First Pitch: The Small Market Advantage

There are a lot of moves you can point to that led to the Pirates being so competitive over the last few years. Several of those moves involved getting a lot of value from bounce back candidates, or guys who had skills that were undervalued. In the last week I was reviewing two of those value moves, both of which involved trades with big market teams. In that process, I noticed a similar trend.

I probably shouldn’t say that I “noticed” it, because this is something I’ve noticed before. Instead, I started thinking a bit deeper about what worked when the Pirates brought in Mark Melancon and Francisco Cervelli from the Red Sox and Yankees, respectively.

In each of those moves, the Pirates appeared to pull one over on their big market counterparts. They traded Joel Hanrahan and Brock Holt to the Red Sox in exchange for Mark Melancon, Stolmy Pimentel, Jerry Sands, and Ivan De Jesus. In the other trade, they dealt Justin Wilson to the Yankees for Francisco Cervelli, and this came one year after sending minor league right-hander Kyle Haynes to the Yankees for Chris Stewart.

The Melancon deal looks a bit more even than it did two years ago, mostly because of the emergence of Brock Holt as a strong super utility player, and the promise of Stolmy Pimentel wearing off. Still, the Pirates got a guy who has quietly been one of the best relievers in baseball for the last three years. They also shed Hanrahan’s salary, which allowed them to go on and sign Francisco Liriano and Russell Martin that same 2013 off-season.

The Pirates added Melancon to be their set-up man initially, backing up Jason Grilli. As we know, the move worked out perfectly in 2013, and in 2014 they saw Melancon take over as the closer by mid-season. But it’s not like Boston didn’t have the same plans. The Red Sox traded for Melancon prior to the 2012 season — sending out Jed Lowrie in the process — with the intent of having him as their setup man. It didn’t work out, and despite signs that he could bounce back the following year, they sold low on him, packaging him for Hanrahan.

The situation with the Yankees was very similar. When New York saw Russell Martin walk as a free agent in 2013, they decided to go with a catching combination of Francisco Cervelli and Chris Stewart. In fact, the Yankees seemed very set on that combo, considering they didn’t go above a reported two years and $12 M to try and “re-sign Russ.” Two years later, the Pirates took the exact same approach, opting for a combo of Cervelli and Stewart, rather than bringing back Martin (who was commanding a lot more money this time around).

As we know, the move worked out well for the Pirates. But why did the same approach not work for the Yankees? The 2013 answer is simple — Cervelli went down with a hand injury early in the season, and despite good numbers in a small sample size, that ruined the plans to see what the two cheaper catchers could do. As for 2014, the Yankees signed Brian McCann, forcing them to trade Stewart away, and forcing them to put Cervelli in a backup role. That role led to his eventual deal after the 2014 season.

In reviewing these deals, I wondered why both big market teams gave up on such promising players so quickly. The Red Sox thought enough of Melancon to deal a talented young infielder in Lowrie, plus a promising pitching prospect. A year later, despite signs that he’d bounce back, they traded him for a “proven closer” who had some signs that he was starting on the decline.

The Yankees thought enough of Cervelli that they were willing to let Martin walk over $5 M spread across two years. Cervelli had good numbers in his small sample size, which can’t really be relied on going forward, but shouldn’t do anything to make an organization down on him — especially an organization that was so high on him heading into the year. Instead, they moved on from him, and replaced him with a high price catcher that ended up costing $68 M more than Martin in guaranteed money (and more than double the four-year, $40 M asking price Martin had at the start of the 2012-13 off-season).

In each case, the team was very high on the player one year, then very low on them the next year, despite signs that they shouldn’t have had a drastic change in their evaluations. The Pirates ended up benefitting from the drop in value, even though their plan was similar to what the Yankees and Red Sox did just a year or two earlier. Granted, there are other factors at play here. The Pirates kept Cervelli fresh and healthy, and they made adjustments with Melancon to get him back on track. But the point is that the Yankees and Red Sox couldn’t even be bothered to try these things, instead spending a lot more money and sending these players away to get proven options.

My belief here is that the Red Sox and Yankees are limited on these types of moves due to their market size and payroll. The Yankees can afford to go out and sign a Brian McCann, and they can even sign a replacement if McCann doesn’t work out. The Red Sox can trade for Andrew Bailey, then trade for Joel Hanrahan the following season when Bailey doesn’t work out. That’s the big market way, and when you can spend that money with a lot of room for error, it’s hard to justify going with a high risk, high reward option that comes with a lot of apparent uncertainty.

Meanwhile, the Pirates and other small market teams can’t afford to miss on many contracts, unless they want to be rebuilding again in a few years. The Pirates could have afforded Hanrahan. They could have afforded Martin. But it’s doubtful that they can afford Hanrahan plus Francisco Liriano and Martin. And it’s doubtful that they can afford Martin plus Liriano, A.J. Burnett, and Jung-ho Kang. They can spend money, but they’re going to need value moves somewhere, along with home-grown talent.

There is definitely an advantage when it comes to being a big market team, and most of that advantage involves a large margin for error, and access to any player you want to acquire. But in turn, there’s an advantage for small market teams, in that they can be aggressive when trying to find value moves. In each of these cases, the Pirates saw a talented player, much like the Red Sox and Yankees saw talented players. The difference was that the Pirates were able to go with those guys, despite low values, while the Red Sox and Yankees had to quickly move on from each player when the moves didn’t initially work out and the values for the players dropped.

**Site Updates: Site Navigation, Search, App Update, Subscriber Events. The latest site updates. A few changes tonight, as the Twitter feed has been added to the right sidebar, and a lot of progress was made on the Prospect Guide this afternoon. By tomorrow we’ll have the first of many drafts of the top 50 prospect list, and I might have an article with a few notes from that process tomorrow evening.

**Pirates Claim Jorge Rondon Off Waivers From Orioles. Late move tonight as the Pirates add a reliever on waivers. Looks like a strong arm with a nice slider, and definitely a project for one of the final bullpen spots.

**Pirates Acquire RHP Trevor Williams From the Marlins. In case you missed it over the weekend, the Pirates added a new right-handed pitching prospect. Link includes the details of the trade, with profiles on Williams and Richard Mitchell, who was traded away.

**AFL: Trevor Williams Looks Good in First Outing With Pirates. Williams made his first AFL start tonight since being traded to the Pirates.

**Marlins Hire Jim Benedict As New VP of Pitching. The other big news from the weekend was that Jim Benedict was hired by the Marlins.

**How Can the Pirates Replace Jim Benedict’s Impact When Developing Pitchers? I broke down what that means for the future of the organization, and how the Pirates can replace Benedict’s impact, looking at three specific coaches who could see their roles increased.

**Pirates Reportedly Had Informal Discussions With Ben Cherington. This didn’t pan out, as Cherington accepted a position with Columbia University.

**Winter Leagues: Heredia Picks Up Extra Work, Munoz Homers. Carlos Munoz is having a great winter so far, following up on a great season. I’d expect to see him in West Virginia next year.

**Snider and Ishikawa Elect Free Agency, Guerra Sent Outright to Indianapolis. Some transactions from the weekend to clear up 40-man space. The 40-man roster page has been updated with all of the moves.

  • Ok, what about lower payroll teams paying potentially high impact free agents? Or higher payroll teams doing the same? Takes the contracts for Cespedes, Chapman and even Yasiel Puig ($42 m for 6 years, average annual value $7 m). I think one move that Pirates could and should have made was trying hard for Abreu. As Tim pointed out at the time, his contract would not have been that much higher than what they were paying for Sanchez/Jones/Davis. I think they may have missed the boat there. Maybe Abreu would have put them over the top and made it possible to win the NL Central in one of the last couple of years. Also what was the rational for not spending the additional dollars to sign Sano? Whatever they saved would have repaid itself many times over in value. Wouldn’t he look good on the right side of the infield for the next 6 years?

  • Really if you think about it, if Holt keeps producing like he has Boston will most likely win this trade in dollars per WAR correct? Correct me if I’m wrong but Holt has provided 4.7 WAR for how much in terms of salary. And his first arb year is 2017? Melancon has been worth 6 WAR but has underperformed Holt the last 2 years. Don’t have his exact salary #s but has to be a helluva lot more than Boston has paid Brock.

    • Depends on how far you go in the trade tree, and whether you calculate Hanrahan’s salary in the mix.

      So far, Hanrahan and Holt have netted 3.6 WAR and cost a little over $8 M.

      Melancon has been worth 6 WAR, at $8.5 M over three years.

      If they trade Melancon, then the value extends to the guys they get in that deal.

      Also, the X factor here is that they were able to make some moves in 2013 that they probably wouldn’t have been able to make without the savings going from Hanrahan to Melancon.

      • Even throwing the 7 innings a mangled Hanrahan ptiched into the equation I think it is looking good for Boston if Holt keeps producing anywhere near current pace.

        See below as for reason I think you may be overestimating the value they could get for trading Melancon.

      • Tim: A very good subject – I did not think it would have the legs this has had, but good to see you getting exercised and warmed up for the Hot Stove season.

        • Essentially I think it is analyzing an EXTREMELY SSS and then confusing a choice with a mandate(which I think scott already mentioned)

  • I think what Tim says makes sense, there is more pressure and less patience for those teams that have the resources. And the teams with fewer resources have to be innovative to find ways to win. But, eventually one of the big resource teams is going to be smart enough to learn from the small, and when “small market” thinking meets big market resources, you’re going to have a walk-away winner. The Cubs, maybe?

  • I don’t know that it’s an advantage, but I might be inclined to say that the PBC brass identified those players as potential trade targets and facilitated the moves by offering steady veterans.
    Who could say for sure who started the conversations but regardless NH has made more good than bad moves for our club and in a variety of ways.
    I really hate the spend money argument – I’ve always had one argument – Win Games. As long as NH does that consistently, I don’t care if we have the lowest payroll in the league.
    The days of holding onto stars for their careers like Pops are just no longer a reality for baseball in the burgh. That doesn’t mean however that a smart GM can’t manuever through those challenges and produce players that win. Billy Beane has been doing it for years.

    • Billy Beane has an awful lot of Runner-up trophies.

      Give me a blend like the Giants and Cardinals. Grow your own, keep what you want. Move the excess for more assets and the wheel keeps spinning.

      • I don’t think he is the genius he is cracked up to be.

        And his loading up the Cubs with 3 top prospects (incl #1 and #2) in the Samardzija trade still pi$$es me off. 🙂

  • I see the logic but I would opine it’s not so much that they are forced into moving on so much as they are pressured. And I would think it depends on ownership a good deal as well. If a team like the yankees are expected to win every year and they have a choice between a “proven” option and a risky one, I would think ownership may pressure the gm to spend the money on what they feel is the highest percentage move. I imagine the profit differences between a competitive team in NY and a non competitive team un NY is a lot different than in Tampa Bay. But I agree this trend seems to be shifting somewhat in recent years with large market teams realizing the folly of spend baby spend.

  • Sorry, Tim, but you’re way off base on this one. Scott’s Oahu/Whole Island Analogy listed below is ‘spot on’.

  • I find the whole premis that big market teams are “limited” by their size, and “forced” to move on from high risk, high reward players laughable. Large market teams have more options. Plain and simple. Money provides options. Options by definition means you have choices. The Red Sox and Yankees weren’t forced to move on from these players, they chose to move on because they thought it was best for their respective clubs.

    The fact is both trades have worked out well for all teams involved, which is the whole purpose of a trade.

    • Agree that the large market teams have the options, but with those options comes the pressure on a GM to make moves quicker than might be the case with the Pirates. We make moves at the deadline, but not with our “A” prospects.

      A good example of a large market team successfully spending big at the trade deadline was the NY Mets after Chris Russo embarrassed them in a tirade on MLB TV. They pulled the string on Tyler Clippard and Yoenis Cespedes, paying a king’s ransom in pitching prospects Michael Fullmer and Luis Cessa for Cespedes, and Casey Meisner for Clippard. All Cespedes did was hit 17 HR’s and post 44 RBI’s from the middle of the lineup in the last 2 months, and adding Clippard to Familia in the BP shortened every game.

      • The Mets made these moves because management saw an opportunity to improve their team’s chances to win the division and make a run at a title. Combined with the knowledge they had strong depth in the form of young pitching to deal from.

        The idea they were coerced into doing it by someone in the media is pure fantasy. Especially a blowhard like Russo.

        My whole issue with this mindset Tim has suggested is large market teams are somehow forced into trades and signings because they have money to do so. It’s like saying Bill Gates was forced into renting the whole island of Lanai when he got married, instead of getting married on a beach on Oahu like I did, because he had the money to rent a whole island and I don’t. Of course he could’ve got married on the same beach I did if he had wanted to.

        It’s ridiculous to say large market teams are limited because of their size.

        • agree.

        • Just to be clear, you’re saying that because Bill Gates got married on a private island in Hawaii, and you got married on a different beach, and that means that the Yankees and Red Sox don’t feel any pressure to spend big and go for proven talent, rather than going for bounce back candidates like the Pirates.

          The more I say it, the stranger it sounds.

          • Just to be clear, the Yankees and Red Sox have the flexibility to go after lower risk/high reward players like McCann and Hanrahan instead of higher risk players like Melancon and Cervelli. But to suggest they’re forced to do so because they have the financial flexibility to do so is wrong. Who’s forcing them? The fans? The media? Ownership?

            To take your position to it’s logical conclusion, all large market teams should feel forced to trade away their high risk prospects for proven major-league talent. Which we both know isn’t the best way to compete over the long-term.

            Don’t confuse options with mandates, Tim.

            BTW, to call Lanai a private island is pretty funny. But it was on his wedding day.

            • I’d say ownership would be the biggest one. The lifespan of a GM is short. You don’t get a lot of time to rebuild. You need results quickly, or the owner will move on. So you don’t have as much slack to go with a high risk option multiple years, waiting for the high reward to come around.

              • All GM’s have pressure to succeed. And all are expected to use the resources at their disposal to bring about desired success. So yes, you’re right ownership should expect them to use available payroll when it makes sense to do so.

                But your article claims they are limited and forced to make these type moves. I take issue with this claim.

                • Do you think that GMs have different pressure based on market sizes?

                  Look at Cherington. He won a World Series, and two years later he was fired, despite a rebuilding team with a lot of young talent coming up.

          • Tim….yeh, Yankee and RedSox ‘may’ have pressure to spend big, but ALL GMs have their own pressures.

            But, to whittle your argument down to its true essence, you’re saying WE have the advantage because we can go after ‘bounceback’ candidates and the Big Market clubs can go after proven talent?

            Sounds like a DISadvantage to me.

            • I took it as we can allow more time to certain guys without the GM feeling like he’s gotta move on and get expensive proven talent. We can go after a guy, bring him in, and if he struggles year 1 NH doesnt face near the pressure from within to move him/replace him as a large market team.

              I can see that as good and bad, but it does seem like pressure to be good ASAP could hurt a big market team.

              • Just curious man. Has there ever been a theory promulgated here that you disagreed with?

                • Well ill preface this with saying I like the view Tim takes on the team, im of a similar mindset to what a small market team can do best to win a ton of games and compete both short term and long term. So ill agree with him a lot.

                  I dont really always buy in totally to his ideas, but i rarely disagree 100% and see no validity to what he says. As i said, i can see both good and bad in what he is saying but overall i do agree that big market GMs do face pressures small market GMs dont face as often. And that can dictate how they make moves at times on guys that show good periphs but overall suck one year. As a big market GM, id feel my job is on the line if i have 1-2 years of no playoff games.

            • The big market advantage is that they can go after every player and afford financial mistakes.

              The small market advantage is that they can take bigger risks in terms of talent, gambling on upside, which allows them to compete with the big market teams.

              It’s not “small market has an overall advantage over big market”. It’s pointing out an advantage the small market teams have.

              • I believe your philosophy about big market teams being able to afford big money mistakes and overcoming it is better in theory than practice.

                The Phillies, the Yankees, and Braves come to mind right away when I think of large market teams making bad long-term deals w under performing players and none of them have overcome it.

                Who do you list as real life examples of this happening?

                • Those teams aren’t doomed for a long rebuilding process though. A quick rebuild, combined with spending on the right free agents could lead to a quick turnaround, similar to what the Cubs did.

                  As for overcoming a bad contract, I’m also talking about the ability to get a good replacement. For example, the Yankees replaced A-Rod in 2014 with a $13 M a year player.

                  • Here in Atlanta, most fans don’t see it that way. They blame the Uggla signing and especially the Upton signing for turning the franchise into a dumpster fire. And there is no denying they had to trade arguably their best player to get out from under the Upton albatross.

                    I will agree though it’s much harder for smaller markets to overcome bad signings as Reds and Brewers are clear examples of this.

    • I think the flaw in Tim’s argument is taking a few specific situations, turning them into a trend, and then expanding that into an entire theory. Your run of the mill hot take.

      Tim’s logic would’ve had legs five or ten years ago, but current reality is that most large market teams are smart enough to make decisions that both give young, cost controlled players a chance while also using available resources to bring in veterans as a safety net.

      If his argument was purely in a $/win sense then sure, small market clubs will have the advantage. But there’s absolutely no way I can see an overall argument that small market clubs have an advantage *on the field* making sense.

      • I just did a search for “on the field” to see what you were responding to, and it looks like that argument wasn’t made in the article.

        • Tim……..well, if the eventual results of our ‘advantage’ does not find its way to the field, then what is the point?

          • I think you’re taking “advantage” as “this makes small market teams better than big market teams”. The point is that small market teams have an advantage to go with the high risk/high reward guys more often. The big market teams have an advantage in that they can afford big contracts and make financial mistakes.

            The Pirates got a great move with Cervelli. The Yankees also got a good catcher in McCann. So it’s not like the end result gave the Pirates a significant advantage over the Yankees on the field at that position.

            The Pirates can’t exactly go the Yankees route with McCann, without being limited elsewhere. And the Yankees could go with Cervelli, as shown in 2013, but they’re under more pressure to find a better option if the high risk option doesn’t immediately work out, as we saw with McCann’s signing.

            • Except that once again, you’re presenting a false choice.

              The Los Angeles Dodgers, $300m payroll and all, started four out of five playoff games with Justin Turner and Kike Hernandez in the lineup. Those are *exactly* the high risk/reward players that supposedly give small market teams the advantage in your narrative.

              Bad moves are bad moves. And smart, large market teams very clearly make value moves *as well as* high dollar signings.

              More than two examples are going to be needed before you actually convince anyone that you’re on to something.

              • 1. Turner had an .897 OPS last season. But Juan Uribe got more starts at third base. That’s how the season started this year, until Turner took over early in the season with the same type of play. This wasn’t high risk. It was replacing a struggling veteran with a younger guy who was performing. If Turner was their first choice over Uribe, you’d have a point.

                2. Hernandez was getting time over Carl Crawford. Once again, the first choice was a high priced player (granted, not originally acquired by Friedman), and then they turned to a better producing younger player.

                Neither of these are like the cases I’m pointing out, where big market teams opt first for low risk/high priced talent, and small market teams opt first for high risk/lower cost talent. In fact, they’re the exact same as what I’m saying.

                And I’m not trying to make some grand discovery here, or convince anyone of anything. I’m pointing out a reason why the Pirates were able to have success with players that the Yankees and Red Sox thought highly of, but quickly moved on from.

                Here is a question for you: Why did the Yankees and Red Sox move on from them so quickly?

                • Because they believed better options were available to them? You’ve become so myopic in your focus on these two players that you’ve seemingly disregarded the simplest answer.

                  And again, two cases.

                  You can very obviously just as easily question why the Pirates were quick to give up Brock Holt.

                  • But they believed both were good options the year before. The Yankees passed on re-signing Martin to go with Cervelli. The Red Sox traded Lowrie for Melancon. So why did they move on after just one bad season from each?

                    And yes, they believed better options were available. But expand on that. What made those options better? Perhaps the lower risk, as I’m talking about here?

                    • Because maybe without the benefit of hindsight they thought they were buying low on Hanrahan. He had a 2.18 FIP in 2011 and a 2.62 FIP in 2010 before having off year in 2012. At time of trade Melancon’s career best was 3.25. Maybe there was actual REASON to think Hanrahan might be better? And maybe they really liked the Brock Holt kid who has been worth 4.7 WAR for basically nothing. And they still control that kid for 4 more years where we will have to pay Melancon 10M to keep him this year.

                      I don’t look at that scenario as some sort of panic move by Boston simply because with benefit of hindsight Hanrahan’s arm blew up and Melancon turned out to better than anyone ever probably dreamed of(including NH).

                    • If they were buying low on someone, why would they trade Melancon?

                      Also, pointing out Holt’s success now is the benefit of hindsight. You can’t argue they didn’t have hindsight with Hanrahan, but knew what they were getting with Holt.

                      As for Melancon, they could pay $10 M to keep him this year, or they could trade him for a big return and get more long-term value.

                    • You are completely missing my point. You are the one entirely embracing hindsight. My points are

                      1: Maybe they thought they were getting the 2010/11 version of Hanrahan which was much better than Melancon ever was so they were willing to part with Melancon(who we wanted apparently/ takes 2 to tango)

                      2. Why is pointing out Holt’s success the benefit of hindsight anymore than Melancon being MUCH better than he ever was in his career before arriving here and Hanrahan’s arm blowing up after the deal.

                      3. You don’t know that they will get a “big return”. We don’t know what the market value for Melancon with one year left on his deal at 10 M is yet. Steamer predicts him for .7 WAR. You can argue with that projection but I’m not convinced we are getting “big return” at 10M salary cost.

                    • I disagree on the big return. They’re getting at least a top 50 prospect if they trade him.

                    • Hope you’re right if they actually have to trade him. I will have to see that to believe it.

                    • Top 50 prospect for one year of a non-elite closer making $10m.

                      I’ll wager a prospect guide on that. 😉

                    • Non elite?

                    • You’re asking me to speculate as to the exact reason each club made those decisions?

                      Come on, Tim.

                      And regardless, for the last time, you’re going to have to do a hell of a lot better than two moves to justify this title:

                      First Pitch: The Small Market Advantage

                    • Did you read anything after the title?

            • The advantage is with the Yankees. They can go with Cervelli OR McCann and you shouldn’t limit your narrative to this specific instance(and Melancon/Hanrahan) There will certainly be incidents in the future where the decision to go with the pricier free agent will be the BETTER choice. And I don’t buy that they will always go with the pricier choice because of pressure either. There are times where their internal scouting will say “hey, let’s give this guy one more year”