Just a few years ago, the Tampa Bay Devil Rays were a team playing in a bad market, in an awful stadium, wearing goofy uniforms, with an awkward name and a terrible record of on-field performance that was only outdone by their front office’s horrible decision-making and loose-cannon owner. Just thinking about the team was enough to scare away fans, local business owners, sponsors, government officials, investors and nearly Major League Baseball itself.
The Tampa Bay franchise was a dud and no one worth their salt wanted anything to do with them. Except Wall Street trash-picker Stuart Sternberg, of course.
Fast-forward to 2011 and as of today, the Tampa Rays have out-dueled the well-funded and oh-so-powerful Boston Red Sox and New York Yankees to take two of the last three American League East division titles. In 2008, the team won the American League pennant and as of today – despite a ludicrous degree of turnover in the offseason, find themselves nipping at the heels of their juggernaut rivals as we head into the All Star Break of the 2011 season. And oh yeah – they did all this on a shoe-string budget.
So what was the secret? Author Jonah Keri decides to try to find those answers and more in his new book The Extra 2%: How Wall Street Strategies Took a Major League Baseball Team from Worst to First.
The answer to those questions shifted depending on whom Keri asked. Those who value stats see the Rays as proof that objective, cold-statistical analysis works. Traditionalists point to strong coaching, scouting, drafting and player development. Some even said that the fact that the Rays stopped dealing with malcontents like Elijah Dukes and Delmon Young and their willingness to stand up to the Red Sox and Yankees shifted the self-perception of the organization as a whole enough to give them confidence they needed to succeed.
Truth be told – they’re all correct. The Rays borrowed a piece here and a piece there from everyone and gradually assembled what would turn into one of the most talented teams in baseball over the past three seasons.
Step-1 was finding whatever value they could from within their own ranks. GM Andrew Friedman and Team President Matthew Silverman made sure to take full advantage of the wreckage left by the previous administration. After sifting through its remains, were able to salvage OF Gabe Gross, RP Grant Balfour, OF Dan Johnson and 1B Carlos Pena from the carnage. They shipped the volatile Elijah Dukes and Josh Hamilton off to other teams and more or less forgot about them. They took their over-valued young talent like Delmon Young and traded him to get a better value in return (In fact, they did just that – especially in the case of Young, acquiring SP Matt Garza and SS Jason Bartlett in the deal).
They tore a page out of ex-Texas Rangers GM John Hart’s book and locked up promising young players long-term, well before they reached their arbitration years. As such was the case with the Evan Longoria deal, where the team inked him to a six-year/$17.5 million dollar contract that could grow to as much as 9 years/$44 million through options.
Second, they got rid of potentially toxic assets before they began to stink.The team would trade franchise pitcher Scott Kazmir at the peak of his value and in the middle of a pennant race, freeing up the money and resources to commit to other problem areas on the team. With Kazmir’s contract on the books, it would have been impossible to make many of the moves they did over the course of the last few years.
The team has taken an innovative approach to scouting as well, opening academies in areas of the world where baseball isn’t a commodity. As we speak, the Rays are opening combines in areas like Europe, the Middle East and South America in hopes of finding raw athletic talent and putting them on a baseball diamond as opposed to a soccer field. By doing so, the team finds themselves ahead of the competition in those regions.
The Rays are built to deal with the human element as well. While it’s true that we’re developing more accurate ways of forecasting player performance than ever before, baseball is still a game played by living, breathing human beings who make mistakes, get nervous, excited, scared, confident and everything else in between. Humans are – in and of themselves – evidence that sometimes, the rules don’t always apply and that it’s OK to deviate from the norm when the situation warrants it.
Rays Manager Joe Maddon isn’t afraid to do just that. Within the scope of the Rays organization, he’s allowed to do… well… pretty much anything he wants. From leading off his lineup with his best hitter to walking Josh Hamilton with the bases loaded, Maddon is a manager that not only fits incredibly well into the Rays laid-back, yet detail-oriented organizational culture, but is a one-man representation and embodiment of it.
This is a book about doing things differently, but make no bones about it – this isn’t Moneyball. You almost get the sense from Keri that he’s not so wild about the gospel-like manner in which the Moneyball theories were latched onto and preached and it’s certainly reflected in his tone and style. This isn’t a book that talks about a system that can (or should) be applied to other organizations in other markets. It’s about a system that has worked for this organization in their market that’s built to face their challenges. It’s not a blue print on how to run a Major League Organization. It’s merely a lesson in how formulating, cultivating, developing and following through with a specific plan can lead to results.
Simply put – it’s the age-old business principal being applied to baseball – do as much as you can spending the least amount of resources necessary. If anything, it’s a testament to how even with limited financial resources thinking outside the box can lead to your finding small, if not miniscule advantages that can add up and keep you competitive.
But even at that – it’s more than just another ‘see how they found value’ book. It’s about finding it where no one else A.) Is willing to look or B.) can see it. The Rays perpetually mull over even the smallest of deals. From the fifth utility outfielders to their 8th starting pitcher who’ll begin his season in the minors – everyone is under the microscope in order to find every single drop of potential productivity stored within.
That in a nutshell, is what the literal 2% is really all about – finding value where no one else sees it. It’s that same mentality that drove Sternberg to buy the team that has philosophically been transferred into their baseball operations division and has transformed the Rays from a laughing-stock to one of the most well-respected franchises in the game today.
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