Lazy Sunday with The President

Ok, maybe not THE President, as the White House Office of Public Affairs continues to ignore my requests for a one-on-one interview with Mr. Obama. But we’ve got the next best thing here on this Lazy Sunday, as the Indians media relations people are much more accommodating than those at 1600 Pennsylvania Avenue. Indians team president Mark Shapiro was gracious enough to take about 45 minutes out of his extremely busy day on Friday to sit down and talk to me here in beautiful Goodyear, AZ. I really enjoyed our conversation, and he was very open and forthcoming with every question I asked him (as you’ll see). The following is the (lightly edited) text of our interview, and I hope you enjoy it as much as I did.

Al: Pretty exciting offseason for you guys, huh? I’ve been an Indians fan since I was born, and this is the most active offseason I can ever remember.

Mark: Yeah, if you define active by spending money. This is my 22^nd season with the team, and there’s never been anything of this magnitude. It’s clearly both a statement and effort by ownership. This isn’t just a front office effort. We identify players, make recommendations and provide alternative plans and they ultimately make the decisions. With both Swisher and Bourn, Paul Dolan was extremely involved and assertive in our efforts to get those players.

Al: Talking about the front office, what exactly does the team president do? Half business and half baseball? Or more of an 80/20 ratio?

Mark: I think that fluctuates by the calendar. I’ve spent 17, 18 years in baseball ops with the Indians, I’m familiar with every aspect of it and had involvement with it from the farm system, which I ran, and it’s largely systematically still the same. Ross Atkins was both a player and a front office guy when I was here, a lot of the staff are the staff that were here, so I’ve got a comfort level and a familiarity and a confidence with our baseball operations staff that I can get out for 3 or 4 days, and get back in very quickly. My office is right next to Chris’, and it’s rare that he and I are not talking baseball and I’m still watching the games the same way. But I would say that a greater portion of my energy and time are spent on the business side because I’m still learning that side to an extent. It’s all new to me, it all reports to me and I feel responsible and accountable and it’s a big challenge. That and the MLB would be a third portion. I’m attending ownership meetings, I’m on a few committees that the Commissioner has put me on which has been an incredible education and learning process for me. So it really is a job that provides a global perspective of the game, from the MLB perspective to a baseball operations perspective to a business operations perspective. I’m in a leadership capacity in all three of those roles and enjoy those roles and after 21 years in the game I’m still learning a ton. I’m still trying to surround myself with smart, talented people who challenge me and make me better. And I’m able to stay in the same place which I clearly have strong roots, strong ties, strong bond with; raising my family there which means a lot to me, it really does.

Al: Yeah, you’ve been a Cleveland guy for your whole career. Most guys have to get moved out of an organization to get promoted.

Mark: Yeah, it’s a rare thing. I’d always thought that would happen, but it never happened that way and I feel extremely fortunate to spend my career here.

Al: Talking about the signings of Swisher and Bourn, you look at last offseason and at a guy like Josh Willingham. He was a 32-year old outfielder coming off of a very similar offensive season to Nick Swisher this year. Why Swisher this year and not Willingham last year?

Mark: Well, we offered within the parameters that we were expected to operate, and we actually offered Willingham more money on an annual basis than he signed for. We just didn’t feel comfortable with the risk when it was spread over that many years. A lot of what we do is risk based, we’re managing risk. We understand a little too well what a long-term contract can do to us when it’s not performing, and we get nervous about age and defense and what those things mean for a player. Obviously he had a career year in the first year of that contract, so hindsight is 20-20. But Swisher has defensive value at outfield and first base, two areas where we need help. He’s an average to plus defender, and we felt like there’s value that offsets the decline if he does decline over the contract because he provides value at first base and outfield, and provides us with versatility that we’ve already demonstrated by signing Bourn. But again, the situations were different. If ownership had decided last winter that it was critical for us to make a sign, then Willingham may have been a guy we overextend on. Again, we make recommendations and assess risk. We provide those in a context of what we’re given to operate under. Both Swisher and Bourn were outside of our original expectations of how we’ve operated, and ownership just stepped up and said we want these guys. It’s important to get them signed for us as a franchise, for our fans. These were really ownership-based decisions; not personnel wise, there were still the baseball people making the personnel selections and providing the analysis, but ownership said that even thought you might be scared about an extra year, we want the guy.

Al: Looking back at your history with the Indians, very few long-term contracts to free agents. You’ve bought out some arbitration years and bought out some free agent years, but haven’t really brought in a guy for a 4-5 year deal who’s clear of arbitration. And when you have given out long-term contracts, you’ve been bitten by it like with Hafner.

Mark: Yeah, those weren’t even long-term, but they were 2^nd generation contracts. And with both Hafner and Westbrook it didn’t work out. I think the reality is that anytime you’re signing a player who’s past his prime, more than 29 years old, the risk is just going to go up. No forecasting or modeling we had ever could have guessed that Hafner was going to go through injury issues like that.

Al: And now with Kipnis and Brantley, you’re going through the same thing, looking to buy out arbitration years and free agency. Is that a continuation of the John Hart strategy that worked so well back in the 90’s?

Mark: Yeah, we did it with Carlos Santana and Asdrubal last year, and of course I was involved with John and Dan back in that initial set. Different parameters back then, we did it wholesale for everybody. We did it with Dave Otto, Scott Scudder, everyone. We were able to insure every contract back then, which we can’t do now which made a big difference. So it’s a little bit different today than it was then. That being said, it’s still something that we’re going to explore with what we feel are core players. It’s always about sharing risk. Do they think that the potential risk of leaving money on the table is worth the benefit of some certainty of financial security? For us it’s asking if having the fixed cost, a cost we can manage, we can plan around, is that worth the potential for injury that creates a mismatch in value.

Al: Looking at the new collective bargaining agreement, there are caps on draft spending, caps on international spending. Does that sort of thing help or hurt a team like the Indians?

Mark: That’s a very good question, and a very difficult question. I would think this; clearly it benefits us from a standpoint of stopping the largest market teams from exploiting their extreme resources and just go crazy. While we really feel like there should be some market considerations within amateur player acquisition, anything that limits our intellectual creativity, anything that limits our freedom of choice is probably a bad thing for us. So we need to be able to feel that year to year we can deploy more resources there and less in free agency. The bottom line is this; we’re always going to lose in major league free agency. Our chances to compete are going to be in a rare opportunity like with Nick Swisher and Michael Bourn where the biggest market clubs for some reason are not playing. Because they can always go an extra year, they can always go an extra $5 million. In amateur acquisition that discrepancy isn’t as great. So if we decided that we wanted to go heavy there, deploy more resources there, the freedom to do that would probably be better for us. But I still think the changes that were made are an incremental step in the right direction. It’s going to take more than one CBA to get it further. I accept the fact that there’s not a whole lot more revenue sharing coming, but I’d like to see more market consideration mixed in to the amateur talent selection process.

Al: With the steps to cap the spending in the draft and international market, do you ever see a salary cap in baseball?

Mark: That’s more of a labor-related issue. I guess I don’t really foresee that happening. It’s hard to get to that point. I think that something very dramatic or catastrophic would have to happen to get to that point.

 Al: With all of the TV contracts coming out, not just the major league deal that gives money to all teams but when you look at teams like Anaheim getting $150 million a season; can the Indians hope to compete with teams that are getting that much money just from TV revenue?

Mark: Yeah, and the Dodgers. The national money helps, but it helps everyone the same way so it doesn’t really provide us with a competitive advantage. The Fox Sports deal will give us a little more. But the magnitude of the television deals probably point to the greatest challenge within constructing teams in major league baseball. Where there’s greater revenue sharing than there’s ever been, while there is an effort to achieve competitive balance, under the current structure the extreme market disparities in size, population and wealth the nature of the system is going to create some large swings in payroll. And there’s a direct correlation from payroll to the expectancy to get into the playoffs. Not to go deep in the playoffs necessarily, but to get in and to sustain it. I think you’ll still see well-run small and mid-market teams have a chance to cycle in and win; maybe even win a World Series. What you’ll have a difficult time seeing, unless Tampa Bay proves to be the first, is to see a small-market team that can sustain it. And it still causes some pain for a fan base, you still can’t keep players. Carl Crawford, B.J. Upton, James Shields, they’re making tough trades. They just happen to do a good job when they make those trades and have a talent influx. In every study there’s a direct correlation between size of payroll and chance to get into the playoffs.

Al: Changing gears a little here, having talked to players, fans and reporters around the team, they all say that this is a different team with Terry Francona here. His leadership has already had such a profound effect on the club. Can you talk a little bit about the effect Terry has had on this franchise already?

Mark: We’re always looking for the moves that we can make that are levers, moves that will impact more than one player. Manager is one of those moves, it can impact the culture, the attitude and the energy of the team. Tito’s a guy that both has the confidence of having achieved the ultimate within the game, the passion for the game that comes from just being a baseball lifer and having the game running through his blood, as well as an appreciation and desire to be here, which I think is extremely important for us. This is a guy who wants to be here, that appreciates Cleveland, that has a history with Cleveland. He appreciates our culture because he has a history and a bond with our culture having worked with me and Chris. I think that resonates and has an impact throughout our entire organization. Not just players; it has an impact on our scouts, on our player development staff, on our front office. His energy, his attitude has been infectious. It has rubbed off on everyone, and that’s been a neat aspect of this camp.

Al: It’s always great when you can bring in guys like Francona and Swisher who are not only talented, but they are Ohio guys. They get the fanbase.

Mark: Right. I think those two moves were moves that really…I mean, watching Nick Swisher yesterday in the dugout, and he never stopped talking. He’s talking to the fans, he’s talking to the players, and it’s in a meaningless spring training game. On April 12^th when it’s 37 degrees out and there’s 10,000 people in the stands, he’s going to be talking the same way. So if you want to know what leadership can mean, what energy can mean; when it’s tough for guys to get up, when they’re cold, tired, when there’s not a lot of energy coming from the stands, he’s still going to provide that. So again, when you’re looking at levers that exist that can impact more than one player, that’s one of them.

Al: Going back to the 2012 draft, the first draft in the new system with the new rules on spending; how do you think you did? Was there a strategy going in on how to save money in some areas and spend it in others?

Mark: I think our strategy wasn’t too different from a lot of other teams. We looked at what would be available at different picks, and if we didn’t think that the allotted amount for the pick justified the pick then we tried to use that money elsewhere in the draft. Try to get more leverage to convince a guy to sign that might not be inclined to sign for slot. We tried to be creative within the framework of the system, much as the Astros did and numerous other teams did. Early returns, I think we had a good draft. I think that sometimes people don’t understand the value of the top 4 or 5 picks is very different from 8, 9, 10 or 15. History would say that when you get one of those top-5 picks you really have a chance to get a player who can make an impact. After that, you’re more hoping to get a major league player, or really hit on something later in the draft. You feel good about it after draft day, but it really takes 4 or 5 years to analyze the quality of a draft. I feel like we had a good understanding of the system and our guys did a great job walking through mock drafts, simulations, negotiations, trying to get a feel for how it would go. I don’t think we were surprised by anything. We largely executed our strategy. This year will be an important year for us.

Al: Yeah, I noticed a little glint in your eye when you were talking about how a top-5 pick can impact a team, with you having the 5^th overall pick this year.

Mark: (Laughing) Yes, this year will be an extremely important first round pick for us.

Al: Sticking with the minors, looking at the organization holistically you see a lot of high upside, athletic middle infielders. Lindor, Ramirez, Wolters, Rodriguez, Paulino; those are traditionally the tougher players to get. It’s usually easier to find a 1B or a LF. Is that an organizational strategy to go and load up on MI?

Mark: Yeah, the system is weak on corner players. We probably said years ago that Latin America would be a good place to go get middle infielders. But it’s not really a conscious effort; we look to get the best talent we can. I think it’s unrealistic that all of those guys are going to make it as middle infielders. One of those guys is going to get too big and end up as a third baseman or an outfielder, but we’ll keep them in the middle as long as we can. We’ll find ways of getting all of them at bats, and if one of them plays their way off middle infield then that’s fine, we need corner players too. They still have to become guys who are productive and hit enough and if they’re all middle guys then we have assets that we can find corner guys with. It’s still too far away to say where they’ll all end up.

Al: Trevor Bauer was another big acquisition for a team that is light in the upper minors when it comes to starting pitching prospects. Is there even such a thing as a starting pitching prospect, having gone through it with guys like Adam Miller and Jason Knapp?

Mark: Yeah, I think there is. I think we’ve got a better understanding of things like deliveries and mechanics, things that keep guys healthy. It’s still not a science, it’s still an area that’s in development but I do think we’ve done a ton of work on it and I think we’re better at understanding those things. Bauer is a guy who, because of four tough starts in the big leagues and an organization with a lot of depth in that area, we were able to find a unique opportunity to acquire a high-ceiling starter. That draft, if it ends up netting us Trevor Bauer and Lindor, we’ve got two players that we feel good about today. So I hope I’m saying the same thing to you three or four years from now when we’re sitting here talking about multi-year deals for those guys, but we’re very excited about them and think that both of those guys can be building-block guys that you can really build a team around.

Al: Talking about studying the delivery and mechanics, Trevor Bauer is one of the most dedicated students to the craft and art of pitching that you’re ever going to find. Have you had a chance to sit down and talk with him about pitching?

Mark: Yeah, Chris and Tito went down to visit him at the Texas baseball ranch where he works out, and I’ve had a chance to talk with him up here. He’s a guy who’s highly intellectual, he’s highly aware of what makes him successful, he’s aware of what will keep him healthy which is an asset but can also be a challenge. This is a game where if you over-intellectualize it can work against you, because there’s just so much failure built in. I think he’s going to have to learn to selectively use that intellect that he’s got. He’s clearly a smart guy and clearly aware of what makes him successful and he’s clearly applied a lot of those things to both his delivery and his level of preparation. I think we choose to see it as an asset more than anything else.

Al: Do you think you were able to get him at a bit of a discount because of that rough MLB debut? Choo is obviously a good player, but…

Mark: I think two things happened; one, their (Arizona’s) organization has Corbin, Skaggs, Bradley, a lot of young pitching. They have the ability to make a trade from depth. And two, they may have been colored by his interactions there, his poor major league debut. But I look at the fact that it was his first year of pro ball, and he had unbelievable AA and AAA numbers which guys don’t just go to AA and AAA and dominate like that in their first year. If you throw out the four major league starts, we probably don’t have a chance to sniff getting the guy.

Al: What is the most challenging aspect of building a championship level roster in Cleveland?

Mark: I think just the resources. The combination of resources and MLB structure. We’re competing against Detroit, whose average payroll is going to be well over $100 million and even with the steps we’ve made to put us in the high $80’s we’re still operating at a disadvantage. How that impacts decisions, how that impacts the ability to retain players, that’s still probably the greatest challenge. It’s an emotional challenge too, but I think the day that you view that as insurmountable, the day you view that as colossal is the day that it becomes an excuse instead of a challenge. From a leadership perspective it’s never a question of “can we,” it’s just a question of “how do we?” And there are examples of teams that are doing it well. So we just have to design our systems, we have to make our decisions, we have to align our processes to overcome those challenges. But it’s clear that’s the single biggest challenge. It’s a combination of the size of the market and the system that’s in place to share revenue. The revenue is largely predicated on the number of human beings that live in the market, and the wealth and corporations. The number of tickets purchased is directly proportional to the number of people that live there. I’m confident that there are more baseball fans, percentage wise, in Cleveland than in New York City. But if the % of baseball fans that come to the games in Cleveland is a little higher than the % of fans in New York that go to games, it doesn’t matter because there are just so many more people there. So it effects the number of tickets purchased, how much you can charge for tickets, the number of corporations that buy suites, sponsorship and the number of executives that buy tickets. All of those things are more of a challenge in baseball because of the system that baseball uses.

Al: The Royals did something before the 2012 season that I thought was pretty neat, they had a “prospect all-star game” before the season started. Would the Indians ever do something like that?

Mark: We talked a lot about playing minor league games there, but haven’t really been able to set it up. The Red Sox have done it, the Orioles have done it, but I think we’re cognizant of the fact that you’d be serving a very hard-core, small % of our fans with something like that. It’s not something that we’d get a huge turnout for. We just know that based on experience, based on how those teams draw, how our team draws and how these things work. I think it’d be fun for us, I think it’d be fun for a small group of our minor league fans, but really just for our hard core fans.

Al: Speaking of the marketing research, there was a really eye-opening article in Baseball Prospectus a couple of weeks ago about how the Indians handle their promotions. I don’t think any other team has come forward with so much visibility into the way they operate in that department.

Mark: We don’t have to be quite as secretive on the business side, we’re not competing against teams for marketing dollars. I hired Alex (King), and there are things in the business side that I find directly analogous to the baseball side. There’s an opportunity there for better decision making by utilizing decision-making and information. What makes it analogous to baseball is that while there is data and there is objective analysis, there’s still a subjective component to it, still a feel to it. You’re still dealing with human beings who are making decisions, you’re dealing with marketing. You can’t just spit out a definitive answer. But what I do think you want to do, just like when making a baseball operations decision, is that you want the best information possible. You want to have the smartest people help you bring that information to light in a way that you can apply it and execute it in a series of decisions that set up a strategy and make up a plan. I think that the business sides of professional sports organizations often are reactive to the performance of the team. They maximize revenue when the team is doing well and then they just try to hunker down and survive when the team is not doing well. The magnitude of our challenge has made us ask what else can we do and how do we know that we’re performing as well as possible on the business side regardless of team performance. That’s what we’ve tried to figure out. It’s a very tough question, and clearly the biggest lever and the most important area of focus will always be team performance. But what we want to know on the business side is how we can soften the valleys and heighten the peaks as far as revenue. And we build that bond with the fans by knowing our fans extremely well we build a stronger bond that’s more resilient.

Al: Do you still use proprietary statistics in the organization?

Mark: I’ll say this; when it comes to making decisions we want the best information possible. Analysis and statistics are one part of that. Seven or eight years ago we had one person who did it full time and now we have five people who do it full time. We have an analytics department. A big part of that department is just data management. There’s so much data to manage generate by every single pitch in the major leagues. It’s partly analysis, and it’s partly getting the information to Chris and Mike (Chernoff) so that they can make an efficient decision without getting bogged down in the statistics. So there’s multiple layers of how you use statistics and use information. That being said, I’ll also tell you that we have a never-ending thirst for the best information. Subjectively, from scouting, psychologically or mentally, financially or economically; we want the best information available on these guys in every single variable that exists going into a decision. And that’s the job of the front office, so we have a thirst to acquire the best information possible.

Al: Is there an example of a player where traditional stats like OPS say one thing but your proprietary stats tell you something different?

Mark: Not OPS, but maybe RBI’s and batting average. The utilization of information is always about finding inefficiency in the market. They’re going to constantly close, and when you do find one you’ve got to be constantly on the lookout for the next one. Because they’re very momentary, and you have to take advantage of them. Where’s the value at any one moment in time, and are you prepared and able and nimble enough to execute and make a decision on them.

Al: Well, thanks again for taking the time to talk with me, as I know you’re really busy here in the lead-up to the regular season. I really appreciate it, and good luck this year.

Mark: Thanks, it was my pleasure.

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