We’re still not even to Christmas, but already several teams have made strong plays for the honor of “most interesting offseason.” You could make a good case for the Dodgers, who gave their front office a potentially highly symbolic reboot before embarking on a spree of high-profile wheeling and dealing. There’s the Marlins, who signed Giancarlo Stanton to the largest contract in the history of professional sports and appear to be making good on their promise to surround him with talent. Either Chicago team would qualify after marquee acquisitions that signal both teams are forcing open their respective windows of contention. And then there’s the Athletics, whose offseason moves would be a fascinating subject even without the inevitable Moneyball-induced paranoia that there’s another side to their deals that no one else sees yet.

I acknowledge that this is probably recency bias talking, but my vote right now would be for the Padres. If you somehow missed the news, San Diego has been insanely busy the past few days. The big headline is the Padres’ brand new trio of potential star-caliber starting outfielders: Matt Kemp, Wil Myers, and Justin Upton. They’ve also acquired or are rumored to be close to acquiring Josh Johnson, Brandon Morrow, and Will Middlebrooks—and they still might not be done. Whatever you think of the specifics of each move, you have to admire the gusto with which new GM A.J. Preller is going for it this winter.

But what puts San Diego over the top for me is that this spending spree has come totally out of left field (pun intended). As recently as a couple weeks ago the baseball world’s consensus was that the Padres were heading toward at least a soft reloading cycle. After all, they’d just come off their fourth straight losing season and reviews of their farm system, while positive, were lukewarm; it seemed a telling sign of the state of the organization that the Padres took the unusual step of firing their GM at midseason. Few teams felt like better bets to sell this winter than San Diego. Yet here we are, talking about the Padres as possible 2015 contenders.

It certainly came as a surprise. But then again, maybe Preller’s bold moves towards contention shouldn’t have been unexpected. Or, to be more precise, maybe we shouldn’t be surprised that we’re surprised. Because with a little bit of quasi-economic thinking, it makes total sense that a team with a new GM would be the most surprisingly aggressive buyer in the league.

A Unique Situation
I didn’t sit down to write this with the intent of singling out Preller and the Padres. Rather, I wanted to lay out a model that explains why a surprise attempt at contention makes sense for a new regime at the helm of a struggling team. Of course, Preller isn’t the only new GM in the league—five other GMs have been hired in the four short months since he took over in San Diego—and none of the others has been as unexpectedly bold as he has. However, I would argue that Preller’s situation is unique, and the things that set him apart from his fellow rookie GMs are indicators of the organizational turmoil that I believe are essential to both the stereotypical (though increasingly rare) front office shakeup and the prediction of surprise attempts at contention.

Of the six teams who have hired new GMs in the past few months, four are the Diamondbacks, Rockies, Rays, and Braves. The latter three all hired from within: The Rockies promoted Jeff Bridich, the Rays moved Matthew Silverman, and the Braves stuck with then-interim GM John Hart. If you squint you can throw the Diamondbacks in here too since Dave Stewart is an old friend of Chief Baseball Officer Tony La Russa and was seen as the favorite for the job more or less as soon as the GM spot became vacant, meaning his hiring did not represent a fundamental shift in direction. (I acknowledge that this point is tenuous, as La Russa has been on the job for less than a year too, but I think that the length and gradualness of the transition made it distinct from an immediate replacement.) That leaves only the Padres and Dodgers as teams whose GM hirings could really be described as shakeups.

Which brings us to the second important distinction: The states of the franchises at the times of their respective GM hires. The Padres were on their way to their fourth straight losing when Preller was hired; the Dodgers were coming off their fourth straight winning record. The Padres have finished third in the NL West twice in a row; the Dodgers are the two-time reigning division champs. The Padres were an organization in flux; the Dodgers have a massive payroll and appeared well equipped to contend for at least a couple more years on their then-current path. Clearly Preller and Farhan Zaidi (or Andrew Friedman, depending on whether you use the term “General Manager” literally to describe the job title or figuratively to describe a team’s top baseball operations executive) walked into very different situations.

In other words, Preller is probably the only new GM who is both a true outsider and is joining an organization that is not currently successful. In fact, typical though those factors may sound for a regime change, by my categorizations Preller is the only GM in the last three years whose hiring fit both those criteria.

The Winner’s Curse—Sort of
As an economics major who loves baseball, I’m always glad to see economics terms entering the baseball lexicon. This offseason, the term that seems to be taking hold is the “winner’s curse.” No explanation I can give of the winner’s curse will be as good as Gary Huckabay’s, but the short version is that anyone who outbids a number of competitors for a single specific good or service is probably overestimating its value.

In baseball terms, it’s usually used when talking about free agency. Because contract offers are based on projected performance and the collective league consensus is usually better than any single organization’s information, the team that places the highest bid on a player is probably overrating him. If your favorite team signs a player to an $8 million contract, it’s because the front office has good reasons to believe he’ll earn his salary. But it’s worth questioning whether signing him for $8 million was a good investment when you consider that 29 other teams presumably declined to match the offer.

The model I’m finally going to get to in a moment isn’t an exact application of the winner’s curse per se, but it touches on a related and perhaps more fundamental concept. I’m not talking about money or bidding processes or whether or not a favorable evaluation is justified. The takeaway is that, when there are multiple possibilities for who will be matched with whom, there is a correlation between how highly the respective bidders think of the thing they are after and how likely each pairing is to come to fruition.

How to Hire a GM
Imagine you’re the owner of a team that just fired its GM amid a string of losing seasons. After a couple rounds of interviews you’ve narrowed the list of GM candidates down to three people, who just so happen to be now-retired players from my hypothetical E Street League: Wendy, Kitty, and Mary. Each is a highly qualified candidate with great experience, a wealth of baseball knowledge, and an uncanny knowledge of Springsteen lyrics — all the makings of a great GM.

The only major differences between the candidates are their answers to the question, “How soon do you think we can compete?” Here’s what each said:

  • Wendy: “Not until at least 2019. We just don’t have the talent in the organization to sustain a several-seasons-long run of playoff contention, so the smart move is to start a massive rebuild now and lay the groundwork for a dynasty a few years down the road. Someday girl, I don’t know when, we’re gonna get to that place where we really want to go, and we’ll walk in the sun. But the key words there are ‘I don’t know when.’”
  • Kitty: “Probably in 2017. We’ve got a lot of good young players who need a little more seasoning and a wave of interesting prospects who will start coming up in the next year or two. We don’t need a full-scale rebuild, but I would trade away any veterans who aren’t part of our long-term plan in exchange for longer-term assets who can complement our core once them young dudes are musclin’ in.”
  • Mary: “Next year, no doubt. There’s a lot more talent on this roster than most people realize. We need to make some big trades and add a couple free agents, but the future of this club is now and I think we can make the playoffs in 2015. It’s a town full of losers and I’m pulling out of here to win.”

Without knowing anything more about the situation the new GM is inheriting, assume that all three approaches have merit. Which one are you choosing? Here, I’ll give you a moment to decide.

So it’s Mary, right? If you’re giving me the choice between winning now, probably winning three years from now, or maybe winning five years from now, that’s an easy call. All else equal, I’m going with the GM who will make me excited about my team right away.

The moral of the story isn’t that your team is going to hire an optimist. The point is that you’re hiring the glass-half-full candidate even though she’s in the minority in thinking that your team is ready to win now. It makes total sense that a majority of people would be skeptical about the future of an organization that just fired its GM. But it also makes total sense that a team in search of new leadership would be most attracted to the candidate who is most realistically bullish about the team’s playoff hopes in the near future.

That doesn’t necessarily mean the consensus skepticism is wrong. Nor does it necessarily mean that the new GM and team are wrong for trying to open the window of contention ahead of schedule. It just means that differences of opinion between them are to be expected, and that we shouldn’t be surprised when Mary’s optimism surprises us.

You Stay Classy, San Diego
I don’t know how the Padres’ GM search worked. I don’t know who conducted the interviews, what questions the candidates were asked, or what specific qualities the team was looking for. The one thing we do know (to the extent that any rumors can be trusted) is that the Friars considered more than a dozen people for the GM position before hiring Preller. And that means they must have heard quite a few different takes on how soon the organization could practicably return to contention.

To continue my list of ignorance: I don’t know how Preller compared to the other candidates in terms of his experience, knowledge, and personality (though I assume it was at least somewhat favorably). Nor do I know how much more the Padres liked Preller over their second choice, or what it was that set him apart. But in a world where most of baseball saw San Diego as at least a couple years away from contention, I’m sure a big part of Preller’s appeal was his belief that the Padres were ready to win.

No, most of us didn’t expect the Padres to go all-in so quickly. But when you consider all the factors that go into making a GM change amid a front office shakeup, maybe we should have expected to be surprised.

Thank you for reading

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Oh how I wish an uncanny knowledge of Springsteen lyrics was actually a requirement to be a GM.
I still have to do some growin' up to even attain that position.
I think we've been lead to believe that the full rebuild is the only way a new GM should tackle the organization they've taken over. Strip everything down and start from scratch with your vision. I suppose Preller saw a window of opportunity by selling from the previous regime's prospect depth and I think we all appreciate the boldness.
I agree with this. I wouldn't characterize what Preller has done as going "all-in." He hasn't traded Wisler, Renfroe, Liriano or Hedges, arguably the top 4 non-injured prospects in the system. As a guy whose supposed strength is scouting and outworking opponents, one has to assume that Preller thoroughly evaluated the farm system he inherited.
I know nothing about Preller but his actions the past couple of weeks. I saw him interviewed on mlb network and he has to learn to look at the camera. He shifted his focus several times throughout the short interview, but never at the viewer. He came across as a shady frat guy wanting to date your daughter.
For this interview, was Preller in the same location as the person asking the questions, or was the interview conducted via satellite hook up?

If the interviewee is in the same location, he/she should look at the person asking the questions and never at the camera.
Maybe he was looking at your daughter.
Lewis, I would say a key element here as well is the hiring person's own opinions, if they think they could be a couple of players away from contending they will likely hedge towards the person who agrees with them and this would be the same if that person thought the organisation needed to be rebuilt.

Another factor is the business side, the Padres want more fans and the network wants more viewers, winning brings both.