February 21, 2014

Prospectus Q&A

John Hart on Atlanta's Extension Spree and the Future of Club-Friendly Contracts

by Ben Lindbergh

Last month, I wrote about what looked like a coming contract crisis for the Atlanta Braves’ young core, wondering when the Braves would approach their young players about long-term deals and speculating that Atlanta’s hiring of senior advisor John Hart—who pioneered the concept of contract extensions for young players while serving as the Indians’ general manager in the 1990s—might portend an extension spree. None of this was news to Braves president John Schuerholz and GM Frank Wren, who had already been laying the groundwork for contract talks with their young stars. Since then, we’ve seen Atlanta swiftly defuse any fears that they would be priced out of their own players, buying out Jason Heyward’s remaining arbitration years and signing Freddie Freeman, Julio Teheran, Craig Kimbrel, and Andrelton Simmons to extensions of various lengths. (Links to Transaction Analysis: Freeman; Teheran and Kimbrel; Simmons.)

Shortly before the Simmons extension was announced, I spoke with Hart about the Braves’ incentive to do the deals, the parallels between Atlanta and his Cleveland clubs, the ways in which the pursuit of extensions has changed, and how we might see teams try to get creative with the structure of extensions in the future.

Ben Lindbergh: What are the parallels between the Braves now and the Indians when you pioneered the concept of extensions? Do you see some similarities in the situations of the two clubs?

John Hart: Well, ours was a little bit different because when I went to Cleveland, it had been 40 years of a bad team. We worked long and hard to draft the right players. We made a lot of deals for the Loftons, the Alomars, the Baergas, Sorrento, Vizquel to go along with the Thomes and the Mannys and different guys we had drafted, Charlie Nagy, Albert Belle. We were probably the lowest-revenue club. We were in the old stadium. With a low-revenue team that had had really no success, we were trying to do two things. One was not to run an entire class through arbitration and two was to demonstrate to our fan base that we were in this for the long haul. It's sort of a turnover route in Cleveland—when a guy got close to free agency he was traded, there was no long-term commitment.

So ours was just different. With the Braves, they've had such a tremendous run of success. When this new stadium looked like it was going to happen, they felt more comfortable that there would be some revenues that would be able to support some aggressive moves like they’ve made.

The parallel is the fact that Frank Wren and his staff have just done a phenomenal job of accumulating this gifted young core of players that's a 25-and-under group that are all in this together. It would be difficult to retain these players in free agency. Because you’ve always got the big-market clubs that have been there, you have another group of clubs knocking out of the park some of these television deals that are going to give them revenue, and then you always have an outlier like Seattle was this year.

BL: You’ve had a relationship with John for a long time, and you were in a similar role with the Rangers before this. When the Braves brought you on, was it at all with an eye toward these extensions and knowing that this would be on the horizon, or was it not really related to that?

JH: No, John and Frank, I think that this was something that they wanted to do. I do have a longstanding relationship with John borne out of mutual respect. Along with Pat Gillick, John Schuerholz, probably head and shoulders the top two general managers of my era. In the case of Frank, I remember bringing Frank into Cleveland in an effort to hire Frank when he was getting started as a young assistant. He was a bright, young guy that had a baseball background but also was extremely bright and extremely intelligent. So although I didn't work with Frank, I also had a longstanding relationship with Frank. So it was a perfect fit. And in my world right now, it’s more like a home game. I live in Central Florida, they train in Central Florida. It wasn't specific [to the extensions].

This was obviously a big step out for the Braves, but I think without the new stadium and some additional revenues that looked like they were coming online, it would have been difficult for the Braves to do what they wanted to do. This gives the Braves a better chance to manage a payroll, manage a roster, and perhaps not get caught with contracts that are going to be way overvalued as a player gets into the twilight of his career. Timing is important, the ability to manage risk, and the ability to have guys retained, a core of young players retained in the prime of their careers. These all were things that John and Frank had to get comfortable with. They did. And I think that this was in place long before I got here.

BL: It had been a while since the Brian McCann extension in 2007, since the Braves had extended a homegrown player, but it sounds like that was more a matter of financial circumstances changing than the desire not being there before.

JH: You’re absolutely right. When you're looking at organizations and their tolerance for risk, you almost always have to go back to the economics of that particular organization. A lot of times the national media missed that piece where, 'Hey, the Braves haven't been locking these guys up,’ or ‘Every small market needs to do what Tampa does.' You sometimes have to follow the agents. Is the guy a Boras client? I think in looking at that dynamic, although the Braves wanted to do these things, that to do the numbers they did, there had to be some level of comfort that there was going to be a revenue stream to support what they're doing. The feeling here is that if we're going to make commitments, ultimately we are going to put revenue back into the club. I'm not going to use examples, but I think you know there are clubs out there that, ‘We can abandon ship and we're going to turn a profit.’

The point that the Braves have made is that we continue to invest back into our ball club, and I think that this is a part of it, the ability to get that new stadium online, to have a potential spike in some of the television revenues. Obviously we're stuck with a deal that is well below the market, but they were able to do some other things with a portion of that. So they end up taking that and have been able to put it back into the ball club. What they did is that they put it into the core of their team, to their young players. It’s easy to come out and go, ‘Well, the Braves didn't go after the no. 1 starter.’ It’s not like the Braves to go get a 30-plus-year-old starter. They're not going to be the ones that are going to be able to play. They're going to have to continue to do what they've always done, and I think it's always music to my heart—because I'm a player development and scouting guy at my core, small-market to my core.

BL: You once said that one of the things you had learned as a GM was that "Stability leads to flexibility." You mean that once you have your core locked up, you can count on that amount of money being assigned to that amount of production, and then you can work around that?

JH: It really does. Every organization has a different mindset. I had to be a little more nimble in Cleveland. We maybe traded a few of our guys to gather payroll flexibility in certain points, but the idea of going in is that we can manage this payroll and this roster, and that will also allow us the ability to be creative if we find a free agent that we like. They're our core players, they're our better players and we know what we're paying them. And that does lead to stability.

And I think in this case, every guy that’s been signed here, these are players that you're looking to be stable with and build around them. That gives you the ability to do it, and quite frankly, I think that was a little bit of the mindset as to why these players wanted to sign here. I think Frank did a great job. His strategy was Freeman one, along with Heyward. I think Kimbrel, you read some of his quotes, it was like, ‘This makes sense to me because I know who I'm going to be with. This is showing me, number one that the Braves believe in me, and number two we're going to have a core of good players that are going to grow together.’

BL: Once you get the first deal done, you can use that to convince the next guy that he should stick around.

JH: That's exactly right. I'm going to say this. I think in the case of John and Frank, they watched what happened when McCann hit free agency. They watched Hudson get overpaid. I'm sure they looked up and said, "Nuh-uh, not with this young core..."

The difference in Cleveland is that it hadn't been done before quite in mass like we did with an entire class. In that first year I think we did 12 guys, and then we were doing three or four a year. We sort of caught the industry by surprise. In this case, it's not that easy to catch Casey Close by surprise. It's not easy to catch the union by surprise today. There's a lot of different dynamics in place when you go to do these things. You're not always going to be successful on every guy. There's going to be different incentives and different factors in play.

BL: This was initially sort of a small-market club’s strategy to keep costs down, but it's been embraced by larger-market clubs in recent years. Do you find that the discount has decreased? Are teams no longer getting quite the same deal that you did when you started handing out these extensions?

JH: You go back to what I was just saying. I don't think you're catching people by surprise. You're finding players that have interest in stability. The general feeling that I've always had—and I think some of this is my field background—is that young players recognize and are interested in a level of security because of just the general toughness, the risk associated within the game as it is. There are a lot of good players in the major leagues. It's very difficult to establish yourself as an everyday regular, much less an all-star. With every success story comes with five or six crash and burns, and the players are aware of that. If you present opportunities for these guys at a younger age, you are going to have a willing ear. Not that you're always going to get a deal done.

I don't think anybody looks at it now to go in and, if you will, steal a player. I think you're going to go in and you're going to get the ability to get a discount for the guarantee. You're going to get the ability to get a level of perhaps some piece of free agency. You're going to be able to get some piece of an option along with it. In effect, what the large markets are doing or realizing is that they’re no different than anybody else. They want to retain a quality young core of players. Yes, you are looking for a certain discount, but you're also still taking the same certain level of risk.

This isn't guys shooting from the hip. You should know these guys and know them well. That was always a part when I went to sell this to ownership, that, ‘Look, I know these guys. Here's the risk, here are the things that can happen as you go forward, as you go along. No guarantee. But as good as we can cut it, here's the savings.’ So yes, I think things have changed to a level, but the same intent is there. Prices haven't gone down. Who knows what's going to happen? You never know the future. But the cost of doing business has not gone down.

BL: Do you think that we will see teams get more creative in some way? Whether it's signing earlier extensions or longer extensions or maybe signing a different caliber of player to extensions? Because to this point, we've generally seen star-level players get these deals, not so much average players or role players. Maybe that's an area teams would try to expand into now that it's harder to get an edge?

JH: Yeah, I think that's a great point. Yeah, I do. There are scenarios where you're going to do it. And I did this with guys I knew were winning players. You're not going to make the same level of commitment.

But what you're fighting there to a degree is that at some point you should be able to pick up a couple of nice role players through your system. A couple of bullpen arms from your system, a couple of back-end starters from your system, you might be able to make trades and deals. You run the risk of getting too locked down on, if you will, fringe players.

So yes, there is definitely a window there for that, but before you get too deep into that, I wanted to do the core guys. Guys that I felt were everyday players on a first-division club, that had the potential to be an occasional all-star. You don't want to ever get to where you can't finish the deal on a core player because you're tied down on something that you might be able to fix within.

BL: You mentioned the importance of knowing your players and being able to judge how they would react to one of these deals, having financial security after not having it before. Was there ever an instance where you felt like either you or some other team had misjudged a player in that sense, and maybe been disappointed by his attitude or his work ethic after having locked him up?

JH: I'll be quite candid. I never missed on the fact that I had a player. Because we generally signed them young, these guys are given these deals because they're talented, and as you said, we have charted the waters on their makeup and their work ethic and the intangibles. And these guys also recognize that there's another bite out of the apple potentially for them. There's just also the self-pride, the peer pressure, if you will, to want to be as good as you can be. I think within every organization there is so much support for a player. If there's an injury, the guys can patch him up. If the guy is struggling with something, you've got a sports psychologist that can help. There's just a lot of support.

I've had guys that didn't take the deal that came back and took the deal the second year. Albert Belle was one. But as far as signing guys, we maybe missed a little bit on the talent, but it wasn't because you looked up and that guy did a total flip-flop personality- and makeup-wise. We had a guy that maybe gained a little weight. We maybe had a guy that we had to ride herd on a little bit more off the field. But guess what? It wasn’t a surprise to us. We knew that guy before. We bit the talent, and generally we were almost 100 percent able to get that guy back on the grid.

But generally what I found is that these guys get more comfortable in their skin. With a level of security also comes a level of—I don't want to say leadership, because you don't want these guys to be what they're not. We signed Manny Ramirez to a long-term extension; I never wanted Manny to have to be a leader. I never even brought it up. I never even thought about it. But some guys are going to get more comfortable because they're part of that core. It's in their DNA. You'll see guys step up and become more lead-by-example, lead-by-vocal. I guess the answer to the question is that we sort of knew what we had and didn't expect too much else. But I never saw anybody crash and burn.

I remember Fred Claire, who I’d had a lot of conversations with before, he called me when these were announced and went, ‘John, it's your first full year on the job. What are you thinking? John, you have this time, that's what the arbitration process is for—that you can get your arms more around your players.’ And he was exactly right, but we came from two different markets. I said, ‘Fred, I understand what you're saying. Believe me, I respect this call. And if I were in L.A. maybe I wouldn't have. You’ve got to have something pushing you to do it. I've got to be more creative within what we're doing.’

He understood it, but it was an interesting phone call, because he was right. You do have those extra years to get the player figured out. It's tough to figure a player out at one year or two years. But I think it's been proven that young players, if surrounded by a good atmosphere, if they have a level of talent, that you can win with young players. Yes, we added some veteran experience guys as we got better. But the core of that club that we had all those great years with, and the reason we won, was that young talent. Just because they got the deal doesn't mean they're going to walk in the locker room and start shouting orders. They're not going to do that. These guys are still proving themselves.

This conversation was edited for length. Thanks to Chris Mosch for transcription assistance.

Ben Lindbergh is an author of Baseball Prospectus. Follow @benlindbergh
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