by Daniel Gettinger
Earlier, Myron asked:
Would the $5.3M the Padres gave Garland be better utilized on, say, locking up young players currently on the roster, future draft pick signing bonuses, international signings, and improving the scouting, player development, and analysis departments?
Myron’s question is a good one, and some, including R.J. Anderson of Fangraphs have answered “yes, Garland’s impact on the club’s playoff aspirations is minimal, and therefore the money would be better spent in other areas.”
Tom Waits, in the comment section (2) of Myron’s post adds further complexity to the issue. He writes:
If there was a good chance that the Padres would have spent the Garland money in other ways, I’d be on the same page with Myron. Using Garland’s 5 million in the draft or internationally could buy you 8-10 years of control each for multiple talented players. But if the major league and amateur budgets are separate, which doesn’t make a lot of sense but might still be true, then signing Garland isn’t robbing Peter to pay Paul. Peter was never going to get that money anyway.
Tom is mostly correct. If the budgets for major league talent and “everything else” are completely separate (I doubt they are), then the Garland signing probably constitutes the best use of the Padres’ remaining budgeted funds, and is in a fact a good one.
However, as Tom alluded to, I bet that management has at least some flexibility to spend funds at their discretion. If spending additional money at the major league level is not looking like a good investment, then it can probably transfer some of that to other areas.
Even in a world where management has full discretion over its spending, it may still make sense to spend money on a team not expected to compete for a post-season birth.
Sometimes we forget that marginal wins matter even for teams not expected to reach the post-season. Those wins still result in marginal revenue.
Furthermore, revenue generated is probably dependent not just on performance in the current season, but also performance in past seasons. The Padres’ mediocre performance in 2009 is likely to negatively affect revenue in 2010. That the Padres were also bad in 2008 further magnifies the situation. I believe a string of consecutive poor performances may have the ability to significantly drive the revenue curve down. That is, for any given level of wins, revenue will be lower if past performance was poor than if it was good.
If you accept such a model, achieving at least some reasonable level of success in 2010 can be important, and change the result of the cost-benefit analysis Tom and Myron were discussing. A poor 2010 season would result in three consecutive bad seasons at the major league level, shifting the 2011 revenue curve even further downward (all else equal).
Because we do not have access to the Padres detailed financial information, it is impossible to fully analyze whether the Garland signing was a good one. However, without adequate evidence to the contrary, I like to give the team the benefit of the doubt when it makes decisions on what areas of the organization it chooses to allocate funds. Under such a framework, we must conclude that the Garland signing will result in a greater return on investment than the next best alternative.
Daniel, great points here.
I agree, a solid effort by this year’s team, say an 82-80 record, is going to boost excitement — and revenues — going into 2011.
The question to me still, are the estimated two extra wins that Garland will provide boost that excitement enough to justify the cost?
It is fun stuff to think about, even if we can’t come up with a definitive answer.
I agree with your assessment of this signing. The Padres will see a greater return on this signing than on using that money for other available pitchers or on the draft and international signings.
1 in 30 drafted players make above average major league players.
3.5% of international signings eventually become above average major league players.
I think spending the money on what amounts to a one year deal for a proven player is a better bet.
I may not have chosen Garland, but there is no doubt that he fits the Padres stated need for an inning eating middle of the rotation veteran pitcher and he is a bargain at $4.7 million.
Season ticket sales are up to this point compared to last season and from what I have heard so is advertising revenue. Broadcasting revenue is locked in. I don’t see how revenue can be negatively affected to any great extent in 2010. And if the team is playing .500 ball or better then it likely won’t be affected at all.
With the Marlins getting publicly spanked for their low payroll, for many reasons including PR the Padres could hardly afford to leave their payroll where it was before this signing at $32-33 million.
I can’t argue with the reasons why signing Garland is a good move, but I can’t understand the critcism that it takes innings away from the young guys. There aren’t that many who can take the 150-170 inning load of being in the rotation.
People assume Latos will be a starter, but he just turned 22 and has only 3 pro seasons under his belt. He’s pitched 56.1, 56.0 and 123 inning the last 3 years, and he really dropped off his last 5 starts. He has a major league power fastball, but his other pitches need work. He should be pitching fewer innings than last year, preferably out of the bullpen, so Balsley and the trainers can keep an eye on him.
Cesar Ramos has pitched 150 innings three of the last four years, but has very little experience. Gallagher had an injury and pitched 40 innings, Poreda is a couple years away, Cesar Carillo did not impress and only LeBlanc has pitched a normal load, 167 innings last year overall. LeBlanc at least finished with 7 strong outings, averaging 6 innings per start, with a 2.67 ERA.
Add Young recovering from shoulder surgery and the need to nurse him along, and it’s obvious that Garland’s durability makes pushing the kids unnecessary as well as unwise. I think Garland just replaced Latos and gave LeBlanc the five-slot, with Latos making a few spot starts, or finishing Young’s short outings.
Lorenzo-I agree, there will certainly be plenty of innings for players like LeBlanc, Gallagher, and Stauffer.
I do not however believe that Latos will/should be working out of the bullpen. He is a starter and appears ready to start at the major league level. The team will surely monitor his workload, but right now, I’d say he’s penciled into the rotation.