos fit for GQ and furiously familiarize themselves with their new players and the gigabytes of proprietary data now at their disposal, but meaningful changes are already afoot. If there’s any team in need of a fresh start, what Epstein called a “Cubs Way,” it’s the Lovable Losers, who now have a better reason than usual to wait ’til next year.


Ben Lindbergh is an author of Baseball Prospectus. 
Click here to see Ben's other articles. You can contact Ben by clicking here

Related Content:  Chicago Cubs,  Cubs,  Theo Epstein,  The Who,  The Process

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