Why the A’s rebuild can’t work like Houston’s or Chicago’s

The Houston Astros seem to have struck gold with a great young shortstop in Carlos Correa, who was a perfect midseason addition to the Astros’ young, talented lineup as the team rode its power and 2015 AL Cy Young Award winner to a playoff berth. The Chicago Cubs have great young position players popping up left and right, and have spent good money in the past 12 or so months to add some reliable veterans to that core. Both teams appear to have very bright futures.

The Oakland Athletics, meanwhile, just signed a reliever with a lengthy injury history to a three-year deal (Ryan Madson) and traded away their 25-year-old third baseman (Brett Lawrie) for two mid-level pitching prospects.

It’s fair to question those moves. It’s fair to wonder why they seem to be moving in two directions at once. In fact, it’s fair to ask where the team is headed, to ask what in the world A’s executive VP of baseball operations Billy Beane is up to now.

So I did.

At last week’s baseball winter meetings, I asked Beane, he of the “Moneyball” fame (book and movie), why he wouldn’t do a tear-it-down, sell-all-assets rebuild like the Cubs and Astros did, like the Braves and Brewers appear to be doing now, and maybe what the Reds are in the early stages of doing. Doesn’t that approach help you get higher draft picks and collect talent for your next run? Doesn’t that help you find those young, cost-controlled players that drive winning teams?

Beane saw things differently — and uniquely, of course.

“We’re always trying to win now”

Beane said that as I chatted with him in his suite at the Opryland Hotel. “[Our] market is not going to allow us to punt for five years. We’ve never done that. That’s never been a part of our model.”

It’s no surprise by now that Oakland draws like a small-market team, and the numbers show it; they consistently end up in the bottom five when it comes to revenue. In fact, only three teams made less money in 2014, so even if $202 million in revenue sounds like a lot, it’s not. At least not compared to the $508 million the Yankees took in last year.

“We can’t be like the Cubs and Astros”

There’s validity to that. Even in bad years, the Cubs can take in a steady flow of revenue. The 2014 revenue totals linked above show the 88-win 2014 A’s brought in $202 million, as noted, while the last-place, 73-win Cubs brought in a full $100 million more.

Chicago’s Wrigley Field, with its neighborhood setting and old-school charm, is a destination for many more people than Oakland’s o.Co Coliseum with its leaks, sewage problems and all its boring concrete.

In 2013, the Cubs were 66-96 and brought in $305 million in revenue, including $128 million from tickets. That same year, the Athletics were 96-66 — yes, that’s a full 30-game difference — and they brought in $175 million in revenue, only $33 million from gate receipts.

As for the Astros, they actually made less than the A’s in 2014. But Beane offered this explanation for why their fan base would come back when the team won more games: “There are two teams in our market. There’s one in the third-largest city in America, that’s Houston.”

The Bay Area is a large market, but when you call his A’s a Bay Area team, Beane will correct you. They play in Oakland and in that stadium, and that’s probably why there was a special designation for the Athletics in the last Collective Bargaining Agreement that said they can continue to receive revenue sharing despite being in a big market as long as they aren’t able to move out of their current stadium.

Getting back to the Astros, you can actually see that Houston can support bigger payrolls if you look at the team’s rank in payroll since 2000. Compare Houston to Oakland when it comes to that rank, and the difference is pretty stark.

The Astros have been a top-10 team in payroll twice this century, the Cubs have steadily been in the top 15, while the A’s peaked at 18th during this span, and even that was too much for Beane’s liking. “I’ve been in a situation where we spend more than we had,” he said, “and recovery from that is a long way. At some point, the bottom falls out.”

So maybe they can’t spend at the lofty peaks with the Cubs and the Astros. But couldn’t the Athletics still cut money, be worse, get the high picks and collect talent that way? After all, the Astros have spent less money than the A’s twice in the past three years, and they dramatically cut the budget from their peaks, going from $102 million in 2009 to $26 million in 2013. Couldn’t Oakland do that?

I pressed Beane on that, and he got a little more specific on the matter. “We have payroll limitations,” he said. “The great thing about having a season ticket base is there’s a fixed amount you can rely upon.”

The Athletics just don’t have that base of guaranteed ticket money, and to some extent, Beane is guessing about how much he can spend. “We’ve realized that if we’re a little bit over, and we’re playing well, we can catch up to it,” he admitted. “But if we’re not, we need to be ready to have an exit strategy, too, in terms of payroll. I check with [Oakland team president] Mike Crowley every two weeks during the season, asking where we are at, how we’re doing, what we need to do.”

What about the other revenue?

There’s one thing about this argument that I wonder about. Could Beane be overrating the importance of ticket sales?

We know, for example, that teams get $50 million each from the national TV deals. Local TV deals are harder to find, but we can approximate. Wendy Thurm at FanGraphs chronicled the information that was available about all 30 local deals, and while the Athletics’ information wasn’t out there, if we gave them the worst deal on record, they’d still get $12 million a year from CSN Bay Area.

Revenue-sharing numbers are the hardest to find. The only record I could find of single team receipts was from 2013, when the Athletics got $36 million. The game’s payrolls have gotten bigger, and there’s no real evidence that the pie would be smaller, but even if we give them only $32 million this year, we’d still have enough here to cover last year’s $84 million payroll and have $10 million left over — and that’s before we counted a single dime from parking, gate receipts or concessions, which totaled $47 million in 2013. Sure, they were good in 2013, but their attendance was still only 1.8 million. They were bad in 2015, and according to ESPN’s data, they still drew 1.77 million.

Oakland’s post-rebuild challenge

So maybe the A’s could make a little more than they’re letting on if they slashed their payroll to $20 million, pocketed some money and worked to get better. But as Beane details, there’s a bit of nuance to the five-year plan that still might make it hard for them to undertake such an approach.

Let’s go back to the Cubs. Because of the way arbitration works, their roster might get expensive in a hurry. Jake Arrieta is in his second year of arbitration, and is projected by MLBTradeRumors to make $10.6 million. What happens when Kris Bryant, Kyle Hendricks, Kyle Schwarber and Addison Russell all start hitting arbitration in three years?

“One of the beauties of what they’re doing is that they have the ability to hold on to those players for a while,” said Beane of the Cubs and Astros. “That would be a challenge for us. In some sense, if we embarked on a five-year plan, we would not be able to afford it in Year 3.”

Some teams try to get out ahead of this by signing their young players to multiple-year deals before they’re fully established. The Cubs did this with Anthony Rizzo, and the Rays have done this with many of their top players, including Evan Longoria, Chris Archer and Matt Moore on the current roster. The Astros have tried this (perhaps unsuccessfully) with Jon Singleton after hitting jackpot with Jose Altuve on a similar deal.

Again, Beane’s not sure this would work for the A’s. “We have no choice but to be right,” he said of long-term deals, even with young homegrown players. “We can’t absorb being wrong. Is the risk worth it? Even if we are right, it may not be the right thing to do based on the percentage of the payroll. If you’re wrong, you’re in big trouble. It’s a bit of a lose-lose situation.”

What about the draft?

It has been a long time since the A’s developed their own above-average position player, and their spots in the draft could have something to do with it.

Three years in a row (from 2011 to ’13), the Astros lost 100 games. Thus they picked first in the MLB draft 2012-14, and they picked both second (compensation for not signing 2014 first pick overall Brady Aiken) and fifth this year. According to research by Joe Aiello, a team’s chance of finding a “superior” player in picks 1-5 is 30 percent, nearly double your chance in picks 11-15 (16 percent).

So with payroll possibly accounted for with fixed income, and tanking leading to better outcomes, could the Athletics have better outcomes if they tried to get better draft position by spending less? Beane has two more retorts.

To summarize his first thought, we look at the role that chance plays. Dave Cameron at FanGraphs estimated that even the best projection systems can’t be any more any more precise than a projected mean “plus or minus 10 wins, and quite possibly more.” In other words, if a team was an 81-win team and it cut a key player from that team, making the simple subtraction would be ignoring the fact that it could have been a 90-win team if everything broke right. As Beane said, “Sometimes good things happen.”

And then there’s just good old competitiveness. “We’ve used the term rebuilding, but we’ve always spent all of our payroll in an effort to respect the fact that we have to field a major league team,” Beane said. “I think our market demands it, and we demand it of ourselves.”

Perhaps their finances are trickier than they seem from the outside. Or perhaps they just want to win, every year. “Quite frankly, we’re just too competitive to [punt],” Beane admitted.

So what’s next?

“This year, what we’re trying to do, is again walk that balance,” he said. “We do need to hold on to some of these younger players. In the past, when we thought we were right there, we were pretty aggressive in trading players.”

Beane pointed out that people have questioned the team’s moves just before the A’s went on a run, including their jump from 74 wins in 2011 to 94 wins in ’12. “They said ‘why’re you doing that?'” Beane remembered when he made the trades. “Well guess what, we won the division again [in 2013].”

So the Athletics will continue doing what they always do, spending every dime they’re allotted for payroll while keeping a trick or two up their sleeves. They’ll do so while “looking for the best value we think we can get for the money we have,” as Beane put it.

And while trying to compete, they’ll continue to try and acquire young players. “It’s a delicate balance you walk,” says Beane of the whole thing, and the Oakland Athletics have found their own way to negotiate that path.