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May 12, 2011 Future ShockSecond Thoughts on Hosmer
If you are a prospect hound, the last week has made some sort of live baseball package a must. On Thursday, the Royals called up Eric Hosmer, arguably the best hitting prospect at the upper levels. On Saturday, the Braves called up Julio Teheran, arguably the best pitching prospect at the upper levels. On Sunday, the Red Sox promoted Jose Iglesias, the best defensive shortstop in the minors. The Teheran and Iglesias promotions require little analysis. Teheran's start against the Phillies on Saturday was the product of a doubleheader and the fact that his turn was up in the Triple-A rotation. Iglesias is just a temporary fill-in for the injured Marco Scutaro, and is present to provide late-inning defense and speed off the bench. Hosmer is a different story. He's not only in Kansas City far earlier than expected, but he's presumably here to stay. But was the timing of the move a sound decision by the Royals or something they will regret down the road? Let's gets the easy part out of the way: There's little argument that Hosmer is ready to perform at the major-league level. After all, his batting line of .439/.535/.583 in 26 games for Triple-A Omaha looks like something out of the college game before they deadened the bats. This isn't about talent; it's about the mirage of a hot start, winning environments and, of course, money. I'll admit that I got caught up in the excitement myself. Within 24 hours of Hosmer's arrival at Kauffman Stadium, I did two radio shows in Kansas City, and both times I praised the move and talked about the beginning of a new era in Royals baseball. But wisdom may have come with time, and now I'm thinking that's all a bunch of hogwash. Last week, I discussed the how the Indians’ hot start had affected their philosophies about bringing up young players this year. The Baseball Prospectus Playoff Odds backed up their excitement, with Cleveland’s surprising April bolstering their chances of reaching the postseason more than ten-fold to greater than 30 percent. That's not the case with the Royals. While having a record above .500 might be an even bigger surprise than what Cleveland is doing, it hasn't moved the needle on the playoff odds, which pegged their chances of post-season baseball at 0.9 percent heading into Wednesday's games. For you folks that just blew your paycheck at Saturday's Kentucky Derby, that's a 111-to-1 longshot that one prospect, even one as good as Eric Hosmer, just can't change to something more realistic. So why now? Why not wait until other big names at Triple-A, like third baseman Mike Moustakas, and left-handed starters Danny Duffy and Mike Montgomery, were deemed ready? Clearly the struggles of Kila Ka'aihue played a role, but one front-office veteran questions the thought of throwing Hosmer to the wolves alone. “If I'm in the Royals front office, I'm fighting like hell to keep him down,” said the National League executive. “Why bring him up on a team whose big three are Kyle Davies, Bruce Chen, and Jeff Francis? If they wanted to bring up Montgomery, Duffy, and all of those guys and let them take their collective lumps, then OK, I get it. Buy why just him when they have all these washed-up guys and limited playoff chances?” Maybe the Royals don't believe the playoff odds, and that's fine. They see a surprising start, an American League Central division turned upside down, and a rare window of opportunity. Still, this is gravy to part of the master plan for long-term contention, and calling up Hosmer could impact the Royals’ financial flexibility down the road. The promotion does not change Hosmer's potential free agency when it crosses the six-year service time barrier, but assuming no radical changes in the upcoming CBA, it does likely make him a Super Two following the 2013 campaign. That's one less year of a cost-controlled star, and that year could be expensive. Let’s assume for a moment that everything works out for the Royals, and the best system in baseball transforms them into a legitimately competitive team, unlike the early 2011 smoke-and-mirrors act. Let’s also assume that Hosmer is a big part of that success, quickly establishing himself as one of the best young hitters in the game. Now going into the 2014 season, the Royals are favorites to win the Central, and instead of having Hosmer under control, he's now subject to arbitration, and thus due a big pay day. The Royals don't have unlimited finances, and that multi-million deal that could have been avoided by waiting one more month three years ago suddenly limits the team in adding the pieces that might put them over the top. You still sure this was the right time for the Royals to unwrap their shiny new toy? Even if Hosmer is immediately great, say, a six-win player, that one month of impatience cost the team millions of dollars three years later for a single extra victory in a season where the odds say overwhelmingly that it just won't matter. The only argument against this is the concept of the Royals following the lead of the early 1990s Indians teams that produced young players and then locked them up to long-term deals that bought out their arbitration and some free-agent years. On Saturday, I was discussing this via text messages with a veteran scout. After mentioning the thought of locking Hosmer up, I walked away from my phone, only to return to a series of messages, presented here with time stamps to preserve the humor.
20:17: Boras. Laughable. Keep reminding me of that. I need a good laugh. The Royals created plenty of excitement with Hosmer's ascension to the big leagues, and I'm the first to admit that I got caught up in it. Just a few days later, I'm wondering if the team will eventually have the same second thoughts that I'm bothered by.
A version of this story originally appeared on ESPN Insider
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Kevin Goldstein is an author of Baseball Prospectus.
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I tend to agree, but a commenter over at Rany On The Royals made an interesting point. Because of the excitement over Hosmer and the admittedly smoke-and-mirrors early success of the major league team, the Royals may earn enough in improved attendance this year, after a couple of years of interest, to significantly offset the cost of Hosmer's Super Two status. Not to pay his whole salary, of course, but we are only talking about a few million dollars here, which isn't enormous in an MLB-salary context.
I also wonder if having Hosmer up now, learning to hit major league pitching, improves the Royals playoff chances in 2012. If so, it could still be worth the money. He clearly has little to learn in the minors.
I agree with this. How many tickets to the Royals have to sell to offset the additional cost? I believe I read that there were over 30,000 in the stands for just his debut alone. With the early season winning, the Royals brass might've decided now was the best time to bring him up to maximize ticket sales.
I was thinking the same re attendance. KC drew another 8K fans last weekend over the weekend before, and did it v. OAK on a weekend after division-rival MIN was in town. If Hosmer is a draw to a good baseball city that's primed for these guys and thirsty for anything at all to be excited about, and Moose is the same and has a similar but smaller marginal impact on attendance later in the summer, they could cover the Super 2 cost pretty easily. Not to mention, this is a team that's spent over $70MM on payroll the past two years, has only $11MM committed next year, and is difficult to project much higher than $50MM for 2012 even after a couple back-end pitchers, a catcher and a couple bench players are added in at market rate. (I still don't like the promotion, though, when it's just a matter of waiting another few weeks to eliminate the S2 issue.)
I think there's a lot of smart thinking here, but I don't agree with the concept of making up or offsetting the cost. It's not a one-to-one relationship. Let's make up a number of what the super-two year costs the Royals . . . say $7.5 million. Could they make that up in attendance? Sure. Then they'd have $7.5 million. But even if that happens, they COULD HAVE HAD $15 million had they waited just the one month. If I lend Jason Parks 40 grand tomorrow, and he skips off to Mexico forever with it (quite likely), I'm out 40 grand. If somehow I land a book deal next month for 40 grand, I've made up for it, but I'm still out 40 grand, ya know?
There's also the ticket sales factor of extra success. If I follow the premise that in 2014 all these stars will be up and running at the major league level, then if Hosmer is cost controlled you have $7.5 extra to spend.
Maybe that's money spent on a veteran who does enough to push the team to a division title. Or even gets them a World Series appearance.
Bottom line is the more money spent on the core players of the team during this period of predicted boom times is less money spent on supplementing that core. And without the supplements it will cost the team wins and potentially all the fans and merch sales that winning titles bring in.
The modest attendance bump is a) gonna be short term and b) would have happened anyway, had Hosmer been brought up in another month.
Attendance and t shirt sales are the old reliables for justifying bad moves, and they just are rarely the case.
The Reds acquisition of Jung Bong for Chris Reitsma may have been entirely based on t shirt sales and might have actually payed off (I recall reading an article at the time mentioning that "Bong" Reds jerseys were selling like hot cakes).
That correlates only if Jason was the reason you got the book deal. If the Royals don't bring up Hosmer, then theoretically they wouldn't be able to sell the additional $7.5 million in tickets.
To finish that thought, if the Royals start tanking in the next month (very likely), then maybe they only sell an additional $3 million in tickets for Hosmer's debut instead of the possible $7.5 million. Plus, they really only need to make maybe $5 million now, since the present value of the $7.5 million is less than that.
You can economy this all you want, you can make the money in a month.
Or can't. I type too fast.
If he turns out to be Ryan Howard and wins an MVP award during his Super Two year, and takes the Royals to the cleaners for $10 million bucks then yeah we'll hear the I told you so's. I just think that's more the exception than the rule. Jay Bruce was a Super Two and made an additional $2.31M over the league minimum. Not a big deal. That's probably more what they're looking at instead of a Ryan Howard case.
What is the PR/Marketing value of an extra month of Hosmer, beyond tix, parking, beer, dogs, foam fingers, and HOSMER 35 jerseys sold in the ballpark shop? More buzz in the papers, a local Hosmer watch (I'll admit to flipping over from my team to the KC games on MLBtv when he's coming up all of this week), having your guy on the front page of ESPN.com for a couple days, etc. Repeat in a month with Moose, then a few weeks later with one of the pitchers, and you've got a pretty sustained buzz around a team that was only supposed to be interesting the last month or two.