JP a “desperate” GM?

ESPN.com’s and former special assistant to JP Ricciardi has recently written an article that speaks to the signs that your team’s GM may be a “desperate” GM.  These include trading young prospects for “proven” veterans, signing well-known, overvalued free agents (Frank Thomas, Barry Zito) and heavily backloading deals (Vernon Wells will earn $86M of his $126M from 2011-14).  As Kman and myself have pointed out earlier, with his “big 5 (or 6)” article and my constant worrying about how Ricciardi will leave the franchise in tatters when the backloaded contracts are paid out, Jays’ GM JP Ricciardi is definitely a desperate GM.

 

 

JP has backed himself into a corner and it all began when he was first hired. He touted a 5 year plan that would turn the franchise into a playoff contender on a $50 million payroll and threw the shrewd drafting of college players.  What happened? The 5 year plan turned into a 7 year plan with JP singing a different tune “that it is not possible to compete in the AL east without a large payroll”. Okay, thats fine, so JP’s payroll has almost been doubled. His drafts however, have been miserable.  So in year 7 of the 5 year plan, JP has to put up or shut up and he is doing so with backloaded contracts. He can keep his job and look good today, and jet when the system is bare and the $21 million contracts are paid to broken and old players.  Keith Law says it best:

(desperate GMs) are in the situation because of more fundamental and often systemic problems like poor scouting, inability to develop players, or the most fundamental problem of all — insufficient talent. For those teams, a baseball strategy built around winning more games this year, this month or this week is wrong. Trading away young talent, eliminating long-term payroll flexibility, and alienating a portion of the fan base can set the team back several years.

 

Economists have a name for this problem: moral hazard. It refers to any situation where an agent (in this case, a GM) can take a risky action where he will not have to face the full consequences if the action turns out badly. A GM who hands a player a seven-year deal knows that if the deal works out, he’ll probably keep his job (and even earn a raise), but if the deal doesn’t work out, he might lose his job. But he’ll still earn the money he was guaranteed under his contract, and he won’t have to deal with the albatross contract, or the restrictions it places on payroll. A GM who gives multiyear deals to his cronies to serve as special assistants, or in other high-paying roles, knows that if he’s fired he doesn’t have to pay for those contracts. It’s the next GM who has to clean up the mess, fire the cronies and have less money to bring in his own people, forcing him to scrimp on payroll, or to restock the farm system.

 

Sound like anyone I we know? JP Ricciardi’s contract comes due in 2010 and Vernon Wells is paid his $86million from 2011-2014.  The Cubs’ GM Jim Hendry is in a similar situation and the Giants’ Brian Sabean is headed down that road as exemplified by the Zito signing.

 

Is there any way to solve this madness? From the Sabernomics blog:

*EDIT*

Whether it’s through tying bonuses to stock options or hiring outside auditors, it’s something that owners can only hope to mitigate, not solve. I wouldn’t be surprised if owners began to give bonuses that are good even if you’re fired. If you sign a free agent or draft a certain player who reaches a certain level, you get a share of that, whether you are with the team or not. This would encourage the GM to focus on the long-term.

 

This isn’t the first time that Keith Law has made a not-so-subtle jab at Ricciardi. Since Law has such intimate experience with the inner workings of the Jays front brass and makes thinly veiled attacks at them, I wonder what he knows that we don’t? I am scared to find out come 2011.