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February 23, 2010

Prospectus Hit and Run

AL Central Competitive Ecology

by Jay Jaffe

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Since its inception in 1994, the American League Central has been the Junior Circuit's weak sister. Its teams have posted cumulative records above .500 only four times, topping the league only once (1996) and trailing it nine times, including six of the last eight. While the division has produced its share of memorable races for the postseason-including Game 163 tiebreakers in each of the past two years-it has rarely played host to two strong teams at the same time. Or even one. In non-strike years, the AL Central champions have averaged just 92.9 wins, compared to 95.7 for the West winners and 98.4 for the East winners, and they've produced just one wild-card winner, compared to three for the West and 11 for the East.

Money matters only go so far in explaining that outcome. On the one hand, the teams in this division historically haven't drawn well, even before the economic downturn that hit the Midwest disproportionately hard. The White Sox, who at least have the excuse of sharing their city with the Cubs, have never cracked the three-million mark in attendance, the Tigers have done so only twice (2007 and 2008), the Indians haven't done so since 2001, the Twins not since 1988, and the Royals... wait, is Kansas City still in the league? Only in 2007 has the Central placed more than one team in the upper half of the majors' attendance rankings; in many years they haven't had a single team.

On the other hand, while the White Sox and Tigers both occupy large markets and have spent their way into the league's top five in payroll in recent years, those two teams have had only intermittent success over the lifespan of the division, with three flags and one wild card between them. Meanwhile, the smaller-market Twins and Indians have combined to win 12 of the Central's past 15 titles (again, not including the strike year). Perhaps what's most surprising, then, is the fact that even with a relatively low threshold for success, there hasn't been all that that much turnover atop the Central standings.

Before we dig into the individual teams' plights, here's the boilerplate, for those joining us in medias res... This series builds on the recent work of colleagues Shawn Hoffman, Matt Swartz and Jeff Euston as well as older work by Keith Woolner, Doug Pappas, Nate Silver, and Neil deMause. You can read Keith's introduction to the concept of competitive ecology here, dig the late, great Doug's introduction to Marginal Payroll Dollars per Marginal win here (as part of his must-read 2001-2002 series, "The Numbers"), catch Neil's application of Nate's marginal-dollars-per-additional-win curve here, see Shawn Hoffman's introduction and then revision of his Payroll Efficiency Rating, chew on Matt Swartz's work on service time contracts and wins here and here, and check out the details of each team's payroll situation at Jeff's Cot's Baseball Contracts site. Note that PER' is my break from Shawn's work, using actual wins instead of third-order ones, and end-of-year payrolls instead of Opening Day ones. I also normalized the figures on an annual basis such that the yearly average is always 1.0. NM% is the percentage of WARP derived from Non-Market salaried players, a figure by which we can infer teams' relative abilities to produce talent from within and to buy it on the open market, by extension providing something of a proxy for team age via the distribution of the two.

Chicago White Sox


Year  Wpct   HLF  Attendance      Payroll       MP/MW     PER'   NM    AM   Tot   PctNM
2007  .444  .427  2,684,395   $100,189,832   $3,826,916   0.71   3.5  23.3  26.8  13.1%
2008  .546  .543  2,501,103   $113,641,026   $2,577,434   1.16  26.5  22.3  48.8  54.3%
2009  .488  .493  2,284,164   $105,287,384   $3,094,980   0.80  20.8  19.4  40.2  51.7%
Avg.  .493  .488  2,489,887   $106,372,747   $3,057,619   0.89  16.9  21.7  38.6  43.9%

Post-season appearances: They won the World Series in 2005, and also won the AL Central in 2008 via a Game-163 tiebreaker.

Since breaking their 88-year World Championship drought in 2005, the White Sox have been a hit-or-miss proposition, alternating years of contention with years of futility: 90 wins in 2006, 72 in 2007, 89 (and a division title) in 2008, and 79 last year. In the aftermath of their World Series win, the team's payroll ballooned from $73.2 million to $96.9 million, and then even higher thanks largely to the additions of Jim Thome and Javier Vazquez, in addition to fat extensions for Paul Konerko and A.J. Pierzynski. Over the next year, they re-upped Jermaine Dye and overspent to sign relievers Scott Linebrink and Octavio Dotel.

Those didn't all work out so well. The Sox were the majors' fourth least-efficient team in 2007, with the single lowest contribution from Non-Market talent of any team over the past three years. Luckily, some of general manager Kenny Williams' trades for young talent began paying off, thus offsetting a reliance on Auction-Market talent. A pair of young hurlers acquired back in December 2006, John Danks and Gavin Floyd, vaulted from a combined 0.8 WARP in 2007 to 9.3 in 2008. Carlos Quentin, acquired in December 2007, added another 5.3 WARP, and suddenly the team was 15th in the league in Non-Market talent, not to mention AL Central champions.

Williams tried to milk one more run out of that core in 2009, but in doing so he traded young talent for old, swapping four players, including 2007 first-round pick Aaron Poreda, for the Padres' Jake Peavy, whose three year, $52-million extension hadn't even kicked in yet. He also took on more than $61 million worth of Alex Rios' contract by plucking the Blue Jays outfielder off waivers. Neither player made much of an impact down the stretch-Rios was awful, Peavy merely unavailable due to injury-and the team finished below .500 again. Even having shed the deals of Thome, Dotel, Dye, and Vazquez (the latter traded last winter), Williams has $101 million committed for 2010 thus far, with five players making about 60 percent of that (though the Dodgers are paying for the bulk of Juan Pierre's deal). Given that the system is thin in terms of near-ready talent, the Sox have clearly made the choice of trying to spend their way back into contention.

Cleveland Indians


Year  Wpct   HLF  Attendance      Payroll       MP/MW     PER'   NM    AM   Tot   PctNM
2007  .593  .566  2,275,916    $71,887,236   $1,292,136   2.07  42.2   6.3  48.5  87.0%
2008  .500  .517  2,169,760    $78,663,582   $2,090,851   1.06  36.3   6.5  42.8  84.8%
2009  .401  .439  1,766,242    $77,192,253   $4,023,918   0.64  26.9   5.4  32.3  83.3%
Avg.  .498  .507  2,070,639    $75,914,357   $2,026,851   1.23  35.1   6.1  41.2  85.3%

Post-season appearances: After winning six division titles and two pennants in seven years from 1995-2001, the Indians were absent from the playoffs until winning the AL Central in 2007. They eventually lost to the Red Sox in a seven-game ALCS.

Though they've since handed the baton to the Twins, once upon a time, the Indians were the class of the AL Central. Towards the middle of the past decade they were on the rise again; after a near-miss of the postseason in 2005 (they topped the first season-ending Hit List), they came within one win of the World Series in 2007 via a 96-win team which posted the second-highest single-season PER' of the past three years, not to mention the third-highest Non-Market salary WARP total. That fine season helped them compile the majors' sixth-highest PER' over the time span, just a fraction of a percentage point behind the Twins.

Alas, the Indians' bid for continued dominance crumbled with alarming rapidity. Slow starts under manager Eric Wedge doomed their playoff hopes by mid-summer in each of the past two seasons, compelling the Indians to trade the reigning AL Cy Young winners, CC Sabathia and Cliff Lee, in consecutive summers. Veteran Casey Blake left town in 2008 as well, and last summer saw a more thorough housecleaning as Victor Martinez, Rafael Betancourt, Ryan Garko, Mark DeRosa, and Carl Pavano were traded, the latter two having barely unpacked their bags as off-season acquisitions. Though the end result was a 65-win season, the team's worst showing since 1991, those deals have gone a long way towards rebuilding the Indians' system. First baseman Matt LaPorta and left fielder Michael Brantley, both acquired in the Sabathia deal, could be part of their 2009 lineup, as could catcher Lou Marson, acquired in the Lee deal. The real treat is catcher Carlos Santana, acquired in the Blake deal; he ranks eighth on Kevin Goldstein's Top 101 Prospects list in the new Baseball Prospectus 2010 annual, and should reach the majors later this summer.

The Indians ranked just 17th in Non-Market salary WARP this past year because those deals have yet to fully pay off at the major-league level, but the trades run true to form for GM Mark Shapiro, whose wheeling and dealing has covered for more than a decade of brutal draft results. Since choosing Sabathia in the first round in 1998, the Indians have gotten just 1.5 WARP from their first-round picks, with recent yields consisting mainly of eminently hittable lefties of no fixed hairstyle like Jeremy Sowers and David Huff. Jeremy Guthrie, their most successful draftee, has accrued nearly all of his value for the Orioles after being lost via waivers. Shapiro (who was kicked upstairs last week) can point to past success in bringing young building blocks such as Shin-Soo Choo and Asdrubal Cabrera (both acquired in separate 2006 deals with the Mariners) into the organization via trade. Neither will reach first-year arbitration eligibility until next year, underscoring the youth of the team's core.

The Indians still have a few hefty salaries on the books in Travis Hafner, Jake Westbrook, and Kerry Wood, who will make over $10 million apiece in 2010, over 60 percent of their current payroll commitment of $52.4 million (though that figure will rise as the team renews its pre-arbitration contracts). The real question is whether new GM Chris Antonetti will look to deal Grady Sizemore, who's signed through 2011, his first year of free-agent eligibility, with a club option for 2012. The team doesn't absolutely need to deal him, but Sizemore's price tag ($21.6 million over the next three years, including that option) could help them reap a windfall, assuming the center fielder rebounds from his injury woes. On the other hand, having fallen to 26th in the majors in attendance last year, the Indians can ill afford to lose Grady's Ladies.

Detroit Tigers


Year  Wpct   HLF  Attendance      Payroll       MP/MW     PER'   NM    AM   Tot   PctNM
2007  .543  .548  3,047,139    $98,519,780   $2,230,451   1.21  23.6  23.1  46.7  50.5%
2008  .457  .477  3,202,645   $136,198,404   $4,932,221   0.57  24.8  13.0  37.8  65.6%
2009  .528  .500  2,567,185   $139,429,408   $3,477,654   0.82  29.9   9.1  39.0  76.7%
Avg.  .509  .508  2,938,990   $124,715,864   $3,357,722   0.83  26.1  15.1  41.2  63.4%

Post-season appearances: The Tigers made their first post-season appearance since 1987 by winning the AL wild card in 2006, and they advanced to the World Series before losing to the Cardinals in five games.

The Tigers went from being a 119-loss laughingstock in 2003 to the AL champions in 2006, and they're still dealing with the aftermath of that rollercoaster ride. After ranking 14th the majors in payroll during their pennant-winning season, they spent freely, climbing to ninth in 2007 and to third in 2008, increasing their payroll 52 percent in two years via the expensive additions of Gary Sheffield, Miguel Cabrera, Dontrelle Willis, and Edgar Renteria, and generous extensions awarded to Carlos Guillen, Jeremy Bonderman, Nate Robertson, and Brandon Inge. Soon after trading for Cabrera, the Tigers signed him to an eight-year, $152.3-million deal, at the time the fourth-largest contract in baseball history.

Collectively, the returns on their investments have been underwhelming, as the Tigers ahve yet to make it back to the postseason, flopping miserably in 2008 (their PER' was second-to-last in the majors) and then narrowly missing by losing last year's Game 163 play-in to the Twins in extra innings. They've ranked sixth in average payroll over the three-year span, but just 24th in PER'. Near-misses or no, some of the individual returns on the money they've spent have been downright ghastly. Sheffield gave the team just 3.4 WARP-one pretty good season-for his $41 million take from 2007-09; they picked up nearly the entirety of last year's tab after releasing him in late March. Willis lost the strike zone due to what may or may not be an anxiety disorder, likely rendering the entirety of his three-year, $29-million deal a sunk cost. Bonderman's given the team just 0.9 WARP through the first three years of his four-year, $38-million extension, missing more than a year due to surgery to correct his thoracic outlet syndrome. Robertson's been about one win below replacement level during the first two years of his three-year, $21.25-million deal. Guillen has been worth just 3.8 WARP through the first half of his four-year, $48-million deal. Last summer, the team allowed Magglio Ordoņez to trigger an $18-million vesting option, even as the 35-year-old's slugging percentage shrank to .428. Can't anyone here play this game?

Looking at it another way, the Tigers spent $72.3 million on that unhappy sextet last year-more than half their entire year-end payroll-and they got just 1.7 WARP from them, or -0.2 from the five besides Ordoņez. Yet they missed the playoffs by only the slimmest of margins because they actually received decent enough contributions from Non-Market salaried players such as Justin Verlander, Edwin Jackson, Rick Porcello, Curtis Granderson, and Cabrera (despite his end-of-season ugliness) to rank 12th in the majors in that category.

Unfortunately, even as they contended for the Central crown, the Tigers' attendance fell by 20 percent from 2008 to 2009 due to massive unemployment in the region. As if that weren't bad enough, GM Dave Dombrowski's response to all of the dead money on his books was to ship the relatively affordable Jackson and Granderson to Arizona and the Bronx in a three-way deal that brought back center-field prospect Austin Jackson and hard throwers Max Scherzer and Daniel Schlereth. While that may help the team in the long term, it's probably a short-term setback. Having signed Verlander to a five-year, $80-million extension, and then over the weekend inking Johnny Damon, the Tigers have $129.7 million committed to just 19 players for 2010. In the longer view, things are looking up, as the team could get substantial contributions from rookies Jackson, Scott Sizemore (replacing Placido Polanco at second base), and Alex Avila in addition to more innings from Porcello, and after this year, their payroll commitments drop to $55 million for 2011. It will take some time to turn the Tigers into a younger team; in the meantime, they're in for a penny, in for a pound.

Kansas City Royals


Year  Wpct   HLF  Attendance      Payroll       MP/MW     PER'   NM    AM   Tot   PctNM
2007  .426  .426  1,616,867    $62,264,855   $2,530,630   0.87  19.3   8.2  27.5  70.2%
2008  .463  .459  1,578,922    $69,297,547   $2,211,271   0.97  26.7   7.6  34.3  77.8%
2009  .401  .419  1,797,887    $81,917,563   $4,312,047   0.63  25.5   1.5  27.0  94.4%
Avg.  .430  .435  1,664,559    $71,159,988   $2,859,493   0.81  23.8   5.8  29.6  80.5%

Post-season appearances: Call it the Curse of Don Denkinger. Since winning the 1985 World Series over the Cardinals thanks to one of the most famous blown calls in baseball history, the Royals haven't been back to the postseason.

Futility, thy name is the Royals. The once-proud franchise that made the playoffs seven times in a 10-year span back during the heyday of George Brett has had just one winning season since the 1994 strike. That was back in 2003, a fluky showing sandwiched between a pair of 100-loss seasons. Not surprisingly, that futility has taken its toll at the gate, as the team has ranked in the league's bottom three in attendance in every year since 1999 except for that one. Testifying to the limits of their market, the Royals haven't drawn two million fans since 1991.

For the first half of the past decade, the Royals' losing ways didn't cost all that much, as the team generally ranked in the bottom five in terms of payroll while receiving generous amounts of revenue-sharing money. But once current general manager Dayton Moore hit town in 2006, he started making it rain like Pacman Jones gone to Vegas. That's not entirely fair, actually. Much of the cash spent went towards neglected areas of the organization: scouting, player development, international talent, and above-slot signing bonuses for amateur draftees. At the major-league level, their most visible move was the five-year, $55-million deal for Gil Meche in December 2006-more dollars than the team spent on its entire payroll the previous season. Their year-end payroll rose 21 percent from 2006 to 2007, another 11 percent the following year, and then 18 percent last year. In all, that's a 59-percent increase for a team that won only three more games in 2009 than in 2006.

The Meche contract had its critics; a coworker of a BPer famously quipped, "This is like a family on welfare buying a plasma TV that doesn't work," and at the very least, the signing sparked plenty of discussion about the value of bad teams handing out big deals in an effort to move towards mediocrity-much as the 43-119 Tigers' addition of Ivan Rodriguez had a few years earlier. What's followed in its wake, however, have been some palm-to-forehead trades and free-agent signings in which Moore has frittered away significant amounts of cash on replacement-level talent. Jose Guillen, Kyle Farnsworth, Mike Jacobs, Yuniesky Betancourt, Juan Cruz, and Willie Bloomquist collectively cost the Royals about $30 million last year, and they were a collective 2.8 wins below replacement level. Throw in the $17.5 million they spent to milk just 1.8 wins from Meche and Coco Crisp due to the medical staff's questionable competence and the tally comes to one win below replacement via about 59 percent of total payroll. Aside from Jacobs, those aforementioned contracts are the gifts that keep on giving, and they're now accompanied by a dubious multi-year investment in Jason Kendall, who's been worth an average of 0.8 WARP per year over the past three, and at 36 years old, he ain't getting any less dead.

Which isn't to say that the team hasn't had its successes, particularly in the Non-Market arena. Zack Greinke won the AL Cy Young award last year, having overcome an anxiety disorder, and the team has him locked up through 2012, buying out his first two years of free agency. Joakim Soria has become one of the game's best closers, and iron-gloved Billy Butler and Alberto Callaspo can both hit. The team has ranked 14th and 20th in Non-Market salary production over the past two years, up from 24th in 2007. The problem is that they've still got bloated contracts that will keep them from going anywhere, even as they've pared payroll down to about $70 million for 2010. In their small market, the Royals need to be a lot smarter about the money they spend.

Minnesota Twins


Year  Wpct   HLF  Attendance      Payroll       MP/MW     PER'   NM    AM   Tot   PctNM
2007  .488  .487  2,296,347    $71,938,505   $2,016,398   1.02  28.2  10.7  38.9  72.5%
2008  .540  .526  2,302,431    $65,096,667   $1,394,146   1.53  40.1   4.8  44.9  89.3%
2009  .534  .522  2,416,237    $73,068,407   $1,633,866   1.18  37.3   9.9  47.2  79.0%
Avg.  .520  .512  2,338,338    $70,034,526   $1,655,461   1.23  35.2   8.5  43.7  80.6%

Post-season appearances: The Twins won the AL Central last year by beating Detroit in a Game-163 tiebreaker after losing to the White Sox in a tiebreaker the previous year.

Though they haven't won a playoff series since 1991, the Twins' collection of five division titles (not to mention their 2008 near-miss) over the past eight seasons makes them the AL Central's dominant team in that span. They've achieved their success on the cheap, drafting well, developing talent from within, keeping payrolls low, and pulling off a couple of the best trades in recent baseball history. Not too shabby for a franchise that was among those considered for contraction after the 2001 season.

Over the past three years, the Twins have ranked just 24th in average payroll ($1.1 million per year behind the Royals), and 18th in attendance, but they're 10th in winning percentage, third in MP/MW (behind only the Marlins and Rays) and fifth in both PER' and Non-Market salary WARP. Padding their bottom line as it relates to all of that good stuff are draftees Justin Morneau and Joe Mauer, both of whom won MVP awards during their Non-Market years, although the former's 2006 prize-which should have been the latter's-falls outside the window of the three-year span under evaluation. Homegrown hitters like Jason Kubel, Michael Cuddyer, and Denard Span have done their share as well.

The Twins' stretch of dominance would not have been possible without two lopsided deals. Back in December 1999, the Marlins drafted a 20-year-old Venezuelan lefty in the Rule 5 draft, then turned around and flipped him to the Twins for minor-league reliever Jared Camp. That lefty was Johan Santana, who moved into the rotation for good in 2003 and went on to win two of the next three AL Cy Young awards while leading the league in strikeouts for three straight years. After the 2003 season, the team dealt Pierzynski to the Giants for three pitchers, Boof Bonser, Francisco Liriano, and Joe Nathan. Bonser didn't really pan out, but Liriano emerged as one of the game's most exciting pitchers in 2006 before needing Tommy John surgery the next year. Meanwhile, Nathan has established himself as one of the game's top closers, with numbers over the past six years that rival those of Mariano Rivera. Santana was traded after the 2007 season, and while the team hasn't truly replaced him atop the rotation, they've drafted and produced a solid handful of strike-throwing starters over the past several years, among them Scott Baker, Matt Garza (also traded after 2007), Kevin Slowey, and Nick Blackburn.

Having ditched the Hubert H. Humphrey Metrodome, the Twins stand to reap the revenue benefits of a brand new stadium as they move into the outdoor Target Field. They've already bought out the first three years of Morneau's free agency (as well as this last arbitration year) via a six-year, $80-million deal signed in 2008, and they plan to spend an even larger chunk of change on Mauer, though reports of a 10-year contract turned out to be premature jocularity. With Nathan also in the eight-figure range, Cuddyer just south of it, and a double play combination (Orlando Hudson and J.J. Hardy) that for once was assembled rather than scavenged, the price tag is adding up. The Twins have $93.2 million committed for 2010, and another $36.75 million to just three players (Morneau, Nathan, and Cuddyer) for 2011. Even as the money rolls in, the Twins have put themselves under pressure to live up to their winning reputation.

Jay Jaffe is an author of Baseball Prospectus. 
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