The Milford Academy Was Right: Stan Kasten Should Be Neither Seen nor Heard

Imagine that Derek Jeter held a press conference this afternoon and said, “The Miami Marlins have always been committed to winning, and we believe that the team we have assembled is as good as any team in baseball. We expect to bring a World Series title home to Miami in 2019.” Obviously, everyone in the media and on Twitter would take him at his word and treat it as the gospel truth, right? No, of course not. We would see that the words coming out of his mouth don’t line up with the actions taken by the organization and discount his words accordingly.

So why is everyone taking what Stan Kasten said about the Los Angeles Dodgers at face value instead of doing that same comparison?

In an article for the Los Angeles Times, Dylan Hernandez quoted and paraphrased Kasten saying some pretty offensive things. Not offensive in any way that will get him disciplined, but offensive in an “I’m so much smarter than you I can’t believe I have to talk to a big dummy like you” sort of way. What I’m about to write is not intended as a defense of Kasten or his remarks — to be honest, as a Dodger fan I’d be thrilled if Kasten were relegated to silent partner immediately, sent to the mythical Milford Academy from Arrested Development:

But what I do want to do is look at his actual comments, compare them to the organizations actions, and see which parts deserve to be taken at face value and which parts should be discounted the same way we’d discount other obvious falsehoods.

The Attendance Myth

“I’m dealing with facts,” Kasten said.

The facts, Kasten said, are that season-ticket sales point to the Dodgers leading baseball in attendance again. And if season tickets are selling, everything must be A-OK.

[Later…]

Asked again if he didn’t want to offer fans an explanation for the team’s relative inactivity on the free-agent market, Kasten said, “You’re inventing a narrative that I don’t agree with because, like I said, I can almost tell you for sure, we’re going to lead the National League in attendance again. You’re inventing a different universe that is not borne out by reality, by facts.”

We probably need the Dylan Hernandez Disclaimer here. I’m wary about such an inflammatory paraphrase coming from anyone; from Hernandez, my wariness bumps up a notch or two. Clearly, if Kasten had said “everything must be A-OK,” that would be in quotes. What did he actually say that Hernandez interpreted as “everything must be A-OK”? I don’t know. So let’s parse this as if Kasten said it, with the caveat that Hernandez might be misrepresenting his statement. Neither guy has really earned much benefit of the doubt.

Dave Roberts and Stan Kasten (Photo by John McCoy/Getty Images)

Are ticket sales a surefire sign that everything is fine? Of course not. As Hernandez notes, there’s a difference between loyalty and satisfaction. The Dodgers were near the top in attendance even while Frank McCourt was draining the organization of money and hope. Dodger fans are going to show up, so gauging how well you are running the organization by how many fans show up is like judging the quality of your cooking by the fact that your kids keep eating dinner.

Why Haven’t They Spent More?

The Dodgers kept their payroll under the luxury-tax threshold of $197 million last year, which would prevent them from being taxed at a higher rate for repeat offenders if they spent more than the limit of $206 million this year. So if they would be penalized as a first-time offender this year and have plenty of money coming off the books next year, why haven’t they spent more this offseason? Is this a warning of what is to come in future seasons?

“That’s also such a weird narrative,” Kasten said. “If we can do whatever we do and stay under [the luxury-tax threshold], there are a lot of advantages to being under — by the way, a lot more advantages than you all write about.”

We’ll cut off the quote right there for now. We’ll talk about the condescension in a bit, but let’s look at the main assertion here: If a team can “do what we do” while staying under the luxury tax, that’s a good thing. This is true, assuming “do what we do” means what I hope it does. There is no value inherent in spending money. If Player X and Player Y are perfectly equal in every way except that Player Y costs half as much, it’s not cheap to sign Player Y.

Of course, no two players are perfectly equal. Sometimes Player X is a guy who has had one amazing offensive season and a couple good ones, sprinkled in with some lackluster years, who has all the talent in the world but hasn’t always put forth a performance to match it, and he’s also coming off his worst defensive season; and sometimes Player Y has only really played one full season in his career and it was outstanding, but a variety of injuries have limited his playing time and effectiveness the last few years, but he’s very good defensively, but he’s also five years older, but he also only costs about one-third of what Player X would cost (or one-sixth if you factor in the contract being half as long).

On a per-plate-appearance basis, A.J. Pollock has actually been a better player than Bryce Harper in their respective seven-year careers. The problem is that those seven years have produced 2,500 plate appearances for Pollock and 4,000 for Harper. There is a lot of value in staying on the field, and Pollock hasn’t done that as well as Harper.

But on the other hand, Pollock’s injuries have been mostly unrelated and kind of fluky — a broken thumb and a broken elbow are not necessarily things you worry about becoming chronic — so it’s entirely possible that Pollock will be healthy and productive for the next three or four years. On the other hand, why was Harper’s defense so bad in 2018? Was it a fluke? Maybe! Was it a lack of effort to prevent injury in his walk year? Maybe! Was it related to his knee injury from 2017? Maybe!

Harper is still a great offensive player. Whether you want to look at OPS+ or wOBA or wRC+, he has always been somewhere between above-average and excellent. Nearly all of that value comes from his power and his ability to get on base. Of course, his ability to get on base is directly tied to his power, because he would not have walked an MLB-leading 130 times in 2018 if pitchers weren’t afraid of him hitting the ball 500 feet. But Harper used to be a solid defender, too. So if we don’t know why his defense fell off a cliff, how confident can we be that his power or his plate discipline won’t do the same thing, as they did with Albert Pujols?

So anyway, back to Kasten. He’s absolutely right that in a vacuum, paying less is smarter than paying more if you can get the same production. There are plenty of questions about the Harper/Pollock production question, and the smart money is probably still on Harper, at least for the five years of Pollock’s contract. But it’s far from a cut-and-dried, settled matter.

The Luxury Tax Condescension

“That’s also such a weird narrative,” Kasten said. “If we can do whatever we do and stay under [the luxury-tax threshold], there are a lot of advantages to being under — by the way, a lot more advantages than you all write about.”

Such as?

“I’m not going to go into that because that’s real inside baseball economic stuff,” Kasten said.

Told fans would be interested in the details, Kasten replied, “Hold on. Let me finish the answer. Some of the things are elsewhere in the collective bargaining agreement that no one’s bothered to look at. Some of the things are inside baseball. So there are more advantages than just a little tax.”

Still, no details.

That’s … bad. No paraphrases, no trick questions. Just Stan Kasten saying that fans are stupid or, at least, uninformed.

The Collective Bargaining Agreement is available online. It’s as boring to read as most legal documents, but its contents are not a secret, and they’re not hard to understand. There are two types of consequences for exceeding the “competitive balance tax” threshold(s). They are:

Financial:

If a team exceeds the “Base Tax Threshold” (BTT), they are taxed a percentage of the overage. The percentage is determined by how many years in a row they have exceeded the BTT — it can be 20, 30, or 50 percent.

If a team exceeds the BTT by $20 million, they have hit the First Surcharge Threshold (ST1). In addition to the base tax, they are taxed an extra 12 percent of everything between ST1 and ST2.

ST2 is set at $40 million above the BTT. For every dollar over ST2, a team is taxed an additional 45 percent.

Draft Picks:

In addition to the tax, a team that exceeds ST2 has its first draft pick dropped ten spots unless it is one of the first six picks in the draft.

Look, Stan, we did it with our tiny brains!

There are not secret penalties spelled out in other parts of the CBA. If there are secret penalties NOT spelled out in the CBA, that’s called collusion and it’s illegal. I have to assume Kasten was referring to the draft pick penalties, which a) are not extremely severe, and b) apply only to the most extreme luxury tax spenders. The only penalty for going over the base tax threshold is, despite Kasten’s assertion to the contrary, “just a little tax.”

The thing is, Dodgers ownership knows this, and their actions show that. They are paying Homer Bailey $28 million to go away, all as part of the price to save $18.25 million on Matt Kemp‘s contract. The difference is that Kemp’s contract counts as $20 million towards the luxury tax (the average annual value of his eight-year, $160 million deal), while Bailey’s only counts as the $17.5 million AAV of his overall contract. So they are saving $2.5 million for luxury tax reasons, which means that they’re saving somewhere between $500,000 (at the 20 percent rate) and $1.625 million (if they went crazy and exceeded ST2) in taxes.

Do we really think that Andrew Friedman and his degree in finance took on an extra $9.75 million to save a fraction of that in taxes? Of course not! The Dodgers needed to trade Kemp — not just for financial reasons, but because he’s a former star who expects to play but his current skill level doesn’t warrant it. They gave up Yasiel Puig and Alex Wood and Kyle Farmer to get rid of Kemp, and in return they took on Bailey and received two quality prospects. There are financial aspects to the trade — again, Friedman as a finance degree — but the luxury tax was not the point of this trade.

What Kasten did say was that ownership hasn’t issued a directive to remain under the luxury-tax threshold.

In fact, after signing center fielder A.J. Pollock to a four-year, $55-million contract, Kasten said, “We may be over already.”

This is just comical, for Kasten to not know where they stand in relation to the luxury tax at the same time that he’s lecturing people for not understanding how the tax works. No, the Dodgers are not already over the luxury tax. Before factoring in the 22 players on the 40-man roster who will make at or near the league minimum, the Dodgers are currently just over $193 million. The base tax threshold this year is $207 million. The minimum salary is $555,000, but that only applies when a player is in the big leagues. The minimum for a 40-man roster guy playing in the minors is $90,400. So if we count seven players at the MLB minimum and the other 15 at the MiLB number, that’s $5.241 million. Let’s call it an even $6 million to account for any weirdness. That still has them nearly $8 million below the luxury tax, and $48 million below any penalties that aren’t purely financial.

Kasten explained how teams often spend more than the payroll figures used for luxury-tax purposes, which take the average annual values of contracts.

“You folks, what you see, we’re paying a lot more than that,” Kasten said. “We’ve just done it in a way that I have to say is smart. I hate to use that word, but I think that’s what it is when we can accomplish our goals and stay under.”

That’s true. The actual payroll right now is just over $202 million. Throw in the ~$15 million for player benefits costs and the $6 million for those other 22 players, and you’re looking at about $223 million — or about 64 percent of the amount they get each year JUST from their television deal. Again, these numbers are public, and Kasten is doing himself, his partners, and Dodger fans a disservice by pretending he can just be vague and mystical about things that are concrete and quantifiable.

Homegrown Players

“Fans want stars they can identify with,” he said. “I’ll tell you what they like better than free-agent stars and I absolutely will show you proof of this. They like homegrown kids that develop into stars. They like that better. And there’s no team that has focused more on that aspect of our program than us.”

Specifically, he named the since-departed Yasiel Puig, as well as Joc Pederson, Corey Seager, Cody Bellinger and Walker Buehler.

“By the way, did we not say then that this is how we were going to do it?” Kasten said. “We were so transparent about what our plan is. Here we are, we’re still at the top in the payroll.”

Guggenheim Baseball Management always made clear the long-term plan was to develop stars. Except of the players Kasten mentioned, only Seager and maybe Buehler count as stars. The others are contributing players.

“They contribute to a team that goes to the World Series,” Kasten said. “I mean, come on, don’t minimize that. It’s an important thing. It’s a hard thing.”

Here we have Kasten being mostly right and Hernandez taking his turn at being wrong. The most beloved Dodgers are either truly home-grown (like Clayton Kershaw, Bellinger, Seager, etc.) or did not come into the organization as big stars (Justin Turner, Chris Taylor, Kiké Hernandez, etc.). All fans — not just Dodger fans — have an affinity for players they watched from very early in their careers. And the Dodgers have done an outstanding job of developing that talent pipeline without sacrificing major-league success. They have traded from their system, but they’ve also held on to Seager and Buehler and Alex Verdugo and Julio Urias, guys who very well might make up the core of their next World Series title. (Or they might not. As much as Twitter would like to think otherwise, no one knows the future.)

Hernandez probably undersells Bellinger here. Yes, Bellinger struggled offensively in 2018, but after all was said and done, his OPS+ put him 20 percent above league average offensively and he played outstanding defense at multiple positions. He’s not Mike Trout, but there’s a reason the Marlins want him in a possible J.T. Realmuto trade, and that’s because he’s a star, or at least well on his way to becoming one. He’s definitely not just a “contributing player.”

The Dodgers have consistently put excellent teams on the field using a strong mix of homegrown talent and an influx from other organizations. Oh yeah, and they also acquired the best player available at the trade deadline each of the last two years and re-signed three key free agents in one offseason just two years ago.

What Andrew Friedman Said

Friedman was less defensive when asked similar questions. He said the front office believed the Dodgers were considerably better than a 92-win team last year and pointed to how the foundation of the team remained intact. He said the team’s increased financial flexibility alone isn’t a reason to spend and how the Dodgers would be smart to spend on the right players at the right time.

As for trading Puig and replacing him with Pollock, Friedman warned against viewing that as a one-for-one swap. The Dodgers had a surplus of corner outfielders and traded two of them in Puig and Matt Kemp to the Cincinnati Reds. Pollock is a center fielder.

“We feel like it’s really well-balanced and feel like we have a team that has every bit as good a chance to win a World Series as any other,” Friedman said.

See, Stan? That’s how you answer questions. Don’t get defensive, just have enough confidence in your approach to be honest about it. Spending money for the sake of spending money will not make the Dodgers a better team. They already extended Kershaw. They made a baseball decision to go after Pollock (seemingly) instead of Harper. They made a baseball decision to trade two of their eight outfielders. The made a baseball decision to trade Wood, who was likely to be one of the odd men out among their glut of starting pitchers, and Farmer, who had no chance of ever getting regular playing time with the team.

At the end of the day, a front office’s job is to put a winning team on the field. Despite many, many assertions to the contrary, reaching the World Series is a great accomplishment even if you don’t win it all. Losing the World Series is a better result than losing the NLDS or missing the playoffs, and reaching back-to-back World Series should be seen as validation of the approach the team is taking, rather than a referendum on a front office for not doing more.

But Stan Kasten isn’t helping. Take his speaking privileges away. Let him do whatever it is that he brings to the table, but until he learns to talk to the media without insulting the intelligence of an entire fan base, let’s have him be neither seen nor heard.

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